Analysis of Company Types, Structures, and External Market Influences

This report provides a comprehensive overview of different company types, ranging from micro entities to large enterprises, examining their characteristics and operational aspects. It delves into various business structures, including sole traders, partnerships, limited liability partnerships, and public limited liability companies, highlighting their advantages and disadvantages. Furthermore, the report analyzes how external factors, such as political, economic, social, technological, environmental, and legal (PESTEL) factors, influence business operations, using Tesco as a case study. The analysis covers divisional and horizontal business structures, concluding with the importance of understanding market environments for effective decision-making and resource utilization. The report emphasizes the significance of adapting to changing market dynamics and environmental factors for sustainable business practices.

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Table of Contents
INTRODUCTION ...............................................................................................................................3
MAIN BODY ......................................................................................................................................3
Section 1...............................................................................................................................................3
Discuss different types of companies in market ............................................................................3
Section 2 ..............................................................................................................................................5
Critically explain from sole traders to cooperatives & limited liability partnerships .....................5
Section 3...............................................................................................................................................6
Access different business structures & how external factors affect businesses...............................6
CONCLUSION....................................................................................................................................9
REFERENCES...................................................................................................................................10
Books & Journal:...........................................................................................................................10

INTRODUCTION
Business and management are interlinked with each other. With changing period of time, it
is essential to examined that in market small, medium and large enterprises exist. Main aim of this
report is to critically understand the importance of marketing activities on small & medium
enterprises (Alfoqahaa, 2018). It is crucial to have appropriate information about market so that it
is easy to use resources in business within effective way. Tesco, a large supermarket chain
headquartered in U.K. It is located at global scale and has wide range of competitors such as Asda,
Walmart, etc. This report comprises of several kinds of companies, different companies from sole
traders to LLP and business structure with external factors affecting operations.
MAIN BODY
Section 1
Discuss different types of companies in market
Micro entity
A micro entity is one which there are nearly 10 or fewer employees. These micro firms deals
in market at small level & aims at survival rather than profit. For example- small shops in the street
of commercial or local communities. Micro entity survival period is small & limited relying on
level of situation (Ben Youssef, 2018).
Characteristics
 The small enterprises has less gestation period, period after which ROI on investment starts.
 The owner of small firm is play role of manager, employee consistently.
 Their main objective is to increase percentage of profit up to minimal extent.
Small enterprises
A small entity refers to organisation which has turnover of £10.2 million and 50 or less
employees. For example- restaurant, cafe, saloon etc. are to be viewed as small entity. For example-
small enterprises in U.K are Fordway solution, Airdri, etc. Small firms aims at earning profit at
moderate level & increasing access to resources in specific manner.
Characteristics
 Small entity mostly have lower revenue and profitability because of limited resources as
well as financial viability.
 Main aim of small entity is to access more customers in specific way.
 They have small amount of investment within business.
Medium enterprises

It is another type of entity in which it has turnover of less than €50 million & with employee
size of 250 or less than 250 employees. Also, balance sheet is of less than €43 million. Main aim of
medium size based business is to enhance the profit ratio & increase ROI in order to achieve
strategical objectives.
Characteristics-
 Main aim of medium entity is to access resources at larger so that objectives are achieved in
proper manner (Çitilci,, 2020).
 Another important characteristics of this medium entity is that they remain calm when high
work load is present at workplace.
Large enterprises
Large enterprises are those who have 250 or more than 250 employees and investment is
greater than 1.5 billion euros & balance sheet is of more than 2 billion euros. In U.K, there are
various types of large enterprises such as Walmart, Tesco, Asda are considered as large firm. Main
aim of such organisation is to increase profit & competency level within current market so that
benefits are easily achieved.
Characteristics
 Large enterprises has more employees and investment amount.
 Such type of enterprises operates at various locations and has branches at both national &
international level (De Mot, 2019).
 Furthermore, large entity has wide number of operations as well as functions.
Thus, it is analysed that there are various types of organisations and it is crucial to be aware
about these enterprises on basis of marketing activities are carried out accordingly. Furthermore, it
is crucial to have relevant knowledge about these organisations. All small, micro, medium & large
enterprises are different from each & has different form of working activities.
Section 2
Critically explain from sole traders to cooperatives & limited liability partnerships
In market, there are various kinds of companies which operates at different levels.
Businesses consider these types of business & on basis of which they implement their marketing
activities. So, these are further explained as follows-
Sole traders-
A sole trader is one who run their business activities on their & operates at small level.
Being a sole trader means that person is individually responsible for all activities which related with
business. For example- a saloon, restaurants, cafe's comes are known as sole traders.

Advantages
 Main benefit of sole trader is person can take decisions independently.
 Sole traders do not have to share their profit with any individual.
Disadvantages
 Risk when occur, sole trader have to face the risk by own & accordingly strategies are
adopted which is time consuming process.
Partnerships
A partnership refers to written document which is a type of agreement that is used with aim
to carrying out business activities simultaneously. It is being considered as most effective way of
doing business as profit, risks are shared between both the parties.
Advantages
 Advantage of partnership is that business activities get expanded and employees also get
chance to improve their level of skills at higher scale (Formosa, 2018).
Disadvantage
 Drawback of partnership is that everything is being shared equally which sometime can also
leads to conflicts due to difference in opinions in some situations.
Limited partnership-
A partnership refers to agreement between two or more than two people that is being carried
out with aim to achieve common desired goals. Also, in this it is used for business expansion & one
or one or other partners is liable up to amount of investment (George, 2020).
Advantages
 Benefit of limited liability is that it secure the safety of organisation as because it is treated
as separate legal entity.
Disadvantages
 Limited liability is more cost expensive as compared to sole traders.
 Further, tax has to be paid by limited liability owner on himself/ herself in comparison of
sole traders.
Public limited liability & Cooperative
A public limited liability company is one which offered shares to general public & has
limited liability. A PLL stock is offered to public and can be acquired by anyone. Limited liability
refers to legal structure in which entity loss will not exceed more than amount invested in
partnership or firm.
Benefits
 Main benefit of PLL is that loss of firm is limited to their share contributors only.
 Another advantage is that shares of PLLC are being listed in stock exchange which means

they are freely transferable.
Limitations
 As shareholders easily invest in PLLC, but most of the shareholders aims at earning higher
profit rather than staying for longer time interval.
Moreover, it is too analysed that these different forms of businesses are crucial as they
contribute at larger scale to the economy. So, it is necessary for every business to have proper eye
on these legal structures as it help in development of functions & operations appropriately (Hopej,
2017).
Section 3
Access different business structures & how external factors affect businesses
In organisation, business structure refers legal structure of enterprise on basis of which it is
necessary to be aware about these structures so that goals are accomplished. Business structure are
of various types which are explained below-
Divisional structure
It is a type of structure in which employees are being divided into different division. The
division can be made on basis of geographic, product or service etc. There are various types of
division for example- production, sales employees, product development and many more. It is
beneficial to use this structure as it simplified the work of firm in effective manner & objectives are
achieved proper manner (Husniah, 2020).
Horizontal structure-
It is another type of structure in which how decision making is being considered & carried
out relying on lower or upper management. It is often seen that most of entity follows horizontal
structure. In this, decisions made are mostly made supervisors & only formal relationship is
maintained.
Market based divisional structure
It is another form of structure in which division is being done on basis of industry, audience,
market type. In relation of Tesco, they follow market based structure as they divide the employees
into division & then work is done accordingly.
External factors
External factors are those which occur outside the business and impact at wider scale. In
market, it is critically important to have relevant knowledge of such elements so that strategies are
implemented accordingly. It is also a time consuming process because wide range of information &
data is needed to use this framework. In relation of Tesco, they uses PESTEL analysis to determine

impact of external elements on business performance.
PESTEL Analysis
It is framework which is used by organisations to analyse & identify the external factors
through scanning of business environment. It comprises of several components which are further
discussed below-
Political factors-
Tesco is being viewed as largest retailer in world. It run its business at global scale. Due to
its working across the globe, they have to change their political processes and procedures
accordingly. This reflects the political stability of firm in effective manner. With impact of Brexit, it
can effects the sales process of chosen firm (Kirby, 2018).
Economic factors-
It is another element of framework in which it includes factors such as inflation & deflation
rate, foreign exchange rates, etc. These factors are non controllable by organisations. In relation of
chosen firm, they can affected by change in price of product & which directly affects sales.
Social factors-
It is type of component in which it comprises of elements such as disposable income,
attitude, behaviour of people etc. The needs & demands of customers are being affected by such
variables. In reference of selected entity, customers needs are changing towards organic food so it is
necessary for entity to focus on such changing shifts so that relationship is maintained.
Technological
In this competitive market, use of internet has been growing at rapid scale. Technology has
deep impact on business performance as because it consists of use of artificial intelligence, advance
d software & hardware etc. In viewpoint of Tesco, they are shifting their business activities more
towards their online e-commerce website. As currently 43% of shoppers access their online website
& purchases products (Martiskainen, 2018).
Environmental
In this element of framework, it comprises of green agenda, waste management, pollution
etc. With changing time period, people concerned regarding protecting of environment has grown.
So, it is analysed that it is essential for selected organisation to focus on these factors because it
directly affects the goodwill of firm at wider scale.
Legal
It is last component of tool in which it includes rules, regulations, laws etc. It is necessary to
execute every business activity with proper consideration so that problem or issue do not occur. In
context of Tesco, legal department of firm make assure that all functions & operations are executed
with government considerations.

Thus, from above explained matter it is seen that it is essential for Tesco to have appropriate
knowledge of market environment so that decision making is done in most effective way (Page,
2017).

CONCLUSION
After a brief analysis of above report, it has been stated that market comprises of different
kinds of organisation which are operated. So, discussions have been made about different types of
organisations several kinds of companies and various business structure with PESTEL analysis.
Therefore, it is examined that it is necessary for entity to focus on market situation as it help in
implementing of effective decision making. Moreover, it is crucial for individual to focus on
changing SME'S & environmental factors which so that resources are used accordingly.

REFERENCES
Books & Journal:
Alfoqahaa, 2018. Critical success factors of small and medium-sized enterprises in Palestine.
Journal of Research in Marketing and Entrepreneurship.
Ben Youssef, 2018. The importance of corporate social responsibility (CSR) for branding and
business success in small and medium-sized enterprises (SME) in a business-to-distributor
(B2D) context. Journal of Strategic Marketing, 26(8), pp.723-739.
Çitilci,, 2020. The Importance of PESTEL Analysis for Environmental Scanning Process. In
Handbook of Research on Decision-Making Techniques in Financial Marketing (pp. 336-
357). IGI Global.
De Mot, 2019. Public authority liability and the cost of disasters. The Geneva Papers on Risk and
Insurance-Issues and Practice, 44(4), pp.760-783.
Formosa, 2018. From a sole trader to a company: a legal and financial analysis (Master's thesis,
University of Malta).
George, 2020. How Organizational Structures Affect Project Outcomes. International Journal of
Science and Research (IJSR) ISSN: 2319, 7064, pp.1553-1557.
Hopej, 2017. Community-oriented culture and simple organizational structure. Organization and
Management, 4A, pp.75-93.
Husniah, 2020. Legal Consequences of Limited Liability Company Law Which Has Not Been
Given Legal Status Under Law No. 40 of 2007. International Journal of Multicultural and
Multireligious Understanding, 7(5), pp.413-425.
Kirby, 2018. Mega-sport events, micro and small business leveraging: introducing the. Event
Management, 22(6), pp.917-931.
Martiskainen, 2018. Creating innovative zero carbon homes in the United Kingdom—
Intermediaries and champions in building projects.Environmental Innovation and Societal
Transitions, 26, pp.15-31.
Page, 2017. Case study: Wellness, tourism and small business development in a UK coastal resort:
Public engagement in practice. Tourism Management, 60, pp.466-477.
Senaratne, 2018. Organisational ambidexterity in UK high-tech SMEs: An exploratory study of key
drivers and barriers. Journal of Small Business and Enterprise Development.