Business and Business Environment


The business functions of any organizations depend several factors including the employees, management, and market forces demand and supply. The competitive structures of the company defines how long it will survive in the market. Organization needs to develop a correct strategy for the the external market and to manage the internal management. The strategy need to partial proactive and partial reactive in nature so the goals of the organization can be achieve in dynamics environment. In this present report we choose the Morrison company which is UK based retail company. In this report we analysis the size and scope of the organization and their legal structures and and stakeholders as well as the functions and their interrelationships. This report also include the environmental factors and their impact on the organization.

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Business is majorly divided into two main sectors i.e. public and private. Here, it is considered as the main difference related to ownership. Public sector business is owned and governed by government forces while private businesses are not regulated by government whereas functions within such firm is carried out by private bodies. However, purpose of such business will be more understood through carrying out operations within both the firm. Public organization involves NHS which is a publicly funded national heath care system whose main purpose is to provide the best quality services to patients without having any profit interest. While, private firm involves Morrison which is considered as one of the main business enterprise which is focused upon earning profits and delivering better quality products or services.

Types of organization

However, it could be assessed that businesses are classified into two different parts and owned and operated by government and also owned and operated by private bodies.

Public company

Here, NHS has been selected which is a public firm and thus it is operated as a non profit making firm whose main purpose is to render the best quality services to patients in regard to improve their health services (Zhang, and Huang, 2012). NHS obtains funds from general public in the form of taxes and spend the same upon the welfare of society and provide the best quality services to patients.

Private company

Further, Morrison has been selected which is a supermarket and is owned and regulated by private businesses in relation to earn high profits as well as maximize sales (Demil, Lecocq. and Zott, 2015). Here, business is also focused upon identifying the needs of customers and providing them proper services so that best results can be attained.
Purpose of organization

Public organization

Main purpose of public firm is non profit making who possess a main motive of trust and welfare in society. Business started with certain purpose at the time of their establishment. Hence, organizations such as NHS operates in public sector in regard to provide better quality care and support to patients. NHS purpose is to deliver high standard care and support services to make that resources are effectively used and thus best result can be attain for improving the society and community to attain success.

Private organization

Further, main purpose of private firms is to earn profitability as well as enhance market share of firm. Morrison focuses upon providing different services related to carrying out development of organization and thus improve sales and profitability. It also helps firm to satisfy the needs of customers and thus attain customer satisfaction. While, the purpose of private firms to earn high profits and enhance market share of firm. Morrison also aims to improve its quality of products or services so that customer satisfaction can be enhanced to attain desired goals.

Growth of business in international environment

It is essential for business to undertake effective management practices and result in achieving high growth and success in international environment so that best results can be attained. However, it is significant for attaining growth in international environment, firm needs to possess effective practices so that success can be attained. Hence, it is essential for enterprise to focus upon providing growth and success of business in international environment so that high profits and targets could be attained.


Organization functions: Without the appropriate organization functions the it cannot achieve the its goal. Morrison performs a number of function in order to achieve its goals. The major functions of the company are marketing, finance, human resources and productions. The organization functions help to achieve the objectives of the company. The objectives of the company is gain more customers satisfaction, expand the business activities and improve quality of the goods and services produced by them. The following are the functions of the Morrison and their impact on the organization's


Human resources functions

The most important thing of the organization is to make correct selection of the right candidates for the right job profile. Every business need a large numbers of manpower to perform activities in the company. The human resources management hire talent people at every level so the company can use their potential. This help to company to achieve their objectives because the correct persons help the company to ensures its growth in long term. The human resources functions interrelated to every other functions in the organization. The company also provides training to the talented persons so they gain more knowledge about the industry.

Marketing functions

Marketing functions help to transfer goods and services from the company to consumer and Good marketing strategy help the company to gain more customers. The marketing function includes the selling, promotion of company products, and market information. This function helps to company to more customers satisfactions. The company introduce a more modern brand with lower price option and offers the different discounts and cash back schemes. The production is always related to the marketing because they well finished products can nor reach the customers until the good marketing strategy take place to reach the customers.

Financing functions

The availability of the different functions are depend on the finance it is the back bone on the every business. Under this functions business activities like acquiring, raw material, and hire the labor take place to support the work . A proper estimated funds help the organization to manage the other functions properly. The fiance functions helps the company to gain more shareholders trusts so they invest more money in the company.

Productions function

It is another function of business. Under this functions the raw material and semi finished goods are converted into the final goods. Through the correct productions the company can achieve the customers utility and satisfactions. The production helps to provide information about the capital and labor inputs and price of the particular products. The well finished product help the company to gain customers utility in the long run.

Organizing functions

In this functions the organizations manage man, machine, materials and money which are essential factors for every business. The functions collects and coordinate all other factors of the business. This function helps to run business operations smoothly and coordination in their people as well as resources.

Researches and development functions: The R&d department focus on the innovation of the industry. The more researches conduct by the company the more growth it will ensure. The consumers wants to buy more different products with different taste to understand the the consumers habits and their utility towards their products.


PESTEL frame work helps the to find the possibles success or failure in particular strategies which organization has choose for the particular goals (LiPuma, , Newbert and Doh, 2013.). The main elements of the PESTEL analysis is political, economical, social, technological, environmental and legal. The business is always affect by the external factors and its affect the business performance and decision.
Political factors: UK and EU separation have great impact on the retailers. The food standards act 1999 – has main aim to establish the food quality in order to protect the the public health. The regulations are created to the the standards of the food and supply chain the company. This legislation aimed limiting the the development of the out of town supermarkets it provide the advantages to the Morrison. The company has established the better relationships with the farmers and national farmers union which help to them maintain their close supply chain (Dumas, La Rosa, and Reijers, 2013). Now the company able to produced the safe and seasonal food in their stores more faster than their competitors. However, its increases the licensing cost of the company and separation from the EU decreases the customers and increases the new legislation on the company.

Economical factors

The global recession and the UK recession affect all the business and food retailers. The economic situation of every country is strong then the retail industry can run smoothly because the purchasing power of the consumers increases. The retail industry also affect by the habits of the consumers and make bigger impact on the sale and profit on the company. The Morrison has shifted from the luxurious items to value brand. Rising energy costs, transport costs, raw material have a huge impact on the supermarkets. The positive effect of this factors is that company use diversification and increases the profit margins to survive in the recession.

Social factors

Due to changes in the consumers trends and social changes the UK people move towards the bulk shopping and one stop shopping cause of this change the company increased the number of the non food items (Cheng, Yip and Yeung, 2012.). The consumers are become more health aware. Therefore the Morrison collaborates with UK's top chefs and also provide their food recipes in their website and magazines to boost their sales. The company want to stretch their brand for example considering the food online as to become the part of the social market. The company focus on the new culture adapt process by changing its logo.

Technological factors

The modern technology have brought various new opportunities for Morrison. To development in the online shopping with the facilities of the home delivery and second self scanning. In the self scanning company allows customers to scan their purchases and pay for them in dedicated checkouts (Barkemeyer, Holt and Tsang, 2014). The online marketing offers the customers to make purchases from their homes and social media has good impact on the supermarket brands. Now company encouraging the customers to leave their feedback about product and services. Company also provide the Loyalty cards which help to them predict the customers behaviour and changing the market segmentation and stock.

Environmental factors

Co 2 Emission leave great impact on the the Morrison product and result they need to close the warehouse locations to main shops. The different forms of the energy used by the company affect the changing trend of environment. The UK government ban the use the various sprays and gases over the food product which are sold in the stores. The stores are planning to reduces the carbon foot print and minimizing the waste produces in their stores to increases social conscience in customers. They also planning to introduce the waste management in the company.

Legal factors

Government legislation like Employment Laws, Health laws, Safety Laws directly affect the performance of the company. For example, the food retailing commission in 2004 introduced that ban current practices such as changing price without notice is not legal these additional laws affect the profits of the company. These various laws save the retailers from the manipulation of their products. The company follow the consumer protection and labor rights as well as contractual rights which provide the better working conditions.


For conducting the external we will use the porter's five analysis. This analysis deals with the the factors that affect the industry from the outside. A business environment is dynamics in the nature and need to understand the competitive environment of its industry. The analysis indicates company's rivals , Customers, suppliers, and other factors which affect the company from externally. The following are the porter's five forces and their impact on the decision making process.

Threats of new entrance

The capability of the rivalry company is very important. Due to inflation in the UK the many other small retailers are introduced in the market because of their low price products (Li, Wang . and Du, 2013). The company's management changes the stocks and focus on the more value brand rather the luxury items to face the inflation and survive in the market.

Threats of substitution

As we know the china is fastest growing nations which offers the low price products because of it manufacturing capabilities with its smart strategy to making the substitute products the original products loss its value. The company also introduces the low price products to maintain the demand patterns.
Bargaining power of customers: The company can push prices down but cannot forces the customers to buy the products. In case of the retail industry buyer power is relatively large force. low cost switching between the suppliers from one industry to another industry also affect the the company's sells (Rogers. and Davidson, 2015). The company introduced the loyalty card to their customer to understand preferences and taste.

Bargaining power of suppliers

The larger industry deals with larger power of the suppliers. In retail industry the suppliers have little control on the industry. The power of the suppliers are still affect the business of Morrison when the switching costs are high.

The degree of rivalry

The intensity of the rivalry help to the industry to find its exact positions. The main competition of the company are other retailers who sell the same products in different brands labels. In market there are little space for the innovation so people become saturated with the same products. The company become more innovative to gain more customers by using the online and social media where they can prompt their products and also receive feedback.

SWOT analysis

The SWOT analysis help the company to understand the internal strength and weakness as well as its external opportunities and threats. The SWOT helps to organization to understand the strategy they want to take and predict the upcoming challenges in their goals. The following is SWOT analysis of the company we take.


The major strength of the company is its low price products with good quality of the food which help to them to retain more customers in the market (Munksgaard. and Medlin, 2014). It has good supply chain and strong infrastructure that helps to maintain the costs and well integrated distributions channel. The company promotes the market street by providing a variety of fresh food.


The company network and infrastructure in the information technology is not well developed. Need to invest more in the employees training and outbound logistics or checking out facility is not very well develop as compare to the competitors. The company has only limited geographical area which need to be develop. The company improve the services and after sale services in the market which help to the company to take major decision in the future growth.


The growing market of the organic products of the company helps to become major player in the market company offers the food products at low price rage as compare to its competitors. The more international market will expand the business activities the company. After the acquisition of the Safeway, the other supermarket in the UK the company has make presence in the south England. The company has it is own packaging and label which raise demand from the customers.


UK market have been affected by the economic concerns through the credit crunch. Lower available income will impact on the and strategic need to focus on the lower price products. Rising raw material costs on the food items reduces the profit of the company. The management require further analysis to changes the consumers buying habits and technology development require in the consumer buying patterns (Peng, 2016). The china made products reduce the market share of the company so the organization also introduces the low prices products. The company is more based on the UK so it need some expansion to run its operations in the the other countries so they can gain more markets benefits and increases the market share.


It can be evident that internal factors involves strengths and weaknesses which is linked to external macro factors in regard to achieve best results. Main strength of Morrison is that firm has high growth rate, minimum labour costs, effective distribution and sales network and also provide monetary assistance. While there are several weaknesses as well as which affects firm's financial performance so that desired results could not be attained (Tongur, and Engwall, 2014.). Strengths of Morrison are linked to the external macro factors and thus needs to improve business performance. By evaluating the strengths and weaknesses it helps in improving business expansion so that sales and profitability of firm can be improved. Morrison improves its brand image in market by enhancing firm's operation in market so that set results can be attained. Hence, it is essential for cited organization to prepare appropriate brand portfolio in regard to obtain best measures and thus overcome weaknesses so that with the help of external factors success can be attained.

Further, it is essential for firm to assess its strengths and weaknesses which is interrelated to the external macro factors i.e. PESTEL which has been carried out above. Thus, it helps in identifying the political, legal, social, environmental, economic and technological factors that influences the business performance in market. Hence, it is essential for Morrison management to assess its strengths and weaknesses in relation to enhance firm's performance in market and thus enhance overall market operations of firm. It would also help in improving Morrison performance in market and thus aids in measuring success so that quality products could be delivered to consumers. However, all such factors are interconnected with each other and helps in improving business performance towards firm's objectives and link the same with the external factors in regard to overcome ineffectiveness and thus achieve success.


Report articulates that there are different businesses with varied purposes so that desired results can be attained. However, it is essential for firm to maintain sustainability in regard to carry out different functions within business. Here, private and public businesses are being carried out whose main aim is to satisfy the needs of customers as well as earn profitability. Further, stakeholders also possess responsibility in relation to improve business performance in market. Business also follows different rules and regulations in regard to overcome environmental issues affecting the business functions. Also, SWOT analysis is being carried out which helps in identifying the strengths and weaknesses of firm and assesses the interrelationship possess upon external macro factors so that best results can be attained.


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