Business Strategy and Environment Assignment

This assignment delves into the intersection of business strategy and the environment, exploring how companies can achieve success while promoting sustainability. It draws from various sources, including academic journals and books, to provide insights into the importance of environmental considerations in business decision-making. The assignment includes references to specific studies and articles on topics such as corporate social responsibility, stakeholder theory, and sustainable entrepreneurship.

Business and Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Different type of organisations and their legal structures......................................................3
P2 Size and scope of different organisations..............................................................................5
P3 Relationship between different organisational functions and their link to organisational
objectives and structure...............................................................................................................7
TASK 2............................................................................................................................................8
P4 Positive and negative impact of macro-environment on H&M.............................................8
P5 Internal analysis of H&M in identification of strength and weaknesses ............................10
P6 Interrelation of strengths and weaknesses with external macro factors...............................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business environment consists those factors which affects the working of company. It
consists internal and external factors which have positive and negative effect on companies.
Internal factors includes the strength and weaknesses of company which are in control of
management. External factors includes political, social, legal, etc. which affects the working of
company and not in control of the management. Hennes and Mauritz is fashionable clothes
retailer in Europe. It provides the fashionable designs in high quality at affordable price. BBC is
public company which provides the services related to broadcasting (Bos‐Brouwers, 2010).
In this present report explain about, Different type of organisations and their legal structure and
also defined about the size, scope and relationship between the functions of these companies.
Here also define about, impact of macro environment on performance of company and internal
and external analysis of H&M.
TASK 1
P1 Different type of organisations and their legal structures
There are many organisations which work in market. It includes public, private and
voluntary organisation. The functions and the legal structures of these companies are different
from each other. All the organisations and their legal structure is defined below:

Public company
It includes those companies which are under control of government. All these companies
are established under special act and by parliament. These companies provides the services for
the benefit of society (Charter, 2017). All the income generated by government from these
companies are applied for the development of economy. The main objective behind the
formation of public company are:
 Provide job opportunities to the individual of country which contributes in developmnt of
economy.
 To provide quality services to society.
 Develop infrastructure of country and promote trade
BBC is public company which provides the services related to broadcasting. It provides the news
related to sports and other important matters happen in country to general public.
BBC is large company because it operates their business activities in all over the world. The
large number of employees are work to control and manage the business. The total number of
employees in company are 35402 which contributes in success of the organisation activities.
Objectives of BBC
 To provide information to general public related to different important matters
 To expand the broadcasting services all over the world
Legal structure of public company
The legal structure of public company includes central, state and local government.
 Central government: This includes the all departments of central and state government
 State government: It includes all the activities related to state government and the
services provided by state agencies (CHUANG and Liao, 2010).
 Local government: It handles all the activities related to administration of public
company
Advantages and disadvantages:
Advantages Disadvantages
This helps the economy of country to grow by
providing them more funds through FDI.
There is more restrictions on the public
company
This helps in the development of the They required to take the approvals of

infrastructure of country government before starting the transactions
Private company
It includes all those companies which are in private control of one and group of persons.
Private companies are not required to meet all the requirements which are necessary to meet by
public company. Government has no control upon the activities of these companies.
Hennes and Mauritz is the private company which deals in fashionable clothing in
Europe. This company provides the fashionable clothes in high quality at affordable price and
also provide cosmetics in retail market (Drucker, 2017). It is large company on the basis of size
and the activities of company. This company appoints the large number of designers to meet the
demands of their customer.
Objectives of H&M
 To earn high profit for the benefits of stakeholders
 To become a largest brand in fashion industry
 To provide high quality designer clothing at low price
Purpose of H&M
The main aim of the company is to become the big brand in clothing and cosmetic line.
To increase the sales by providing high quality products at low price And maximise the profit for
the benefit of stakeholders.
Legal structure of private company
 Partnership: These companies are formed by group of persons to earn high profits. All
the members of company have limited liability as per their contribution in capital of
company.
 Sole trader: It is the company formed by single person to earn profit and have unlimited
liability in company.
 Limited companies: These companies are formed by the shareholders. All the activities
of company are managed by them.
Advantages and disadvantages:
Advantages Disadvantages
There is less restriction on the activities of Private companies are restrict to invite the

company public to subscribe their shares
This helps the company to earn high profits by
taking the advantage of various provisions
Exploitation of the society by taking
advantages
Voluntary organisation
It includes all those organisations which are formed for the benefit of society. These
companies are called non profit organisations. The main of these companies are to provide free
services to society for there betterment (Du, Bhattacharya and Sen, 2010). To start these
companies they have to take licence from government.
Oxfam is voluntary organisation which provides the services for the benefit of society.
The main of company is to remove the poverty. This company is founded in Oxford, in 1942.
Many local committees are work with company to helps British government to allow food relief
to the public of country. These activities of company helps to remove the poverty.
Objectives of Oxfam
 To provide the services to remove the poverty
 To help poor people of society by giving them food relief
 To help British government in reduction of the poverty from country
Advantages and disadvantages:
Advantages Disadvantages
This provides the opportunity to company to
make their good image in market
This will take the licence from government to
operate their business and if not follow the
conditions the licence is revoked
To work for the benefit of society The company is not work to earn profit for
their stakeholders
P2 Size and scope of different organisations
Ever organisation defined above has different size and scope in market. Size and scope of
every organisation is described below:
BBC

 Size of BBC: BBC is public company which provides the services related to the
broadcasting of general and sports news. The headquarter of BBC is located in London
and provides services in all over the world. BBC is oldest national broadcasting
organisation and it the largest company in terms of number of employees. The total
number of employees working in this company are 35,402 and out of which 16,672 are in
public broadcasting (Hallin, Holm and Sharma, 2011). The total revenue earned by
company in 2015-16 is £4.963 billion and the net income is £59 million. It provides the
24 hour English language news in all over world.
 Scope of BBC: It provides the broadcasting services in all over worlds and provides the
news to general public. BBC is established by British government and agreed by
parliament. The products provided by company are broadcasting, radio, web, portals and
the services provided by company television, radio, online. This company also provides
news in 28 languages and also provides the TV, radio and online services in Arabic and
Persian. This company provides 24 hour English language news to all over world.
 List of stakeholders and their role: There are many stakeholders are working in BBC.
All these stake holders have different roles and functions to perform in company which
are described below:
Employees: Employees are important asset of the company. The success of company is depends
upon their performance. It is the duty of the management of company is to take care of all the
employees to achieve organisational targets.
Government: Government has the important role in the operation of the activities of company.
They provide the guidelines which are required to follow by the management of company as to
fulfil all regulations. Government has control over the activities of BBC

Hennes and Mauritz
 Size of H&M: It is the retail company which deals in fashionable clothes and cosmetics
in Europe. This company provides clothing for men, teenagers, women and children. The
main of this company is to provide the quality clothes at affordable price. It wants to
become the biggest brand in fashionable clothes. It is multinational company and have
more than 1500 outlets in 40 countries. The turnover of company in 2015 is over
SEK112bn. This company does not have factories of his own for the production of
clothes. They have designers and 900 independent suppliers which are pricing the clothes
for customers at affordable price (Nadkarni and Herrmann, 2010). The number of
employees work in the company all over the world is 132000.
 Scope of H&M: It is the multinational retailer company which deals in fashionable
clothing and cosmetics. The main of the company is to provide high quality fashionable
clothing at affordable price. This helps the company to increase their sales and capture
more market share. The company provides the clothes for women, teenagers, nightwear,
underwear and cosmetics. This company also provides online shopping services to the
customers of 32 countries. This helps them to easily order the clothes of company. This
helps in increase the sales and profitability of company.
 List of stakeholders and their roles: There are many roles and functions of the
stakeholders of H&M. These roles helps in effective operation of the activities of
company which are described below:
Creditors: These are the important stakeholders as they provide the resources to the company to
operate their functions on credit. Such credibility provides the opportunity to the management of
H&M to effectively operate the activities of company.

Customers: These are the important stakeholders of company as the business of company is
depends upon the their demand. It is the duty of the management of company to identify the
preferences of customers and satisfy their needs.
Oxfam
 Size of Oxfam: Is the voluntary organisation which provides the services in Oxford,
England. The main aim of company is to provide the services to remove poverty of
peoples. This company provides their services in all over the world. This will takes the
helps of other local committees to provide free food relief to the peoples and remove
poverty from them. The main function of company to poverty eradication, disaster relief,
advocacy, policy research and pro-migration.
 Scope of Oxfam: The scope of company is to provide service to remove the poverty
from the peoples. For this purpose, company takes the help from various local
committees to serve the food to the local persons. There are many services are provide by
company like, disaster relief, advocacy, pro-migration etc.

 List of stakeholders and their roles: There are many important roles and functions
which are perform by the stakeholders of Oxfam. All these roles are important for the
successfully achieve the organisational objectives. Stakeholders and their roles are
described below:
Funders: These are important stakeholders of company as they provide the funds to carry out
the activities for the benefits of society. There role is to provide funds for providing help to
remove poverty not for earning profit.
Volunteers: These are important part of the organisation as the activities are depend upon their
working and contribution,. This helps to cover the large area to provide their services and
provide benefit to the maximum part of society.

P3 Relationship between different organisational functions and their link to organisational
objectives and structure
Success of every organisation is depends upon the performance of different departments.
It is the duty of the management of company is to make the relation between all departments for
the accomplishment of common organisational objectives. All the departments of organisation
are highly linked to the objective and structure of company. H&M is the clothing company
which operates their activities in many countries (Schaltegger and Wagner, 2011). It is required
that all departments of company work with the identification of the global objectives of
company. This helps to understand the customer preferences and satisfy their needs. Different
departments of H&M and their functions and interrelationship among them is defined below:
 Human Resource department: It is the main department of every organisation which is
responsible for the management of employees of company. This helps the company to
maintain the employee relation and coordination among them. The main activities which
are operate by HR are Appraisal of performance, appointment of employees,
determination of remuneration and maintain employee relation. All these activities helps
the company to properly manage the working of departments and employees to achieve
the organisational objectives. These roles helps in improvement of performance of
employees of company (Sekaran and Bougie, 2016).
 Research and development: This department is responsible for providing the
information to company regarding various aspects. It provides the information regarding
competitors , strategies adopt by them, products and services provide them and the price
which are charged by them. This helps the company to make the plans and strategies
according to them. This provides the competitive advantage to company and understand
the preferences of customers. This helps to achieve organisational objective in more
effective and efficient manner.
 Operational: This department of company is responsible for the activities of employees.
The main role of the department is to assign the roles and responsibilities to individual
employee of company in accomplishment of the organisational objectives. The
operational manager has duty to supervise the work of employees and compare with the
standards made by company. This helps to remove the problems and improve the

performance of employees. This will help in decrease the operation cost of task and
increase the profitability of company.
 Marketing: This department of company is responsible for the advertisement of the
products and services provided by them. The main aim of this department is to increase
the sales and profitability of company. Different type of advertisement methods are used
by company like print media, social media, electronic media etc. All these platforms
helps to make the product of company popular in mind of customers. This helps the
company to increase the brand image and achieve the organisational objective of high
profitability ( Smallbone and et. al., 2010).
Organisation structure
There are four type of structures in an organisation on the basis of which different
function are performed. These structures are mentioned below:
 Functional based: This includes about divide the structure of H&M on the basis of the
functions performed by different departments. This helps the different departments in
performance of their functions effectively and achieve their individual targets.
 Geography based: This includes about the determination of the structure of company on
the basis of area in which they provide their services. This helps in identification of the
demand of customers as per different regions.
 Product based: This includes about the divide the structure on the basis of different
products provide by organisation. As H&M if fashionable clothing company divide
structure of organisation on the basis of men, women and children.
 Consumer based: Divide the structure on the basis of the needs of customers of different
region.
Contribution of interrelationship of different departments in achievement of objectives
 Satisfaction of customer need: Interrelation of marketing and production department
helps in accomplishment of the objective of customer satisfaction. Marketing department
helps in identification of the demand of their different products and this research helps
the production department to effectively produce clothes as per their preferences.
 Optimum utilisation of resources: Interrelationship between different departments
helps in optimum utilisation of different resources as the supportive behaviour of
different departments helps in optimum utilisation of given resources.

TASK 2
P4 Positive and negative impact of macro-environment on H&M
H&M is the multinational fashionable clothing and cosmetic company. It operates its
business activities in many countries. This is the reason that they have to face impact of the
macro-environment factors on the working of company. All these factors have positive and
negative impact on the performance of company. Macro-environment includes political, social,
economical, legal, technological and environmental factors. The management of H&M has duty
to consider all the factors while operating the activities of company. This helps the company to
make the plans according to economy and improves the profitability. So, the positive and
negative impact of macro-environment on H&M is described below:
Political factors: This includes the factors related to the government of country. It means
policies framed by government for regulation of clothing industry, policies on import and export
of materials, Taxation policies etc. All these regulations have positive and negative impact on
performance of company (Smith, Binns and Tushman, 2010).
 Positive impact: If the government of country makes liberal policies for regulation of
clothing industry, import and export policies and taxation policies then it is beneficial for
the company operate its activities in country. This helps the company to reduce their
operating cost and increase their profitability.
 Negative impact: If the government makes strict regulations on the import and export of
the material from different countries then it affects the working of company. It is difficult
for them to maintain productivity and quality of products. Similarly, If government
increase the Tax rate on Clothing industry then it effects the pricing policies of company.
It is difficult for them to provide fashionable clothes at affordable price.
Economical factors: It includes the factors related to income of persons, cash flow in economy,
inflation, recession etc. All these are major factors which persists in economy of country and
affects the working of organisations (Sosna, Trevinyo-Rodríguez and Velamuri, 2010).
 Positive impact: If the income of persons is higher then it has positive impact on the
performance of cited company. Income of persons generates the higher demand of the
products which helps in increasing the sales and profitability of company.

 Negative impact: If there low income of persons and the situation of recession in
economy, then it lowers down the demand of products of company. This will reduces the
sales figure of company.
Social factors: It includes the factors related to eduction, consumer behaviour, culture, ethics
etc. All these factors have major impact on the performance of every company which operate in
economy. It has both positive and negative impact on the working of companies.
 Positive impact: The positive impact of the education is that in helps the cited company
to generate sales more through online mode. This helps the company to expansion of
business without operating physical stores. Consumer preferences have major effect on
fashion industry. Preferences of customers are changed very simultaneously in clothing
industry, so it is the duty of cited company to match there preferences for success.
 Negative impact: Cultural differences in the market effects the consumer behaviour in
selection of clothes which affects the business of cited company. They provide
fashionable clothes which is not preferred by old age people and the persons who like
traditional dress (Teece, 2012).
Technological factors: It includes the factors related to advencement of techniology and the
process which affects the working of company.
 Positive impact: It helps in reduction of operating cost of company and increase the
profitability.
 Negative impact: The company needs to spend more cost on training and development
of employees which takes more time to be familiar with new processes.
Legal factors: It includes the factors related to copyright, patent etc. It is the duty of company
not to infringement of the legal rights.
 Positive impact: It helps the management to secure the company from legal penalties.
 Negative impact: If the company not give emphasis on that they have to pay fine and
charges (Wang, Wang and Yang, 2010.).
Environmental factors: It includes the factors related to hatefulnesses on the environment and
society because of the operations of company.
 Positive impact: If company fulfil all regulation in this respect, it helps in increase the
brand image of company.

 Negative impact: If the cited company not aware about the environment then they have
to face the criticism of society.
P5 Internal analysis of H&M in identification of strength and weaknesses
SWOT analysis of H&M helps to identify the strength and weakness of company. This
can be defined below:
Strength
 The strength of company is their wide range of product provide them. The diversity in
products helps the company to satisfy the different needs of customers.
 It provides high quality of products to customers which helps to retain customers in
market for longer period (Bos‐Brouwers, 2010).
 That cited company provides it products in many countries by using the online services
and provides the products at affordable price.
Weaknesses
 The weakness of the cited company is dependent upon third party suppliers because they
don't have their own factories they hire the designers which provide the products to
company.
 Due to affordable prices of the clothes of company it is difficult for them to maintain
quality of the products. This affects the market share of company and to retain the
customer for longer period of time.
Opportunities
 Cited company has the opportunity to expand the business of companies many countries
and to open new 400 stores. This helps the company to increase the sales and profitability
of company.
 The cited company has the opportunity to expand their business in emerging markets like
Asia and Africa, by use of online methods.
 The company need to advertise their products this helps the company to improve the
lifestyle and purchasing power of customers. This helps the company to generate more
capital (Charter, 2017).
Threat

 The high competition in clothing industry is the biggest threat faced by company the big
brand like Zara have more customer base and brand image affects the profitability of
company.
 E commerce is the threat to cited company because this allows the competitors to easily
enter in the market and expand their business activitie4s. This will reduces the sales and
profitability of company.
P6 Interrelation of strengths and weaknesses with external macro factors
External macro factor includes political, social, economical, technological, legal and
environmental. All these factors have great impact on the strength and weaknesses of H&M
which is defined below:
 Political: This factor plays huge role in strength and weakness of cited company. If the
policies regarding import and export of materials are linnet then it becomes the strength
of company otherwise it is the weakness (CHUANG and Liao, 2010).
 Economical: High cash flow, inflation and good income of persons become the strength
of company because these factors helps in increase the demand of the products. But
recession and low income becomes the weakness of company.
 Social: Old age, poor education plays the role of weakness of company because there
preferences are different and it is difficult for them to use online shopping. Another point
is young generation and good education helps the company to increment the sales and
profitability of company.
 Technological: Technological advance is the strength of company it helps to maintain
the quality of products and reduce the operating cost. On other hand it involves high cost
of company in implementation and training of employees.
 Legal: It becomes the strength of company if fulfil all regulations by company because it
helps in increase image otherwise the company has to pay penalties.
 Environmental: If the cited company takes cares of the environmental factor and society
it become strength of company. This helps the company to increase the good image of
company otherwise the company has to face criticism (Drucker, 2017).
Porters five forces

This analysis helps in determination of of the competitive forces which are present in
business environment. This helps in preparation of the policies and maximising the profitability
of H&M. These different forces are define below:
 Competitive rivalry: This includes about the analysis of the competitors which are
present in market and the strategies adopt by them. This provides the opportunity to the
management of H&M to adopt attractive and rigorous policies to attract the customers.
This helps in attainment of the competitive advantage.
 Supplier power: This includes about the suppliers which are posses by H&M to deliver
their products to end customers. This also includes the analysis of the power of supplier
regarding manipulation of the prices.
 Buyer power: This includes about the identification of the buyers which are buying the
clothes of H&M. This helps in identification of the problem which are present in their
clothes. This contributes in improvement of the quality of their products.
 Threat of substitution: This includes about the identification of the other substitute
brands which are providing good quality products and diminish the market value of
H&M. This helps in adoption of attractive policies to improve the brand image in market
to influence the behaviour of customers.
 Threat of new entry: This includes about the identification of the new companies which
are enter into market and the restrictions which are imposed on new entrants,. This helps
in capturing the market and drive out the new entrants to capture market.
CONCLUSION
It has been concluded from the above report that study of business environment helps the
company to identify the factors which affects the activities of company and to provide the
solution to overcome from those factors. This helps the management of company to make the
plans and strategies according to them to achieve organisational objectives. SWOT analysis of
company helps to identify the strength and weaknesses persist in company and the future
opportunities and threats available to company.

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Online:
Business Environment. 2017[Online]. Available
through:<https://www.slideshare.net/NikhilSoares/business-environment-
featuresmeaningimportanceobjectives-porters-model> .[Accessed on 22th
November2017].