COURSE: HND BUSINESS

MODULE: BUSINESS AND BUSINESS ENVIRONMENT

LECTURER’S NAME: IMOH ITIEIMOH

NAME: LAVINIA ALEXANDRA GATEJ
ID: 17003616
BATCH: WH D38
 TABLE OF CONTENTS

INTRODUCTION................................................................................................................................3
P1. DIFFERENT TYPES OF ORGANISATIONS..............................................................................3
a. Differences between profit, not for profit and non-governamental organisations (NGOs). .3
b. Business purpose and supply of goods and services...............................................................3
P2. SIZE AND SCOPE OF THE ORGANISATIONS.........................................................................6
a. Difference between micro, small, medium-size and large enterprises...................................6
b. Market share, profit share, growth and sustainability............................................................7
P3. ORGANISATION STRUCTURES AND FUNCTIONS...............................................................8
a. Different kinds of structures relating to size and scope of operations...................................8
b. Complexities of transational, international and global organisation structures.................10
c. How functions relate to overall organisation mission and objectives..................................10
P4. Using PESTEL model, identify the positive and negative impacts the macro environment has
upon the UK retail sector....................................................................................................................11
P5. Conduct internal (SWOT/TOWS analysis) and external (Five forces model) analysis of a UK
Supermarket to identify its strengths and weaknesses.......................................................................12
P6. Explain how strengths and weaknesses interrelate with external macro factors.........................15
REFERENCES:..................................................................................................................................15
 INTRODUCTION

The purpose of this assignment is to provide and understand basic knowledge and
understanding of businesses, the functions of an organization and the broader business
environments in which organizations operate. We have reported about 3 types of organizations, their
size and scope, and how they work. The organizations we have chosen are: TESCO - profit
organization, OXFAM - nonprofit organization (NPO) and NHS ENGLAND - non-governmental
organization (NGO).
We explored the reality that organizations have with their various stakeholders and how wider
external environments influence and influence business decision-making.
The knowledge, understanding and skill sets acquired in this assignment will help me
understand my preferred field of expertise in future studies and my professional career.

P1. DIFFERENT TYPES OF ORGANISATIONS

a. Differences between profit, not for profit and non-governamental organisations (NGOs)

b. Business purpose and supply of goods and services

Profit organisation: TESCO PLC

https://www.tesco.com/

Background company:
In 1919 Jack Cohen set up his first Tesco stores in East End, London. This was his debut as a
merchant. In 1932, Jack established Tesco Stores Limited. Over the years, Tesco has grown locally,
adapting to the environment by introducing innovative technology by introducing online shopping
in 2000.
Type of business:

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 Being a global organization, Tesco operates in 14 countries across Europe, Asia and North
America, with more than 300,000 employees and more than 2900 open stores. By selling or selling
shares to the public, Tesco is a limited liability company.
Capital:
Tesco raise the capital by selling investors. 50% of its profit is distributed to shareholders as
dividends, and the other 50% is for investment and service improvement for consumers. Tesco has a
good analysis of the capital structure that is introduced into their program to help various business
development plans in the financial and numerical management system as a financing company. The
company has made a banking business. Between the two companies is a funding group that has a
management scheme that includes financing strategies such as: debt, finalization, capital and mixed
capital investments.
Ownership:
Limited liability companies are of two kinds: public and private. The stakeholders of Tesco
are: customers, staff, suppliers, investors Tesco is a public limited company and puts shares on the
stock market where they are traded on a centralized market that has advantages and disadvantages
such as:
Advantages:
 Tesco publishes, buys and sells stocks on stock;
 Any shareholder may transfer shares;
 If the owner dies, Tesco can work as a limited liability company;
 Tesco can dominate the market even if it has a bigger market share;
 If you buy the company's shares, any of the employees can own the property;
 Tesco can get cheaper loans and buy bulk products;
Disadvantages:
 The costs of setting up a limited liability company are high;
 If someone outside the company buys 51% of the total shares, they can always become the
new owner;
 When creating such a company, a lot of documentation is needed;
 The company's share of the latest tax rates for the government;
The stakeholders of Tesco are: customers, staff, suppliers, investors
Purpose:
Tesco offers a wide range of services and products from food, household products, clothing to
travel insurance. The company is in the tertiary sector because it is a retailer and provides services
to the population, transport, distribution and wholesale companies. Profit growth is one of Tesco's
main goals. Other goals that Tesco has are: to increase sales, to be a market leader, to provide goods
and services for all categories of clients.
 Non Profit organisation: OXFAM GB

https://www.oxfam.org.uk

Background company:
Oxfam was founded in 1942 in the UK. It is made up of 14 organizations that collaborate with
100 countries with over 3,000 partners. Oxfarm GB is a member of Oxfam International with many
charity stores selling very cheap second hand products of all kinds. In the UK, he works with over
20,000 volunteers.
Type of business:
Oxfam is a non-profit international charitable organization that works with small and
medium-sized businesses to combat global poverty.
Capital:
Oxfam raises its capital from donations, individual companies, fundraising. As a NGO,
Oxfam receives funding and the government because it not manage by govern.
Ownership:
In each of the 14 countries, there is a board of directors that raises funds. This form of
ownership is very good for Oxfam because it allows administrators to be chosen by the donors.
Administrators can make decisions at national and international level. Oxfam is headed by a Board
of Directors. The Board of Directors is made up of several directors, of which I could list a few:
Karen Brown - President
Sandra Dawson - Vice President
David Pitt-Watson - Hon. Treasurer
Vanessa Godfrey
James Darcy
Matthew Martin
The stakeholders of Oxfam are: customers, people who donate, the partnership, the trade
unions. Of them are part of it: full time employees, part time collectors, supplier of goods, buyers,
recipients, funds provider, local community.
Oxfam's biggest disadvantage is that despite generating money to help the poor, they
sometimes do not have enough money to help those in urgent need.
Purpose:

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 Oxfam's main goal is to collaborate with as many organizations as possible, with people who
fight for human rights and dignity. The organization offers all the services and therefore is in the
tertiary sector. Another goal of the organization is to ease suffering, combat poverty, educate people
to ease their lives.
Non governmental organisation: NHS ENGLAND

Background company:
https://www.england.nhs.uk/
The NHS was set up in 1948 and became the
largest publicly funded health service. The NHS is directly funded from national taxation, so it has a
responsibility to the Parliament.
Type of business:

The NHS is a national non-governmental organization.

Capital:

The NHS raises its capital by donations from government, offering medical services instead.

Ownership:
The NHS UK has about 980 full-time employees. NHS employees can also be referred to as a
stakeholder, because they want to work in a professional business environment. Being a National
Health Service is government-led, there are no other investors outside the government.
Purpose:
The NHS aims to provide medical services to UK citizens.
 P2. SIZE AND SCOPE OF THE ORGANISATIONS

a. Difference between micro, small, medium-size and large enterprises

Tesco size: Tesco is the UK's largest retailer and is the world's third-largest retailer. As a
percentage, around 30% of the UK market. In 2007 it made a profit of £ 55 billion. So Tesco is a big
company.

Tesco scale: Being a national business would scale in many UK cities. Tesco is competing
with Sainsbury, Asda and Iceland, but Tesco is the first in this competition. At the moment, this
competition with large companies has helped to improve customer service.

Tesco scop: Diversifying the stores, including Tesco Extra, Tesco Metro sells and sells
products that any other supermarket has. in addition to the others, Tesco sells furniture, electronics
and household equipment, clothes and more. Providing financial services, own card, personal loans
and more types of insurance.

Oxfam size/scale: Oxfam is a medium sized organization, but it is a very important business
that works with over 3,000 partners in over 100 countries to look for opportunities to combat
poverty and injustice. It is a global organization with 13 stores worldwide.

Oxfam scope: Oxfam's primary goal is to overcome poverty.

NHS England size/scale: The NHS is one of the 5 largest organizations in the world. The
number of employees is around 150000 doctors, 40500 practitioners, 314000 medical assistants,
about 19,000 employees for ambulance service and 18,000 medical and dental staff.

NHS England scope: The goal of the NHS is to provide healthcare to every person living in
the UK. Most services are free of charge.

b. Market share, profit share, growth and sustainability

The number of clients represents the market share of a business.Tesco it hold 27% of its
market share. Tesco is in the best position among the four major supermarkets in the UK, with
quarterly sales of 2.2% per annum, and continues to be the market leader. Increasing online sales is
a big advantage for Tesco. Now online sales are growing very fast, this being an excellent way to
sell non-food products. The online environment is a successful tool for Tesco in the banking system.
The main sustainability indicators in the form of business operations and market opportunities.
Tesco has a mature sustainability program that maximizes profit.

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 Oxfam draws attention to people through the online environment and media using parallel and
direct mail. The marketing strategy for growth is entering the market to attract new customers and
increase market share. Oxfam wants to increase awareness of poverty by establishing ethical
trading. Offering services based on crop trade is limited due to climate change.

NHS UK contributes to society, viability and the environment. The NHS generates benefits
that help the organization: saving money, increasing market share, creating new jobs and keeping
employees.

P3. ORGANISATION STRUCTURES AND FUNCTIONS

a. Different kinds of structures relating to size and scope of operations

Tesco organisational structure

Tesco has a tall organizational structure because it is a big company. It has a hierarchical tall
structure because it has many layers of management so it gives an individual place to everyone in
the business. The hierarchical structure guarantees that leadership works and that those who are
employed know their responsibilities. Tesco has many responsible employees in each department,
so control is easy for employees. The tall structure also has its drawbacks, because despite the fact
that employees know exactly who they are talking with, communication problems can sometimes
arise. if there is a problem in a lower department of Tesco it may take longer because information
has to travel through all levels of hierarchy.
Oxfam organisational structure

Oxfam has a flat organizational structure because there are not so many people who run and
organize the organization. The organization is headed by a single president who is the head of some
administrators, and he takes all the important decisions.

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HNS England organisational structure

The HNS structure is like a network that has many elements, being a tall hierarchical structure
with a maximum system.
 Source: http://www.ukcab.net/2014/02/uk-cab-48-accountability-in-the-new-nhs-england/

b. Complexities of transational, international and global organisation structures

The strategy of the organizational structure units gives Tesco firmness to branching the
oprations in opposite directions. This helps the company's success at an international level, and
that's because it applies the market strategy that seems to them better. Tesco's success is due to
international affairs.

Companies such as Tesco and Oxfam are organized through their direct functions. Oxfam has
a geographic structure because it collaborates and operates in several countries.

The NHS has a new architecture in which it has to develop the national planning that needs to
be a comprehension of population data and outcomes and the opinions are created in one plan.

c. How functions relate to overall organisation mission and objectives

Tesco is one of the largest chain stores that distributes food from UK and therefore has many
functional areas such as:
 Human resources
 Marketing and sales
 Administration
 IT Support
 Finance and accounts
 Customer service
 Production Operation
Oxfam has the following functional areas:
 Administration
 ICT
 Marketing
 Finance
The NHS is engaged in providing health care services for the most part free of charge. The
functional areas of the NHS are:
 ICT
 Customer Services
 Human Resources
 Support staff
 Strategic leadership
 Marketing
 Finance

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P4. Using PESTEL model, identify the positive and negative impacts the macro environment
has upon the UK retail sector.

PESTEL analysis is a useful tool for deepening the market's rise and fall, the potential, the
position of business and the direction for various operations.In this PESTEL analysis I will try to
highlight the various causes affecting the retail industry.
Britain's decision to leave the European Union has reduced the pound slack and uncertainty about
trade restrictions in Europe. Profit resources are affected by this situation. Stores that are located in
central London are possible targets of terrorist threats that affect tourism.
The exchange rate affects the negotiations with the suppliers and the doubt takes place on the retail
market and the investors because of the exit from the European Union. Running production in the
UK is becoming costly. Another economic factor is the change in consumer consumption habits.

Factors affecting the retail sector in the UK: variety and cultural preferences across the country or
region, the food range does not fit in all demographic areas, market research and investment are
being developed to address a more developed movement, and in some demographic areas the labor
market does not wants to work retail because the salary is minimal.

Technological factors affecting the retail sector in the UK: The e-commerce
TECHNOLOGICAL side is covered by shopping directly from the store. A study of the online
shopping environment shows that the elderly population is more likely to use

ECONOMIC
POLITICAL
SOCIAL
the online shopping environment. As the new innovation in this area that has made it easier to
access is the introduction of various smartphone shopping apps.

The number of ecologically and ethically aware consumers has grown, this improving customer
relationships. Environmental factors that helped the retail sector to operate ethically led to an
increase in image and reputation. Introducing recycled bags is an asset and this can help reduce
global warming. Environmental factors are useful for the retail sector because people want to lower
their pollution levels.

Legal factors, changes in laws, and new laws introduced help the retail
ENVIRONMENTAL sector legally comply with its operations. This division of the PESTEL
analysis is useful for the retail sector to be kept up to date with all legislation in force.

P5. Conduct internal (SWOT/TOWS analysis) and external (Five forces model) analysis of a
UK Supermarket to identify its strengths and weaknesses.

LEGAL
SWOT ANALYSIS OF TESCO PLC

Definition: „Situation analysis in which internal strengths and weaknesses of an organization, and
external opportunities and threats faced by it are closely examined to chart a strategy. SWOT stands
for strengths, weaknesses, opportunities, and threats.”1

Strengths

 Is a market leader with a 20.6% share of Sainsbury and Asda.

 Has a hot standing on its own brand, with over 20000 products.
 Has become weaker by applying the long-term financing strategy.
 Tesco has stepped up important milestones to buyers with Club Card.
 The company has a very good position with those who finance it because it has a healthy
economic growth.
 Innovation has developed an information exchange system (TIE) that helps suppliers to see
real-time information about the store.

Weaknesses

 Is vulnerable from the perspective of the low daily price campaign.

 The company has entered the online environment but has not invested much in
software by increasing the risk of being overtaken by others.

1 http://www.businessdictionary.com/definition/SWOT-analysis.html

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  Another area in the non-food sector.
 Being a market leader has to spend to keep his position, leading to the forcing to
borrow money. This has made the company shrink its financial mobility.

Opportunities

 The richest segment in the food market development is the development of the
prepared meals
 Tesco's tangible variation shows many possibilities for opportunities to bring more
national businesses to the steady profits table.
 The company operates its only online grocery store and has reached sales of 356
million representing the company's best performance.
 The most recent acquisition of the company is T & S, which holds 5% market share
in the UK.

Threats

One of the company's great fears is the global recollection that could add to the basic consumers.

Putting emphasis on the various international obstacles may distract attention from UK business.

The law that protects data in the UK has diminished the use of customer data that was taken over by
Tesco when it introduced the Club Card.

Radical changes to planning regulations can hinder development.

The prices of Asda policy-priced prices of reduced prices have made the company make reductions.

Porter's Five Forces of Tesco

Definition: Porter's Five Forces is a model that identifies and analyzes five competitive forces that
shape every industry, and helps determine an industry's weaknesses and strengths. Frequently used
to identify an industry's structure to determine corporate strategy, Porter's model can be applied to
any segment of the economy to search for profitability and attractiveness.2

Threat of new participants

Surface imagery in the commercial area and distribution process are critical factors on the UK
market. Supermarkets can store and sell more products faster, balancing the tastes of customers and
suppliers.

Consumer devotion to this sector is very high.

2 https://www.investopedia.com/terms/p/porter.asp
New on this market have limited distribution because channels are controlled by those who are
already on the market.

Very low cost to current customers by exploiting the price and different product ranges.

Those already on the market have a lot of advantages due to asset management.

Supplier power

This has to be largely declined in the UK market, and that's because there are a small number of
apple operators on the market.

Its own brand is a segment of the portfolio of goods portfolio.

Buyer Power

In the commerce industry, the buyer's power is very strong because there are many buyers.

A customer group is an important segment of stability for smaller merchants. These smaller vendors
have a small role in the UK market because they can not guarantee storage space for big vendors.

The retailer controls the distribution directly.

Threat of substitutes

Tesco has resolved its margins by increasing the ratio of food to non-food.

Competitive rivalry

At this time in the UK there are four major companies that control the market.

There is no difference between the products sold, the competition revolves around the pricing
strategy and its own label.

Supplying stocks through information technology is an advantage for all those on the market.

Tesco's strategy is similar to all four major supermarkets and that's because they use international
acquisitions to grow.

P6. Explain how strengths and weaknesses interrelate with external macro factors.

The fundamentals of the UK economy were good, the economy being characterized by low
inflation, many jobs and rising costs of real estate. These are factors that have provided the basis for
some progress in consumer spending. Retail work has been helped by huge increases in government
spending in the public sector. Large supermarkets had a very good growth. Prices of aliments were

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not affected due to low-income fluctuations. Instead, non-food products are exposed to me, and
shifts that have occurred will have a negative effect. Tesco has changed much of its business by
introducing non-food products, which can lead to a slowdown in activity that could change the
overall business.

REFERENCES:

 https://www.england.nhs.uk/statistics/wp-content/uploads/sites/2/2013/09/stats-5-meth-
state.pdf
 https://www.tescoplc.com/media/392373/68336_tesco_ar_digital_interactive_250417.pdf
 https://www.england.nhs.uk/wp-content/uploads/2017/04/nhs-england-sustainable-
development-managemen-plan-2016-18.pdf
 http://www.businessdictionary.com/definition/SWOT-analysis.html
 https://www.investopedia.com/terms/p/porter.asp
 Suzanne Fernie, a Fernie and Christopher Moore, (2012), Principles of Retailing, Published
by Routledge, 129-133
 BARON, P. (2012) Business and its Environment. 7th Ed. London: Prentice Hall.
 PALMER, A. and HARTLEY, B. (2011) The Business Environment. 7th Ed. Maidenhead:
McGraw-Hill.
 WEATHERLEY, P. (Editor) and OTTER, D. (Editor) (2014) The Business Environment:
Themes and Issues in a Globalised World. 3rd Ed. Oxford: Oxford University Press.
 WORTHINGTON, I. and BRITTON. C. (2014) The Business Environment. 7th Ed. Harlow
Pearson.

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