- What is Business environment?
- Explain Various types of Organisations.
- Discuss the Purpose of business and supply of services and goods.
INTRODUCTION
Business environment can be refer to as collection or sum of external and internal factors like staff members, consumers wants and needs, demand and supply, government and clients. Respective components has a direct impact on the purpose of organisation in direct as well as indirect way so it is very much effective to control and coordinate respective factors by building strategies and tactics properly. The following study is about Sainsbury which is the second widest supermarket chain in the UK marketplace. The following report is going to cover different types, sizes and scope of the organisation by differentiating within not for profit, non governmental and profit organisations . Further it includes the various kinds of complexities and structures of international, global and transnational business formations in order to gain proper understanding regarding business and related activities. In addition to it elaborate the way through which various functions related with mission of organization. In the part B it includes the environmental analysis both internal and external with the help of PESTLE and SWOT and their interrelationship with macro factors.
PART A
Various types of Organisations
- Divergence in between not for profit, non governmental as well as profit organisations by using examples of organisations within the three different sectors by commenting on their legal structure.
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Basis of difference |
Profit |
Non profits |
Public sector |
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Definition |
The private sector is driven by the revenue and growth so that salaries of respective organisations can be impressive (Wu, Buyya and Ramamohanarao, 2019). |
The non profit sector is separate from oneself from both the public and private sectors, but it collaborate with either of them any time. |
In public sector wide range of opportunities available that shows the diversity of the sector itself. Public employment refers to the jobs which contribute in effective running of country at every tier. |
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Example |
The example of private sector organisation is Sainsbury in respective assignment |
For Non profits the example is Oxfam. |
Example of Public sector is NHS. |
Legal structure
Public sector In public sector organisations there are kinds of legal structure exist to serve different purpose and objective that are as follows:
- Public corporations and nationalised industries: Respective sector business activities at broad level. NHS come under respective public sector legal organisation.
- Local authority undertakings: A local authority undertakings that run as a part of government departmental under the direction of minister.
- State services: In state services consist of the management of state wise such as defence, education.Worried for Business Essay Writing Help? Get our experts Help Now!
Private Sector and its judicial composition
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Sole trader: It can be refer to as an individual who is the exclusive owner of the enterprise and responsible for keeping all profits after all taxes has been paid. Sole traders are often employed waged employees and bear all risks.
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Partnership: To overcome from the issues faced by the sole trader the business concern may be generated. It is the union of various persons approximately in between 2 to 20 partners.
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Public limited company: Unlike private limited company, it is also a larger kind of joint stock company. It is basically an incorporated enterprise which is run by Board of directors instead of shareholders. Sainsbury operated under legal structure of public limited company.
Voluntary organisation legal structure
The main judicial composition come under voluntary organisation are as follows:
Unincorporated organization: Respective kind of legal structure is best fit for the small groups by membership, small goals, low income which not intend to acquire property.
A trust: Trust is build up to carry off the financial aspects in order to achieve the decided goals and objectives. They possess the formal relation among three different individuals that are presenter, trustees and beneficiaries. Oxfam come under legal structure of trust.
Limited structure: Respective company structure increasingly popular for voluntary organisation, often appropriate for managing staff or large amount of funding.
Purpose of business and supply of services and goods.
The prior focus of Private organisation is to gain benefit by elaborating the needs and demand of consumers as Sainsbury operates to earn profit by satisfying consumers needs. The major objective of of Non profit organisation is to work for the advantage of society in which Oxfam work for the elimination of poverty that is major problem in front of country. Public sector units work to provide essential services to underprivileged and large section of society in which NHS provide best health treatments to people (Stanković and Novaković, 2019) .
In context of Sainsbury by using the distribution network with wide supply chain to acquire large number of consumers. In context of Oxfam they directly serve consumers to bring out from the poverty. In NHS they diagnose diseases of consumers and accordingly treat them.
Scope and Size of organisation.
Divergence between medium, micro and small size as well as large enterprises.
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Basis of difference |
Micro enterprises |
Small enterprises |
Medium size enterprises |
Large enterprises |
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Definition |
A micro enterprise usually operates with the less than 10 individuals and begin their business activity with small amount of money. Example of micro business is ice cream parlour, cafe in neighbourhood. |
Small enterprise is the business that employs a small no. of workers and not have high volume of sales. It is independent owned and operated company that is limited in size and revenue depend on industry. |
The medium size enterprise made up of enterprises which employ fewer than 250 employees (Wu, Buyya and Ramamohanarao, 2019). |
A large enterprise is an enterprise that check the at least two conditions that are at least 5000 employees and annual turnover greater than 1.5 billion euros and balance sheet total of more than 2 billion euros. |
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Purpose |
The major purpose of business activity to lead the livelihood by serving limited individuals (Tuiskula and et.al., 2019) |
The small enterprises operate in small region by using specific products and services. |
They work for earning profit by giving employment to people and give contribution in economic development. |
In large enterprise they focus on bring innovation I their products and services to build the distinctive image in marketplace which helps them to remain competitive in marketplace. |
Market share, profit share, growth and sustainability.
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Basis |
Sainsbury |
NHS |
Oxfam |
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Market share |
Sainsbury sales dropped by 1.8% due to bringing down their market share to 15.3%. |
NHS is the world's largest publicly funded health service provider and devolved in England, Scotland, Wales and Northern Ireland (Sebikari, 2019) |
IN Context of Oxfam they operated in various nations such as America, Australia, Canada, Belgium and many more. |
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Profit share |
In the end of financial share in the end of march is 239 million British pounds. |
It still paid for out of taxation, it has no shareholders and not seek profit. It by providing the universal service and fit for the criteria of service rather than a business. |
Oxfam's total profit increased by the £18.6m to £427.2m in 2017/18 which derived majorly by activities of trading, fundraising and institutions. |
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Growth and sustainability. |
To grow and sustain in the marketplace they focus on cutting down carbon consumption, maximise energy and water efficiency and limiting food waste minimum on their value chain (Schaltegger, Hörisch and Freeman, 2019) |
In context of NHS they are accountable for the 6.3% of the England's total carbon emission and 5% of the total air pollution that enhance rate of sustainability in market. |
The accepted definition of the sustainable development in form of achieving economic growth, environment protection and social progress. With the help of their GB's programme which seeks in attaining sustainable development for people who living in poverty. |
Various kinds of structures linked with scope and size of operations.
Private organisation
Size
Scope: The scope of Sainsbury is to reach at large no. of consumers by entering into the new market to sell the products and services. They already have the large market share in the UK and outside the market. So respective organisation is very much potential for economy as it contributes a lot in employment.
Public organisation
Size: It is one of most important healthcare service provider in context of medical and best treatments to consumers.
Scope: The scope of National healthcare services is to provide facilities like screening, treatment, antenatal screening and many more to around 64.6 million people in the UK market and 54.3 million people in England. (Rofiq and Pramono, 2019)
Voluntary organisation
size: Oxfam operations are not that much large because they offer facilities to individuals in order to reduce poverty, providing relief from disaster as well as advocacy for gaining competitive advantage in overall market area.
Scope: The major scope of Oxfam that they want to give the services in the market of foreign and try to provide services to individuals who are experiencing some kind of injustice. It raises voice for people suffer from the poverty and affect on their process of making decisions.Want to get Assignment help ? Talk Our Exper Now!
Complexities of international, global as well as transnational organisation structures.
With the help of transnational organisational structure, management organize business with different dimensions like such as geography, functional and product levels. The major complecity behind using respective structure is complexity that likely to interfere with efforts in achieving integration and coordination at various tier (McDonald and Eisenhardt, 2019)s. Organisations find difficulty in balancing needs of differ functional, geographical and product stakeholders.
In international structure which take care of international operations of business that deliver the works and responsibilities in proper manner. In that regards the major complexity is that it requires separate manager locally for managing international counterparts and global allocation of resources turned to be difficult affair.
Global organisational structure can be define as global operations that are primarily organized based on product orientation, function and which bring complexity in operating the works and activities in proper manner. So the major challenge is to manage the multiple kind of product lines as marketing and production departments are not properly integrated.
Determine how functions are linked with mission of overall organisation and objectives commenting on interrelationship in various departments.
For an organisation it is very much potential to maintain the relationship with other department in order to gain effective results. In context of Sainsbury there are various functions to carry out the work in proper manner that collaboratively work in attaining business-objectives and goals that are as follows
Human resource and Marketing
Both the functional areas work in collaborative manner for acquiring the objectives and goals of organisation (Quinlan and et.al., 2019). Marketing department plays very crucial role in acknowledging the requirements of consumers and build products accordingly. As per the requirement of human resource in marketplace they provide information to HR department and they select potential candidates within the organisation. By choosing one of most potential candidates that enables in achieving business goals and objectives in Sainsbury.
Marketing and finance
Marketing and finance department have the close relationship with one another to attain the goals and objectives of organisation. In relation with marketing department which provides relevant information to finance department regarding the financial source best suited for organisation and benefits occurs by using it (Popescu and Popescu, 2019). Finance department on other hand give adequate funds as per the financial condition of organisation to market the services and products for remain in the competition in market area. The roles and functions of both the departments enables in achieving the desirable outcomes positively.
So it can be said that all the departments work together by intercourse responsibility and roles with each other in order to gain desirable outcomes.
PART B
The Effect PESTEL Analysis.
The External business environment consist of the broader forces which not only affect on the business activities but also on the micro environment (McDonald and Eisenhardt, 2019). So it is very much potential for business to evaluate respective factors by using the framework that is PESTLE analysis that are as follows:
Political factor: Here are the some political factors which directly influence on the business activities of Sainsbury that are as follows:
Brexit uncertainties: In the year 2016, UK marketplace voted in favour to leave the EU that hinders or affect seriously the consequences of the Sainsbury and other English super market chains. Due to leaving the EU which make inconvenient for supermarkets in affording the import product from the international market. As in enhance in price of foreign products to passed up to the end consumers that bring Sainbury in difficult situation to push hard in order to ensuring that they can be continue spending for maximising profitability positively. So it is very much important for respective organisation to evaluate the effects on business activities to take actions promptly.
- Advantage: Due to brexit the cost of staples such as dairy and meat that rises the cost of products that squeezed consumers disposable income growth that tend to do better, because people stop eating out and eating in.
- Disadvantage: The major disadvantage from the Brexit on profitability of organisation that it is very difficult for them to sell products at less price as it slow down disposable income of consumers.
Economic factor: Such factors comprises ofthe interest rates, inflation as well as employment rate that affect directly on the business works and activities in both positive and negative manner (Marijs and Hulleman, 2019). In context of Sainsbury the economic factors which directly affect on their business are as follows:
Rising fuel cost: In earlier years, fuel prices rises gradually in the market and eliminating the offerings of fossil fuels. Ultimately, high prices of fuel appear situation to making it expensive for transporting goods and services around the whole nation. Respective factors directly influence on supplying products and services in effective price range to consumers.
Fierce competition: Sainsbury encounter the fierce competition in the marketplace, as in UK there are no. of supermarket chains operated which includes Tesco, Morisons, Waitrose and Lidl. With there are no. of independent corner stones that provide specialist food as per consumers demand that work as an major threat for them.
- Advantage: Due to change in economic conditions in the UK marketplace they can be able to take proper steps by using the proactive approach for remaining competitive in overall market area (Hofmann, 2019).
- Disadvantage: Due to decrease in disposable income of consumers, it directly affect on the pricing of products and services negatively.
Social factor: In social factors consist of the change in the taste and preferences of the consumers, in context of Sainsbury People of the 21st century shows the trends towards the healthy eating so it bound organisation to adopt respective changes in order to remain competitive in marketplace positively.
- Advantage: With the innovation in the products and services of organisation they can be able to gain sustainability in marketplace and helps in gaining competitive edge.
- Disadvantage: change in consumers taste and preferences that simultaneously bring changes in organisational proceedings that carry out rigidity of employees.
Technological factor: In technological factors consist of the change in technology by using the advance kind of tools to enhance consumers experiences positively (Heirati and Siahtiri, 2019). In context of Sainsbury technological advancements in analytics such as usage of artificial intelligence and Big data helps to organisations all around the globe in order to gain some knowledge about their operations and proceedings in positive manner. In that regards Supermarkets such as Sainsbury advancements in analytics proved beneficial in gaining highly developed framewoks that determines about how much a procut is expected to sell which helps in estimating the side of both demand and supply of products and services.Take Examples of Assignments Now!
Online shopping: In UK marketplace, Sainsbury offers their consumers the online shopping options as customers want to order the groceries comfortably from their home. So the arrival of e commerce along with its utilization in industries that deal with food in early years.
- Advantage: Respective factors helps in gaining the competitive edge in the marketplace as preference to consumers proved very much beneficial for organisation.
- Disadvantage: Change in technology and adopting respective technology required lots of time and investment.
Legal factor: Such factors are comprise of regulations, legislations and laws that immediately impact on the organisational works and capabilities (Hassanien and Dale, 2019). The legal regulations related with the money laundering, consumer protection ,health as well as safety regimes and many more. Due to modifications in preferences and changes of customers rules imposed like salt, high fat and sugar food or drinks that determines individual interest.
- Advantage: The application of the new rules and regulations on food leads towards the gaining higher profitability and sustainability in market.
- Disadvantage: The law imposed by the UK government that is reduction in content in sugar drinks by 20% in 2020 adversely impact on their profitability.
Environmental factor: In environmental factors consist of the awareness towards the saving the environment and carbon footprints in order to remain competitive in marketplace. Here are the some factors:
Carbon footprints: Chains in supermarketsare accountable for the large footprints of carbon, whether it is exporting services and products from one side of the country to another side. As the environmental concern is on mount, organisations all across the globe are supposed to reduce the carbon footprints for gaining competitive advantage in market area (Hair Jr, Page and Brunsveld, 2019). They by identify the new ways to become the more environment friendly to manage the ecological changes due to their operations.
- Advantage: The positive effects of various environmental factors on activities of enterprise that companies can be able to provide one of the best products and services to the consumer that other competitor can not hence it gives competitive advantage.
- Disadvantage: While an organisation not follow the environmental laws and regulations then government impose the fine and penalty that directly impact on organisational goodwill and brand value adversely.
Implement suitable type of SWOT analysis which have a major impact on decision making process.
Internal analysis is the exploration of the organisational competency, cost position and competitive viability in the marketplace in order to gain desirable outcomes. In context of Sainsbury which is the second largest supermarket chain in UK marketplace needed to evaluate the internal strength and capabilities in order to remain competitive.
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Strength
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Opportunities
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Weaknesses
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Threats
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It has been analyzed that by evaluating the internal business environment organisation can be able to take effective decisions in regards of strategies, recruitment of employees and many more. To collect important outcomes it is needed to analyze the internal environment of Sainsbury competitors that is Tesco.
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Strength: The major strength of respective organisation that it is one of the biggest retailer in the whole world in context of sales and revenue in compared to other retailer chain in Britain. The another important aspect that it continuously grow its stores in number of locations to enhance market base. |
Weakness: Although Tesco is the market leader but use always low cost strategy that hinders their profitability and sustainability into the market. |
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Opportunities Respective organisation have the opportunity to expand in the emerging market and records its presence in the online market to remain competitive in marketplace. |
Threats: The major threat in front of respective organisation that Tesco surround from the fierce competition such as Walmart, Aldi and many more that hinders their profitability and sustainability. |
In that regards evaluated that internal analysis is very much important and by comparing with the competitors organization can be develop strategies accordingly.
Explain how strengths and weaknesses interrelate with macro factors.
In an organisation there is a close relationship in the Micro and macro factors of the organisation that needed to be understand in proper manner to build strategies and tactics in proper manner that are as follows:
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Political Factors |
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Economic Factors
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Social factors |
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Technological factors |
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Legal factors |
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Environmental factors |
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So it is very much important for an organisation to measure or evaluate the important attributes in order to remain competitive in marketplace.
CONCLUSION
From the above report it has been concluded that in the business world there are no. of organisation exist with different size, scope and legal structure to serve the consumers needs and demand in positive manner. It is significant to analyse the business scenario and factors which directly and indirectly affect on their business goals and objectives .Business environment plays very much important role to operate business and related activities in very smooth manner. With the help of internal and external business environment organisation can be able to build strategies and tactics in order to remain competitive in marketplace.
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