Analysis of Business Environment and PESTLE Analysis

This assignment delves into the concept of business environment and its significance for firms. It covers various articles and studies that discuss the impact of the business environment on firm performance, innovation, and entrepreneurship. Additionally, it provides an overview of PESTLE analysis, a framework used to identify and analyze factors affecting businesses. The assignment also includes relevant references and resources for further learning.

Business and
Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1) Different purpose and type of business organisation.......................................................1
P2) Size and Scope of various type of business organisation................................................4
TAKS 2 ...........................................................................................................................................6
P3) Explaining Relations between different organisational purpose, their link with structures
and objectives.........................................................................................................................6
P4) Evaluating negative and positive impact of Macro environment on business operations8
P5) External and internal analysis to determine strengths and weaknesses ..........................1
P6 Relation of strength and weakness with external macro factors.......................................2
CONCLUSION .............................................................................................................................4
REFERENCES ...............................................................................................................................5

INTRODUCTION
A business can be consist as firm, company, industry or organisation, who works for
gaining growth and success at market place through offering various goods and services to their
potential buyers. Market refers as a place where people can share goods and services in terms of
gaining money (Aithal, 2016). Business environment regards as various activities and operations
that are helpful in attaining organisational desired goals and objectives in most efficient manner.
Environment has some positive as well as negative impact on organisational performance. In an
organisation manager and higher authority are responsible for conducting all business activities
in appropriate manner, so that goals and objectives can be attained in effective way. NATWEST
is a famous company who deals in banking sector and provide various services to business
organisations in order to effectively perform at market place. The present report is based on the
study about business environment that involves concepts in respect to create effective plans and
policies to execute their working, interrelations between different functional areas, influences on
macro environment factors in economy and strong and weak points that are related with macro
factors in an economy.
TASK 1
P1) Different purpose and type of business organisation.
In today's modern scenario each business organisation is focused on attracting large
number of customers towards their offered products and services. The major purpose of each
business organisation is to gaining high profit and revenue at market place. Different type of
business organisations are available at market place who are performing various business
operations in the economy. This is beneficial in attaining higher growth and profit for well-being
of society. Three different sectors are there that are evaluated at business place in respect to run
all business plans and policies in most efficient manner. These industries are known as public,
private and voluntary sector and they all are preforming various business activities in different
functional areas as they all are not having similar functions and operations. NETWEST is a
popular business firm who helps in providing various facilities to different industry in order to
performing various business operations at market place (Aterido, Hallward-Driemeier and Pagés,
2011). NETWEST guide various business through granting them loan, so that they can run their
1

all business activities in efficient manner. The differentiation can be done through the table
which is described as under:
Type of firm Explanation of firm Aim of firm
Public sector These can be considered as the most
essential aspect which are contributing
a huge amount in developing
economic condition of country. These
type of business are governed by
government as well as private bodies.
There is a huge control of government
or its all bodies in the business
activities. In this sectors all business
organisations are working for gaining
high growth and success at market
place which are valued for
development of social environment of
country (Boons and Lüdeke-Freund,
2013).
The basic aim of each business
organisation is to gaining attention of
large number of customers through
offering variety of goods and services to
their potential buyers. The major aim of
public sector is to providing high quality
products and services to clients in order
to satisfying their potential needs and
wants. These type of firms are concern
on providing support to government and
its bodies in order to generating social
well-being of society and its people.
Some example of these sectors are as
army, schools, police and electricity
boards etc. such type of firms are dealing
in providing various services to people,
so that they will not face any kind of
obstacles and issues.
For example: McDonald's are
conducting various effective business
operations in respect to attaining high
profit share at market place.
Private
sector
This type of firms are governed or
handles by private bodies. In this
sector people are running their
business activities individually and
they are not taking any kind of help
The operations and functions of these
yep of organisations are very much
different from public and voluntary
sectors. The basic aim of such type of
organisation is to generating high profit
2

from government bodies. They are
based on some rules and policies
which are created by government or its
bodies. It is required for private sector
to follow these rules and regulations in
order to gaining high profit at market
place. Their major purpose is to
gaining high profit ration at market
place.
and growth through offering various
products and services which are helpful
in satisfying the needs and wants of
customers, so that they can sustain
customers for long time. The industry
who are dealing in this sector includes
sole proprietorship, traders and
partnership business and many other. In
the case of sole traders whole activities
of business are handled by a single
person or they perform business
activities as per their own choice. In the
case of partnership all business activities
are handled by two or more than two
partners and the business is also owned
by the number of partners (Bryman and
Bell, 2015).
For example: Starbucks is known as
most popular private company who deals
in variety of food and beverage products
in order to satisfying the needs and
wants of customers.
Voluntary
sector
These sectors are owned by
government bodies and the major
purpose of such type of organisation is
to providing satisfactory services to
people without gaining any kind of
profit and revenue. These type of
sectors are beneficial for reducing
inconvenience from society and
peoples life (Casadesus-Masanell and
The basic main of such type of business
organisation is to rendering services and
products to needy people who are not
able to satisfying their fundamental
needs and wants. With the help of free
and least price services people can easily
increase their living standard which is
effective in development of society.
3

Ricart, 2010). They are mainly
focused on providing high quality
products and services in order to
providing high satisfaction to their
customers in very less price.
For example: Oxyfam group is dealing
in voluntary sector and concern on
providing easy and effective services to
their customers.
As a largest bank in private sector NETWES providing various loans and funding facilities to
their clients who guarantee them to return the loan in desired period of time which are decided
by the mutual understanding of client and company. The company NETWEST came into proper
existence due to merger of Westminster and National Provincial Bank (Chavis, Klapper and
Love, 2011). The company is focused on providing different loans facilities to the firm which are
having goodwill and stable at market place because such type of firms are able to providing
proper interest and loan money in desired period of time.
P2) Size and Scope of various type of business organisation.
Each business organisation performing their business activities in different size and scope
and these are based on type of business firm. The major purpose of each business is to gaining
high position at market place in order to gaining comfort zone for firm or its activities. The size
and scope of firm are based on their business type, some private sectors are small or some are big
in size. The large as well as small business organisations are classified in three different areas
such as small, micro and Medium business enterprises. Such type of business organisations
applying various plans and strategies for moving forward towards right direction at market place.
NATWEST is dealing in private banks, who are providing different loan facilities to clients as
per their requirement. Before giving loan NATWEST measure the financial report and position
of company and mainly provide loans to highly reputed companies who are able to fulfilling the
requirement of bank (Chesbrough, 2010). Loans are also granted as per to scope and size of
business activities. Thus banks can easily get their loan amount without facing any kind of issue
or difficulty.
Name of
company
Size of the business Scope of the business
McDonald's This is the most popular and worlds
largest food retail chain company. The
The basic scope of firm is to
expanding their business activities at
4

company is having their business
operation all over the world at
international or national level. It has
large number of outlets and stores
through which company can provide
highly quality products and services to
their potential buyers. McDonald's had
achieved at least 50% of market share
in order to gaining competitive
advantage at market place (Chow and
et. al., 2012).
very large scale, so for this company
is focused on adopting most suitable
marketing strategy in order to
gaining attention or large number of
people towards the offered products
and services of firm. As a large food
chain across the globe company is
concern on gaining high profit and
market share in respect to gaining
high position at market place, so
competitive advantage can be gained
in effective manner.
Starbucks It can be considered as the largest firm
who is dealing in variety of coffee
products. The size of business is very
much large as they are providing high
quality products and services at very
large scale. The company is focused on
expanding their business activities at
very large scale as large number of
people are willing to taking advantage
of offered products and services of
Starbucks. The company is basically
part of Micro business that desired their
business operations outside the
boundary of UK.
Scope of company has a direct link
with performance and size of firm.
The basic scope of this business
organisation is to attaining higher
share through increasing the number
of customers who are willing to
taking benefits of high quality
products of firm (Collis and Hussey,
2013).
Austin Fraser This is a small consultancy firm who
are providing recruitment service. The
company is successfully contributing in
attainment of growth and success at
The operations of firm are limited as
their major scope is to providing
better job opportunities to people in
various sectors as per their skills and
5

internal level. knowledge.
Rolex It is the most leading. Manufacture and
retailer of watches. The company is
dealing in high quality watches and
donating a huge amount in charity
(Commander and Svejnar, 2011). The
size of business is very large and they
are operating their business activities at
very large scale.
The major aim of company is the
enhancing their profitability ratio
through providing variety of goods
and services to their potential
buyers. The company is doing
charity at regular basis in order to
providing significant support to
needy people.
TAKS 2
P3) Explaining Relations between different organisational purpose, their link with structures and
objectives.
In today's modern world the basic objective of each business organisation is to gaining
high profit and revenue at market place. The maximisation in profit helps the firm in order to
reaching at higher position at market place, so that firm can easily provide competition to their
competitors (Craig and Campbell, 2012). All business are having different objectives as to
conduct their business operations at wide level. Each business organisation adopt various
strategies as per the size and scope of firm. NATWEST is banking limited company who is
having its operation in private sectors. The company have employed over 70000 employees who
are having potential knowledge and skills in banking sector. They are assisting various firms and
its operations through providing loans and facility of funding so the operations of firm will not
be affected in any kind of condition. This is beneficial for firm to implement their all business
activities in planned and efficient manner. The basic purpose of each business organisation is to
attaining desired goals and objectives in respect to gaining at higher position at market place. It
is the major responsibility of manager and higher authority to manage their organisational
activities so that competitive advantage can be gained in efficient manner (Gecevska and et. al.,
2010).
various type of organisation, their purpose and structure are described as under:
Name of Objectives of firm Structure of firm
6

organisation
Burger king Objectives are plays most effective role
in providing proper guidance to firm or
its employees for carry out all business
activities in right direction. Burger king
is focused on designing objective which
are prepared for short time duration.
The all objectives are needs to achieved
by employees in cited period of time
(Zikmund and et. al., 2013). The major
focus area of firm is to providing high
quality products and services to their
regular buyers in order to satisfying
their needs and wants.
Burger kings are focused on
establishing effective relationship with
their customers in order to sustain
them for long time. It is the major
responsibility of manager to manage
quality aspect in order to providing
best services to their potential
customers (Griffin and Pustay, 2012).
McDonald's It is the worlds largest food retail
company, which provide high quality
services and products world wide. The
basic aim of firm is to rendering high
quality products and services to
consumers who are very much willing
to taking advantage of offered products
and services of firm. The firm is
conducting their business activities
from 1974. the major aim of company
is to provide high quality products and
services to their customers in desired
period of time, so there is no need for
buyers to stand in a queue. The
organisation are valuing the amount of
money which are paid by customers in
Structure of firm are based on the size
and scope of organisation. Structure
can be described as a plan in which
firm can easily implement their all
business operation in effective period
of time, so that cited objectives can be
achieved. McDonald's have used
defined structure in which all
employees are aware about their
assigned roles and responsibilities at
work place, so that each activity can
be execute in well planned manner.
7

respect to retain its good image in the
mind of consumers (Newbold, Carlson
and Thorne, 2012).
As a private company NATWEST design some aims and objectives on which it is easy
for firm or its employees to implement all business activities in well planned manner, so that
competitive advantage can be attained. The banks can evaluate the operations of firm and than
effective decision can be made after analysing the financial condition of firm in order to
providing funds and loans which are expected by the clients. Capital can be considered as the
fundamental need of each business organisation as it is required for firm to execute their business
operations in appropriate manner. The major purpose of each business organisation is to gaining
high profit and growth through attaining their desired objectives and goals. NATWEST mainly
provide loans and funding facility to highly reputed and settled business firms who are having
significant support and financial condition to return the amount of money, so company is always
assure about the safety and security of money (Roederer, Nozzi and Nason, 2011). The company
is also dealing in national as well as international level in order to establishing an effective
relationship with the company of other countries.
P4) Evaluating negative and positive impact of Macro environment on business operations
Business environment is dynamic in nature which required to make a company’s
performance consistent in the longer run. There are two types of factor macro and micro and its
having a large influence over the operational activity of the company. External factors are too
complex and competitive for the company in the longer run. Therefore, each and every enterprise
needs to analysis and evaluate these elements in advanced so that they can eliminate potential
impact on business and its performance. On the other hand, internal factors also play a vital role
in order to impacting business. Therefore, this is the responsibility of manager is to evaluate
these factors and make their decisions in an effective manner (Weske, 2012). These factors can
be involving:
 Political factor: This is one of the key factor which is related with the government
stability and business policies of a company. In the context of UK, where long term
consistent political structure available and helps to make and promote business. Net West
required to understand the overall situation and make their decision accordingly.
8

 Economic factor: This is another element which involves GDP growth rate, employment
situation, interest rate, inflation rate, demand and supply and other factors. The influence
of these factors on business large and long term. For example, UK government plan to
increase interest rate which having adverse impact on business of Net West in the longer
run.
 Social factors: It involves those factors such as culture, population, income groups and
other elements. This is very significant for a company is to understand such aspects and
develop their product and services accordingly (Zalengera and et. al., 2014). For
instance, there are large number of people in UK which having approx. $35000 per capita
income which is quite higher than other countries and helps to meet their sales target in
an effective manner.
 Legal factor: There are various legal issue such as minimum wage rate, labour rate,
discrimination act and so on. This is responsibility of a business enterprise is to follow all
these guidelines. It helps to create an ideal image in front of their stakeholders such as
employees, shareholders, investors, suppliers and so on. This is very critical is to manage
their operations according to these legislations.
 Technological factors: The role of technology and innovation plays a vital role in the
growth and success of a company. This is very significant for an enterprise use such
aspects in order to gain competitive advantage in the market over others. For instance,
Net West can sue digital platforms which helps to increase in productivity and
effectiveness in operational performance (Zikmund and et. al., 2013).
 Environmental factors: Today, each and every business organization wants to use
sustainable business practices in their operations. This is very significant and meet their
environmental targets. For instance, cited firm can promote a healthy environment and
climate which increase awareness among the public. This is very significant for a
company is to conduct various events on environment as a part of CSR activity which
meet their short and long term goals and target.
9

P5) External and internal analysis to determine strengths and weaknesses
For every organisation, it is necessary to determine internal and external factors of
business environment which influence the performance of the firm. It creates huge impact on the
profitability and growth of the entity. The company, NATWEST deals in banking sector and
helps other businesses to perform their tasks in effective manner. It is essential for the managers
to formulate effective policies and strategies so as to deal with issues in a very efficient manner.
The environmental factors, i.e., internal and external can only be determine by conducting
SWOT analysis. It includes strengths, weaknesses, opportunities and threats of an organisation. It
is necessary for the company to conduct SWOT analysis for developing future action plans and
strategies.
SWOT analysis of NATWEST :
Strengths Weaknesses
 Strong distribution network of the
company helps it in reaching to its
potential customers so as to accomplish
higher profits and generate high sales
ratio.
 NATWEST is established at many
places where many people are exist. It
provides high competitive advantage to
the company from its target market.
 The firm has highly qualified and
skilled employees who contributes in
the growth and success of the firm.
NATWEST administer appropriate and
timely training to its workforce so as to
increase the competency of the firm
and to compete in the market place.
 The company creates strong
relationship with its customers which
 The company is unable to handle the
issues and challenges that arises due to
the entry of new entrants in the market
place.
 The production methods used by the
company are traditional. So,
NATWEST is not able to compete with
the external market forces. Due to that,
the production level of the firm falls
down.
 The financial planning of the company
is not done properly which leads to
imbalance between the ratio of current
assets and liquidity.

enable it to attain higher level of
satisfaction of buyers through
providing them quality services.
2

Opportunities Threats
 The newly formulated taxation policy
in UK administer various opportunities
to the firm. It impacts significantly
upon the business entity by enhancing
its profitability.
 The ups and downs in the economy
influence the demands of customers as
they spend more amount to buy new
products. This could improve the
market share of NATWEST effectively.
 The firm gets opportunities to stay in
the market place because of low
inflation rate. Due to this, credits are
available at lower rates.
 Every organisation has its own
strategies and policies. It is difficult to
NATWEST to follow these policies and
regulations as the firm operates at
various countries.
 All the Business organisations face
fierce competition which puts
downward pressure on the growth and
profitability of the firm.
 Emergence of new technologies and
innovations in the market is a big threat
for NATWEST as it influence the
overall performance of the business as
well as its market image.
P6 Relation of strength and weakness with external macro factors
Strength are the major activities which support business to grow and expand in diverse
situation. Every organisation have several advantages which promote appropriate and ethical
working environment as well. Along with this, weakness are all such limitations which made a
vast impact on business and their operations (Zott, Amit and Massa, 2011). Thus, appropriate
and suitable strategies have to prepare by an organisational managers to overcome from all
limitations properly. NATWEST bank have to identify all their strength and weakness properly
and link them with all external macro factors of business which are: political, technological,
legislative, economical, environmental and social. Although, business growth is completely
depend upon preparing appropriate action plan which support in facilitating new development
opportunities of world (Zalengera and et. al., 2014). Below are define appropriate strength and
weakness of NATWEST and their link with external factors so that managers will going to
incorporate suitable steps of development:
Basis Strength Weakness
3

Political A major strength of a company is live at
various locations. Thus, a political support
for business through government is to
perform all duties and things properly for
ascertaining targets properly (Newbold,
Carlson and Thorne, 2012).
Change in government
stability will directly influence
the business and its operations.
Hence, this reflect a negative
impact on business. Although,
they are already suffering from
imbalance of current ratio.
Legal Another major strength for business is
recruiting suitable candidates for business
and follow all legislation properly as well
which are related with staff.
Lack of flexibility in
modification of policies is a
major weakness of NATWEST
bank. Thus, bank not able to
handle all changes and
modifications in regulations
perfectly especially after
Brexit.
Economical Economical condition of a business have to
be appropriate in manner. Thus, business
have to fulfil all satisfaction wants and
needs of customer and maintain healthy
relationship with them.
A major weakness of bank is
about lack of financial
planning which made a vast
impact on operating financial
things at such strong and
powerful market world
(Roederer, Nozzi and Nason,
2011).
Environmental Environmental related strength of a
company is focusing more on digitalisation
which reduce chances of wastage of papers.
Weakness of business is
change in business
environment will directly
affect their activities due to
low stability and not
appropriate financial planning.
Social Use such steps which made a positive Lack of financial stability and
4

impact on society like providing more job
opportunities, use such practices which
promote ethical working etc (Weske,
2012).
Brexit decision will
incorporate a outcome of many
people get unemployed. This
made a negative impact on
business and reflect limitation
as well.
CONCLUSION
As per the above given report it has be concluded that the major purpose of each business
organisation is to gaining high profit and growth at market place through offering variety of
goods and services to their potential customers in very affordable prices. In this modern era each
business firm is focused on gaining high competitive advantage at market place in order to
providing competition to their competitors. The structure of organisation is based on size and
scope of firm and it is required for banking sector to analyse the size and scope of firm in order
to making effective decision to provide funds and loans. PESTLE analyse is helpful in
conducting external analyse of firm and with the help of SWOT analyses internal analysis has to
be done n most efficient manner.
5

REFERENCES
Books and Journals
Aithal, P. S., 2016. Study on ABCD analysis technique for business models, business strategies,
operating concepts & business systems. Browser Download This Paper.
Aterido, R., Hallward-Driemeier, M. and Pagés, C., 2011. Big constraints to small firms’
growth? Business environment and employment growth across firms. Economic
Development and Cultural Change. 59(3). pp.609-647.
Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-
the-art and steps towards a research agenda. Journal of Cleaner Production. 45. pp.9-
19.
Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
Casadesus-Masanell, R. and Ricart, J.E., 2010. From strategy to business models and onto
tactics. Long range planning. 43(2). pp.195-215.
Chavis, L. W., Klapper, L. F. and Love, I., 2011. The impact of the business environment on
young firm financing. The world bank economic review. 25(3). pp.486-507.
Chesbrough, H., 2010. Business model innovation: opportunities and barriers. Long range
planning, 43(2), pp.354-363.
Chow, A.T., and et. al., 2012. Computer readable medium with embedded instructions for
providing communication services between a broadband network and an enterprise
wireless communication platform within a residential or business environment. U.S.
Patent 8,155,155.
Collis, J. and Hussey, R., 2013. Business research: A practical guide for undergraduate and
postgraduate students. Palgrave macmillan.
Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance. The Review of Economics and Statistics. 93(1). pp.309-337.
Craig, T. and Campbell, D., 2012. Organisations and the business environment. Routledge.
Gecevska, V. and et.al., 2010. Product lifecycle management through innovative and competitive
business environment. Journal of Industrial Engineering and Management. 3(2). pp.323-
336.
Griffin, R. W. and Pustay, M. W., 2012. International business. Pearson Higher Ed.
Newbold, P., Carlson, W. and Thorne, B., 2012. Statistics for business and economics. Pearson.
Roederer, M., Nozzi, J. L. and Nason, M. C., 2011. SPICE: Exploration and analysis of post‐
cytometric complex multivariate datasets. Cytometry Part A. 79(2). pp.167-174.
Weske, M., 2012. Business process management architectures. In Business Process Management
(pp. 333-371). Springer Berlin Heidelberg.
Zalengera, C., and et. al., 2014. Overview of the Malawi energy situation and A PESTLE
analysis for sustainable development of renewable energy. Renewable and Sustainable
Energy Reviews. 38. pp.335-347.
Zikmund, and et. al., 2013. Business research methods. Cengage Learning.
Zott, C., Amit, R. and Massa, L., 2011. The business model: recent developments and future
research. Journal of management. 37(4). pp.1019-1042.
6

Online
Business environment. 2017. [Online]. Available through:
<http://www.investorwords.com/19252/business_environment.html>. [Accessed on
18th November , 2017].
PESTLE Analysis 2017. [Online]. Available
through:<https://business-docs.co.uk/downloads/pestle-product-strategy-template/>.
[Accessed on 18th November , 2017].
7