Analysis of Business Environment, Organizations, and Functions

This report provides an analysis of the business environment, focusing on Asda as a case study. It begins by defining the business environment and then explores various types of organizations, including private, public, and voluntary organizations, highlighting their objectives, legal structures, size, ...Read More

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P.1 Various types of organizations and growth of international business .................................1
P.2 Size and scope of various organizations ..............................................................................2
TASK 2 ...........................................................................................................................................5
P.3 Interrelation of different functions and their applications to achieve objectives .................5
TASK 3 ...........................................................................................................................................6
P.4 Positive and negative impact of macro environment on business operations ......................6
TASK 4 ...........................................................................................................................................8
P.5 Internal and external analysis in order to identify strength and weakness ..........................8
P.6 Strengths and weakness are related with external macro factors .......................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment is the mix of internal and external factors that affects company's
operations (Andersson Forsgren and Holm, 2015). It means an collection of entities, individuals
and other factors which may or may not under control of organisation, but can influence its
profitability, growth and performance. Feature of environment are complex, dynamic and
uncertain in nature as no one can predict future. This is the total of external factors of business
which greatly influence functioning of company. Asda is most leading supermarket retailer in
UK. This company dealing in grocery products, general merchandise and financial services.
Report includes different type of organisation and their purpose, legal structure, size and scope.
It also show the relationship between different organisational functions which links with
objectives of enterprise. In addition to this report also contain SWOT and PESTEL analysis
which helps in identifying various threats and opportunities present in environment.
TASK 1
P.1 Various types of organizations and growth of international business
Business environment consists of various internal as well as external factors which can
affect the company. Company has to create various strategies and policies so that it can easily
survive in the market (Botha, Kourie and Snyman, 2014). Various types of organization are
established and their objectives differ from each other. Thus different types of firms and their
purpose is described below (Business environment, 2012):
Types Overview Purpose
One of the organization is the
private company. Their main
aim is to earn more revenues.
They have less direction and
power as compared to public
firms. There is no government
interference.
Asda is a private company
which was established in 1949.
It has approximately 160000
employees. It has earned
revenues around 791.7 million.
It generally provide grocery
and financial services to all
people.
Its main mission is to increase
the level of users satisfaction.
Thus it has to create strategies
and policies that it can fulfil
the needs and wants of all
users. Thus it delivers superior
quality of products so that it
can enhance satisfaction level
of all customers.
Second is the public company. National trust is the Their main purpose is look and
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They create plans and policies
so that they can enhance the
standard of living of all people
and thus they can directly
support to society. They have
objective to develop the
society by fulfilling their needs
and wants. Local or general
Govt. directly controls the
activities and task which is
performed in the company.
organization which is a public
firm. It was established in
1890. They tries to preserve all
items and thus they can take
various steps so that they can
conserve natural beauty. Thus
they can easily accomplish the
objectives.
consider the special places. It
includes the beautiful places
such as England, Wales and
Northern Island etc. Thus they
can directly preserve these
places and can protect their
beauty.
Third is the voluntary
organization. Their main
objective is not to earn more
profits bur their objective is to
develop the society. They can
take step so that they can
easily fulfil all needs and
wants of all people. It leads to
growth and development of
society.
This is the organization which
is called child support agency
which directly supports the
children. They can create plans
and policies so that they can
protect the children.
Their main purpose is to
protect the child and support
every children if they are
separated from their parents.
Many committees are created
so that they can create strict
rules and regulations and thus
they can take steps to protect
the child. It leads to growth
and development of every
child.
P.2 Size and scope of various organizations
Every organization has a different purpose and the scope (Cavusgil and et. al., 2014).
Thus they work in a unique manner. Mission and their structure of all organizations are very
different from each other. Thus the size and scope of various firms are described below:
Asda company
Background Product and
services
Mission and
vision
Size and
objectives
Legal structure
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It is a private
company. It
delivers basically
the grocery items.
It create goods
according to
needs and wants
of all people.
It wells the
grocery products
and the
merchandise
items such as
milk and bread. It
tries to deliver
superior quality
of products so
that all users gets
satisfied and
hence as a result
they can easily
enhance the
satisfaction level
of all people.
Its main mission
is to reduce the
packaging from
the products.
Thus as a result
they can easily
accomplish their
goals. They also
have purpose is to
enhance the
satisfaction level
of all people by
delivering the
good quality of
products.
It has a objective
to give right
products at lower
costs. Thus it can
easily capture
more users and
hence as a result
they can easily
accomplish the
objectives and
gaols.
It has a proper
structure and thus
it tries to create
effective and
efficient policies
so that they can
easily generate
more revenues. It
has a positive
culture which can
directly motivate
all staff members
so that they can
give superior
results and they
can easily
accomplish the
objectives. Thus
as a result they
can easily
maintain good
mage in minds of
all users and in
market.
National trust
Background Product and
services
Mission and
vision
Size and
objectives
Legal structure
National trust is
established in
They create
effective
Their main
purpose is to
Their main
objective is to
It has different
trust and the
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1890. Thus they
can create
effective policies
and plans to
conserve special
places and hence
they protect these
places.
strategies and
methods so that
all beautiful
places such as N
orthern Island,
Wales and
protect places and
it also has a
purpose that all
persons get equal
opportunity and
they can
participate in all
activities and
tasks. Thus as a
result they can
easily maintain
strong image in
the market.
give equal
opportunity to
people who have
a disability and
thus they can
easily create
distinct position
in the industry.
They can also
support to many
organizations so
that they can
create rules and
regulations which
can directly leads
to protection of
the society.
groups through
which company
can easily identify
the people with
the disability and
thus they try that
they can get equal
opportunity and
thus they create
various laws and
rules.
Child support agency
Background Product and
services
Mission and
vision
Size and
objectives
Legal structure
Child support
agency is the
company which
can protect the
children which
are separated
from their
parents. Thus
they can create
They create
various laws and
regulations so that
hey can easily
protect the child.
Their main
mission is to
provide the
facilities to
children which
leads to growth
and development.
Their main
objective is to
protect each child
and to create
effective policies
so that they child
can get all
facilities at every
level.
It has a
appropriate
structure in which
there are many
committees and
trusts which can
take care of the
child.
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plans and policies
so that they can
protect the
children and thus
it leads to growth
and development
of all child.
TASK 2
P.3 Interrelation of different functions and their applications to achieve objectives
Business consists of various points and all department function in a different and unique
manner (Gilboy, 2016). Thus as a result they have to create strategies and policies so that they
can easily perform all activities and task in a proper and suitable manner. Thus various
departments in Asda are explained below:
Research and development: Company tries to create effective strategies and policies so
that they can perform well. Manager of Asda tries to evaluate the needs and wants of all users so
that thy can easily satisfy all needs and wants of users. They evaluate requirements of people and
then tell to the research and development department. For example they can tell the information
regarding customers and new techniques through which it can deliver superior quality of
products to all users. Thus as a result research and development department can easily satisfy all
people in a unique manner by using the advanced tools and methods.
Finance: Asda can easily give advices to finance department so that they can easily
operate their activities. Thus marketing department helps a lot to the department. They can give
various data to the section (Taipale-Erävala, Heilmann and Lampela, 2014). For example
marketing department can easily provide data and information related to inflow of funds and tells
about the activities so that they can generate more revenues. Thus finance section can easily
invest in those task through which they can generate more profits and thus they can easily
enhance the market share. This also helps the finance department to create various reports and
thus they can easily operate the activities.
Human resource department: Marketing can various data and information to the human
resource section. They have to recruit talented and competent applicants who can perform well
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and they can give superior results. Through this it is easy for the section to select all applicants.
For example marketing gives the data and information to the human resource department so that
they can easily recruit and select talented applicants (Hillary, 2017). They also give information
regarding the training needs and the compensation of all staff members. Thus as a result they can
easily recruit and select many employees and hence they can get adequate compensation
according to their performance (Huang-Horowitz, 2015).
Production: Marketing helps the production department so that they can easily operate
their activities and tasks. Through this they can create products according to preferences of all
people. It can satisfy all needs of all people. For example Marketing provide information
regarding the tastes and choice of all people. Thus as a result they can create goods according to
needs and requirements of all users. Hence they can deliver the products in minimum time. This
result sin enhancing the satisfaction level of all users and thus they can easily gain more revenues
and hence as a result they can directly enhance their market share.
TASK 3
P.4 Positive and negative impact of macro environment on business operations
Firm creates plans and policies so that they can easily deal with changes of macro
environment. It is crucial so that it can earn more revenues and they can easily enhance the
market share. Thus as a result it can easily expand their activities in drastic manner (Moutinho
and Vargas-Sanchez, 2018). Positive and negative impact of macro factors that can affect
business operations of Asda are:
Political: This aspect covers the policies, rules and regulations made by the government of
company to maintain economic growth. Stability in government of country in which ASDA
wants to diversify its operations affect positively to enterprise. On the other hand, government
instability and complex trade policies negatively affect company’s operations and decisions.
Economic: High growth rate of country in which company operates affect business
activities of firm in positive manner. On the other hand, rise in inflation rate and other changes in
economic elements all affect negatively.
Social: When company manufacture products as per the specific requirements of its
target market then it affect it in positive manner. Differences in culture, requirements and habits
of company’s target market affect negatively.
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Technological: When company adopt and manufacture products as per the new
technology exist in market then it affects company operations in positive manner. Opposite of
this, failure of company to adopt new technology impact its activities in negative manner.
Environmental: In market of increase number of environment concern customers it is
very important for ASDA to carry out production process by ensure minimum wastage of
resources. This impact in positive manner and also help in sustain in market for long run.
Legal factors: There are various laws which are created by Government and thus they
can create the plans and policies in a unique manner. Comply of all rules and regulation for
develop policies affect business activities in positive manner.
TASK 4
P.5 Internal and external analysis in order to identify strength and weakness
Company has to perform internal and external analysis so that they can easily identify
strength and weakness (Niemann-Struweg, 2014). Thus they can create various plans and
policies so that they can maintain unique position in market. This is crucial so that company can
remove the weakness. SWOT analysis of Asda are:
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Strength
 Asda can offer different variety of
products such as financial services.
Thus it can attract many users in
limited time.
 It creates strong and effective
campaigns so that it can promote
products in a unique manner.
 It has various employees who can work
in various stores and thus they can
perform their services in a unique and
distinct manner. It has a huge reputation in the market
and thus it can sell many products at
lower prices. It helps the form in
expanding their operations on large
scale.
Weakness
 Asda has limited presence as compared
the rivals. Thus it has to create effective
and efficient policies.
 They have a fear that they face
competition from local vendors and
thus they cannot maintain good and
unique position in market.
 They have to create effective policies
so that they can easily promote various
products.
 It cannot focus on a particular segment
and thus it cannot maintain unique
position in market. Its other rivals only
focuses on a particular segment and
thus it cannot create unique position in
market and thus it cannot earn more
revenues as compared to other rival in
market.
Opportunities
 Asda has opportunity so that they can
increase the market share. They can
easily expand their operations in
various nations such as opticians,
jewellery and in other sectors.
 They have a unique opportunity so that
they can enter in markets in China and
India etc.
 They have a great opportunity to merge
and can perform strategic alliance with
northern companies so that it can sell
Threats
 Company faces huge competition from
other retail chains. They have to create
effective pricing strategy so that they
can attract many users and thus they
can easily enhance the market share.
 They have a tension and pressure as
they have to chge lower prices from all
users as then only all customers can
purchase the product. Through this they
can maintain good and unique position
in market. Thus as a Asda has to cretaer
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food and non food products. Through
this they can easily generate more
revenues. It has a opportunity to sell non food
items to many other nations so that firm
can increase their sales and profits.
string marketing policies so that they
can generate profits even by reducing
price of all products.
 There is reduction of profits of
company as company is facing the
threat from inflation. Govt can charge
higher taxes from the company. This
can directly reduce the profits of the
company.
P.6 Strengths and weakness are related with external macro factors
Strengths and weakness of firm are related to macro factors in a unique manner. Through
strength company can easily adopt various external macro factors and then it can earn more
revenues (Novakovic and Huemer, 2014). Through weakness it cannot easily adopt external
factors. So strength and weakness are related with external macro factors in Asda are:
Basis Strength Weakness
Political There is a stable political
environment and ASDA can
formulate strategies to get
advantage of this by expand
its business operation in other
areas.
Sometimes Government ban
some products and thus company
has to shut the business. In this
scenario sale of some ASDA
products can be decline which
affect its profitability.
Economic environment This aspect covers the
inflation, deflation rate exists
in market which have an
impact on purchasing power
of customers which directly
affect the sale of company’s
product. Stability in
Instability in economic factors
largely affect the profits level of
ASDA and also affect its market
share.
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economic conditions and
diversification of business in
countries having developed
economy improve company’s
position in market and also
increase its market share.
Social It is very important for ASDA
to manufacture products and
services as per the needs of
people living in the area in
which it operates. This help
in make the customer loyal
towards a brand and help in
sustain in market for long
run.
When frequent changes take
place in needs and requirement
of customers then it become
difficult for firm to respond as
per their changing needs and
company loose its market share.
Technological Asda adopts various
techniques and tools such as
creating unique mobile
applications and thus it can
create a unique position in the
market.
When big changes arise in
technology then it become
difficult for company to switch
to new technology due to costly
technical equipment. Further,
company fails to attract more
number of customers towards its
product.
Environmental It is essential for ASDA to
formulate policies and
production process in a way
that wastage of resource can
be minimised as this help in
attract more number of
customers due to increasing
It is not easy for company to
manufacture unique products for
its customers without any harm
to environment and due to this
company lost its market share.
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number of individuals who
concern more about
environment.
Legal Changes in rules, regulation
of government in the favour
of company help in
diversification of business
operations in other areas. It
consists of plans and policies
so that it can easily maintain
good image in market.
Restrictions in trade policies and
other important laws make it
difficult for firm to operate in
different location and which
affect the international presence
of firm.
CONCLUSION
From above report it has been concluded that monitoring business environment is very
essential for each company. Thus it has to continuously monitor them. There are various firms
including private, public and voluntary and each has different objective. Various functions are
related with each other and use of contemporary examples so that factors of macro environment
can affect operations. Internal strength and weakness and their relation with external macro
factors.
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REFERENCES
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Online
Business environment. 2012. [Online]. Available through:
<http://www.investorwords.com/19252/business_environment.html>.
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