Business Environment Analysis and Strategies

This assignment provides an in-depth analysis of the business environment, highlighting its significance, characteristics, and goals. It discusses the impact of the business environment on organizational strategies and operations, using examples from various industries. The assignment also touches upon Porter's model and other relevant concepts, making it a comprehensive resource for students and professionals alike.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Various types, purpose and legal structure of different organisations...................................3
P2 Size and scope of range for different companies...................................................................6
TASK 2............................................................................................................................................9
P3 Interrelation among different organisational functions and their link with organisational
structure and objectives...............................................................................................................9
TASK 3..........................................................................................................................................10
P4 Positive and negative impact of Macro-environment upon business operations.................10
TASK 4 .........................................................................................................................................13
P5 SWOT analysis to identify strengths and weaknesses.........................................................13
P6 Interrelation of strength and weaknesses with external macro factors................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business is defined as an activity which is performed by a group of humans for earning
money. In addition to this, it is an economic system where products and services are given to the
customers in order to earning wealth. On the other hand, Business environment is a total of
internal and external factors that provides positive or negative impact on the business operations
of an organisation. Present assignment is based on McDonald’s which is a private organisation
and provides services in food and beverages sector along with headquarters in Chicago. Besides
this, NHS is taken for public and Oxfam is taken for voluntary organisation. This report will
discuss about the different kind of legal structure, purpose, size and scope of organisations. In
addition to this, interrelation between different departments of a firm will also included in this
report. In the last, Micro and Macro-environmental factors along with strengths and weaknesses
will also discussed under this report.
TASK 1
P1 Various types, purpose and legal structure of different organisations
In a Marketplace, There are a large number of organisations who performs their activities
so that their objectives can be achieved in an effective manner. These companies have a different
kind of structure and purposes which is briefly explained as under:
Public Organisation – These kind of firms are mainly regulated or controlled by the
government authorities so that citizens of nation can gets services at lower or reasonable prices.
Main aim behind formulation of this associations is to providing services in the nation without
concerning own profitability. The chosen firm for this kind is National Health services which is a
largest public firm in terms of number of staff members. It provides health services in all over
the world and shares of these firm are freely sold-out in the individuals of country (Weiss, 2014).
Purposes of National health services
 Providing better Health services to the patients so that well-being of individuals can be
maintained in the nation
 To Provide effective quality of services to the patients so that the brand image of
organisation is maintained in the world.
 Spread awareness about health services in the citizens of nation.

 Organise Health check-up campaigns in the country so that the understanding of citizens
about healthcare will be enhanced.
Legal structure: These type of associations have to follow different kind of Legal structures
which are given as under:
 Local government: This authorities are considered as a lower part of the government
which is liable to manages and controls the laws within the cities or towns. These
authorities have also follow the regulations which are formulated by the state or central
government.
 State government: It is also a sub-division of government which have responsibility to
maintain laws and legislations in whole state.
 Central government: This kind of structure is formulated for control the code of
conduct in whole the nation and it has also responsibility to formulate legal rules and
regulations for the country.
Here are some Legal responsibilities which have to follow by the NHS which are given as
under:
Public organisations like NHS have to take registration from the National Government
under the Health and Social Care Act, 2012. The main responsibility of Health care associations
are that to bring awareness about the healthcare services among the citizens of UK nation. For
this, Employees of NHS have to collect the related data who are aware regarding the Health and
Care services. From this information they can take supports for providing Health services in
entire country. Employees of NHS have to take permissions from the national authorities of
Health and Social care Before providing any healthcare services to citizens. Then the medical
informations are submitted in the Health and social care office and they evaluated that whether
the submitted informations are wrong or right. After this, Governmental authorities provided
permissions which are also called directions of working (Ramdani, Chevers and Williams,
2013).
Private organisation: This kind of organisations are controlled or managed by the single
or a group of individuals. Main aim of these organisations is to earning profits along with
providing products or services to the customers. The taken company for this is McDonald's
which is a multinational fast food chain along with based in Chicago, U.S.

 Purpose: The main purpose of this firm is to provide quality in food products to the
customers through which the brand image is maintained in the marketplace.
Legal structure: Various kind of legal structure which are related with the Private sector are
given as under: Partnership: Under this, two or more individuals are gave their mutually consent and
signed an agreement for performing a similar activity in order to achieving a common
objective. For this, appropriate example is H&M which has a partnership with Balmain
and they both engages in clothing sector. Sole trader: In this, Business activities are performed by single person and a less
investment is needed for starting this type of businesses. For example- Colin Bush and
co. which engages in consultancy services.
 Private limited company: In this type of structure, Organisations have their own identity
in the market place and its business operations are controlled or managed by the
shareholders of company. In it, any shareholder have authority to sold out shares of the
firm in public.
For running a fast food restaurant in UK nation, Owners of McDonald's have to
adhere such obligations which are given as under:
Take certifications of Food hygiene, Pest control etc. from the Environmental health
authorities of UK then take approval of food premises from the governmental authorities and
make insurance of restaurant so that claim can be received at the time of mishappening. Some
other requirements which have to consider by the Mcdonald's are given below:
 Make sure the provided food is safe or hygienic (Lilien and Grewal, 2012).
 Staff have to use those ingredients in food which is not harmful to eat.
 Keep proper records of the food ingredients which are used by the employees of
restaurant
 Display the rating of the food quality in the premises of restaurant so that customers can
easily attract and purchase the food products.
Voluntary organisation: These organisations are formulated by the associations of
persons in which industrialists, Ministers, Business persons are included. They have to perform
their activities so that a common objective can be achieved. The members of these organisations
are known as volunteers who does not aims for earning profitability whereas, they performs their

duties for welfare of citizens. The chosen firm for this is Oxfam which is Voluntary firm and its
main objective is to execute the activities so that needs and wants of needy people can be
fulfilled.
 Purpose: The primary purpose of Oxfam is to fulfil the requirements of poor citizens of
nation along with eliminating the poorness from the world.
Legal structure: Association: In this type of firms, Members have mutually consents to perform their
duties so that a common objective can be achieved and needs of citizens will be fulfilled
in proper manner.
 Trust: These kinds of organisations are not based on any membership whereas it is
formed on the basis of trust.
Voluntary firms like Oxfam have to follow some legal requirements which are given as
under:
Directors of these firms have liability to make registrations of organisation in Charities
Act, 2011. these companies are also known as limited by guarantee. These members have no
authorities to perform any activity whose objectives are related with the profitability of firm. If
the company is wind up from any ground then the assets of these organisations will be used by
same charitable trusts (Klapper, Lewin and Delgado, 2011).
P2 Size and scope of range for different companies
Public organisation: National Health Services
Background details: Organisation was started in 1948 at the time of Second World War
with an aim of providing health services in UK, Scotland and Wales
Products and Services: It offers various kind of Healthcare services to the citizens of
UK such as emergency care, mental health, pharmacies, Dentists, Optician services etc. in order
to maintain well-being of them.
Size: The firm have employed approx. 1400000 employees who are providing health
services in different nations. Company have also achieved the highest position in terms of
number of employees which defines the size is very large of the organisation.
Scope: Organisation is providing health services in Scotland, United kingdom along with
spreading awareness about the healthcare in the world which maintains the brand image of the
company.

Mission and vision: Vision and mission of NHS is to providing better health care
services to citizens of nation so that illness or harmful diseases can be removed from the nation.
Objectives: At the time of Formulation of NHS, Health minister Aneurin Bevan have
formed some objectives which are given as under:
 To Provide health services to the poor people at free of cost.
 Provide better quality of health services to the patients so that proper satisfaction from the
patients can be gained by the staff members.
Organisational structure: Organisation performs its functional activities in an umbrella
structure.
Stakeholders: Stakeholders of this organisation are patients, employees, insurance
companies and government authorities.
Private organisation:- McDonald's
Background details: The company was founded in 1940 by Richard and Maruice
Mcdonald. Headquarters of organisations are placed in Chicago, U.S. In current scenario, firm is
providing its products and services in all over the world.
Products: Organisation offers Hamburgers, French fries, Soft drinks, salads etc. to its
customers.
Size: It have more than 200000 employees along with company was earned 17 billion
pound in the year of 2017 which defines large scope of organisation in the food and beverages
sector (Khan and Quaddus, 2015).
Scope: As the firm is providing its services across the globe through which they have
maintained a good brand image in hospitality sector therefore, it can be said that the scope of
firm is very bright in future.
Mission and vision: The Mission of firm is to provide best quality of products in the
marketplace so that competitive advantage can be gained. Whereas, vision is to increase the
profitability so that sustainability and growth can be achieved in market.
Organisational structure: Company follows flat structure in the workplace so that
managers have responsibility to consider the opinions and views of employees in decision-
making process.
Stakeholders- Company's stakeholder includes customers, investors, owners etc.
Voluntary organisation:- Oxfam

Background details: The company was formulated in the year of 1942 along with 20
trusts with an purpose of removing the poorness from the world.
Services: Volunteers are providing services for eliminating the poorness from the world.
Size: There are 20000 volunteers who are providing their services without earning any
single amount. Volunteers of organisation was raises the fund of £17.1 in the year of 2008
which shows the large size of firm
Scope: Company is providing its non profitable services in across globe which defines
that scope of organisation is very large in nature.
Mission and vision: The mission of organisation is to fulfil the necessary needs of
needy people of country so that they can live their livelihood in easy manner. Vision of
organisation is related to build a nation without poverty in it.
Objectives: Main objective behind formulation of this firm is to fulfil the desires of
required citizens so that their livelihood can be spend in easy manner.
Organisational structure: The structure of firm is based on hierarchical structure in
which the managers have divided the activities in various parts so that volunteers can performed
their duties easily (Karagiorgos, Drogalas and Giovanis, 2011).
Stakeholders- Volunteers, event sponsors, members are involved in the stakeholders.

TASK 2
P3 Interrelation among different organisational functions and their link with organisational
structure and objectives
Illustration 1: Organisational structure of McDonald
Source : Organisational structure of McDonald, 2018.
There are different departments which helps the organisation in efficient handling of activities in
the firm. Managers of McDonald's are using vertical organisational structure in their workplace
in which they have divided work between departments along with a head on them. These
departments heads have responsibility to provide all necessary informations to the Managers.
Such department includes HR, Marketing, Production etc. with the proper functioning of all
departments company can easily achieve its goals and objectives in the marketplace.
 Human resource and marketing department: The main responsibility of HR
department is to hire, recruit or direct the employees in right way so that productivity of
firm can increased. Whereas, Marketing department have obligations to promote or
advertise the offerings of firm through which sales figures and revenue of firm can be
enhanced (Huang and et. al., 2013). For example- There is a requirement of marketing
executives in marketing department so marketing manager has to contact with the HR
manager. Through which, talented and experienced employees can be hired in
organisation. Therefore, It can be said that there is an effective interrelationship between

HR and marketing department which helps the organisation in achieving its goals and
objectives.
 Marketing and production department: Marketing department of McDonald's has
responsibility to identify the needs and wants of customers so that products can be
provided to them accordingly. If there is no communication between these departments
wastage of raw material will be increases which is not beneficial for the brand image of
organisation. Hence, it is very important for both the managers to make interrelation so
that organisational objectives will be achieved in proper manner.
There are some advantages and disadvantages of interrelationship which are given as under:
Advantages:
 From effective interrelationship targets and objectives of firm can be achieved in easy
manner.
 With the help of interrelation of departments chances of conflicts and issues are reduces
which is beneficial for the profitability of organisation.
Disadvantages:
 More interrelation between departments increases confusion and dissatisfaction in staff
members which reduces the performance level of employees.
 If managers will considers opinions and views of employees of different departments
which increases the time of decision-making
TASK 3
P4 Positive and negative impact of Macro-environment upon business operations
In order to determining the influence of macro-environmental factors managers of
McDonald's can use PESTLE analysis which will help them in identifying political, economical,
social, technological etc. in an effective manner. With the help of it, they will easily determine
that what kind of investment will be profitable for the firm. PESTLE analysis of Mcdonald's is
briefly explained as under: Political factor: This factor is related with the stability of government, tax policies of a
specific nation which can provide positive or negative influences on the profitability of
firm. As the government of UK is stable which provides supports and profitability to the

companies to perform business operations in the country. Market-share of Mcdonald's in
UK is 3.8% which defines a good position.
Positive impact: Positive political factors will help McDonald's in sustaining a strong presence
within international markets.
Positive political elements will help the managers of McDonald's in making strong presence in
the marketplace because the political environment of nation is stable and international trade
agreements are increasing which is an ultimate opportunity for the firm.
Negative impact: If political factors will not favourable for the McDonald than the managers
have to pay high tax duties due to this, revenue and sales figures will decreases which will not
beneficial for the organisation (Helms and Nixon, 2012).
 Economic factor: As McDonalds have maintained a global brand image so economic
aspects of environment can also impact on national and international environment of a
firm. At the time of economic recession that was happens in 2008, private firm are
negatively influences and purchasing power of customers are also decreased. On the
other hand, economic condition of UK due to which the negative influence of recession
was overcome in short time period.
Positive impact: As UK is well developed nation and its citizens are economically capable who
can buy the products of organisation without considering the cost.
Negative impact: Due to decreasing of purchasing power of customers, Citizens of UK are not
able in spending as per their will which reduces the profitability of organisation.
 Social factor: These factors are related with needs, values and beliefs of the customers
which can change according to their taste and preferences. It can also impact in positive
or negative manner on the profitability of firm. As the individuals of UK nation are
mostly concerned about their health so, managers have duty to provide hygiene quality of
food products to them so that brand image of McDonald's can be maintained in
marketplace.
Positive impact: Staff members of McDonald are using healthy and authorised ingredients in the
food products which can provide profitability to the organisation
Negative impact:If the organisation will not provide healthy and hygienic food products to its
customers then company will not achieve desired targets and objectives.

 Technological factors: These factors are connected with the advancement of technology
which can provide impact on the profitability of company. As customers in UK are very
advanced and they wants effective services with high technology. Therefore, it is very
essential for McDonald's to adopt advanced technologies in their outlets so that good
satisfaction in services will be given to the customers.
Positive impact: If organisation will adopt new technologies in the workplace it will helpful for
them in enhancing sales figures and revenues through which they will be able in expanding their
customer base.
Negative impact: If management will implement advanced technologies in the workplace and
not provides any training to the staff members due to which they will not provide effective
services to the customers it will not beneficial for the good customer base of the firm (Ferraro
and Briody, 2013). Legal factors: These factors are related with legal obligations or rules which are
formulated by the government and can provide positive or negative impact on the
performance of firm. More regulations such as food and safety, Pest control regulations
can provide negative impact on the business strategies whereas, less legislations of food
and beverages will provide flexibility to the organisation in performing their activities.
Positive impact: If organisation wants to increase productivity and profitability in UK market
then management have to follow legislations which are formulated for Food and beverages
sector.
Negative impact: Whereas, if Managers of McDonald's will not adhere these legislations they
have to pay penalties which will not beneficial for the brand image of firm. Environmental factors: These factors are comprises of CSR policies, environmental
laws etc. therefore, managers have to implement and adopt such policies in their
workplace so that positive response can be received by the government. Implementation
of CSR policies in workplace will helpful for the firm in maintaining a good brand image
in the marketplace.
Positive impact: Following environmental legislations will beneficial for the organisation in
creating a good customer base because most of the citizens in UK believe in eating good quality
of food. With the help of this, brand image of firm can easily improve.

Negative impact: Issues such as improper food quality and pest control can influence negatively
on the popularity of firm.
From the above PESTLE analysis, It has been analysed that Political factors are
providing good and favourable results in growth and success of firm. Technological factors are
also providing positive outcomes because managers of firm has adopted digital marketing in
their workplace due to which they have created a good customer base in the UK market. Legal
factors should considered by the managers because it can reduce the brand image and customer
base in UK. United kingdom is a well developed nation in which customers are preferred to eat
high quality of food so that managers should consider such factors because it can reduce the
profitability of organisation. Managers must adhere all the policies which are related with
Customer Social Responsibility because if they will not follow then it will reduce the reputation
and sales figures of McDonald's (Chang, 2016).
TASK 4
P5 SWOT analysis to identify strengths and weaknesses
It is a general framework which assists the managers in analysing internal and external
factors. Internal elements includes strength and weaknesses whereas, external factors consists
opportunities and threats. SWOT analysis of McDonald's is given as under:
Strengths Weaknesses
 As organisation has launched new
products in the marketplace like coffee,
smoothies etc. due to this, popularity of
firm have increases.
 It offers a variety of products to the
customers which makes its good
customer base in the marketplace.
 As the annual dividend are increases
and growth rate is reduced which is
reducing the sales figures of company.
 Product development team of firm is
facing issues of quality which also
reduces the profitability of company.
 Health conscious customers are not
preferring fast food products due to
which the sales figures of firm are
regularly reduces.
Opportunities Threats

 There are various nations such as India,
China where company can open more
outlets for expanding their market-
share.
 Joint venture with the small players of
food and beverages will beneficial for
making strong presence in marketplace.
 Giant players such as KFC, Starbucks
are providing tough competition in
marketplace which can reduce the
profitability of firm.
 Fluctuation in currency can influence
the MNCs such as McDonald's in
negative manner.
P6 Interrelation of strength and weaknesses with external macro factors
Strengths and weaknesses of McDonald's are interrelated with macro-environmental
factors which can be more understood by as under:
 Political factors: These factors are related with rules and regulations of government
which includes tax policies, stability of government etc. As the government of UK is
stable and supportive due to which the managers of McDonald's was able in reducing
influences of recession. As managers have not followed some rules and regulations in
product development which also impacts on the sales figures of firm. Therefore, it is very
important for the managers to consider such rules and regulations so that brand image of
firm can be maintained in proper manner.
 Economic factors: It includes fluctuation in currency rates, inflation and interest rates.
As the firm has formulated and implemented its strategies as per the economic condition
of UK. At the time of recession, Management of firm has performs effective functions
due to which organisation was easily overcome from the negative influences of recession.
But during the recession time company have lost its skilled and experienced employees
which have provided negative influences on the brand image of firm (Boons and Lüdeke-
Freund, 2013).
 Social factors: It includes taste and preferences, market trends etc. Life style of citizens
can also influences positively or negatively on the sales of organisation. As the
residentials of UK nation are health conscious and concerns on the healthy food products
instead of fast foods due to which sales of firm are regularly reducing. In UK, most of
youngsters and business persons prefers fast foods which can provide opportunity to the
firm. For this, company have also launched smoothies, coffee in UK market.

 Technological factors: As the UK nation is well developed and technological advanced
nation due to which various companies are wants to expand their business in this nation.
For this, managers of McDonald have also implemented some technologies in their
workplace so that they can make strengthen of organisation. Whereas, they have not
provided effective training of using technologies to their employees which can provide
negative influences on the services of firm (Ardichvili and et. al., 2012).
From the above analysis, it can be said that these internal and external factors have a
strong relationship with the macro-environmental factors which also impacts on the operations
and decision-making of firm.
CONCLUSION
It has been summarised from the above report that there are different kind of
organisations in market whose scope, size and objectives are different from each other. For this,
their departments performs their duties with mutually consents and coordination so that desired
goals will be achieved in proper manner. Internal and external factors also plays an essential role
as it guides the managers in analysing strength and weakness along with opportunities and threat.
Macro-environmental factors of business environment are also provides assistance to managers
in implementing of plans and strategies so that brand image of organisation can be maintained.

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