BE for anbarasu.docx

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Contents

Introduction:......................................................................................................2

1 Know the range of different businesses and their ownership...................................2

1.1 Describe the type of business, purpose and ownership of the two contrasting

businesses.......................................................................................................2

1.2 Describe the different stakeholders who influence the purpose of contrasting

businesses.....................................................................................................11

2 Understand how businesses are organised to achieve their purposes.....................15

2.1 Describe how two businesses are organise...................................................15

2.2 Eplain how their style of organisation helps the! to fulfil their purposes.........17

" know the i!pact of econo!ic environ!ent in business........................................20

".# Describe the influence of two contrasting econo!ic environ!ent on business

activities within a selected organi$ation.............................................................20

4 Know how political factor, legal and social factor i!pact on business.....................26

4.1 Describe how political legal and social factors are i!pacting upon the business

activities of the selected organisations and their stakeholders...............................26

%eferences.......................................................................................................28

Introduction:

1



&usiness environ!ent is co!posed of two words '&usiness( and 'Environ!ent(. In

econo!ic sense '&usiness( !eans hu!an activities like production, purchase or

etraction or sales of products or services that are perfor!ed to earn !oney. )eanwhile

'Environ!ent( !eans the aspect of surroundings. &usiness environ!ent is the set of

conditions institutional, political, econo!ical, legal or social that is uncontrollable and

affects the functions of the organi$ation.

In this task I will be looking at how two different businesses that contrasts with each

other and I a! going to find out the !ain purpose and ownership of these businesses.

Know the range of different businesses and their ownership

Describe the type of business, purpose and ownership of the two

contrasting businesses

Local

*ocal is a co!pany that will provide either a goods or a service to the local area and

although a local business is !ost often used when referring to a locally owned type of

business, and an ea!ple of a local business near !e is +ar!er opley-s. he types of

things +ar!er opley-s provide are a far! shop, a !oo *ady bird, corn !a$e, florists

and fish!ongers.

National

2



/ national business is the business that is 0ust across the UK only and an ea!ple of this

is )orrison(s and also )orrison(s did start out as a local co!pany in !y area but then

branched out so it beca!e a national super!arket across the UK.

)orrison(s is a super!arket that is placed all around the UK. It(s one of the 1largest super!arket in the UK, with over 1 stores, it first started off as a stall in the

&radford )arket to then beco!e what it is today a well know super!arket that sells

food and your local groceries.

European

/ European business is a business that is 0ust in Europe and an ea!ple of this is

3/I43&U%5 Europe. 3ainsbury is a third biggest super !arket in the United Kingdo!.

3ainsbury was established in #678 by 9ohn 9a!es 3ainsbury and his wife )ary /nn in

*ondon, England and developed uickly during the ;ictorian period. It developed to

turn into the biggest grocery retailer in #822, spearheaded self<serviceretailing in the

UK, and its pri!e during the #86. he establishing 3ainsbury fa!ily still retain

approi!ately #=> of 3ainsbury plcshares , through different trust. he fa!ily sold

down their stake fro! "=> in 2=. he biggest 3ainsbury fa!ily shareholders are *ord

3ainsbury of urville with =.6". &iggest general shareholder is the invest!ent vehicle of

the ?atari i!perial fa!ily who now hold 27.#1=> of the organi$ation.

International

3



/n international business is a business that is

worldwide and is a well known business and an ea!ple of this is apple. /pple was

founded on /pril the #st in #8@7A /pple is a Bublic li!ited co!pany.

he type of products /pple sell is the )ac co!puters and there is arrange of )ac(s, they

also sell iBads, iBods, iBhones these are very popular products these days. /pples was

!ainly known to the people that worked for the co!pany at first but now is etre!ely

popular and well known anywhere in the world you go.

Public, Private, and not for profit

Public

Bublic businesses are owned by the govern!ent these types of businesses are the 4C3,

+ire services, and these are a li!ited liability co!pany Bublic co!panies, including

public li!ited co!panies, can be either unlisted or listed on a stock echange depending

on their si$e and local legislation.

Private

private businesses are owned by a non govern!ent organi$ations, or a s!all nu!ber of

shareholders who don(t offer or trade the stock to the general public that are on the

4



stock !arket and by this I !ean that the co!pany(s stock is then offered and then

traded privately.

Not for profit

/ not for profit organi$ation uses revenues to achieve its goals rather than distributing

the! as a profit or dividends. he revenues !ust be retained by the organi$ation for

epansion or plans for the co!pany, !ost not for profit co!panies don(t pay staff they

e!ploy unpaid volunteers these people usually work with or without co!pensation.

What does priary, secondary and tertiary ean!

Bri!ary is the etractive source for a business, secondary is the !anufacturing section

for a business and then tertiary !eans it(s giving the service for the custo!ers and this!eans then the business can sell a product to !ake !oney.

Priary businesses

)ost local and 4ational types of Bri!ary businesses you will find are far!s and !inesA

this is because you are etracting the product fro! the natural area. &p is an ea!ple of

this

"econdary businesses

)ost local and national types of 3econdary businesses you will find are the factories and

!achinery this is because you are !anufacturing the etracted product fro! the natural

area. &p is an ea!ple of this

#ertiary businesses

)ost local and national types of ertiary businesses you will find that they are shops,

restaurants and this is because it(s a service and you are selling the !anufacturedproduct. . &p is an ea!ple of this

"ole trader

/ sole trader is a business that is controlled by one person and they !ake all the

decisions, but although they can have e!ployee(s. /lso the sole traders do not have a

5



separate legal eistence fro! the owner. “ This is known as being ‘self-employed’. You

can keep all your business’ profits after you’ve paid tax on them.”

Partnership

Bartnerships are businesses that are owned by two or !ore people and a contract is

called a deed of partnership is nor!ally drawn up, and this is the type of partnership it

is and how !uch !oney each party is contributed and how profit losses will be

shared. ! partnershipis an arrangement where parties agree to cooperate to advance

their mutual interests.”

PL$

/ public li!ited co!pany is a li!ited liability this is whose shares are freely sold andtraded to the public and with a !ini!u! share of !oney and the letters B* after its

na!e. "hose shares are freely sold and traded to the public# with a minimum share

capital of $%&#&&& and the letters '() after its name.”

L#D

/ li!ited co!pany is a co!pany in which the liability of !e!bers or subscribers of the

co!panies is li!ited to what they have invested or guaranteed to this co!panyA also

li!ited co!panies can be li!ited by shares. ! limited company limited by shares# may

be further divided into public companies and private companies.”

%ranchise

It(s a type of business that sells the rights of another business to operate the franchiseA

this also !eans that the owner of the franchise !ight want to let others run the business

in other parts of the country.

/ franchise is bought by the franchise co!pany and once they have purchased the

franchise they will have to pay a proportion of their profits to the franchiser on a regular

basis. The franchise is an alternative to building *chain stores* to distribute goods that

avoids the investments and liability of a chain.”

"ainsbury "all &usiness '

6



ladybirdsPurpose he purpose of 3/I43&U%5

is to sell products to custo!ers

as it(s a super!arket, and they

sell food, clothing, general

!erchandise, toys

o look after children aged

<= years

(wnership he ownership of 3/I43&U%5 is

9ohn 9a!es. B* public li!ited

co!pany

Fwnership is by a wo!an

that cares about young

children

"cale

here are #@=, e!ployees

that 3/I43&U%5 has which

shows it(s a big business.

hey have #" e!ployee(s,

that all have different roles

"ector ertiary ertiary "i)e here are =7= locations for

3/I43&U%5 which !eans they

have loads of stores across the

UK.

he si$e of the nursery is

only uite s!all but has

ti!e goes on it will grow

and beco!e bigger and

successful.

Liitations of business '

he li!itations that are affecting so!e businesses are that !oney is dropping because

there is a recession but that is not the only thing that(s affecting so!e businesses the

profits levels drop and also with the rise of co!petitors, and also the location of the

business.

he govern!ent have been spending cuts and they grants for new businesses and also

they have funding for charities.

I a! going to be co!paring these two co!panies which are 3/I43&U%5 and *adybirds,

this is where I will talk about the type of business they are and the purpose as well as the

ownership.

7



*analyses the type of business, pupose and ownership of two contrasting

businesses

* description of two contrasting businesses

"*IN"&+- . PL$ '

he type of ownership that 3/I43&U%5 is a Bublic *i!ited o!panyA this !eans that

they are protected legally and they float the co!pany in the stock !arket, and with

3/I43&U%5 being a Bublic *i!ited o!pany it !eans they are a big co!pany but

people can buy shares into the co!pany.

he !ain purpose at 3/I43&U%5 is to sell things and serve the! to the UK custo!ersA

they also sell a range of different products that are I products, food, and clothing. hey are also trying to get !ore people to do their shopping fro! ho!e by using the online

shopping syste!. his shows us the different types of products that 3/I43&U%5 sell.

hese are all for good purpose as they don(t 0ust have one store in one location they have

their stores up and down the country, it(s great to see that they sell a range of products

so the custo!ers can buy all these things in one place rather than all over the place.

It(s also great to see that 3/I43&U%5 are trying to get !ore people to use the ho!e

shopping online, this is good because it will be easier for the! single !u!s that don(t

drive to go shopping and wait for it to arrive. Instead of going into a busy super!arket

trying to shop, because they will also need to find a way to get there shopping ho!e, this

is showing you that you can sign in and order your shopping online and can get it

delivered to your door.

/t the !o!ent 3/I43&U%5 is using a new advertise!ent which it(s called the price

lock, this is showing you that they try to keep their prices as low as possible and stick to

one price throughout the year. his is also good for 3/I43&U%5(s purpose as its

showing us as custo!ers that they are the cheapest super!arkets in the UK.

3/I43&U%5 also try to raise a lot for charity whether it(s a big national charity down to

being a little fundraiser for the co!!unity. his also tells !e that 3/I43&U%5 will have

8



a great custo!er service, as they don(t 0ust help !assive charities in the UK they are

willing to help people in the co!!unity.

I have been on 3/I43&U%5(s website and this is their !ission state!ent !t

+!,+/0Y# we value the trust placed in us by customers# suppliers and colleagueswho give us their personal data. 1ata security is one of our highest priorities and we

aim to be as clear as possible about what we do with personal data and why we do it.”

Ladybirds . L#D

*adybirds is a private li!ited co!pany this also !eans that they are protected legally,

with *adybirds being an *i!ited o!pany this !eans that only the people that are

involved it this will have the shares to the co!pany.

he purpose of *adybirds is to provide a service to parents that need daycare for their

children so they can go off to work, they don(t 0ust offer a great service to they parents

they also offer a great service to children, the children they offer great care for is <=(s.

hey also offer to educate all of the age groups and also they have great nutrient food

recipes, they also have great indoor and outdoor facilities.

*adybirds also have a !ission state!ent and this is what it is “ 2ur aim is to exceed all

standards in care 3 education for young children through a highly 4ualified 3 caringteam# in a well e4uipped environment allowing children to mix 3 learn together 3

independently grow in confidence each day. 5ere children are prepared to take on

their next challenge.”

5ou can find these !ission state!ents on their websites it(s i!portant that a co!pany

has a !ission state!ent because this helps the co!pany know what they are working

towards this it(s practically like a target.

$oparison to "*IN"&+- and Ladybirds

he two businesses I a! going to be co!paring are 3/I43&U%5 and *adybirds and the

different types of ownership these businesses have.

he differences between the ownerships of 3/I43&U%5 /4D *adybirds are:

9



3/I43&U%5 is a Bublic *i!ited o!pany this !eans that they are protected legally and

they float the co!pany in the stock !arket. *adybirds is a Brivate *i!ited o!pany,

this also !eans that they are protected legally.

/lso the difference is that with 3/I43&U%5 being a Bublic *i!ited o!pany it !eansthey are a big co!pany but people can buy shares into the co!pany.

/lso with *adybirds being a *i!ited o!pany this !eans that only the people that are

involved it this will have the shares to the co!pany and only the!.

Differences .

he difference about 3/I43&U%5 is that it(s a co!pany that helps people across the

country, and gives the! a place to shop, and provides everything they need. /lso3/I43&U%5 is the type of business that(s their to sell you food, clothing, general

!erchandise, toys.

/lso the difference about *adybirds is that it(s a co!pany that(s there to help parents in

the local area to where this co!pany is based, the co!pany is not also there to 0ust help

the parents they help the children too, by giving the children chance to have fun and give

the! confidence and let the! learn new things. /lso *adybirds is a type of co!pany

that(s their to give you a service.

"iilarities .

he only thing that is si!ilar about the two is that they both want to !ake a profit, and

bring in new custo!. his is i!portant because !aking profit is the only thing keeping

these businesses going, also if they don(t !ake a new profit then 3/I43&U%5 cannot

sell the products and *adybirds won(t be able to buy new things for the children to

use. /lso another si!ilarity is that they are both li!ited but ones a B* and the other is

a *D, they both can have shares but for the B* the public can buy shares into the

co!pany.

Describe the different sta/eholders who influence the purpose of

contrasting businesses

10



"ta/eholders

3takeholders is where a person or a group that either has an interest of concern in an

organi$ation, also they can have an affect or can affect on the actions an organi$ation

and the ob0ectives and policies put in place.

#rade +nions

rade Unions are a !e!bership group that looks after the interests of the e!ployees so

in so!e cases it !ay lead to strike action if the Union decide to disagree with the

co!pany. 3ainsbury don(t have Union !e!bership any!ore and neither do *adybirds

usually 0ust public owned businesses like schools G fire brigade

(wners

he owners are there to !ake sure that the business epands and to !ake sure it !akes

a healthy profit every year after the sales, also the owners will be willing to take risks

that will involve the business and will get a reward when the risks will pay off. /nd the

owners are responsible for the business and they will !ake sure that the co!pany is set

up and running well financially.

he owners have the !ain i!pact on 3/I43&U%5 but if there is !ore than one and

then the disagree!ents are discovered, then 3/I43&U%5 cannot bring in new ideas and

epand the business and also they then !ay want different things to happen for the

business.

$ustoers

he custo!ers are the very i!portant part of the co!pany as they are epected to

purchase products fro! the business, and also they should by products fro! the

co!pany because they will give the business the profit to carry on running well andsuccessfully, but without the custo!ers the business wouldn(t be able to stay open and

!ake !oney.

he custo!ers have a !a0or i!pact on 3/I43&U%5 because if they are not co!pletely

satisfied with the business, then they could dislike the product they have brought then

11



they can bring it back for a refund, but that !ay be unhappy with the custo!er service

that they have received fro! the staff then this could cause co!plaints, this !ay lose

custo!. his also !eans that if this happens then 3/I43&U%5 !ay lose profit and sales

!ay drop.

%inanciers

+inanciers should invest an a!ount into the business for it to start up and run before it

!akes a big profit fro! sales, but also then when the business starts to get profit !oney

than they should pay it back to the financiers with interest on the invest!ent, so they

are also !aking a profit fro! the business.

he financiers are every i!portant to a co!pany as they are able to !ake the business

and start up with a good a!ount of !oney, and they can pay back with interest in the

future, although the financiers can have the chance to increase the interest on the

financial loans.

Eployees

he e!ployees are e!ployed to epand and develop their career and then they are also

there to get pro!otions for the good and hard work and also they should be working in a

cal! and orderly !anner whilst respecting every other !e!ber of staff as well as thecusto!ers.

/lso the e!ployees are the ones that !ake it successful as well has the custo!ers and

they can also have a negative i!pact on the co!pany and this is because the co!pany

can e!ploy the wrong type of people and give the wrong standard of e!ploy!ent that(s

needed for this 0ob.

/lso if 3/I43&U%5(s e!ployees show a bad reputation for the business this !ay have

an i!pact and it could be that 3/I43&U%5(s shelves are not well presented and

custo!ers !ay then not shop there !eaning they will lose sales and profit.

"uppliers

12



he suppliers should be given the orders to supply the co!pany with the correct things

that they will need and, also they should be trusted with getting the supplies to the

co!pany on ti!e and unda!aged with the correct order that they asked for.

he suppliers are etre!ely i!portant for the co!pany because they deliver theproducts that the co!pany will want to sell to !ake !oney. &ut if the suppliers don(t

bring the products to the co!pany it !eans that they cannot !ake a profit.

/n i!pact that !ay happen to 3/I43&U%5 if the stakeholders give up and leave then

3/I43&U%5 are probably going to lose suppliers.

Local counity

he local co!!unity should then help the e!ploy!ent or the people in the area so thatthey then can have !oney to spend locally, as well has the local services and it will the

benefit the co!!unity as a whole.

he local co!!unity is still i!portant as they will provide the financial to help the

co!!unities through the sales in that particular area. /lso an i!pact !ay be that

3/I43&U%5 can or will get a bad reputation.

0overnent

he govern!ent is i!portant to the co!pany because they will need to !ake sure that

they are legally and successfully running, this is also i!portant as the co!pany will

oversee the work that gets done.

/lso an i!pact !ay be that 3/I43&U%5 will have to pay staff to !ake changes in

stores G plus increase in ta !ay !ean that custo!ers don(t buy as !uch and sales could

go down.

#rade +nions

rade Unions are a !e!bership group that looks after the interests of the e!ployees so

in so!e cases it !ay lead to strike action if the Union decide to disagree with the

co!pany. / *ady bird don(t have Union !e!bership usually 0ust public owned

businesses like schools G fire brigade

13



If a stakeholder gives up or wants to leave a businesses like a cafH this !eans that it will

have an i!pact on the owners I know this because for the cafH there could be !ore than

one stakeholder this then !eans the disagree!ents are discovered, then the afH cannot

bring in new ideas and epand the business and also they then !ay want different

things to happen for the business.

he custo!ers have a !a0or i!pact on the *ady bird because if they are not co!pletely

satisfied with the business, and that !ay be that they are unhappy with the custo!er

service that they have received fro! the staff then this could cause co!plaints, this !ay

lose custo!. his also !eans that if this happens then afH !ay lose profit and sales

!ay drop.

/lso if the *ady bird is not are not well presented and custo!ers !ay then not shopthere !eaning they will lose sales and profit. /lso the suppliers are etre!ely i!portant

for the afH because they deliver the products that the co!pany will want to sell to !ake

!oney. &ut if the suppliers don(t bring the products to the co!pany it !eans that they

cannot !ake a profit.

/n i!pact that !ay happen to *ady bird if the stakeholders give up and leave then *ady

bird are probably going to lose suppliers.

he local co!!unity is still i!portant as they will provide the financial to help the

co!!unities through the sales in that particular area. /lso an i!pact !ay be that the

cafH can or will get a bad reputation.

+nderstand how businesses are organised to achieve their purposes

Describe how two businesses are organise

(rgani)ational structure is a syste! used to define a hierarchy within

an organi)ation. It identifies each 0ob, its function and where it reports to within the

organi)ation.

1atri2

14



he !atri structure is usually found in organisations that can deal with the special one

off type of pro0ects, also these co!panies can also work on several pro0ects all at the

sa!e ti!e.

/lthough while all of these pro0ects are ongoing, they have and epert tea! seeing itthrough !aking sure it goes well.

/nd the eperts also support the !a0or functions of the organisation, and by this I

!ean the financial, hu!an resources and production.

Product

/ product structure is the way an organisation represents the parts of a product and the

way they fit together and interact, also the organi$ed levels in the detail based on thetype of structure. /lso this type of structure that is also used to !anage the changes,

testing and the proble! resolution for the co!ple products with a large nu!ber of

parts and functions.

%unctional

he functional structure is !ore of an organisational structure where the e!ployees are

all grouped hierarchically and then these are !anaged through the clear lines of

authority and then only report to the only person in charge

0eographic

he geographical structure is the way an organisation put things into a geographical

units which are regional, national, and international, this !eans that they will need to

report to one central headuarter, by doing this is ad!inisters to the core functions such

as the planning and !arketing.

$ustoer

#he purpose of a structure

Diagraatic representation of structure 3charts4

15



his is a diagra! that shows you the initial structure of a co!pany, fro! showing who

each e!ployee has to go through to get a 0ob done for ea!ple< you have the !anager, a

few deputy !anagers and then the workers. 3/I43&U%5 as si to seven layers below

the EF, this !eans that they have a lot of people to go through.

Divisions of wor/

he divisions of work are where a co!pany has different types of works and these are

the !anager, a few deputy !anagers and then the workers. Caving these divisions at

work !eans that the e!ployees know, who to talk to if they need help.

Lines of control

his is i!portant that they have deputy !anager 0ust in case the !anager is in a

!eeting, and the workers need help the deputy !angers are second in line to be in

charge if help if needed or if there is a proble!. his also !eans that each layer in the

structure for 3/I43&U%5 has a certain a!ount of control.

16



$ounication

o!!unication is where each layer of the structure passes on infor!ation and the

changes a business !ay take to !ake the business !ore successful, this !eans also fro!

the top layer to the botto!, everyone will find out things, having this structure will !akethings easy for 3/I43&U%5 to get infor!ation across.

"pan of control

3pan on control is where each person in the structure can have control over a certain

a!ount of people. +or ea!ple for this is like a deputy !anager has, a span of control

over the ad!in sections and then the ad!in sections, would have a span of control over

the other depart!ents etc.

$hain of $oand

hain of co!!and is how !any layers in a structure will need co!!ands, for ea!ple

3/I43&U%5 has seven layers, this !eans that si of the! layers will need co!!ands.

565 E2plain how their style of organisation helps the to fulfil their

purposes6

3/I43&U%5 is a public li!ited co!pany it is for!ally known as a B*, they have a lot

of stores across the UK, plus they sell a wide range of products, and this variety fro!

food, toys, electronics, drinks, clothes, toiletries.

he background of 3/I43&U%5 started out as a group of 5orkshire +ar!ers and this

was the beginning of 3/I43&U%5 in the #82(s, also in the #888 3/I43&U%5 beca!e

!ore of a successful business when the parent owner brought in /*<)art, in the

beginning they started out fro! a !arket selling products in *eeds, but since then they grew out in to the northern area, then up to being a big based super!arket, and !ost

successful in the European area.

he organisational structure 3/I43&U%5 has is a hierarchical style and this !eans, that

there will be fewer people at the top of the co!pany !anaging the people below. Blus

17



this also will allow the !anaging directors, at the top of this chart to !ake the big

decisions about which way the business should take net. hese decisions are i!portant

and should be !ade by the top eecutives with the right eperience and intelligence in

this type of eperience.

/n ea!ple of this is that /ndy larke was a regional store !anager for !any years

until he was pro!oted to the !ain board and that is where he is now. Under /ndy there

are several layers of the hierarchy and JThis is a relatively flat structure” 3arah

olclough buyer at 3ainsbury “ as there are thousands of people that work there and

only 6 or 7 layers”

his helps 3/I43&U%5 fulfil there roles by having a director that is going to be

responsible for each different area in the business.

/n ea!ple of this is that the custo!er services tea! is etre!ely i!portant to the

co!pany so one person !anages a large tea! in head office, or at call centres and in

stores where every colleague is responsible for taking care of custo!ers

/lso the sales director is responsible for !aking sure that all the right products are

bought for the store, although he doesn(t have change to check every individual one he

knows they !ust ensure that the right people are buying these products. /lso there are

different types of buying tea!s that will need to focus on their area and then leave the

other tea!s to look after their products.

/lso by having this type of organisational structure it also allows each tea! to run in

their own areas and research about the! properly to help the! find out about the new

trends across the world and also try to be one of the first to !arket or offer out the best

deals.

E2aples of how each section of the business wor/s will be e2plained below:

his will help the finance depart!ent fulfil their purpose by !aking sure the payrolls,

invoices, BL* also balance sheets and the businesses perfor!ance, is up to date

regularly and on ti!e. he finance depart!ent will !anage the payrolls, invoices, BL*

18



also balance sheets and the businesses perfor!ance, the finance depart!ent will also

report how well the business is doing to the rest of the co!pany depart!ents. his will

happen each day if there is any !a0or area of concern, plus there will also be a !onthly

late lunch !eeting for everyone in the 3/I43&U%5 house this then will be videoed and

sent out to all of the stores

his will help the hu!an resources depart!ent fulfil their purpose by co!!unicating

well with the other depart!ents and !aking sure the training is done correctly. /lso the

Cu!an %esources depart!ent will work with all the different depart!ents and will

offer the training that will be needed, and will also help when recruiting the key people

for the different areas. /lso an ea!ple of this is the buyer !ay also leave a produce and

then they will need to recruit so!eone who has an eperience and knowledge about

buying products.

his will help the I depart!ent fulfil their purpose by keeping focus and working and

co!!unicating well with the other depart!ents. /lso the I depart!ent will also work

with all the other depart!ents, because this depart!ent are always looking for new

ways of doing things to help the business progress and !ove forward.

/lso these people are not skilled buyers or interviewers for the business but they are also

skilled in the I section and can fi proble!s and also design a new syste! for the whole business which they then !ay use.

his will help the B% depart!ent fulfil their purpose by !aking sure the only thing the

press talks about is good and also they will !ake sure there isn(t anything bad that can

be said about 3/I43&U%5. /lso the B% Depart!ent work etre!ely close with the

press and they will let the! know if there are any stories to report about 3/I43&U%5,

as they try to ensure that 3/I43&U%5 will be seen in a positive light, but this is not

always possible for ea!ple when there was the big crisis over the !eat.

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7 /now the ipact of econoic environent in business

768 Describe the influence of two contrasting econoic environent on

business activities within a selected organi)ation

&oo

&oo! is generally very good for a business as the custo!ers will usually have !ore

!oney, when a boo! happens the une!ploy!ent rates go down in the econo!yA this

helps 3/I43&U%5 because the shoppers will have !ore !oney than if they were

une!ployed. his !eans that 3/I43&U%5 will put !ore !oney into their stores so they

!ay need to e!ploy !ore so they will also reduce the nu!ber of une!ploy!ent !ore.

/lthough a boo! could also be bad news for the !ore valued stores like 3/I43&U%5 as

the people with !ore !oney will go to the higher end super!arkets like )L3,

3ainsbury(s etc, as these target people with loads of !oney. /lso this !ay !ean that the

'eat in( trend !ay drop and !ay not beco!e as popular as, the high earners will go out

and benefit the restaurants. hen 3/I43&U%5 !ust then put out !ore luury products

on sale and an ea!ple of this is their etra special range.

3/I43&U%5 !ay also be able to then charge !ore for ite!s as the custo!ers beco!e

less price aware, but they !ust also keep co!petitive, also during a boo! custo!ers!ay not want value clothing like 'Meorge( although it as a good reputation, they !ay

prefer to buy the epensive brands. +or this not to happen the !arketing tea!s will

have to put adverts out there that show luury and great fashion and not focus on the

'value( side to it as !uch.

/lso during a boo! 3/I43&U%5 !ay need or want to recruit directors that understand

the !ore eclusive side to the business, this is usually what the higher end super!arkets

do as they will understand the business and what type of custo!er 3/I43&U%5 willneed to target now.

ecession

/ recession is a period of general econo!ic declineA and is typically defined as a decline

in MDB, and is typically a drop in the stock !arket, an increase in une!ploy!ent

20



also people fear that they !ay lose their 0obs, and often do which !eans they will have

to cut back and spend less.

/lso during a recession 3/I43&U%5 is one of the 'value( super!arkets that as

perfor!ed well co!pared to others, this is because 3/I43&U%5 as always sold itself asa value super!arket. &ut everyone still needs to buy food so they look for so!ewhere

cheap, which !eans 3/I43&U%5 is the choice for the!. Even though they have lost

so!e custo!ers to value stores like /*DI or *ID* this is because they are also having an

increase the !arket share.

his !eans that the custo!ers are less likely to go out to eat, and not go to the cine!a,

this !eans they will prefer to eat in and by treats for the fa!ily to have at ho!e, so

therefore they are selling products as fa!ily packs and an ea!ple of these fa!ily packsare either crisps or chocolate have been of an increase.

/lthough if the recession de!and falls I think that 3/I43&U%5(s sales could actually

increase as people switch fro! 3ainsbury(s and )L3 to 3/I43&U%5, also other

custo!ers switch fro! having branded products and an ea!ple of this is by having

Kellogg(s to having 3/I43&U%5(s s!art price.

)ost businesses during a recession will need to cut costs unless they are !aking great

sales like 3/I43&U%5 they !ay need to look at reducing the costs. /lso wages are ahuge cost and around 2" they cut out a layer of !anagers in the head office. he

advertising and in store pro!otions will need to show great offers and values for all,

they !ay also need to push special discounts on ho!e shopping, through e!ails and

leaflets. 3/I43&U%5 do this to show that they are cheaper than the other

super!arkets.

Econoy

he econo!y is the syste! of production, echange, distribution and the spending of the goods and services of the country. Inflation tends to increase the spending and will

encourage borrowing at the epense of savings. If the prices are rising uicker than the

inco!e, then !any individuals will tend to buy products at the current prices before

goods and services beco!e !ore epensive and less affordable.

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hen une!ploy!ent is high in a recession it then !eans that people won(t have as

!uch !oney to spend on products, also the businesses don(t have !uch to sell and will

have to close, this will then lead to !ore people beco!ing une!ployed which will lead

to !ore of a downward spiral.

0overnent policy

%iscal

+iscal is a policy that affects the level of ta rates and interest rates and the govern!ent

spending, this is an effort to try and control the econo!y. his is budgeting the public

spending.

1onetary

)onetary is when !oney is cheap and when this happens it(s a good ti!e for borrowers

to take a new debt or renew the eisting debts, but this is a downfall because when

borrowing !ore than one person can afford to repay was one of the big issues in the

recession before. his is done to then try boosting the econo!y out of this recession.

"upply side easures

he supply side !easures is a way to how to i!prove the productive ability of theecono!y, it tends to be associated with !onetary, this tends to e!phasi$e the benefits

of !arketing, such as !aking labor !arkets !ore fleible.

*nalyses the ipact of changes in deand and supply of "*IN"&+-

Deand curve '

he de!and curve is a graph that shows the slop downwards of the uantity of the

product, and the de!and curve for the products usually tend to be aggregated, this is sothe! !arket will have a de!and curve. /lso if the de!and in 3/I43&U%5 slows then

the business would need to look at why this is happening, although they would firstly

ask the buyers to assess their ranges and also why there are selling well. /n ea!ple of

this is that custo!ers would be going elsewhere.

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/lso the !arketing data would be able to show where 3/I43&U%5 were losing their

custo!ers to, and also showing whether their co!petitors are selling the!selves

differently and how. /lso it the co!petitor are selling different and popular products,

then 3/I43&U%5 will need to take i!!ediate effect to sell the sa!e type of product,

although the buying tea! will uestion why the co!pany didn(t sell the! products

earlier and this !ay risk of so!e people losing their 0obs, if the targets have not been

achieved.

he !arketing tea! will also have to review to see whether they have the best offers in

store and in !aga$ines, also they will need to work with the stores to ensure that the

stock is being displayed well showing of all points of sale. he stores will be checked by

the regional !anagers and the top directors to check that it(s all clean and tidy and also

all products are available for custo!ers to buy at all ti!es. /lso the car parks !ust be

easy to access and that the trolleys available for the custo!ers to have an easy and

hassle free shop. his will also !ean no ueues at check outs and polite staff !aking it a

pleasant eperience for the shoppers.

Fnce the stores have been reviewed and the sales are still down then 3/I43&U%5 !ay

need to act uickly to cut costs, and if they do not !anage their costs then the business

could !ake a big loss and ulti!ately closedown and one way of reducing costs will be to

cut a layer out of the !anage!ent tea! in the head office. his would then !ean that

other !e!bers of staff will need to pick up their roles and then if there are less products

to put out on the shelves this then !eans less colleagues will be needed in store, this will

lead to a reduced %ota or staff nu!bers.

*ess de!and for particular products then the prices !ay need to fall and then this will

need to be done in a con0unction with the suppliers as they then !ay need to reduce

their cost price if they(re not as popular. /lthough this is often the case with electrical

products and technology when there is new and !ore popular products enter the !arket

and then custo!ers no longer want the older lines unless they are cheaper.

he influence of de!and is where they are trying to set a price but this also !eans they

can either start of at a price where they feel that its overpriced and risk getting little

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custo!ers supply. Fr they could 0ust have a standard price and have !ore of a chance to

get !ore custo!ers supply.

/nother way for de!and is by advertising this is good because they can then

continuously create advertise!ents so the custo!ers will see the! and then thishopefully will bring in the supply for the co!pany fro! their custo!ers.

Elasticity of de!and is where if you have a product such as cornflakes then the elasticity

of this will be where if the price is changing then !ost of the de!ands are going to

change and this will be because it is only a s!all product, where has if you co!pare this

to the iBhone = there will be lots off de!and because !ore people are wanting this

product and this will be inelasticity because if the price changes then the de!and will

still stay the sa!e because people will still be willing to pay the prices.

"upply curve

he supply curve is about the availability of a product and a supply curve graph will

show an upward slope, this !eans that the higher the price, the higher the uantity will

be supplied and the producers supply a lot !ore at a higher price because when selling a

higher uantity product will be at a higher price and it will then increase the revenue.

hen supply changes it can also affect the price and if the supply is short then the price will often rise and an ea!ple of this is strawberries as if the weather has been poor, but

in contrast to this if there is too !uch production then the prices will take a dra!atic

fall. /lso is 3/I43&U%5 had a shortage of supply than any other super!arket then they

are likely to also have proble!s and an ea!ple of this will be !ilk shortage as the

suppliers were on strike due to the low prices.

his then !eans that 3/I43&U%5 will need to work closely with their suppliers and

far!ers to try finding a solution to this proble! that will please everyone withoutupsetting their custo!ers. hey !ust also work with public relations to ensure that

3/I43&U%5 will not have a bad reputation in the newspapers or television reports. In

so!e cases that are etre!e the govern!ent !ay also need to get involved to help

protect both the custo!ers and suppliers in this instant it would be far!ers.

24



his chart below shows you the de!and and supply of a product and ea!ple of this

would be cornflakes and if the de!and is higher than before then the custo!ers supply

will be etre!ely low, as they will go for a cheaper product because the de!ands for the

cheaper product are low, this !eans the custo!ers supply will be really high. his is

suitable because of the price where as when they !eet in the !iddle this will then show

the custo!ers are happy.

Elasticity of de!and is where if you have a product such as cornflakes then the elasticity

of this will be where if the price is changing then !ost of the de!ands are going to

change and this will be because it is only a s!all product, where has if you co!pare this

to the iBhone = there will be lots off de!and because !ore people are wanting this

product and this will be inelasticity because if the price changes then the de!and will

still stay the sa!e because people will still be willing to pay the prices.

Elasticity of supply is where if you have a product such as the iBhone = as it has a big

de!and the higher the price will be and then the higher uality will be and this will keep

on going because !ore people want this product.

0lobali)ation

Mlobali$ation is a process that is there to increase the world<wide echanges of national

and cultural resources. his advancesin the transportation and teleco!!unications that include the rise of the Internet these

are also !a0or factors in globali$ation, generating further econo!ic and cultural

activities.

Know how political factor, legal and social factor ipact on business

Describe how political legal and social factors are ipacting upon the

business activities of the selected organisations and their sta/eholders

9ow Political, Legal and social factors ipact on "ainsbury '

Political ipacts

25



Bolitical stability is usually defined as the state of peace that is nor!al eperienced in a

country fro! the activities fro! the govern!ent and also the govern!ent in this

situation will !ake decisions and keeping the best interests in !ind for people.

he conservative party that is nor!ally referred as the ory party and is a centre rightpolitical party in the UK and as of 2#" it has beco!e the largest political party in the

UK and also the largest single party in the house of co!!ons with "" )B(s. Movt

initiatives: is when the Movern!ent can support business through grants and ta

reductions and an ea!ple of this is the solar panels grant.

/lso when the govern!ent chooses to Invest!ent finance this then involves selling part

of your business 'shares( to an investor. he investor will then take a share of any

profits or losses that the co!pany !akes.

he International )onetary +und describes itself as Jan organi$ation of #66 countries

that works to foster global !onetary cooperation, to then secure financial stability,

facilitate international trade, pro!ote high e!ploy!ent and sustainable econo!ic

growth, and reduces poverty around the world.

he Movern!ent !ay change the ta rates up or down this will be to try help boost the

econo!y, an ea!ple of this is ;/ this !eans all non food and adult clothing range

will need different prices on the shelf edge labels this then !eans staff will then have to

go change the 3E*(s shelf edge labels. /lthough this then will change the profitability

and finance depart!ent of the co!pany as they will then need to change the profit

sheets that report back to the business.

he govern!ent have their own initiatives for co!panies and these are the healthy

eating and fit for life, these are the type of ca!paigns that the super!arkets will try to

support to then try get !ore funding or advertising for the co!pany fro! the

govern!ent, this is by the pri!e !inister if he !entions how good 3/I43&U%5 has

been supporting the certain ca!paigns.

/lso the govern!ent are also offering support and funding to business that will or are

offering apprenticeships, to then try getting !ore people in to a 0ob and working life.

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Legal ipacts .

he legal i!pacts are that 3/I43&U%5 !ust follow the law, and an ea!ple of this is

the trade description act, this is where the product !ost be described accurately

otherwise it can cause an issue and an ea!ple of this the big issue with !eat earlierthis year, so it is etre!ely i!portant that you describe the product well and accurately

if not then the trading standards will have no other choice but to get involved.

onsu!er protection is when a group of laws and organisations have designed to

ensure that the rights of consu!ers, these are put in place to hopefully prevent

businesses that engage or are planning on engaging in fraud or specified unfair

practices to try and gain or taking an advantage over co!petitors.

+3/ is the foods standards authority, this is where they regulate the a!ount of salt that

is allowed in products and also the a!ount of pal! oil that is allowed in the products

and this is fro! the sustainable rain forests.

Cealth and safety standards are the !ost i!portant, and for all the new workers will

have a full day having an induction before that are allowed to start their 0ob, they are

also shown around their work place and they are also shown the areas that they won(t be

allowed to go due the dangerous !achinery.

he legal fra!eworks is where the business chooses the way it operates, this will then

deter!ine who has what role and share to the business, this will also deter!ine the

relationships between investors, e!ployee(s custo!ers etc.

"ocial ipacts

he social i!pacts that 3/I43&U%5 !ay face are the difficulty to recruit the right

people for the 0ob in the stores or the offices depending on where they will be based, also

!ost of the workers that are in the stores are an unskilled workers on the !ini!u!

wage given .

3/I43&U%5 is a co!pany that will support charities and the !ain one they support

every year is tickled pink, they are always thing outside the past ways they have raised

!oney to, give custo!ers a new product to buy to support the charity.

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3/I43&U%5 has a co!pany cannot discri!inate anyone fro! having a disability,

different religion or if they are pregnant and other things on this ter!s and when they

are e!ployed by the co!pany or if they are in the C% Depart!ent they are then

recruiting they are also not allowed to ask uestions in these areas.

3/I43&U%5 like to support their local co!!unity and an ea!ple 3/I43&U%5 helped

out in a local park in &radford, by tidying it up and planting new plants to !ake it look

!ore presentable and cleaner, they also do talks in schools in local areas and give out

free stock for sports days.

De!ographics are the !ain nu!bers in a given population these can also be used to

identify gender, age, ethnicity, also the knowledge of languages, disabilities, !obility,

ho!e, and e!ploy!ent status, and even the location you live in also !ost of the ti!esthese types of data are used widely in public opinion(s, polling and !arketing.

eferences

#. 4ordhaus, D., 28, 2rgani8ational management , "rd Ed. 4ew ork: )cMraw<hill

international publication.9. /llen )., 2#. J !nalysing the 2rganisational :nvironment N. 3elect Knowledge

*i!ited: 4ew 5ork.+rench, *, and &ell, C 2= Frgani$ation develop!ent andtransfor!ation: !anaging effective change, 7th edition, &oston:)cMrawGCill.

;. )artins, E.M. and erblanche, +. 2". &uilding organi$ational culture that

sti!ulates creativity and innovation. European 9ournal of Innovation )anage!ent,

7 #, 71<@1.

<. 3caner, D., et al., 28, Introduction to business, 8th Ed. *ondon: )cMraw<hill

international publication.

=. %adebaugh, et al., 2#, &usiness and stakeholders, 6th

edition, India7. &roady<Breston, 9. L 3teel, *. 22.E!ployees, custo!ers, and internal !arketing

strategies in *I3.*ibrary )anage!ent, 2", "61<"8".

@. Mit!an *. 9.,L )cDaniel ., 28. JThe =uture of usiness> The :ssentials. 3outh<

estern engage *earning: )ason, FC.

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?. &urnes, & 28 )anaging hange: a 3trategic /pproach to Frganisational

Dyna!ics, =th edition, Carlow: +inancial i!esGBrentice Call.8. 3hein, Edgar #882. Frgani$ational ulture and *eadership: / Dyna!ic ;iew. 3an

+rancisco, /: 9ossey<&ass.

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