Analysis of Business Types, Structures, and External Factors Report

This report delves into the analysis of various business types, structures, and the external factors influencing them. It begins by examining the characteristics of micro, small, medium, and large businesses, providing insights into their operations and market positions. The report then explores different business structures, including sole traders, partnerships, and limited liability partnerships, highlighting their advantages and disadvantages. Furthermore, it discusses various organizational structures, such as functional and market-based divisional structures, and how they impact productivity. A significant portion of the report focuses on external factors affecting businesses, utilizing PESTEL analysis to assess political, economic, social, technological, environmental, and legal influences. The report concludes with a summary of key findings, emphasizing the importance of understanding business types, structures, and external factors for effective decision-making and strategic implementation. The report utilizes Tesco as a case study to demonstrate the real world application of these concepts.

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Table of Contents
INTRODUCTION ...............................................................................................................................3
MAIN BODY .....................................................................................................................................3
SECTION 1 .........................................................................................................................................3
Analyse and examine characteristics and example of micro, small and medium and large
business ...........................................................................................................................................3
Section 2 ..............................................................................................................................................5
Explain sole traders to cooperatives & limited liability partnerships .............................................5
Section 3...............................................................................................................................................6
Explain different business structures & how external factors affect businesses..............................6
CONCLUSION .................................................................................................................................10
REFERENCES...................................................................................................................................11
Books & Journal: ..........................................................................................................................11

INTRODUCTION
In business, there are different types of companies on the basis of which organisational
activities are being carried out. Main aim of this report is to access the different types of companies
within market (Abor, 2019). It is crucial for firm to be well aware about market and businesses so
that it is easy to make decisions in appropriate manner. Tesco, a large supermarket chain
headquartered in United Kingdom. It is located at global scale and has many competitors such as
Sainsbury, ASDA, Morrisons etc. Tesco deals in grocery, daily consumable products etc. This
report comprises of different types of businesses, companies and business structure.
MAIN BODY
SECTION 1
Analyse and examine characteristics and example of micro, small and medium and large business
The corporate sector is wider and broader and it comprises it comprises of various types of
companies on the basis of which functions and operations are being executed. So, in market it is
necessary to be well aware about these several types of business and are mentioned below-
Micro entity
Micro entities are those types of entities which have 10 or fewer employees and aims at
survival in market. Risk associate with this type of entity is low. Also, they focus on gathering of
resources within business.
Characteristics
 Micro enterprise has small market size and few employees.
 These micro firm has small amount of investment within business.
 The business processes and other procedures are limited.
Small entity
These are defined as type of organisation which have turnover of approx £6.5 million.
These small entities have less than 250 employees and decision making is easy. Main aim of such
firm is to enhance the profit scale. In U.K, such small firms have major contribution within
economy (Chandwaskar, 2019).
Traits
 Small entities have turnover of approx €50 million and with balance sheet of €43 million.
 In such type of small firms, the size of subordinate is 50.
 Risk associated with this firm is limited.
Medium enterprise

These are those firms which focuses on accessing to business opportunities and bring
change in market environment. Medium organisation have enough funds to execute their business
activities in proper considerations. In these, balance sheet is approx €43 million.
Characteristics
 The medium firms have stocks and shares in market with investors.
 These type of entities are well aware about market situations and access to resources in easy
way.
 Medium organisations are able to fulfil demands, needs of every individual.
Large firm
Large organisations are types of firms that have a investment amount of approx 1.5 billion
Euros, and it have balance sheet of more than 2 billion. The large firms have a employees with
more than 500. Such type of entities have risk with higher volume. Also, they aims at increasing of
higher profit scale (de Loë, 2018).
Characteristics
 Large firms have employees more than 500 and they are able to execute business operations
easily.
 These large companies are able to access wider range of customers because they operates at
global scale.
 The intensity of risk is higher in large organisations.
Therefore, from above discussed matter it specifies that it is critically important to have
knowledge of these forms of companies so that it is easy to access resources and impediment
strategies in appropriate way (Hahn, 2018).
Section 2
Explain sole traders to cooperatives & limited liability partnerships
In business, there are different types of entrepreneurs and business which helps in increasing
of business opportunities. Basically there are various forms of businesses that as described as
follows-
Sole traders-
Sole traders are those who start the business on their own at smaller scale. The sole traders
are able to manage everything without consulting to anyone. For example- saloon, cafe's are to be
known as sole traders. The investment amount of these sole traders are limited and small.
Advantages

 Advantage of sole trader is that they are able to take decisions independently.
 They do not share their profit and revenue with any one.
Disadvantage
 These type of entrepreneurs has to face problems and situation by them selves.
Partnership
It is type of agreement in which business of two or more than two join with each other in
order to expand business activities. It is to be known as appropriate type of form of doing business.
Benefits
 Main benefit of partnership is that it helps in accessing to resources and profit in easy way.
 Another advantage is that it is beneficial for development of employees skills and
knowledge (Islam, 2017).
Drawbacks
 Drawback is that decision has to be undertaken with consideration of both the parties.
Limited partnership-
It is another type of business agreement in which in which one firm is able to liable up to
amount of their investment. The limited partnership is risky as well as profitable up to limit
(Jonathan, 2020).
Benefits
 Advantage of this form of partnership is that it helps in accessing to business goals easily.
Limitations
 Limitation of this form of partnership is that the intensity of debt and amount is limited to
amount of money which contributes to partnership.
Public limited liability and cooperative
It is defined as type of PLL in which shares are traded within market and public and has
limited liability. The cooperative main aims is to access higher rate of return. The stock of shares
are limited within range.
Advantages
 Main advantage is that they are able to raise funds for business in easy way.
Drawbacks

 Limitation of this is that shareholders are in larger number and they have only focuses on
gaining of higher profits.
So, above explained matter states that these different kinds of businesses are required to be
adopted so that it is easy for entrepreneur to execute operations in proper manner. This is also stated
that through accessing to these businesses it is easy to achieve goals within time period.
Section 3
Explain different business structures & how external factors affect businesses
In corporate sector, business structure is needed to examined as because it helps in
execution of business activities in proper manner. A business structure refers to way business make
decisions and execute business operations. So, various types of structures are briefly explained
below-
Functional organisational structure
According to this structure it depicts about the work is segmented into several kinds of
department such as human resource, Sales, finance etc. (Seo, 2019). This form of structure is
beneficial as because it assist in development of work and achieving of work benefits easily. In
relation of Tesco, HR of a firm is responsible for dividing of individual into different departments.
Effect on productivity
Functional structure have impact on productivity as because when work is divided into
different departments, it is easy to enhance efficiency level of employees and business at higher
scale.
Market based divisional structure
In this, it is type of structure in which it specifies about segmentation of business on basis
of customers, competitors, markets etc. Drawback of this structure is that it needs a proper market
environment analysis and research which is time consuming process. In relevance of chosen Tesco,
they are located at global and they uses this form of structure to access customer easily (Turner,
2018).
Impact on productivity
This structure too impacts on productivity as because when market is divided and it
become difficult to understand the employees skills and how to organise everything. It is too
examined that it is crucial to access the market in appropriate way so that market segmentation is
done in proper manner.

External factors impacting upon business
External factors are those which comprises of external elements that impact on overall
organisation at wider scale. These elements are important which are needed to be analysed so that it
is easy to execute business activities. In context of chosen firm, PESTEL analysis is being used by
them to access to these external factors (Zambrano, 2020).
PESTEL Analysis
It is type of framework which is used by entity to analyse and identify the external factors
that impact on organisational performance. In relation of selected firm Tesco, they operates at global
scale and are affected by external factors at wider scale. It is time consuming process as because it
require wide range of information and research. It comprises of several elements which are
explained below-
Political factor
It is first element in which it comprises of factors such as trade policies, political stability,
tax policy etc. In relation of selected entity, it is seen that they are affected by political factor for
example- due to financial instability in world government is forcing firms to create more jobs. In
context of Tesco, as it is large firm they it is not possible for them to create job at all level.
Economic factor
It is another factor in which it focuses on inflation and deflation rate, economic policies,
demand and profit etc. The chosen firm is developing at rapid scale and it is important for them to
focus on these economic factors such as change in taxation policy can affect the overall structure of
business.
Social factor
It is another element in which it consists of factors like income, age and many more. In
reference of selected firm, social factor has deep impact on business operations because market
activities are being carried out within community and society. In context of selected firm, they
segment their market by considering these social factors (Vodă, 2019). For example- Tesco has
increased the sale of non vegan items. Also, it is analysed that they are focusing on providing of
healthy products at larger scale due to impact of COVID 19 people have become more aware about
the health saefty and being fit.
Technological
In this element, it focuses use of software, advanced technology such as artificial
intelligence etc. In this contemporary business environment, it is crucial to focus on use of ICT

skills and factors so that competitive benefits are achieved. In relation of selected firm, they have
been using smart applications and use of social media such as Facebook, Snapchat You Tube for
promotion and advertising (Chandwaskar, 2019).
Environmental factor
This factor focus on waste management, environmental protection, etc. In market,
environment is needed to protected so that resources are used in appropriate way. In relation of
selected firm, they execute every business activity with proper consideration of environmental
policies and procedures.
Legal factor
This factors comprises of rules, regulations, etc. It is also seen that this element is essential
which is to be carried out in proper manner so that problems or issues does not occur. In context of
Tesco, they are to affected by legal factors as because sugar tax of country (U.K) is forcing firm to
produce low sugar products (Abor, 2019).
So, above discussed matter states that it is crucial for organisation to be well aware about
external element so that decisions are being undertaken in proper manner. Furthermore, it is too
stated that it is necessary to be well aware about market situation so that benefits are gained in eay
way.
CONCLUSION
After a brief analysis of above report, it has been concluded that it is crucial to be well aware
of market and other type so businesses so that effective decisions are being undertaken in proper
manner. So, discussions have been made about different types of business, forms, business and
structures. It has been analysed that it is critically important for every entity to have knowledge

about the corporate sector so that strategies are implemented in effective manner. Further, it is
examined that proper analysis is needed to be done so that benefits are achieved appropriately.

REFERENCES
Books & Journal:
Abor, 2019. Organisation and Structure of the Banking Industry. In Money and Banking in Africa
(pp. 65-71). Springer, Cham.
Chandwaskar, 2019. TLP for Organisation Theory, Structure and Design 2018-2019.
de Loë, 2018. Boundary judgments in water governance: Diagnosing internal and external factors
that matter in a complex world. Water Resources Management, 32(2), pp.565-581.
Hahn, 2018. Business model design in sustainable entrepreneurship: Illuminating the commercial
logic of hybrid businesses. Journal of cleaner production, 176, pp.439-451.
Islam, 2017. SWOT Mix and PESTEL Analysis: Effective Tools of Risk Management of Leasing
Companies. The Millennium University Journal, 2(1), pp.1-18.
Jonathan, 2020, April. Organisational Structure’s Influence on IT Alignment in a Public
Organisation: A Confirmatory Case Study Analysis. In 25th UK Academy for Information
Systems International Conference, Oxford, UK, 31st March–1st April, 2020. Association
for Information Systems.
Seo, 2019. Effects of internal and external factors on business performance of start-ups in South
Korea: The engine of new market dynamics. International Journal of Engineering
Business Management, 11, p.1847979018824231.
Turner, 2018. Entrepreneurship unleashed: Understanding entrepreneurial education outside of the
business school. Journal of Small Business Management, 56(1), pp.131-149.
Vodă, 2019. Impact of personality traits and entrepreneurship education on entrepreneurial
intentions of business and engineering students. Sustainability, 11(4), p.1192.
Zambrano, 2020. A Trialist Perspective of the Labor Inclusion of Indigenous People in Ecuador
through PESTEL and Neutrosophic Cognitive Maps (Vol. 37). Infinite Study.