Unit 1 Business Environment Analysis Report for ASDA: PESTLE & SWOT

This report provides a comprehensive business environment analysis of ASDA, a British supermarket retailer. It begins with an introduction that outlines the scope and objectives of the analysis. The core of the report comprises a PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors impacting ASDA's operations. Following this, a SWOT analysis is presented, evaluating ASDA's strengths, weaknesses, opportunities, and threats. The report then explores the interrelation between internal and external factors, demonstrating how they influence ASDA's decision-making processes. The reflection section highlights the impact of macro-environmental factors on business decisions and emphasizes the importance of considering these factors in strategic planning. The report concludes by summarizing the key findings and their implications, underscoring the necessity of analyzing both internal and external factors for the smooth functioning and success of any business. References are provided at the end, citing the sources used in the analysis.

Business Environment Analysis

INTRODUCTION
 Business environment analysis means examine and gather
information of all internal as well as external factor of the business
that effect the smooth functioning of a business.
 ASDA is a British supermarket retailer in UK and in this report
ASDA has been taken as company.
 This report present PESTLE and SWOT Analysis of ASDA and the
way it affects the functioning of the company.
 At last this report explain the way key finding and evaluate of
analysis influence the decision process of the company.

PESTLE ANALYSIS
 Political factor: It refers to the government policy and practice such as new legislation
that influence or effect the industry or economy of the country. It includes laws related to
labour, environment or trade restriction, tariff that effect business operation of company.
 POSITIVE IMPACT : ASDA has expanded its business in Chinese market and at the same
time can import certain product due to political factor.
 NEGATIVE IMPACT: European Regulation in national and international market has
impact on ASDA company policy, to its employee and war and instability has also effected
the decision-making.

Cont.
 Economical Factor: This factor helps in determination of economic position of a country or
performance, it effects the purchasing power of the customer and thus will impact the company
performance in long term. So, in order to be success it is necessary to keep watch on its economic
factors that are beyond the control of the company. It includes employment or unemployment, tax
rates, exchange rates and inflation.
 POSITIVE IMPACT: Due to recession in 2008 in UK, ASDA revenue increased as customer shifted
their shopping from expensive retailers to shop at cheaper rate which was offered by ASDA
company.
 NEGATIVE IMPACT: Due to recession the price of raw material price raised, credit crunch, more
competition in the market so it impacts the pricing strategies of the company.

Cont.
 Social Factor: These factor includes the trends of the society such as their life style, culture they follow, income
distribution, emphasis on health and safety. All these factor describe or represent the culture, customs value of
people's in which the company operates its business.
 POSITIVE IMPACT: Social factor help ASDA help the company to identify the increase demand for organic
food thus ASDA ensure to offer organic food to its customer to satisfy their needs.
 NEGATIVE IMPACT: Increasing Ageing population has increases in payment to their employee in terms of
pension and apart from this these people's so less interest to work in the company.
 Technological Factors: It includes level of development, technological changes and technological awareness
among the market that may impact on the operation of industry. These may have positive or negative impact that
are as follows:

Cont.
 Legal Factor: These are specific law that restrict and dictate the behaviour of business operation
and customers.
 POSITIVE IMPACT: ASDA by adhering to all rules and regulation can run its business smoothly
without imposed to pay fines.
 NEGATIVE IMPACT: ASDA company discriminate on the basis of gender or does not adhere to
consumer protection law it will decrease its brand image and loyalty among consumer.
 Environment factor: These factors are important as resource are limited and scare they need to
be managed effectively and the increasing awareness of impact company have on environment t
has also forced company to consider such factors.

SWOT Analysis
SWOT Analysis its internal and external factor such as strength and weakness, threat and opportunities that
effect the business and evaluate its current position in the market. Thus, its help company in strategic
planning to gain competitive advantages in the market. SWOT Analysis of ASDA is given below:
 Strength: It describes the thing in which the company excel or is best or special skill or any positive
attribute that can differentiate the company from other's in the market. There are many things in which
the ASDA company excel that are as follows:
 Wide range of products: ASDA deals in large varieties of product and services thus provide wider choice
to its customer to choose among.
 Strong Brand Image: As ASDA is operating its business in the market from many years and had mainly
focused to built good image of the company.

Cont.
 Weaknesses: This describes the weak point of the company where it needs to improve
or change itself. ASDA company weakness are as follows:
 Global presence: The company not operate its business globally as compared to its
competitor.
 Quality control: The company is not able to maintain quality at many stores due to less
budget assigned to quality control department.
 Opportunity: Is a situation or favourable time that gives the company to use its
resource effectively in order to gain advantages. Opportunity of ASDA are as follows:

Cont.
 Threats: It is indication of something unpleasant may occur that may
likely cause damage or danger to the company. Threats of ASDA
company are as follows:
 Competition: As more companies are entering into market it had lead
increases cut-throat competition in the market.
 Political Instability: Due to uncertainty in the policy the business has to
bear unnecessary costs

Interrelation of internal and external
factors
STRENGTH
 The company is able to maintains it brands image by considering the social factors such as
customer taste, preference, age group thus satisfying the needs of the customer in the most
effective manner and thus increasing the loyalty.
 By considering technological factor the company is able to get feedback of the customer within
less time through social sites and thus also helps the company to keep close contact with the
customers.
 The company by considering environmental factor is able to provide quality product or organic
food to its customer to its customers thus able to cover large market share

Cont.
WEAKNESS
 As the company does not consider the economical, political and social factor of other countries in
decision-making it is not able to expand its business worldwide and had to shut down its stores.
 The company is facing high employee turnover as highly educated employee are leaving the
organization due to the company policy and culture so the company has not considered
economical and social factor before making decision.
 The company has to face cut-throat competition as it has not considered technological
advancement such as other competitor are selling their product online or through e -marketing.

REFLECTION
 As per my analysis and evaluation macro environment factors greatly impact on the
decision-making of the business.
 The company has to keep in mind various factor such as social, technological, political,
legal, economical and environmental before expanding its product line or starting a
new project.
 As per my opinion the company should expand its business around the global and sell
its product online