Business Environment and Sustainability Analysis

The assignment provides a comprehensive analysis of the business environment's impact on sustainability. It explores how micro and macro factors interact with each other and affect the overall functioning of a business unit. The report concludes that it is essential for businesses to look at their strong points and analyze internal market performance to make effective strategies that support the firm in performing well and sustaining in the market for longer duration.

Business and Business
environment

INTRODUCTION
In the modern business world companies are having huge competition, they have to look at
their micro and macro environment both in order to sustain in the market for longer duration.
Firms have to make effective strategies that can support them in meeting with the needs of
consumers and provide benefits to stakeholders (Al-Saleh and Mahroum, 2015). Current study is
based on Nisa retail firm which is the small size retail company. It aims to provide quality
products and services to consumers so that it can enhance their satisfaction level. Present report
will discuss objective of different type of organization and their growth in the internal business
environment. Study will explain mission, vision, objective of these entities. Furthermore, I will
apply PESTLE and SWOT analyses models in order to understand internal and external
environment of the company
TASK 1
P1 different types of organisation and their purpose & P2 Size and scope of range of different
types of firms
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TASK 2
P3 Functions of organization and linked with structure and objective
Organizational structure is the essential part of business unit, that reflects power of each
person in the workplace. Each firm has to perform various functions in the workplace these
functions support business unit in accomplishing their goal effectively. Function, structure and
objective are related with each other’s. In the absence of effective functioning entity cannot
accomplish its goal significantly (Carrió-Pastor and Calderón, 2015). As main objective of Nisa
retail firm is to provide high quality services to consumers so that they buy its products and
profit of the firm can be enhanced. For that entity has to perform various functions such as
marketing, HR, finance, administration etc. All these department coordinate with each other’s so
that common goal of the firm can be obtained. The main objective of NHS is to improve
wellbeing of population. For that NHS make its employee aware with the agenda and develop
communication among them so that all departments can perform in alignment and goal of entity
can be achieved (Rong, Shi and Yu, 2013). NHS follows divisional structure, it allocates work to
the employee as per their ability and skills. This equal division of work enhance motivation level
of workers and they perform well in order to obtain common goal of the firm.
The main objective of Nisa is to generate high profit and become the leading retail firm
across the world. Organisational functions are associated with its objective because when
marketing, operations activities work together then entity gets to know the needs of consumers
and they become able to provide them goods according to their requirements. This supports in
raising profit and accomplishing goal of the firm. The short term goal of the firm is to retain
skilled employees for longer duration. For that entity implements flats structure, This supports in
making effective communication with workers and making them feel satisfied. By this way
people stay in the organisation for longer duration. When skilled staff members work in the
enterprise for longer duration then entity will be able to accomplish its long term goal of raising
profit and becoming leading brand.
Nisa adopts flat structure, it gives power to its employees to communicate well and share
their views with higher authorities directly (Schaltegger and Wagner, 2017). This structure
enhances motivation level and minimize communication issues. By this way all people
implement innovative ideas through which entity can enhance its profitability and can expand its
business across the world. In order to maximize revenues of the entity, HR department of Nisa
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retail firm hires skilled employees those who have great knowledge about retail market and can
deal with consumers well. That supports in resolving consumers complains soon and that
enhance satisfaction level of customers (Wheelen and Hunger, 2017). By this way they become
frequent buyers of the entity. Marketing department of the company helps in promoting products
and services of the entity to the mass audience and making them aware with the benefit that is
offered by Nisa for them. That increase interest of people and they take interest in its products
that support the firm in raising its sales volume and sustaining in the market for longer duration.
Flat organisation structure supports business unit in making effective coordination with
staff members, by this way all people work together. This helps in minimising conflict and
avoiding issues of business unit. Marketing function of Nisa helps in collecting all necessary
information about consumer needs, by this way production team can produce products
accordingly. This helps in raising satisfaction level of consumers and increasing sales of business
which is the objective of organisation. Flat structure supports in increasing coordination and
meeting with objective of business. This supports in performing organisational function
effectively.
Human resource function is the main function that works to provide high quality products
to consumers and satisfy their needs. HR department of Nisa concentres on the skill gap and
accordingly it organizes training for employees so that they can deal with the consumers well
and can meet with their needs. It offers employees flexible environment and give power to them
to share their innovative ideas with the management so that entity can improve its productivity
and profitability (Dima, Grabara and Modrak, 2014).
Finance function is another main functional department which main objective is to utilize
financial resources of the company well and enhance its profitability. It keeps record of cash
inflow and outflow. It looks upon the activities related to budget so that entity can generate
expected revenues. Customer service department of Nisa are responsible to provide quality
services to consumers and resolve their complains soon. It understands requirements of the
customers and make necessary changes in its current process so that entity can meet with the
needs of consumers (Othman and Rahman, 2014). Thus, structure, objective and functions of the
firm are interrelated and support business unit in achieving its goal soon and conducting
operations in smooth manner.
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P4 PESTLE analyses
PESTLE analyses is the method that supports business unit in understanding external
market condition of the business and external factors that impact on the working of the firm. By
this way entity can make effective strategies so that it can overcome from these external factors
(Rong, Shi and Yu, 2013).
Political factor
Political condition affect overall working of industry to great extent. If political
conditions are stable, then it helps the firm in smooth running of business but if it is unstable
then it creates difficulty for the entity to sustain in the market for longer duration. It impacts on
overall functioning of business unit to great extent. Changing tax rates and their laws affect
operational efficiency of the organization. As Nisa is the small size firm that operates its business
to the limited areas (Business Environment: Nature and Significances of Business Environment,
2016). If government increases tax rate then it will enhance cost of the cited firm and by this way
overall revenues of the entity will get reduced. On other hand if government makes favourable
conditions then it will support entity in running its operations in smooth manner. Changes in
working hour law impact on the business unit, it is in favour of the firm then employees will feel
motivated and they will perform their duties well that will support Nisa in accomplishing its goal
soon (Marketing theories – Pestel analysis, 2017).
Economic factor
It is most important external factor that impact on overall working of the business to great
extent. For instance, if there is inflation or deflation then it will directly and indirectly impact on
the purchasing power of consumers. In such condition people will not be able to spend such large
amount in buying such material (Rong, Shi and Yu, 2013). That will affect overall sales of the
company to great extent. On other hand if there are adequate income sources and employment
opportunities in the market then it will enhance per capita income of the nation by this way
people will spend great amount in such shops that will support the firm in raising its profitability
and it will be able to sustain in the market for longer duration. Growth rate affect the financials
of the company significantly. Thus, economic factors impact directly or indirectly on the overall
operations of the Nisa to great extent.
Social factor
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It is another external component that affect business environment. Culture, region,
perception of the society impacts on the choice of the people. These elements influence their
buying behaviour (Wheelen and Hunger, 2017). Some people life to buy products from small
size retail firm because it is affordable for them whereas other people like to spend on big
organization because they assume that these big firms offer them high quality products that small
firm does not have. Age and income are another component that influence the buying decision of
people. Old age people like to spend money on valuable products whereas young people look at
the trends and then make their buying decision. All these factor influence the choice of
individual that impact on the overall performance of the firm to great extent (Al-Saleh and
Mahroum, 2015).
Technological factor
It is another major external factor that impact on operational efficiency of the business.
Changing technologies enhance pressure on Nisa as well to adopt these techniques in order to
improve efficiency level of operations (Carrió-Pastor and Calderón, 2015). But these increase
cost of the business as well. Use of electrical point of sale and other fund transfer options helps
the entity in improving its distributing and reaching to the mass audience. By this way sales of
the company can get increased thus, use of advance technology impact positively on the Nisa
retail firm.
Legal factor
Changes in laws, tax rates, employment regulation affect company significantly. If these
laws are in favour, then it impacts positive otherwise it creates pressure to the business and they
have to modify their operations as per the new norms (Rong, Shi and Yu, 2013).
Environmental factor
Government is paying attention on keeping environment safe, for that they promotes eco-
friendly products that can support in keeping atmosphere safe and clean. Nisa is engaged in
corporate social responsibility and it fulfil its corporate responsibility towards environment and
society effectively (Schaltegger and Wagner, 2017). That helps the cited firm in enhancing
satisfaction level of consumers that help firm in meeting with its objective.
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P5 Internal and external analyses of business
Internal and external analyses of business support the firm in identifying its capabilities
and opportunities, furthermore it aids in knowing the major threats so that entity can make
effective strategy for minimizing its lacking points and strengthen its strong points.
SWOT analyses
Strength:
Nisa retail firm is operating its business at small scale, but it has good number of satisfied
consumers. All its products are having quality that help the firm in meeting with their
requirements. It offers quality consumer services to its valuable clients that attracts buyers
towards the entity and that helps the firm in raising its revenues (Othman and Rahman, 2014).
Weakness
Nisa has limited financial resources and it is operating at the limited area. That is why it
is unable to enhance its profitability to the extended level. Its investment strategies are poor that
is why it is unable to utilize its financial resources well (Business Environment: Nature and
Significances of Business Environment, 2016).
Opportunities
Technological up-gradation is the main opportunity for the cited firm that can help in
raising efficiency level of operations and enhancing its revenues. Furthermore, online shopping
is another opportunity for business. Nisa can enter into the e-commerce business that can help
the entity in expanding its business across the world (Marketing theories – Pestel analysis,
2017).
Threats
High competition in the retail market is the major threat to the business. Tesco, Asda are
big organization those which are creating pressure on small size firms. Changing economic
condition is another threat to the business that impacts on its revenues to great extent.
Porter’s five force (External analyses)
This is the tool that helps in analysing external market environment of business and
identifying the external business issues (Dima, Grabara and Modrak, 2014).
 Threats of new entrants: Retail market is facing high competition but new firm can enter
into this market easily. Thus threat of new entrants is very high.
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 Threats of substitute: There are many big organizations such as Tesco, Asda those which
are operating its business well in the market. They are offering same products to
consumers. Thus, power of threats of substitute is very high (Rong, Shi and Yu, 2014).
 Bargaining power of buyers: Consumers are the life blood of business, they buy products
and services of business that help the firm in raising its revenues. If consumers are not
satisfied with the products of business unit then they can move towards other brand.
Thus, they have high power to influence operations of the entity.
 Suppliers power: Suppliers are the most important stakeholder of the business. There are
many suppliers those who are offering raw material to retail firm. So they do not have
much power because if one supplier is unable to provide quality raw material at low cost
then Nisa can move towards other suppliers (Carrió-Pastor and Calderón, 2015).
 Competitive rivalry: Competition is very high, there are many firms those which are
market leaders that influence pricing of the products. This Nisa has to face huge
competition that impact on its processing of business.
P6 SWOT analyses and interrelationship with external factors
Strength
 High quality products
 Quality services
 Satisfied employees
Weakness
 Weak investment strategies
 Poor financial resources
Opportunities
 E-commerce
 Technological advancement
Threats
 High competition
 Changing economic condition
SWOT analyses support the firm in analysing strength and weak point of the firm so that
it can make strategy to improve its lacking points and utilizing its strength well. Internal and
external both are interrelated and impact on business unit to great extent. Company provides high
quality products to consumers but if social preferences get changed then it will affect the overall
functioning of business unit to great extent. In such condition it will have to make changes in its
products as per the requirement of society members. So that it can earn profit (Othman and
Rahman, 2014).
As Nisa offers high quality products to consumers, it is the main strength of business, this
helps in attracting more people towards the brand. It considers social factors and ensures that it
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offers goods and services to buyers as per their taste. This helps business in gaining competitive
advantage. It makes changes in its existing products according to changing demand by this way
enterprise become able to meet with its objectives.
Furthermore, Nisa always concentrates on implementing new technologies. Entity has
satisfied employees, if it plans to make changes in its technologies then these employee give full
support to business. By this way Nisa become able to make changes in its strategies and
practices. This is the way that assists business in raising operational efficiency.
Furthermore, company has satisfied employees but if government make changes in the
employment law and enhance working hours or decrease wages rate. In such condition people
will feel dissatisfied and they will not like to work in the organization for longer duration. It will
impact on its customer services and it will not be able to provide quality services to consumers
effectively. If new technology came into market, then it would be essential for Nisa to implement
it but this will enhance cost of the firm. Apart from this it will have invest money to give training
to staff members so that they can operate these new technologies well. Thus, this will impact on
the strength of the firm to great extent (Rong, Shi and Yu, 2013). Thus, internal factors are
related with external element. If any external component gets changed then it affects the existing
performance or internal working of Nisa to great extent.
CONCLUSION
From the above report it can be concluded that micro and macro both are interrelated
with each other and affect overall functioning of business unit to great extent. Company needs to
look at the strong point and have to analyse its internal market performance by this way it will be
able to make effective strategies that can support the firm in performing well and sustaining in
the market for longer duration.
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REFERNCES
Books and Journals
Al-Saleh, Y. and Mahroum, S., 2015. A critical review of the interplay between policy
instruments and business models: greening the built environment a case in point. Journal
of Cleaner Production. 109. pp.260-270.
Carrió-Pastor, M. L. and Calderón, R. M., 2015. A contrastive analysis of metadiscourse features
in business e-mails written by non-native speakers of English. Procedia-Social and
Behavioral Sciences. 173. pp.214-221.
Dima, I. C., Grabara, J. and Modrak, V., 2014. Sustainable logistics and business
competitiveness. International Letters of Social and Humanistic Sciences. 15 (2). pp.148-
156.
Othman, Z. and Rahman, R. A., 2014. Attributes of ethical leadership in leading good
governance. International Journal of Business and Society. 15(2). pp.359.
Rong, K., Shi, Y. and Yu, J., 2013. Nurturing business ecosystems to deal with industry
uncertainties. Industrial management & data systems. 113(3). pp.385-402.
Rong, K., Shi, Y. and Yu, J., 2013. Nurturing business ecosystems to deal with industry
uncertainties. Industrial management & data systems. 113(3). pp.385-402.
Schaltegger, S. and Wagner, M., 2017. Managing the business case for sustainability: The
integration of social, environmental and economic performance. Routledge.
Wheelen, T. L. and Hunger, J. D., 2017. Strategic management and business policy. Pearson.
Online
Business Environment: Nature and Significances of Business Environment, 2016. [Online]
Available through: <http://www.yourarticlelibrary.com/business/business-environment-
nature-and-significances-of-business-environment/23367
Marketing theories – Pestel analysis, 2017. [Online] Available through:
<https://www.professionalacademy.com/blogs-and-advice/marketing-theories---pestel-
analysis>.
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