PESTEL & SWOT Analysis: Impact on UK Retail Sector Business Objectives

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Added on 2024/05/23

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This report provides a comprehensive analysis of the business environment, focusing on the UK retail sector. It begins by defining different types of organizations (profit, non-profit, NGOs) and their varying sizes and scopes, linking these characteristics to business objectives and service offerings. The report then explores organizational structures and functions, analyzing the advantages and disadvantages of interrelationships between these functions and their impact on organizational structure. A PESTEL model is applied to identify the positive and negative impacts of the macro environment on the UK retail sector. Finally, the report conducts internal (SWOT/TOWS) and external (Five Forces) analyses of a UK supermarket to identify its strengths and weaknesses, explaining how these factors interrelate with external macro conditions and influence decision-making within the organization. The analysis critically evaluates the impacts of both macro and micro factors on business objectives.

Business and Business Environment
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Contents
Introduction.................................................................................................................................................3
Lo1:............................................................................................................................................................. 4
P1: Different types of organisations........................................................................................................ 4
P2: Size and scope of the organisations...................................................................................................5
M1: Analyze how the structure, size, and scope of different organisations link to the business
objectives and product and services offered by the organisation.............................................................6
Lo2:............................................................................................................................................................. 7
P3: Organisation structures and functions (P3)........................................................................................ 7
M2: Analyze the advantages and disadvantages of interrelationships between organisational functions
and the impact that can have on organisational structure.........................................................................9
D1: Provide a critical analysis of the complexities of different types of business structures and the
interrelationships of the different organisational functions....................................................................10
Lo3:........................................................................................................................................................... 11
P4: Using PESTEL model, identify the positive and negative impacts the macro environment has on
the UK retail sector................................................................................................................................ 11
M3: Apply appropriately the PESTLE model to support a detailed analysis of the macro environment
within an organisation...........................................................................................................................13
Lo4............................................................................................................................................................ 14
P5: Conduct internal (SWOT/TOWS analysis) and external (Five forces model) analysis of a UK
Supermarket to identify its strengths and weaknesses...........................................................................14
P6: Explain how strengths and weaknesses interrelate with external macro factors..............................16
M4: Apply appropriately SWOT/TOWS and Five forces analysis in justifying how they influence
decision-making.................................................................................................................................... 17
D2 Critically evaluate the impacts that both macro and micro factors have upon business objectives and
decision-making.................................................................................................................................... 18
Conclusion................................................................................................................................................. 19
References.................................................................................................................................................20
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Introduction
This unit is about the business environment which includes the different types of organisation
such as profit, nonprofit. Thomas Armstrong Group is the construction organisation which was
established in 1830, this organisation is expert in the services of the construction and
manufactures the building and the product with the quality. The supply of the goods and the
purpose of the business are given. Organisations are differentiating according to their size, scope
which is micro, small business, medium and large business. The advantages and disadvantages of
the interrelation between the functions of the organisation and the impact of the organisational
structure are discussed. The PESTEL and SWOT analysis are discussed; the positive and the
negative impact of the macro business on the retail sector of UK are discussed. The strength and
weakness interrelated with the external macro factors are discussed.
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Lo1:
P1: Different types of organisations.
There are different organisations in the country; one is profit, nonprofit and NGOs. The profit
organisation in the UK is Thomas Armstrong Group which was established in 1830. The profit
organisations are the business that generates more money than their expenditure. The primary
aim of these organisations is to gain more and more market share and revenue. This business
uses different styles of leadership and management to increase the motivation of the employees
and the satisfaction, which helps in increasing the productivity of the organisation. The main
motive of this business is to generate more and more profit. The next focus of this organisation
is to satisfy the needs of their customers. The product and the services of these organisations are
according to the need of the customers.
Nonprofit organisations are charitable and tax-exempt which means they do not pay the income
tax for the money which they receive for their organisation. The main purpose of these
organisations is to benefit the society. The main aspects of these organisations are honesty,
trustworthiness, accountability, and openness to that entire person who has invested their time,
faith and money in the organisation. The message trust is the charitable trust in the UK which
improves the life of the young and teenagers. The common goal of this organisation is to join
more and more people with it and the common goal is to improve the life of the people
(Nakamura, and Abe, 2014).
The non-government organisation is independent of the government and the international
government organisation. These organisations are active in the healthcare, educational, human
rights, social welfare to make changes in the areas according to their objectives. The NGO of UK
4 The Children (4TC) is for the welfare of the children. This organisation provides the education
for the children. These types of organisations are funded by the donations given by the people.
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P2: Size and scope of the organisations.
The microenterprise is the small business; these organisations have less number of employees, 10
or less. These organisations are specialized in providing the goods and services to the local
people. The common works in this business are carpenters, street vendors, peasant farmers, and
seamstresses. Most of the micro business is the family business which is established by the one
or two family member and run by them to earn their livelihood. They grow their business only
when they need some changes in their life and want to generate more income (Min, 2015).
Small enterprises are privately owned by the corporations, sole proprietorship or partnerships.
These businesses have the small number of workers and don't have the high volume of the sale.
These businesses include bakeries, restaurants, small grocery shop, photographers. These
businesses help the local economy by providing the job to the local people. These businesses are
known as the small business in the terms of ability to apply the support of the government and
are qualified for the preferential tax policy depends upon the industry and country.
Medium enterprises are the businesses grow slowly from the small business. These businesses
maintain the assets, number of employees in the certain threshold. When these companies earn
revenue they start creating their assets such as building, more employees, equipment. These
businesses had the employees fewer than 250 employees (Sualang, et. al., 2017).
Large enterprises are the business which has the minimum number of employees is 5000. This
business has the annual turnover is greater than the 1.5 billion euros. The balance sheet of this
business is more than of 2 billion euros. The activities of these businesses run from “huge
transactions” to more general “doing big things”. These business influences over the
governments in the trade policy, tax policy, environmental policies, labor policy. These
businesses are experts in marketing and manufacturing.
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M1: Analyze how the structure, size, and scope of different organisations link to the
business objectives and product and services offered by the organisation
There are many organisations and all work according to their size, structure, and scope. Every
business has different products and services, the different way of presenting the product and
services. The first business which comes is the micro business which has less number of
employees; this business is the family business, these businesses provide their service in the local
area. The next business which comes is the small business; it is the business with less number of
people and doesn’t have high sale revenue. These businesses help the local people by providing
them the job.
The next business is the medium business which is grown from the small business. These
businesses grow their assets when they increase their revenue, to create the new building,
equipment, and the employees. The large corporates are the business which has the power over
the market and on the other small business. The main object of this business is the development
of the society and environment. This business focus on creating more revenue and market share.
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Lo2:
P3: Organisation structures and functions (P3)
The organisational structure is allocated with the activities such as allocation of the task,
coordination, controlling, supervision which directs towards the aim of the organisation. There
are 3 types of organisational structure:
1. Functional structure: This structure has the activities such as coordination, supervision and
the task allocation. The functions of this type of structure are a production of goods, marketing,
selling, accounting and human resource. The functional organisation is the best in the production
of the standardized services and products in the large volume and in the less cost.
2. Divisional structure: This structure is consists of self-contained divisions. In the structure,
the delegated authority is used which improves the performance and the performance can be
measured with each group in the organisation. In this structure of the organisation, it is very easy
to coordinate the work between different departments. In this structure, there is more flexibility
to respond when there is the change in the market.
3. Matrix structure: It is the structure which has the combination of both functional and
divisional structure. It is more complex structure, as the people are divided according to the
functional structure and then separated as divisional products. This type of structure takes a lot
of effort and planning to make the large organisation which has the resources to manage the
complex framework of the organisation (Chelladurai, et. al., 2017).
Functions of the organisation:
1. Leadership: it is the art of managing the growth, profitability, employees, staff, and it is the
process which helps in making the profit to the organisation.
2. Communication: this s the most important aspect of the organisation. While developing the
chain of the command one should ensure that the flow of communication must be in the proper
way. The way of organizing of the communication flow determines the success of the
organisation.
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The functional structure is the structure which helps the company to achieve its goals and
objectives. This is the structure which helps the employees to understand their work easily and
get to clear that to which they have to report and give orders.
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M2: Analyze the advantages and disadvantages of interrelationships between
organisational functions and the impact that can have on organisational structure.
Advantages:
 It raises the association among the employees which increases the effectiveness in the
business.
 It helps in facilitating the time.
 It helps in making the interrelationship among the employees of different departments to
maintain the corporation.
 It helps in reducing the duplicity in the work and helps the organisation to work
according to the functions.
 It increases the profit level of the organisation as every employee of the different
branches shares the information among themselves.
Disadvantages:
 It increases the competitiveness of the different branches of the organisation.
 It creates lack of unity among the employees of the branches.
 The employee of the branch knows the work responsibility of the other branch which he
can misuse and can harm the branch.
The impact of the organisational function is that as the one department doesn’t communicate
their work with another department then it will harm the organisation as all the departments are
correlated with each other. The organisation is the dividend in different function; if a single
department is unable to finish the task at the time when the company has to suffer because of that
department.
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D1: Provide a critical analysis of the complexities of different types of business structures
and the interrelationships of the different organisational functions.
The organisational function and the organisational structure has the interrelation with each other,
as the management’s structure tells about the behaviours, attitude, nature in which makes the
working environment for the employees. If there could be the strict nature of the hierarchy then
there would be more freedom and lack of autonomy will be reflected in the lower level of the
organisation if the power of decision making is done by the top level of management. The
environment and culture of the organisation will be more independent and accountable when the
structure of the management is decentralized. The power of the authority depends on the nature
and behavior of the employees of the organization. The choice of the authority clears the
functions of the organisation and the structure of the organisation.
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Lo3:
P4: Using PESTEL model, identify the positive and negative impacts the macro
environment has on the UK retail sector.
PESTEL model is the framework which is used by the marketers for monitoring and analyzing
the macro-environmental factor which has the impact on the organisation.
PESTEL analysis for the UK retail sector
PESTEL is the framework which helps in understanding the external influence on the business.
This helps the organisation to become the future ready which help the organisation to minimize
the effects of the advertising on the organisation.
Political Economic Social Technological Environmental Legal
The
government
may
influence the
economy of
the particular
industry.
The
government
may impose
the taxes
which may
change the
entire
structure of
generating
revenue of
the
organisation.
It raises the
rate of
inflation
affects the
price of the
company's
product and
services.
It will affect
the
purchasing
power of the
customer.
Scrutinize the
social
environment
of the market.
Gauge the
determinants
such as
demographics,
cultural trends
and
population
analytics.
This refers to
the research,
development,
automation
and the
amount of the
technology
awareness
which market
possesses.
Pertain the
innovation in
the technology
which may
affect the
operations of
the industry.
Increases in the
terrorism.
Rise in the anti-
social activities.
The laws
affect the
business
environment
by the
policies
which are
maintained
by the
companies.
Change in
the laws of
visa which
will affect
the number
of foreign
workers who
are of the
present
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country
(Song, et. al.,
2017).
The positive impact of the macro environment
 If there will be any change in the laws of the government which is not suitable for the
business then it will affect the whole industry.
 Every organisation is different so they will have different domains, they will respond
differently to the change but the change of intensity will be similar to everyone.
 Thomas Armstrong Group the public organisation will have the advantage of exploiting
the opportunity by responding to the change positively.
The negative impact of the macro environment
 The changes in the action plan of the individual branch will affect the whole organisation.
 The changes can have the huge effect on the structure of the organisation.
 There are several parameters which have to consider while responding to the change such
as changes in the policies of the government, laws, and taxation (Popescu, and Popescu,
2016).
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