Business Environment Analysis

This assignment requires students to understand the concept of business environment and its significance in running a business enterprise. It involves analyzing the internal and external environment, which has positive and negative impacts on business activities. Additionally, it discusses various departments within an organization and their functions, which aid in improving performance levels.

BBE

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purposes of organisations; public, private and voluntary sectors and
legal structures............................................................................................................................1
P2 Size and scope of a range of different types of organisations chosen for the purpose..........3
TASK 2............................................................................................................................................4
P3 Relationship between different organisational functions and how they link to
organisational objectives and structure.......................................................................................4
TASK 3............................................................................................................................................5
P4 Positive and negative impacts the macro environment has upon business operations..........5
TASK 4............................................................................................................................................7
P5 Internal and external analysis of specific organisations in order to identify strengths and
weaknesses..................................................................................................................................7
P6 Strengths and weaknesses interrelate with external macro factors........................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment is one of the important aspect which includes internal and external
factors that affect the all the activities of the company in positive and negative manner. Both
factors are vital which helps company to run their activities in effective manner. Employees,
government, demand, supply and many more are the main components of business environment.
As all these play vital role in developing as well as enhancing overall performance level of the
company. By considering all these factors helps in enhancing strength of the firm. Thus, it is
important duty of manager to develop appropriate strategies to implement all the sources in most
appropriate manner (Business Environment. 2018). This will contribute in establishing positive
brand image of the company at market place. Current assignment is based on Marks and
Spencer, is biggest retail company which provide clothing and grocery products and services in
over the world. This report discussed about various type of purpose of different organization.
Size, scope and legal structure of business is also mentioned in this assignment. Along with this,
organizational functions and its relation with its objectives and structure is also mentioned in this
report. At the last of the project, SWOT and PESTLE of company is discussed here which may
helps in determining actual image of the company.
TASK 1
P1 Different types and purposes of organisations; public, private and voluntary sectors and legal
structures
In today's time number of opportunities are there for business organization to enhance
their brand image. As government of UK also define business by considering its workers
number, scope, operational activities and son on. Along with this, different type of business
organizations set their activities. Thus, it is major duty of managers to effectively understand
their company nature and type before perform their business activities at market. Along with this
there are some three types of enterprise like, M&S, NHS and Oxfam. All these are operate their
business with specific nature such as private, public and voluntary as well. In this all these
companies are responsible for following legal These can be understood by following points:
Private sector: Under this, companies are operate their business with the aim of attaining
success in market place by generating large profits (Avramenko, 2012). For this they produce
quality products to customers by understanding their specific needs and wants. As, there is no
control of government authorities upon business activities as all the operations are effectively
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controlled by the private people. In addition of this, they are not allowed for inviting public to
sell their shares. As Marks are Spencer is famous company which operate their business in over
the world. As they offer various quality products and services to larger number of customers
(Bovee, Thill and Raina, 2016). Along with this, company offer clothing and grocery items to
larger number of customers with the purpose of generating larger profitability level.
Purpose of company:
As a biggest company, the main aim of this company is to enhance their operational
activities at global level. In this they serve number of products and services to its customers by
understanding their needs and wants. This will aid in enhancing their profitability level.
Legal structure of private company
 Sole proprietorship: It is an organization which is operate and control by the single
person in which all the control are comes under in an individual. Along with this they
having unlimited liability.
 Partnership: Under this two or more than two parties are comes in formal agreement in
which they share all the liabilities and profits are equally. As the main aim of this type of
companies is to generate more profits.
 Limited companies: As there is two type of companies like limited by share and
guarantee as well. Under this, a separate legal entity which is distinct by individual.
Public sector: In this, all the activities and aspects are control by government. Along
with this, all the operational activities are operate with the purpose of providing quality products
and services to its customers (Cavalcante, Kesting and Ulhøi, 2011). NHS is best example of
public sector as they provide medical services to society development. This will directly
contribute in developing living standard of the people.
Purpose of company:
As company perform their business activities for betterment of society. In this the main
purpose of NHS is to provide quality medical services to society by treating them with respect
and dignity.
Legal structure of company
 Central government: It is known as apex body of government as this regulate all the
functions carry out by state and local government.
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 State government: As this body is develop policies for education activities and at the
same time also contribute in functioning agencies activities.
 Local government: This type of bodies are functioning day to day activities to manage
entire activities of public companies.
Voluntary sector: This type of companies are perform their activities for betterment of
society not for generating profit. As they required approval form government bodies to perform
their activities (Hair, 2015). In this Oxfam is best example of this sector as it is charitable firm
and also focus on developing economic growth by reducing poverty from the nation. Along with
this provide food, shelter to poor people with the purpose of fulfilling their basic needs.
Purpose of Oxfam:
One of the main aim of this company is to remove poverty by providing better and long
lasting solutions. For this they provide education to public to enhancing their living standard.
P2 Size and scope of a range of different types of organisations chosen for the purpose
Every business organization having their size and scope in which they can perform their
business activities in order to attain desirable results. Marks and Spencer, NHS and Oxfam are
different firm as they performance their activities with the specific purpose.
Marks and Spencer Size: Marks and Spencer is famous company in which they serve diversified products to
its customers at market place. As they having approx 84939 workers who put their efforts
for attaining success at market place. In addition of this, company easily generate larger
profitability level by serving quality products and services. Scope: As Marks and Spencer provide diversified products to its customers as per their
needs and wants. Along with this, they produce grocery and clothing items to number of
number of customers. Vision: To produce quality products with affordable cost is vision of Marks and Spencer.
With the help of this, they can enhance their profitability level.
 Mission: As the main mission of Marks and Spencer is to be a leading company in retail
industry by delivering quality services to number of customers.
NHS
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 Size: NHS is public company as it established in 1948 with the purpose of providing
good healthcare services to people. Along with this, they has qualifies workers within
their activities as they perform their activities effectively. Scope: NHS provide medical services to society with the purpose of proving them
betterment. As they serve diversified services to poor people for reducing health issues. Vision: To provide services for making society healthier and independent.
 Mission: The main mission of NHS is to remove poverty from the nation which helps in
developing the economic growth.
Oxfam
 Size: Oxfam is voluntary company as they operate their business with the purpose of
removing poverty in over the globe. As it is established in 1942. They serve food, shelter
to poor people for improving their living standard.
 Scope: Oxfam perform their activities in different field as they work for reducing poverty
from the nation for improving economic growth.
 Vision: Under this, the major vision of this company is to make poverty free world as
they want to see all the people free.
 Mission: One of the main mission of Oxfam is to remove poverty by providing better
services. With the help of this they can improve living standard of society.
TASK 2
P3 Relationship between different organisational functions and how they link to organisational
objectives and structure
Every business organization having functions which are highly relate with company
objectives. Thus it is vital for Marks and Spencer to perform all the activities in most effective
manner with the purpose of attaining desirable goals and objectives. As selected firm operate
their business at larger level as they execute entire business activities for grabbing customers
attention (Hamilton and Webster, 2015). In addition of this, organizational structure also play
vital role in developing positive brand image at market place. All these can be understood by
following points:
Marketing: For attaining success at market place, it is important for business organization
to effectively promote their products and services at market place. In this marketing manager
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carry out an effective market research to understand customers needs. As it is relate with finance
department because it allot adequate funds to implement marketing tool in market place.
Finance: It is one of the important division which help business organization to execute
entire activities of the company by allocating adequate funds to entire department. With the help
of this Marks and Spencer easily attain set goals and objectives in an appropriate time frame.
Human resource: Under this, it is important duty of HR manager to recruit and select
capable workers for executing business activities (Karagiorgos, Drogalas and Giovanis, 2011).
As this department is highly relate with marketing and finance division to enhance their
productivity level at market place.
Research and development: Under this, manager of the company undertake an effective
research for evaluating all the activities with the purpose of attaining desirable goals and
objectives in appropriate time frame. It is highly relate with marketing department as they easily
promote their business activities.
Organizational structure
 Function based: Under this, it is important for business organization which is relate with
human resource, marketing, and finance. With the help of this company attain set goals
and objectives.
 Geography based: Under this, organizational structure is based on the geographic which
help in attaining success at market place.
 Customer based: Firm is focus on customers needs which helps in providing them better
satisfaction level.
 Product based: Under this, company produce quality products and services as per
customers needs. As company increase their profitability level.
TASK 3
P4 Positive and negative impacts the macro environment has upon business operations
Basis Positive aspects Negative Aspects
Political Legal authority is effective to
understand that can be
completed via following of
government policies which
Due to variation in
governmental policies and
activities, manager of M&S
has to modify their plans as
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assist to make effective
activities which are better for
developing loyalty.
well as policies.
Economical Economic is the tools which is
better for making modification
in business activities and
polices (Kolk, 2016).
It is essential in order variation
in business policies and
activities through capital that
can be created and this support
to develop business activities
and policies to plan in an
effective and efficient way.
Social M&S is the big brand in the
retail sector, so it is beneficial
to work and perform as per
variation in demand and needs
of customers. This support to
create business capable to
marketplace and it assist to
make trust.
Through this, social factor
highly effects on the
performances and productivity
of enterprise.
Technology It is more essential and
significant factor which
benefited to the enterprise to
save their time as well as cost
also.
Sometime advanced
technology in the business
operations highly impacted on
the business activities as well
as employees performance
also.
Legal There are certain laws and
regulation which has to be
reasoned by administrator of
M&S for working all functions
business effectively.
If organization is not working
and performing as per legal
standard then there will
authorities hinder and this
impacts image of M&S.
Environmental Environment is another the Due to modification in
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factor which identify regarding
utilisation of different
techniques via which variation
in products and services are
needed. This is essential for
evaluating market as well as
products according to
benchmarks (Nishitani and et.
al., 2012).
environment, business
manager has to create an
effective policies via which
variation as per alteration in
environmental forces. Thus it
highly effects the business
ability.
TASK 4
P5 Internal and external analysis of specific organisations in order to identify strengths and
weaknesses
It is one of the important responsibility of every business organization to determine
implement internal analysis because it is an appropriate tool through which company determine
their strength and weakness. With the help of this company measure their actual performance in
market place. For attaining the same, Marks and Spencer conduct SWOT analysis as it helps in
evaluating the current data and information towards the company and its activities as well
(Osterwalder and Pigneur, 2010). In addition of this, it is important duty of manager to
effectively implement all the strategies in order to attain sustainability at market place. As
SWOT analysis of Marks and Spencer are as follows:
Strengths:
 Marks & Spencer is the renown brand in the retail sector. Which covers huge variety of
categories like eye wear, apparel , footwear etc. Its products are mainly men, women &
children oriented.
 It has made online shopping more convenient by avoiding delivery time. It provides shop
your service for online ordering & pick up product from the merchandise store.
 Company has spread its roots globally by owning 1000+ stores across 40 countries.
 It has around 80000 employees all over the world and provides equal opportunities to
employers to not get biased with any employee.
 It uses high technology to reach their targeted market with usage of mobile, catalogue,
online selling.
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 Company is working hard on its R&D which is reflecting in their new food products &
also adding more items in its Frozen food range.
Weakness:
 Although the company is spreading globally but its supply chain scalability is still in poor
state. It connects to its all merchandise by online stores but is unsuccessful in delivering
products in all locations globally. The unsold stock left in their warehouses is sold in end
of season sales with less price.
 Company has build up their good brand image in United Kingdom, United States and
Europe, but is unsuccessful to attract customers of Asia & Middle East due to their
majority of product are only of western design not traditional.
 Even though company deals with wide variety of products for everyone, but people have
misconception that they do not offer for teenagers & youth which decreases customers
(Pikka, Iskanius and Page, 2011).
 As Company's good brand image its their responsibility to make distance from the fake &
pirated products which can affect their brand name.
Opportunities:
 It can expand their brand in India & China as these are among two of the worlds biggest
market with good future opportunities.
 Company can reshape their clothing section as they have spread their store in Asia &
middle east, if they will focus on traditional wear it will help them to attract customers.
 As the company has vast opportunities to spread there business in the international
market they are ignoring there own untouched market on which they can work hard and
capture them more effectively.
 They could launch their food products for the heath oriented customers who are focused
with more trending variety like Low fat food products, organic food, Vegetarian etc.
 To cover more segments of customers they can focus on the product range with
affordable price for middle class & below middle class customer.
Threats:
 Major threats of the competitive companies which offer same variety of products in
similar range of prices like Zara, United colors of benetton, Tommy Hilifiger, Gap,
Uniqlo etc.
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 Every country has its own government policies for retail stores which have to be followed
by every company who is working under retail industry.
 Cloth industry changes there trends rapidly, it changes with the change in
 Increasing minimum labour cost of United kingdom affects the company because 90%
of the employees are U.K located which ultimately affects the profitability of the
company (Reed and et. al., 2013).
 Change of the social environment also becomes the major threat for the company as
people are migrating from one place to another it brings change in their dressing style ,
eating habits, so Marks & Spencer have work hard to satisfy the adjustive needs of the
customers.
 New Potential entrants can become the threats for company as they are entering in market
with new technologies & more innovative ideas which can give big competition to them.
P6 Strengths and weaknesses interrelate with external macro factors
It is vital for company to enhance their business activities to understand their
opportunities which is relate with macro factors. As there are some strength and weakness of
company with is relate with macro factors:
Political: It includes all the legal and political terms which are important for company to
implement within their activities.
 Strength: BY implementing all the acts company enhance their productivity level.
 Weaknesses: If company fails in following laws and regulations then they reduce their
image and market share as well.
Economic: There is utilisation of different sources including internal or external via which goals
and objectives of company can be accomplished effectively.
 Strength: It is also involved in Corporate Social responsibility by participating in
reducing Greenhouse emissions & and listed in worlds most responsible companies in
2014.
 Weaknesses: It offers products for above middle class & higher class customers which
avoids vast range of middle class & below middle class people.
Social: It includes customers needs and wants in market place as they produce quality products
and services (Shigang, 2010).
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 Strength: Customers are quiet unsatisfied with the return policies & poor in store
experience which increases brand switching.
 Weaknesses: if company produce low quality products then they reduce their profitability
level.
CONCLUSION
From the above mentioned report it can be summarised that, business environment play
vital role in overall performance of the company because it is sum of all the forces in which
some factors are controllable and uncontrollable by the firm. But still company highly depends
on them and it directly affect on sustainability and activities of business enterprise. Thus, it is
important to effectively understand the environment factors to run business in an effective
manner. As it include internal and external environment which put positive and negative impact
on business activities. Along with this, various department also there in business organization
which are relate with function of organization. This will aid in improving the performance level
of the company.
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REFERENCES
Books and Journals
Avramenko, A., 2012. Enhancing students' employability through business simulation.
Education+ Training. 54(5). pp.355-367.
Bovee, C. L., Thill, J. V. and Raina, R. L., 2016. Business communication today. Pearson
Education India.
Cavalcante, S., Kesting, P. and Ulhøi, J., 2011. Business model dynamics and innovation:(re)
establishing the missing linkages. Management Decision. 49(8). pp.1327-1342.
Hair, J. F., 2015. Essentials of business research methods. ME Sharpe.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Karagiorgos, T., Drogalas, G. and Giovanis, N., 2011. Evaluation of the effectiveness of internal
audit in Greek Hotel Business.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Nishitani, K. and et. al., 2012. Are firms' voluntary environmental management activities
beneficial for the environment and business? An empirical study focusing on Japanese
manufacturing firms. Journal of environmental management. 105. pp.121-130.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Pikka, V., Iskanius, P. and Page, T., 2011. The business enabling network–a tool for regional
development.International Journal of Innovation and Regional Development. 3(3-4).
pp.324-344.
Reed, O. L. and et. al., 2013. The legal and regulatory environment of business (p. 328).
McGraw-Hill/Irwin.
Reinhardt, F. L. and Stavins, R. N., 2010. Corporate social responsibility, business strategy, and
the environment. Oxford Review of Economic Policy. 26(2). pp.164-181.
Shigang, Y., 2010. Competitive strategy and business environment: The case of small enterprises
in China. Asian Social Science. 6(11). p.64.
Online:
Business Environment. 2018. [Online]. Available
through:<https://www.slideshare.net/NikhilSoares/business-environment-
featuresmeaningimportanceobjectives-porters-model>
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