Business and Business environment

Introduction

The functions of a business and its environment are dependent on each other and they make up the scope for the analysis of opportunities in markets and making future predictions. In the contemporary time of looming globalization, many organizations make an effort to make business strategies which are both important and efficient in the analysis of their environment (David & David, 2019). The goal of this study is to discuss organizations in the public, private and voluntary sectors according to their type and size. More specifically, this paper will make it easy to delve into the relationship between the structure of an organization and its business functions in private organizations.

This paper will result in the ease of understanding the macroeconomic factors which are crucial in the understanding of a business environment. What will be discussed will be the positive and negative effects of the macroeconomic factors affecting operation of businesses in the market. An analysis of the strengths, weaknesses, opportunities, and threats of company known as Aldi will be discussed.

Explaining different types and size of the organisations

The types and sizes of the corporations are playing crucial role in developing effective strategic planning to run their operations and expand their business across the globe. In this regard, there are three types of sectors which include private, public and voluntary. In the private sector, the firms mainly include sole proprietors and other organizations which are run independent from the government. In the public sector, the firms consist government parastatals, public and statutory corporations, and departmental undertakings. In the voluntary sector, the firms are focusing on maximising social welfare as a whole. Even though in certain cases, it may be hard to place organisations into the voluntary sector, there are two ways in which they can be identified. First, an organization can be said to be voluntary when the frequency of the people can be said to be or associations apart from family and work. Second, a voluntary organization can be tied to a function in the community (Warriner & Prather, 2001). Different size, types, and structure of the business will be evaluated further,

Private sector: Aldi

Aldi is the family-based private organisation, operating in the retail industry, where the organisations provide quality retail products to the customers at compelling prices so that it can maximise the objective of the firm in the near future. The legal structure is totally depending on private entity where intellectual property rights and copyrights are managed well in the organisation. The size of the company is large size, with 10000 supermarket chains, where the company is able to maximise its profitability by serving the customers in a better way (Aldi, 2019).

The scopes for the organisation in the near future are such as,

Maximising social welfare by serving the social communities as a whole

Expanding the business across the international retail market

Creating values for the customers in the near future by helping diversified products at competitive price

These are the significant scope of the company, where Aldi focuses on developing organisational structure according to its business functions so that it is possible for the organisation to maximise its profitability and strengthen its customer base successfully (Aldi, 2019).

Public sector: Bank of England

Bank of England is the central bank of England, and it is government’s banker, where it has been established in the year 1694. The bank became independent and public bank in the year of 1998 where the monetary policies and practices are enough in serving the customers in a better way. It has the monopoly to issue bank notes in the country. The legal structure of the organisation is totally public, and the investment is sufficient in running its operational activities strategically (Bank of England, 2019). In this regard, the primary scope of the organisation in near future is such as,

Regulate the monetary policies in the near future

To stabilize the economy of England sustainably

Issue banknotes

Regulated more banks in the country

These are the initial scope of the organisation where the staff members are efficient in developing effective monetary policies and practice to stabilise the economy of England.

Voluntary sector: Cancer Research UK

Cancer Research UK is a cancer research and awareness charity in the UK, and it was established in 2002 by the merger of the cancer research campaigning and the imperial cancer research fund. It is operating in the voluntary sector for maximising social welfare by serving individuals for reducing the number of deaths from cancer.

The scopes of the firm in the near future are such as,

Expansion of their service internationally for increasing awareness about the cancer

Providing proper treatment and community care

Developing integrated care for serving the social communities as a whole by creating an effective campaign

The legal structure of the cancer research UK is a trust where two trust centres are collaborating to develop the service for serving the social communities with proper information and treatment and care for raising awareness among them, so that the objective of reducing the death rate among the cancer patients can be fulfilled in the near future (Cancer Research UK, 2019).

Hereby, there are different size and scope of the business, and according to the scope of the business in near future, the organisations try to use their resources and capabilities as well as develop effective organisational structure so that the employees can conduct the business operational functions for grabbing the future market opportunities.

Demonstrating the interrelationship of the various functions within the organisations and its linkage with the organisational structure

There are proper corporate functions that are essential for companies to run the business and secure future sustainable development. As per the corporate functions, there include operations, marketing, human resources, information technology, customer service, finance, and warehousing. These are the primary functions of the organisations, where the firms are trying to utilise the organisational resources and capabilities to run these functions efficiently. According to the business functions, the corporate structure is developed, and thus there is strong relationship between the corporate structure and the features of the firm (Barkauskas, Barkauskienė and Jasinskas, 2015). The organisation Aldi focuses on operations, which are the primary functions of the firm, where the employees are responsible for managing operations and developing efficient supply chain for successful distribution of the products. Hereby the as per the structure of Aldi, there is CEO of the company, and thereafter there are different operational heads such as operation manager human resource manager, finance managers, customer service team, information technology department, marketing manager, and warehousing management. This is the structural hierarchy, maintained in the organisation, where the organisational structure depends on the functions of the company. Under the operational managers, there are staff members to handle the internal operational process such as product packaging, labelling, and presenting the products, and there are suppliers and distributors who are trying to distribute the products successfully according to the needs and services of the customers.

On the other hand, the marketing manager is responsible for restructuring the strategic marketing planning of the organisation to promote the organisational products successfully and in his regard, under the marketing manager, there are distribution staffs, content developer, area sales manager who is trying to cooperate and develop effective marketing strategies for promoting the brand in the market successfully and this is linked with the organisational functions, where the marketing department team handle the functions of promoting the business through promotional activities and marketing tactics by product design and service innovation. Additionally, under the customer service department, the organisations hire efficient staff who can handle the latest technology and customer portal for managing the customers. under the manager of customer service department, there are skilled staff, front desk team, who provide valuable services to the customers 24*7, which is also valid for the organisation Aldi to improve their operations and secure future sustainable development by satisfying the customers in the long run. Hence, the customer service department of the firm is able to manage the functions of handling the customers. On the other hand, the information technology department is there and as per the organisational hierarchy, under the IT manager there is the whole team who are efficient to handle the operational functions such as development of mobile application, managing the organisational online portals, software and hardware management so that the online activities of the business are conducted efficiently and thus the organisational structure of IT is related to the organisational functions to manage the functions of technological advancement and customers service innovation (Aldi, 2019).

Moreover, the organisation structure also includes the human service department where the functions of managing human resources are handled will in the organisation. The management team is controlling the employees, front desk team, store keeper and other staff who are efficient in serving the customers in a better and unique way. On the other hand, there is financial management team and warehouse management team that is also competent in managing the employees and lead them towards achieving success. Hereby, the organisational functions are essential to restructure the organisational hierarchy and according to the tasks, the CEO of the company Aldi develops the corporate structure where the management team is capable of handling the employees in their respective field to run the organisations by conducting the functions including human resource management, customer service, and information technology management, finance and operations, warehouse management and marketing which contribute positively in achieving the future objective of Aldi (Aldi, 2019). The linkage between the organisational structure and functions are advantageous for the company to fulfil their operational activities strategically and handle all the organisational tasks efficiently to deliver high quality service to the customers.

Identifying the positive and negative impacts of the macro-environmental factors on the business

There are macros economic factors that have significant effects on the business activities where the organizations face the implications of doing their business in the market. The macroeconomic factors are such as political, economic, social, environmental, legal and technological, which have significant impacts on the business activities of the organisations. The elements and its effects on the business will be evaluated further,

Political:

There are many political factors that have crucial implications for organisations. Though the government is cooperative and the political stability across the UK is beneficial for the organisations to expand their services by conducting the operational activities strategically. On the other hand, there are some political issues, such as corruption, inequality, and delay in making decisions that have negative impacts on the firm Aldi, where the organisation faces difficulties in doing their operations in the country successfully.

Economic:

Economic growth in the UK is one of the contributing factors for the organisations, operating in the market. In this regard, the UK has been experiencing high growth with high national Income and GDP growth, which in turn helps the firm to utilise the growing demand and establish the brand successfully. Moreover, the inflation rate is moderate which provides a scope to the retail firm Aldi to set effective price range for their products according to the market demand and quality of the products. In addition to this, the purchasing power parity of the individuals in the UK is increasing year by year which shows that the customers have the potential to make effective purchase decisions (Aldi, 2019). It provides a scope to the firm Aldi to target the right audiences in the market and influence their purchasing decisions in order to retain the viewers towards the firms for their quality products and services. This is also effective and beneficial for Aldi to strengthen its customer base and influence the buying decision for maximising their sales volume and profitability of the firm.

The social element is also useful in being considered as one of the factors influencing business environment. Social development is there across the UK, where high literacy rates and growth among the social communities are effective which in turn helps the companies to retain the audiences for their quality products and services. The development of society further provides a scope to have strong customer base in society. In addition to this, in the era of globalisation, individuals are educated and try to seek latest information through internet. Hereby, social media is playing crucial role for the organisation to attract the audiences and share adequate information and organisational data for promoting the organisation in the market. Hereby, social development has positive impacts on the operational activities of the firm in doing its business sustainably. Moreover, social development further enhances the transfer of skill and knowledge, which is also useful for the organisations Aldi to have stable employment base where efficient employees can contribute positively to the company to achieve future sustainable growth (Aldi, 2019).

Technological:

Technological enhancement and implementing the latest technology in the retail firm are efficacyin organisations to enhance innovation and creativity. In recent years of globalisation and digitalisation, the entrepreneurs prefer to have and install innovative and latest technology for running their business operations efficiently. It has practical positive impacts on the firm’s operational activities, where the implementation of Information and Communication Technology (ICT), Enterprise Resource Planning (ERP), as well as upgrading the company’s website and developing mobile application for the firm are essential initiative of achieving future success (Beyazit, 2015). Here, the retail firms are utilising these latest technologies for retaining the customers and improving engagement with all the customers for long run where the supply chain system and technological advancement provide scope to the firm Aldi to develop effective strategic planning to run their operations smoothly by making the system automated.

Legal compliances and proper legislation practices are sufficient for the organisations to follow suitable practices for running operational activities in a systematic way. In this regard, the firms can get the scope to follow the legal structure in the UK and implement the practice for developing productive organisational culture. It hereby has positive impacts on Aldi where the firm can run its business ethically (Su, Chenand Wang, 2019). However, it also has adverse effects, where the tariff and quota system and the rules of international trade may hamper the smooth transition of goods and services provided by Aldi.

As per the environmental factors, people in recent years are concerned about environment and natural resources, and in this regard it is the responsibility of the companies to sere future sustainable development by following the environmental rules and legislations. The initiative of using renewable resources is effective which has positive impacts in the firm to utilise the alternative resources and reserve natural resources. There are various techniques such as implementing solar panels and using bio energy, which provides a scope to run the operations positively. On the other hand, emission of greenhouse gas is another issue, which is also mitigated by using electric cars in the organisation for developing green supply chain. Hereby, the organisation Aldi also has the opportunity to createan efficient supply chain by reducing its environmental impacts (Aldi, 2019). However, the environmental rules and legislation are strict and intense for which, sometime, the firm may face difficulties in protecting the brand from controversy and secure future development by managing all the environmental factors in the society.

Hereby, the above-mentioned macro-economic factors are effective, and these have essential impacts on the organisational business operational activities. In this regard, the leader of Aldi needs to analyse the market and business environment and maintain all the intellectual property rights and copyright for making the business ethical and running the operational activities strategically.

Internal strengths and weaknesses of the business and its interrelationship with the external macroeconomic factors

The SWOT analysis is useful in understanding the strengths and weaknesses of the organisations and identifies the future market opportunities and threats for which the companies can be affected in future. Hereby, through the SWOT analysis, it is possible to analyse the strength and weaknesses of Aldi in order to assess their performance and identify the interrelationship between the external factors and the strengths, weaknesses, opportunities, and threats. The weaknesses, as well as opportunities and threats for Aldi, can be evaluated further. After that, the SWOT analysis of Walmart, which is another retail chain, will also be analysed in order to make comparison.

Loyal customer’s base and pricing strategy are the major strength of the business, where the customers are loyal to the brand, and they make effective purchase decisions. The locations of the company are useful to attract the audiences in the retail market, and efficient employees are strength, where the employees are dedicated to their job roles and responsibilities for serving the customers in a better and unique way. The firm aims at delivering high quality products to the customers at lower prices which are the significant strategic planning of the business, and it, in turn, helps the brand to sustain in the retail industry and serve the customers efficiently. The factors such as high inflation rate and social development are useful where the customers are acknowledged the market growth and actual price of the products, and in this regard, the strategies of delivering the products at lower cost further attract the audiences in the retail market for long run.

The major weaknesses are such as high labour turnover rate, low product diversification, and little customer retention technique, and reduced supply chain which affect the business operations negatively. The factors such as low profitability and turnover rate affect the firm where the leader cannot diversify the products and services for retaining the customers. Weak economic growth and lack of investment further deteriorate the chance of customer retention through developing effective marketing planning (Paul, Sankaranarayanan and Mekoth, 2016). Additionally, due to political unrest in some time, lack of organisational policies and practices, and the turnover rate of the employees is high, for which the firm is not able to perform efficiently in the market and gain tremendous competitive advantage.

Opportunities:

As per the possibilities, there is a high expansion of the retail industry across the globe, where improving involvement with the local communities and exploring alternative and innovative business strategic planning can be possible by the retail firms. The macroeconomic factors are such high expansion of economic growth and investment on latest technology as well as technological up gradation are influencing the opportunities in the retail industry. Apart from that, social media marketing is another opportunity where Aldi has the scope toexpandits business operations and strengthen its customer base for near future. In this regard, factors such as social development, rising social media activities across the globe, and globalisation are interlinked with the opportunity where the firm can garb future market growth and establish the company in the market successfully. The prospects of high demand for fashionable products as well as influential e-commerce industries are another scope for Aldi, where the organisation has the chance to grab the customer's base ad target and retain the customers for long run (Hammad, 2015). This is effective for Aldi to ensure future sustainable development by enhancing is sales volume and maximising its profitability. In this regard, with the opportunities of high demand for fashionable products as well as influential e-commerce industry, the macro factors such as technological advancement, utilising ICT and social development with high literacy rate are involved where the social communities are well knowledgeable and the individual prefers the latest products and services with more innovation and creativity. Hereby, it is beneficial for the organisational to focus on the opportunities and develops effective business strategic planning for successful future expansion of the brand.

High competition in the retail industry across the globe is one of the significant risks for the organisation, where the business leader faces high threats from its competitors in the retail market. Lack of market share and low numbers of customers as compared to the established retail firms are the primary reason for this threat, where the company faces difficulties in gaining a competitive advantage in the market. The external factors such as high economic growth and social development further enhance the purchasing power of the consumers, and for these activities, the retail firms are flourishing across the globe, which raises intense competition among the retail organisation in the market. Moreover, the threats of substitute products are also there due to existing product line, where the retail firms are offering same category products to the customers (Thompsonand McLarney, 2017). This is also another major threat, where the firm Aldi could not satisfy the customers by increasing product differentiation due to lack of financial resources in the firm. In addition to these, employee union and costly operations are other threats, where the macro economic factors such as influence of political powers an employee union as well as increasing inflation rate further boost the cost of the organisational operations in the market, which in turn lowers the profitability of the firm in long run which is another threat where the organisation face difficulties to maximise their portability and sales volume.

Strengths of Walmart:

the strengths of the firm Walmart are high profitability, strong customer base, strong employees and quality products through which the company is successful to target he audiences and retain them for long run and these factors are associated with the business growth and customer demand in the market as well as technological advancement and skill enhancement which are also contributing factors to achieve future growth of the firm Walmart.

Weaknesses of Walmart:

The weaknesses are lack of brand expansion and poor marketing activities which deteriorates the sales volume and market share of the company in the global retail industry.

Opportunities of Walmart:

The opportunities are high growth in retail firm, online business expansion and e-commerce activities which are linked with the external factors such as high demand for fashionable products, influential e-commerce industries, technological advancement, utilising ICT and social development.

Threats of Walmart:

There are two major threats for Walmart which are high threat from substitute products and intense competition in the market and these threats are associated with the external environmental which are high economic growth and social development, purchasing power of the consumers and expansion of the retail firms globally.

Conclusion

Through this study, it is possible to understand the business environment and the activities of the business in the market. The study discusses the organisational structure and types in private, public, and voluntary sectors as well as evaluates the corporate structure and its function in the context of the individual firm. As per the findings, the organisation Aldi tries to utilise the corporate hierarchy to develop effective culture and develop appropriate strategic planning for the benefits of the firm, so that the strategic objective of the firm can be maximised well. The macro economic factors such as political stability, economic growth, and social development and technological advancement are sufficient in contributing positively to firm’s achievement. On the other hand, there are some negative factors such as labour union, high labour turnover, increasing price of raw materials, and strict rule and legislative practice in the retail industry, which affect the smooth operational activities of the business in long run. Hereby, the macro economic factors have both the negative and positive impacts on the organisation, where Aldi needs to mitigate the adverse effects and utilise the positive and suitable business environment for grabbing the future market opportunities in order to maximise its objective by delivering quality products to wide range of buyers at lower price.

Reference List

Aldi, 2019. Corporate responsibility. [online] Available at:

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Thompson, J., and McLarney, C., 2017. What effects will the strategy changes undertaken by next Plc have on themselves and their competition in the UK Clothing Retail Market?. Journal of Commerce and Management Thought, 8(2), p.234.

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