Business in Practice: Analyzing Company Types and External Factors

This report provides a comprehensive analysis of business practices, focusing on different types of companies, ranging from micro-businesses to large corporations, and their operational characteristics. It examines various organizational structures, including divisional and flat structures, and their suitability for different business sizes, using Sainsbury's as a case study. The report also explores different business structures based on legal entity, such as sole proprietorships, limited partnerships, public limited liability companies, and cooperative businesses, highlighting their features and providing examples. Furthermore, it conducts a PESTLE analysis to evaluate the impact of external political, economic, social, technological, legal, and environmental factors on businesses like Sainsbury's, emphasizing the importance of understanding these factors for strategic decision-making. Desklib provides access to this and other solved assignments for students.

BUSINESS IN
PRACTICE

Table of Contents
Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
SECTION 1......................................................................................................................................1
Understanding of different types of companies and how they work..........................................1
SECTION 2......................................................................................................................................3
Explain different companies from sole traders to cooperatives and limited liability
partnerships.................................................................................................................................3
Sole proprietorship......................................................................................................................3
Partnership limited......................................................................................................................3
Public limited liability.................................................................................................................4
Corporative business...................................................................................................................4
SECTION 3.................................................................................................................................4
Different business structure and how external factors affects businesses ..................................4
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................7

INTRODUCTION
Business in practice is the aspect which is being considered by the individual so that they
can engage in the some commercial business with the sole motive of generating higher profits. It
is concern with the different tactics and plan so that they can effectively run their business
venture in well-defined manner(Schrauder and et. al.,2018). The main scope of this report is to
explain the different type of companies that are available in the business environment and also
analyse the different business on the basis of their legal entity by which they effectively choose
the appropriate organisation structure by which they can ensure the effective working within the
organisation. Lastly it will evaluate the external factors which is impacting the overall
functionality of the business.
MAIN BODY
SECTION 1
Understanding of different types of companies and how they work
Micro business
Definition- The type of business which is working with the limited resources and having
employees between 0-9 employees with the limited capital and funds. The main motive of such
venture is to have the easy survival of their family and friends and can operate their business in
the local market.
Characteristics- The main attribute of such type of micro venture is giving job to jut 9
employees so that they ensure the easy operations by which they can have the easy survival for
the family and friends. In micro business, they generally generate the revenue of around
£632000. They also emphasis on understanding the needs of their consumer so that they can
ensure the easy operations.
Example- Miel Bakery is the best example for the micro business, It is famous bakery
shop in UK which is offering wide range of cake, pastries and breads.
Small business
Definition- these are the type of venture which is larger than micro business as they are
generally work with the 0-49 employees and also give other job related benefits and they
contribute in the sustainability and success of the business.
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Characteristics- Main feature of this venture is that they operate their business to the
limited areas as thy are having limited funds, resources and capital for earning higher
profitability. They also do not pay any tax due to low profit margin in the marketplace.
Example- The suitable example for the small business is Broadword Event House, It is
the event management company which is offering the best services to the local public in return
the higher level of profitability backed with the limited resources.
Medium enterprise
Definition- Organisation which is engaging in some commercialisation activities with the
sole profit of offering various job opportunities and generate huge profits so that they can
establish good brand image in the market. They are having between 50-250 employees working
and having sufficient funds and capital in order to run their operations in an appropriate manner.
They also emphasis on expanding their business so that they can ensure the brand recognition in
the large market.
Characteristics- The type of organisation which is giving employment opportunities to
the more than 50 employees and ensure effectiveness within the organisation. Such business is
integrated with the huge risk in order to expand their so that having higher revenue and
profitability.
Example- Oscar is the best example for medium size organisation which is based in
Manchester, London. They are providing outstanding digital and technology recruitment
services.
Large business
Definition- The type of organisation which is operating their business to national an
international market as they are having unlimited resources and funds. They also emphasis on
identifying the needs and wants of their potential customers so that they can ensure the higher
profitability and growth. Such type of venture is working on the larger scale and integrated with
the huge risk in order to sustain n the target market.
Characteristics- The main feature of such organisation is to expand their market having
having good brand image in the market due to higher quality products and services. They usually
work with the employees more than 250 as they are giving job opportunities to the society. They
usually generate the revenue of around 1.5 million euros.
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Example- Sainsbury's is the leading company which is operating their business in the
large market as It is established in 1869 by John James Sainsbury in London, England. It is the
second largest chain of supermarkets In the UK which is dealing in general merchandise and
household items.
SECTION 2
Explain different companies from sole traders to cooperatives and limited liability
partnerships
Sole proprietorship
Definition- It is defined as the business which is operated by the single individual which
is responsible for all the risk and profits within the operations. In this, a individual is also
concern for paying all the taxes and liable to pay all the liability of the business in order to run
their business.
Characteristics- The main feature of this venture is there is no separate business entity
as the owner is the manager of the company who oversees all the operations in an organisation.
There is the obligation for the person to show their capital and funds in order to have transparent
business(Centobelli and et. al., 2020).
Example- Hair stylish, carpenters and plumbers.
Partnership limited
Definition- It is the separate legal entity in which two or more individual are comes
under the agreement in order to run the particular business venture in order to share their profits
and looses on agreed rations.
Characteristics- There is no separate legal entity of business and the partners are liable
to show their capital and funds. This business structure is based with in the set time period in
order to achieve higher profitability.
Example- The appropriate example for such business is Deciduous partners Ltd.
Which is located in United Kingdom and it is the consultancy firm which is offering
practical management services.
Public limited liability
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Definition- It is the type of business which is based on the laws according to the
Company law of UK. They can sale their shares to the general public which shows as the legal
entity.
Characteristics- It is the public limited liability which is having separate legal entity
from their shareholders and directors who all are the part of the business.
Example- Burberry and Tesco is the best example for public limited liability as
they are concern about satisfying the needs and wants of their potential customers.
Corporative business
Definition- This type of business structure is includes in the companies that are privately
managed by the group of people without any interference of the government. They generally
work with the motive of meeting the customers needs.
Characteristics- The main attribute of such organisations is they operate their business
by their own as per their rules and actions plan without any inference of government bodies so
that they can sustain in the market.
Example- Sainsbury is the leading chain of supermarket which is established in
1869 and dealing in general groceries.
SECTION 3
Different business structure and how external factors affects businesses
Organisational structure
It refers to the set plan and pathway in which the organisation execute their overall
functionality an it also helps in knowing how the business will direct their business so that they
can retain effectiveness within the organisation. It also includes the integrated set of rules,
polices and assignments which is being established within the organisation so that the right
information can reach to the right person. There are different type of organisational structure
such as hierarchical, flat and divisional organisational structure. These structure are explained as
follows:
 Divisional structure- It is the type of organisational structure in which organisation
divide the huge operations in to small divisions so that it can effectively accomplished. In
this, each department is having the necessary resources and functions on the basis of their
product their market reach(Foss and Saebi, 2018). In relation to Sainsbury, they can use
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this structure as It is the large organisation which is having he operations so they can
divide their work in to small divisions so that it can rightly completed. It also helps in
having the effective communication with in the organisation so that they can ensure the
higher profitability and growth in the marketplace.
 Flat structure- It is the type of organisational structure is mainly adopted by the
small ventures or the new start-ups. In these firms, there are less level of
management which is having opening communication among their employees and
seniors. They welcome the suggestions and feedbacks from the employees so that
they can have innovation and advancement in their operations.
External analysis
It is vital for any business to have full control overall the factors which is impacting the
functionality by any means. In this context, PESTLE analysis is being conducted by which firm
can easily understand the macro factors which is impacting the performance and productivity of
the company. In relation to Sainsbury's, analysis of external factors are plained ad follows:
 Political factor- The type of factors which is having great influence an control of
government such as stability of government and tax rates. In UK, there is the table
government due to which Sainsbury can easily operate their business in an appropriate
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manner(Möller and Halinen, 2018). Due to major impact of Brexit, There is increase in
the tax rate which reduce the overall profitability of the company.
 Economical factor- These are the factors which is concern with the purchasing power
of the individual, economic development, inflation, recession etc. In UK, People are
having good disposable income by which they are having the willingness to pay in return
of their purchasing by which Sainsbury's can easily sustain in the market.
 Social factor- These are the factors which includes the culture, values and ethics of the
individual. In context to Sainsbury's, they are offering the affordable prices of their
products so that they can contribute in social welfare of the society and also can generate
higher profits.
 Technological factor- It is concern with the advancement and change in the
technology. In context to Sainsbury's, They are offering self-checkout stores and easy
payments so that they can ensure smooth functioning of the operations. This helps them
in enhance their customer base and profitability.
 Legal factor- These are the aspects which includes the certain legislation which is
being imposed by the government. In context to Sainsbury's, they are following all the
rules and laws so that they can establish the good brand image in the market.
 Environmental factor- These are the factors which is related to the ecological factors
of the business environment. In context to Sainsbury's, they are emphasising on
implementing reduce, reuse and recycle in their operations so that they can make the best
use of their resource.
CONCLUSION
It is concluded form the above report that business is the aspect in which individual
engage in some commercial activities so that they can ensure higher profitability and growth.
This report also analyses the different type of companies on the basis of their size, revenue and
number of employees. Moreover, It also analyse the various types of firm on the basis of their
legal entity such as sole proprietorship, legal corporative, partnership etc. With their attributes,
and examples so that they can expand their business in the large marketplace. Lastly, It also
conduct the PESTLE analysis so that company can easily analyse the certain factor which
contributing the profits and looses for the company.
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REFERENCES
Books and Journals
Aguilera, R.V. and Grøgaard, B., 2019. The dubious role of institutions in international
business: A road forward. Journal of International Business Studies, 50(1), pp.20-35.
Alsaad, A. and Taamneh, A., 2019. The effect of international pressures on the cross-national
diffusion of business-to-business e-commerce. Technology in Society, 59, p.101158.
Centobelli, P. and et. al., 2020. Designing business models in circular economy: A systematic
literature review and research agenda. Business Strategy and the Environment, 29(4),
pp.1734-1749.
Foss, N.J. and Saebi, T., 2018. Business models and business model innovation: Between wicked
and paradigmatic problems. Long range planning, 51(1), pp.9-21.
Kiani Mavi, R. and Standing, C., 2018. Cause and effect analysis of business intelligence (BI)
benefits with fuzzy DEMATEL. Knowledge Management Research & Practice, 16(2),
pp.245-257.
Möller, K. and Halinen, A., 2018. IMP thinking and IMM: Co-creating value for business
marketing. Industrial Marketing Management, 69, pp.18-31.
Pandey, A., Chandwani, R. and Navare, A., 2018. How can mindfulness enhance moral
reasoning? An examination using business school students. Business Ethics: A
European Review, 27(1), pp.56-71.
Schneider, S. and Clauß, T., 2020. Business models for sustainability: Choices and
consequences. Organization & Environment, 33(3), pp.384-407.
Schrauder, S. and et. al.,2018. Takin'Care of Business Models: The Impact of Business Model
Evaluation on Front‐End Success. Journal of Product Innovation Management, 35(3),
pp.410-426.
Teplov, R., Albats, E. and Podmetina, D., 2019. What does open innovation mean? Business
versus academic perceptions. International Journal of Innovation Management, 23(01),
p.1950002.
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