Business Organizations and External Factors

The assignment explores different types of business organizations, examining their structures, sizes, and scopes. It emphasizes the influence of both internal and external factors on these organizations, necessitating continuous evaluation and adaptation to thrive in dynamic environments.

Business and Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Different types of organisations along with their purpose and legal structure......................1
P2 Size and scope of a range of different types of organisations chosen for the purpose.........3
TASK 2 .......................................................................................................................................5
P3 Relationship between different organisational functions and how they link to
organisational objectives and structure. .....................................................................................5
TASK 3............................................................................................................................................6
P4: Positive and negative impacts of macro environment..........................................................6
P6 Strengths and weaknesses interrelate with external macro factors for the chosen
organisation.................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERNCES ................................................................................................................................11

INTRODUCTION
Business environment consists of all internal and external factors which have impact on
the functioning, performance and decision making of a business. It helps the company to face
competition by analysing market share, market demand of the industry and strategic action of
competitors in order to build good image and cope up with the dynamic business environment.
Every organisation is classified in varies types i.e. (private, public, voluntary sectors) which
contain unique structure, purpose, objectives in order to accomplish organisational goal. In
context to Burberry, one of the leading luxury fashion brand which is founded in the year of
1856. It's headquartered in London, UK and it segmented into varies products like clothing,
accessories, perfumes (Babu, 2012). This report covers different types of organisation with their
scope, size and legal structure, interrelationship of business function and their link to
organisation objective. Finally the application of PESTLE and SWOT in order to analyse the
unpredictable business environment.
TASK 1
P1 Different types of organisations along with their purpose and legal structure.
Business environment consist of surrounding factor i.e. internal and external that either
help or hinder the growth or development of company. It help business to identify threat or
challenges and enable them to overcome seasonal fluctuation by adapting innovative ideas or
technology. Each company is classified into different group such as public, private, partnership
etc. whose main motive is to attain organisational goal effectively and efficiently. Apart from
this they have unique purpose and legal structure which leads them to contribute towards pre
determined goal of a company. Hence, on the basis of ownership organisation are divided into
several types which is described below:
Private Company
Private company is a business company owned either by non- government organisation or
by relatively small numbers of shareholders which does not trade its shares to general public on
stock market exchange. In context to Burberry, one of the international luxury brand which is
commenced in the year of 1856. It's headquartered in London, UK and operates across the globe
with the diversified product like clothing, accessories, cosmetics etc. Due to its effectual purpose
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and legal structure which enable them to contribute towards organisational goal in order to
accomplish high profitability. The purpose and legal structure of Burberry are as follows:
Purpose
The key purpose of Burberry is to maintain its integrity and vitality of their brand, at the
same time, continue to develop the business by adapting the innovative technology in order to
improve the brand image.
Legal Structure
The legal structure of Burberry is described below:
 Sole proprietorship: This business is owned and controlled by one person who is
responsible for bearing all risk and profit.
 Partnership: It is a form of company in which two or more person operate the business
activities and equally share the responsibilities, risk and profit.
Public Company
Public company are those company whose securities are traded on a stock exchange and
can be bought or sold by anyone and it strictly regulated by the law tom publish their financial
position so that investors can determine the worth of shares in market. In relation to, National
Health Service, one of the leading company which deals into health service system and it is
started in the year of 1948. Its headquartered in London, UK which provide comprehensive range
of service such as health service, dental care, optical care etc. The purpose and legal structure of
National Health Service are as follows:
Purpose
The purpose of National Health Service is to provide best healthcare and clinical facilities
regardless of wealth in order to protect or prevent the community from harmful diseases.
Legal Structure
The legal structure of National Health Service are as follows:
 Health and Medicine Act 1988: National Health Service follows this law as it direct them
to create safe and healthy environment in order to prevent the community.
Voluntary Structure
Voluntary structure comprised of organisation whose purpose is to enrich and benefit
society, often without profit as a motive and with no government involvement. Apart from this
their main purpose is to create social wealth rather than material wealth. In case of Oxfam, one
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of the non – profit organisation which is started in the year of 1942. Its headquartered in London,
UK. The purpose and legal structure of Oxfam are such as follows:
Purpose
Oxfam is mainly rooted in a vision of a world that men and women are treated equally
and eradication of poverty from the society and community.
Legal Structure
The legal structure of Oxfam are as follows:
 Oxfam Trustee: They are mainly responsible in law for charity, asset and activities and
includes three parties i.e. donors, trustee, beneficiaries who set up to manage property,
money and clearly defined goal in order to help people.
P2 Size and scope of a range of different types of organisations chosen for the purpose
Business environment encompasses of various types, sectors, structure i.e. private, public,
voluntary who put their best effort towards the accomplishment of goal. Each organisation has
their own size, scope which leads them to attain maximisation of profit with the optimum
utilisation of resources. The size and scope of different organisation are as follows:
Burberry
 Background detail: Burberry is the popular and successful brand in clothing, accessories,
cosmetics which is founded in the year of 1856. Its headquartered in London,UK.
 Vision and Mission: The mission and vision of Burberry is to provide the quality of
product and maintain the integrity and reliability of brand which adds value to customer
and improves the profitability.
 Business Objective: The business objective of Burberry is to target the new generation
and create an emotional connection between brand and customer in order to sustain in the
market for long term (Babu, 2012).
 Size and Scope: Burberry one of the luxury fashion house which is situated in London,
UK and it has a size of 1,45,000 employees with 40 stores in 51 countries. Their scope is
large as they segmented into varies of product such as fashion accessories, sunglasses,
cosmetics, fragrances etc.
 Product and service: Burberry product line is intensive as it offer varies range of products
are fashion accessories, cosmetics, clothing etc.
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 Organisational structure: Burberry follows hierarchy structure which contains various
level of people i.e. chief executive officer, manager, senior managers in order to attain
high productivity.
 Stakeholders: Burberry's stakeholders are employees, customer, suppliers etc.
National Health Service
 Background detail: National Health service is an UK successful health service company
which is commenced in the year of 1948.
 Vision and mission: National Health Service is mainly dedicated to serve the society by
providing quality of care in order to keep them healthy, safe and fit.
 Business Objective: Their main business objective is to promote and maintain the
relationship between health and work.
 Size and Scope: It has a size of 2,165,043 talented manpower who operates across the
globe and its scope is large as they are into dental care, optical, mental health, staffing
etc.
 Product and Service: They are mainly passionate to deliver services in varies range like
heath care centre, clinics and facility of personal care at home.
 Organisational Structure: It applies flat organisation structure with few level of middle
level of management between staff and executive and its span of control is wide.
 Stakeholders: It includes employees, patients, physicians, government etc.
Oxfam
 Background detail: Oxfam is a global organisation which is started in the year of 1942.
Its headquartered in Oxford, UK.
 Mission and Vision: Oxfam is mainly dedicated to injustice and poverty from the society
or community.
 Business Objective: Their main objective is to develop a world of equality and promote
education to society in order to eradicate poverty.
 Size and Scope: They operate in 90 countries with 19 international organisation.
 Product and Service: They offer service in terms of hospitals, clinics and education
service.
 Organisational Structure: It implies flatter organisational structure which enable them to
quicker decision and maintain better relationship between employee and management.
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 Stakeholders: Its stakeholders are donors, government agencies, employees and partners.
TASK 2
P3 Relationship between different organisational functions and how they link to organisational
objectives and structure.
An organisation is a group of two or more individuals who come together with an aim to
accomplish common goals. It contains several business functions or departments which has their
own purpose or aim to achieve maximisation of profit and high productivity. Apart from this
each departments are interrelated with each other as they support and guide each one to put their
best effort towards organisation goal (Babu, 2012). The relationship of Burberry's different
organisational function are as follows:
 Finance and Marketing Department: These both functions are the important domain of
the organisation success. As marketing department takes responsibility for generating
revenue by promoting the product through varies ways like advertisement, sales
promotion etc. While finance department is responsible for transporting these revenue in
different activities to ensure wealth maximisation.
 Marketing and Human Resource Management Department: Both of these function plays
a vital role in the growth of company. Every company require talented workforce in
order to carry out the pre determined goal so in which marketing department plays an
essential role. As they provide advertisement in newspaper, magazine and develop sales
team to recruit potential candidate.
From the above explained statement it signifies that each business are important for each
other growth and expansion for attaining common goal effectively. These departments are
operates and govern by the organisational structure and objective. The organisational structure of
Burberry are as follows:
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Each department or functions are linked with company's objective or purpose
which directs them to contributes towards the pre determined goals. From the above diagram
business operation is govern by board and it has assistance of committee, chief officer which has
team or groups to carry forward the business objective effectively. Furthermore each business
functions has great influence on the overall performance of company as they are interlinked with
each other. Along with this it provide effective working culture , allocation of resources which
creates better working condition and improves the productivity of company. Thus, each
departments are connected with company's objective and they get right path for attaining
organisational goal effectively and efficiently.
TASK 3
P4: Positive and negative impacts of macro environment
Burberry is a luxurious fashion house of British whose headquarter is in London, England. It
mainly focus on fashion accessories, cosmetics, trench coats etc. This report aims to identify the
positive and negative impacts macro environment has upon Burberry. The PESTLE analysis of
the company are -
Political factor – These factors include policy of government, corruption, foreign trade
policy, tax policy etc. Burberry is operated in different countries of the world. The organisation
operates in several countries where rules and laws of each country differs from the other.
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Positive impact – Liberalisation in the policies in one country help an organisation in
attainment of their desired results. This will provides an opportunity to grab the expected market
share.
Negative impact- As, the company trades in the global market, Some countries impose
high tax rates on the products and these tax increases the initial cost of the product. It creates
political instability and becomes unfavourable for Burberry to trade.
Economic factors – These factors consists inflation, economic growth, income of
customer, and interest rate. These forces influences the purchasing power of consumer which has
a direct impact on the industry. The model of demand and supply in the economy can be changed
due to low disposable income.
Positive impact- The industry produce only prestigious products which has increased its
goodwill in the global market. Its trench coat are unique which differs it from others.
Negative impact – Burberry faces tough competition. This is because duplicate copies are
produced in the local market with low cost. As the companies products are luxurious and mid
segment customers cannot afford it, which gives an advantage to the cheap copies to attract
those users.
Social factors - Demographic features, custom, culture, values and norms are the factors
within which the company plays. These forces are crucial for the firm at the time of targetting
their consumers.
Positive impact – Industry uses social media to gather information regarding the users
experience of the product. Facebook and twitter gives the feedback which help Burberry to
make any changes, if required.
Negative impact – The company has global expansion where the people are of different
cultures and have different customs. Some customers prefer ethnic wear whereas other prefers
western wear. If the organisation does not study the target market taste, than it can affect
negatively which will be a huge loss to Burberry.
Technological factors – Innovation in technology can affect the working of the firm. This
factors include automation, technological awareness, research and development etc.
Positive impact – Burberry enables its customer to purchase its products online. It does
not matter where they live. Users can use e-payment methods to pay for the goods. Thus, the
concern uses the latest technology which gives it a competitive advantage.
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Negative impact – Employees of the company does not have proper knowledge of using
the latest machines. They should be given effective training so that they can increase the firm's
productivity.
Environmental factors – Weather, environmental offsets, pollution etc. are the forces that
has a strong impact on Burberry. Increase in awareness of these factors leads the industry to use
practices such as CSR.
Positive impact – The company uses eco friendly raw materials to make the finished
goods so that it does not harm the environment. For example – socks and other inner clothings
are made of organic cotton wool.
Negative impact – Burberry should use some techniques which helps in minimising
waste. This will reduce the operation cost as well as initial cost of the product and will help to
serve their customers better.
Legal factors – Employment law, patent and copyright law, health and safety law etc. are
some of the legal factors. The industry need to know legal and illegal practices to sustain in the
market .
Positive impact – Burberry must study about the legal laws of the country in which it
works. Laws which are favourable to the firm will create positive effect.
Negative impact – If Burberry does not patent its products, it won't be able to have the
right to produce and sell them.
P.5 SWOT analysis of Burberry
SWOT analysis refers to the tool which supports Burberry to take better decisions in
order to grab hidden opportunities which are presented in the market. It enables to overcome the
weaknesses and threats of the organization so that it can gain competitive advantage in the
competitive environment. SWOT analysis of Burberry shows how they use this framework to do
situational analysis by the managers. Burberry has made a dominant position in the market by
following ways -
Strength - The strength of Burberry is that it has a strong presence in the international
market as it has 500 stores in 50 nations. The items of the company have its own distinctive
designs which made it different from another brands. It is one of the leading and popular brand
in the world.
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Weaknesses - The foremost weakness of Burberry is its high price, despite of quality and
value to the consumer. The youthful generation who just started their way of life can't afford to
purchase their products. The limited product line of the firm where it deals only with beauty
products, accessories, Apparels whereas its competitors broaden its product line so the entity
have to still work on it.
Opportunities - Broaden the product line of the organisation makes them more
competitive and opens new opportunities in market. The firm can also differentiate themselves
from their competitors. The company entered into digital platform so, that it is taking the benefit
of the present environment in order to adopt many ways to associate customers with the brand
and also endorses several celebrities for promotions.
Threats – The competition from the strong competitors like Gucci and Prada are the
biggest threats to Burberry. The company should assure about the quality of the product so that
customers can be satisfied. Industry can increase its market share only by satisfying the users.
P6 Strengths and weaknesses interrelate with external macro factors for the chosen organisation
The interrelation between the external factors and strength and weaknesses in ascertained
from the points which are defined below:
Political: This will includes the political conditions which are present in different
countries. As Burberry have their operations in major developed nations where government have
high stability in nature.
 Strength: This will becomes the strength of an organisation as aid to earn huge profits as
not required to change policies due to having high amount of stability.
 Weaknesses: Insufficient government practices in different countries where have
operations other than developed nations results in weakness and negatively impact their
approaches.
Economical: This will includes the factors related to inflation, deflation etc. As, the developed
nations have good flow of cash but in another nations the same is not appropriate.
 Strength: High flow of cash help to expand operations easily with the help of using easy
funding options.
 Weaknesses: Limited amount of cash in various other countries limits the scope of their
operations and reduces the ability to earn profit.
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CONCLUSION
It has been concluded from the above report that there are different type of business
organisation prevail in environment which provides their functions in different areas. All these
have their own structure and different size and scope. Each organisation is effected by various
external and internal factors which need to be evaluated on time so, that accordingly actions can
be taken on time.
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REFERNCES
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