Analyzing the Business Environment of Morrisons Supermarket

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Business and Business
Environment
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TABLE OF CONTENTS
Introduction......................................................................................................................................1
LO1..................................................................................................................................................2
P1 Explain different types and purposes of organizations; public, private and voluntary sectors
and legal structures......................................................................................................................2
P2 Explain the size and scope of a range of different types of organizations.............................4
M1 Analyze how the structure, size and scope of different organizations link to the business
objectives and product and services offered by the organization................................................6
LO2..................................................................................................................................................7
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure.......................................................................................7
M2 Analyze the advantages and disadvantages of interrelationships between organizational
functions and the impact that can have upon organizational structure........................................9
D1 Provide a critical analysis of the complexities of different types of business structures and
the interrelationships of the different organizational functions...................................................9
LO3................................................................................................................................................11
P4, M3 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples..............................................................................11
LO4................................................................................................................................................14
P5, M4 Conduct internal and external analysis to identify the strengths and weaknesses of
chosen organization...................................................................................................................14
P6 Explain how strengths and weaknesses interrelate with external macro factors for the
chosen organisation...................................................................................................................16
D2 critically evaluate the impacts that both macro and micro factors have upon business
objectives and decision-making.................................................................................................17
Conclusion.....................................................................................................................................18
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References......................................................................................................................................19
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LIST OF FIGURES
Figure 1: Legal Structure of Private Sector Organizations..............................................................3
Figure 2: Functional Areas of Morrisons.........................................................................................7
Figure 3: Organizational structure of Morrisons.............................................................................8
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Introduction
Business environment is the total of internal and external factors that either put positive or
negative influence on the business. It includes various factors that affect the ability of the firm
and also support maintaining relationship with consumer. In this context, the report will consider
the example of Morrisons that operate as one of the largest supermarket chains in United
Kingdom.
The report will also consider the examples of various public, private and voluntary organizations
so that their purpose can be understood in a clearer manner. It will also assess the scope and size
of various organizations. The report will also illustrate the interrelationships of various functions
with the organizational structure. Further it will also use number of examples for explaining the
positive and negative influence of macro environmental factors on business operations. Last
section of the report will also explain about interrelationship of strength and weakness with
external macro factors.
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LO1
P1 Explain different types and purposes of organizations; public, private and voluntary sectors
and legal structures.
1. Public sector organization
Public firms are majorly governed and owned by government. The main purpose of public sector
organizations is to serve public by providing services rather than making profit. Public sector
organization raises funds with the help of taxes, financial transfers from various levels of
government. For an example, National Health Service is an example of public sector
organization in UK that operates with supervision under government and has main motive of
serving people by providing health service at lower or no cost (Angelique, 2016).
Legal Structure: Public firms often exist as limited organization under which membership of
ownership is available to public. ASDA is a public limited organization that operates as profit
earning business entity and is liable to issue limitless of stocks to the public.
2. Private Sector Organizations
Such type of organizations are entirely managed and owned by individuals or group of
individuals by appointing decision makers such as directors for the betterment of the business. Its
main purpose is to attain higher profits and acquiring larger market share by providing higher
customer satisfaction in terms of providing quality of products and services. Morrisons is an
example of private sector organization in UK that operates within the retail sector.
Legal Structure: Its legal structure includes partnership, sole trader, franchisees, public and
private limited companies, and co operatives.
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Figure 1: Legal Structure of Private Sector Organizations
(Source: Angelique, 2016)
Sole Trader: This is type of business that is governed by individual and is only responsible for
earning profit. Hairdressers, Plumbers, etc are some of the examples of Sole trader (Obeng,
2017).
Partnership: This is operated by the partnership between two or more individuals and therefore
all are equally responsible for both loss and profit sharing. Uber and Specify is the example of
large scale partnership.
Companies: It includes both public and private limited organization that operates with the
registration number offered by government and is liable to follow certain employment
regulations. Private Limited Organizations operates with board members who are responsible for
taking care of needs of stakeholders. On the other hand Public Limited Organizations are listed
on stock exchange and there is no specific number of members.
Franchises: These are mostly operated under the name of well known brand at various locations
by fulfilling all the legal obligations. Mc Donald’s operates with large number of franchises all
over the world (Bouckaert et.al.2016).
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Co operatives: These are formed by individuals with similar expertise and conduct business
activities for earning profitability. Co operative press is one of British co operative societies
whose main activity is to publish news.
3. Voluntary organizations
These organizations are partially governed by government of the specific country. It is also
owned by individual or group of individuals that are generally referred to as community
organizations for serving people with different type of social and health issues. Cancer Research
in UK is an example of Voluntary Organization in UK.
Its Legal Structure includes nonprofit organizations (NPOs) and Non Governmental
Organizations (NGOs). NPOs are responsible for raising the living standard of people and do not
focus on earning profits. NGOs on the other hand are responsible for raising awareness among
people in the society such as education and health awareness.
P2 Explain the size and scope of a range of different types of organizations.
Table 1: size and scope of a range of different types of organizations
Types of
organisation
Scope Industry and its
position in
market
Size Key stakeholders
Public Public sector
organizations
operate with the
scope of serving
people in terms of
Asda acquires
15.3% of the
market share of
the UK retail
sector in the year
Asda Stores
Limited is
headquartered in
England and
operates at 630
Stakeholders
include
community
members,
investors,
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providing
products at
affordable prices.
For an instance,
Asda operates
with number of
opportunities for
its business
expansion
(Rosenberg
Hansen and Ferlie,
2016).
2017. It has
gained success by
opening up
number of stores
in UK.
locations till the
year 2017. Its
operating income
is £1 billion and
there are 180,000
numbers of
employees.
government,
customers who
expect higher
return for their
investment.
Private Scope of private
sector
organizations is
different for its
various legal
structures. For an
example,
Morrisons
operates as private
limited
organization and
is abided by
certain
regulations. It
operates with
opportunity of
expanding its
operations at
various locations
and industries.
Market share of
Morrisons in 2015
is 10.5% of the
total grocery
stores in Britain.
The organization
operates with
approximately
with 500 numbers
of stores. Its
revenue is 1,726.2
cores GBP and
employs 105,487
numbers of
employees by the
year 2018.
Customers,
employees,
shareholders and
suppliers are the
major
stakeholders of
Morrisons
(Nicolescu, 2018)
Voluntary
organisation
Voluntary sector
is the important
Cancer Research
UK Acquires top
The organization
spent £644m in
Its stakeholders
include directors,
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part of making
society stronger.
Number of
organization in
UK is increasing
and these shows
incline of society
in positive
manner. Cancer
Research UK is an
example of
volunteer
organization in
UK that operates
as NPO and aims
at serving cancer
patients by
conducting
research.
position within
Charity Band
Index in terms of
public awareness.
the past year that
includes £393m
for conducting
research for
cancer patient and
£30m for raising
cancer awareness.
It has currently
40, 000 of
volunteers.
Employees,
Volunteer,
Doctors , Patients,
Government,
Fundraisers,
corporate partners,
etc.
M1 Analyze how the structure, size and scope of different organizations link to the business
objectives and product and services offered by the organization.
Organizations exist with different structure, size and scope and are associated with objectives of
the business as well as its products and services. The organization can successfully set larger
targets or objectives only if they work with effective organizational structure. Considering the
example of Morrisons and Asda, they both successfully set objectives based on their sizes. On
the other hand, sole traders are unable to set huge targets as business is owned and governed by
the individual (Dessein et.al.2016).
In addition to this, organization successfully set business objectives by identifying scope of the
business. For an example, Cancer Research UK serves needy people within and across the
country and therefore business objectives are set accordingly. Organizations offerings also
depend on its structure, size and scope and therefore they set objectives accordingly. For an
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example Morrisons operates with wider organizational structure and size and therefore it has
acquired larger market while offering larger range of products and services.
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LO2
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure.
Figure 2: Functional Areas of Morrisons
(Source: Author)
It has been identified that goals and objectives of Morrisons relies upon organizational functions
that includes marketing, finance, human resource, etc. Marketing is one of the most important
departments in retail sector organizations to make effective relationship with consumers so that
competitive position can be gained (Healy et.al.2015). Employees are aware about their roles and
responsibilities and are responsible for formulation of marketing plan so that customers can be
aware about their products and services. Development of marketing plans needs co ordination
with functions like financial for fiancés and HR department for skilled resources.
Finance department is liable for estimating the budget to fulfil the functional objectives for each
and every department. Morrison’s finance department is linked with HR department, inventory
department, etc for conducting various activities for fulfilling business objectives. For an
example, inventory management is one of the important functions as it is essential to fulfil the
demand of customers on time to gain their trust. For storing the products in retail stores in larger
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