Business and Business Environment Report

This report analyzes the business environment of River Island, a UK-based clothing retailer. It explores the types and purposes of different organizations, examines the interrelation between different organizational departments, and analyzes the impact of micro-environmental factors on River Island's operations. The report also includes an internal analysis of the company's strengths and weaknesses and discusses the interrelation of macro-environmental factors with these internal aspects.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Types and Purpose of private, public and voluntary organisation and their legal structure.1
P2: Size and Scope of different organisation..............................................................................3
TASK 2............................................................................................................................................5
P3: Interrelation between different organisational departments and their linkage with
organisational objectives.............................................................................................................5
TASK 3............................................................................................................................................6
P4: Impact of micro-environmental factors................................................................................6
TASK 4............................................................................................................................................8
P5: Internal analysis of organisation for identification of strength and weaknesses..................8
TASK 5............................................................................................................................................8
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses 8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment consisting of internal and external factors which affects the business
operations of an organisation either in positive or negative way. Internal factors includes
employee morale, technological implementation, shareholder's support etc. thus can be managed
and controllable by management whereas external factors includes political, economical, social,
technological etc. which cannot be controlled and managed. The present assignment report is
based on the River Island, a UK-based company which deals in providing clothing products to all
age group through out the world. The project explaining the types and purposed of different
types of organisation. In addition with this, interrelation between various department and their
linkage with organisational objectives are also covered under this report. All other aspects are
also discussed under this report with the context of River Island (Auzair, 2011).
TASK 1
P1: Types and Purpose of private, public and voluntary organisation and their legal structure
There are large number of organisation exist in world which are following different legal
structure in order to achieve desired goals and objectives. An organisation can be of different
types such as private, public and voluntary which are exist in market with some objectives and
purposes. For this, the management are held liable to ensure whether an organisation perform in
right direction or not. Here are the description of different types of organisation along with their
purposes and legal structures:
Private company
A company which is owned and controlled by two or more individuals is known as
Private company. The government has nil role over the business operations of an organisation
due to which the company are free to set prices on their products and services. Apart from this,
the government authorities put some restrictions on private company as well. For an illustration,
Private company aren't allowed to invite public to subscribe their shares (Boons and Lüdeke-
Freund, 2013).
River Island is private company of United Kingdom owned by Lewis family. It deals in
providing different varieties of clothing products to all age groups by charging an affordable
prices. The company has expand its business to more than 100 countries with the help of 6 online
websites. It has operated over 350 stores in UK itself thus capturing large market share of United
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Kingdom. The company has generated over 925.8 million as revenues in 2014. As a private in
nature, their main objective is to earn huge profits and expand its business to many countries.
Purpose of River Island:
The main purpose of company is to enhance the lifestyle of all age customers through
selling multiple variety of products at optimum quality. Due to offering fashionable garments, it
increases the competition in market which brings lots of options towards customers to buy.
Legal structure of private company
Partnership: It is a company which is formed by two or more persons through signing in
an contractual agreement known as partnership deed which contains all terms and conditions
related with sharing profit and loss ratio, share capital invested by each member etc. The main
motive of partners behind joining hands to run business is to earn huge profits.
Sole proprietorship: A company which is wholly owned and controlled by single
individual after identifying their capabilities of running business is known as sole proprietorship.
As a single individual, all decisions and plans are made by him/her only due to which the
chances of conflicts are almost nil. Any failure or success of any actions are bear by single owner
only.
Limited companies: It is a company in which members of an organisation are having
limited liability due to which they are only liable to pay amount up-to the extent of unpaid share
capital.
Public organisation
It is a company whose more than 51% share capital are hold by government due to which
the ownership and control over company are with government authorities. Thus, the government
are responsible to take actions and plans in order to run business more smoothly. The main
motive of entering into market is to enhance the standard of living of people through providing
quality goods and services at an affordable prices (Hall, 2011).
NHS is public organisation which is offered health related services across worldwide
with an objective of giving healthy lifestyle to people. Along with health services, dental and
optical care services are also provided by them. The main motive of NHS is to protect people
from any diseases and promote to live healthy.
Purposes of NHS:
 Promote healthy eating
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 Protecting people through providing them the ways of preventing diseases
 Expand its health related services to maximum number of people.
Legal structure of public company
Public organisation has required to follow some legal structures such as it is compulsory
for them to maintain reports and statement of accounts. In addition with this, paperwork required
and some other formalities associated with forming public organisation instead of private
company (Hamilton and Webster, 2015).
Voluntary organisation
It includes all companies which are established in market for the welfare of the society
hence earning profit is not their main objective. In order to form such company, it is required to
take permission from government in written form so as to offer services without facing any
future issues.
Oxfam is such an example of voluntary organisation which comes into market with a
main motive of elimination of poverty through out the world. It mainly concentrate on people
which are suffering from any disaster, pro-migration etc. It was first established in 1942 with the
help of getting support from volunteers such as businessmen, industrialists. Through their
sufficient support, an organisation can able to offer basic necessities of life to needy people.
Purpose of Oxfam:
 Reduction of poverty throughout the world.
 Promoting education to build healthy lifestyle.
 Fulfilling the basic necessities of needy people.
P2: Size and Scope of different organisation
An organisation which are exist in competitive market are having different size and scope
on the basis of their objectives. Size of the organisation is related with the expansion of business
to different locations whereas scope of organisation refers to the future possibilities of survival in
market (Nishitani and et. al., 2012). So the different size and scope of all the three type of
organisation are defined as below:
River Island
Size: River Island, a UK company which deals in providing clothing products in different
countries such as America, Ireland, Netherlands and many more. Due to engaging in clothing
industry, the chances of expansion of business will be high. At present, the company has
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generated approx. £925.8 million in the year 2014 which strong their position in market. For
further expansion, the management of River Island has focusing on opening new outlets in Chile
and Peru so as to capturing high market share.
Scope: River Island is engaged in clothing products to the people of all segments due to
which the chances of achieving growth and success in competitive market for longer duration are
more. Due to high competition it may difficult for company to survive but having large number
of customers support company to exist in market for longer period of time (Oh, 2010).
Vision: The vision of company is to bring out new and fashionable clothes in market in
order to enhance the lifestyle of people which help them in attaining string brand image in
competitive market.
Mission: The mission statement of River Island states that the company are focusing on
offering hottest looks for their targeted customers due to which maximum efforts are made to
introduce new clothing products in order to maximise the satisfaction level of customers.
NHS:
Size: It was first introduced in market in the year 1948 and from till to now, it has
attained more than 1.5 million people of United Kingdom which are using their health
improvement services. NHS has named in top five world's workforces which build their brand
position in market. As NHS has provided multiple number of health related medical services
with the help of 150273 doctors and approx. 40458 general practitioners along with 314966
nurses. These all support NHS in serving valuable services with an objective of achieving growth
of an organisation (Pulver, 2012).
Scope: NHS has provided diversified services at free of cost thus the company can easily
achieve growth and success in market for longer period of time. As dental and optical services
are also included in the offered list due to which it become easy for them to sustain in market for
longer period of time.
Vision: NHS has set a clear vision to make everyone healthy through creating awareness
about preventing diseases.
` Mission: The mission of NHS is to reach to the maximum number of needy people who
wants to get health treatment in order to make their life healthy.
Oxfam:
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Size: There are more than 20 charitable trust which are working under Oxfam in order to
eliminate the poverty from the world. Through serving valuable services, it takes support from
number of volunteers thus can successfully expand its business to different countries.
Scope: Poverty are almost in every countries due to which Oxfam has successfully exist
in market for future period of time through fulfilling basic requirements of people suffered from
any disaster.
Mission: The mission of Oxfam is to fulfil basic need of every individual which are
suffered from any discrepancies.
Vision: The main vision of Oxfam is to eradicate poverty from the world and enhance the
standard of living of people.
TASK 2
P3: Interrelation between different organisational departments and their linkage with
organisational objectives
An organisation can achieve growth and success in competitive market with the help of
getting combined support from all departments. Such departments includes finance, human
resource, marketing, production etc. which are performing altogether to achieve organisational
objectives within given time frame. It is essential for an organisation operated at global level
such as River Island to understand the value to interrelation between the functions of different
departments. It is briefly described as below:
Human resource department: This is a department which are liable to recruit skilled and
knowledgeable employees in order to fulfil the requirements of human resource in an
organisation. For this, HR managers are liable to conduct recruitment programs and selection in
order to enhance the capabilities of an organisation. Employees are considered as an asset for
company thus motivating them through conducting training and development programs enhances
their contribution in achieving organisational goals and objectives (Wild, Wild and Han, , 2014).
Marketing department: This is a department which is liable to market the products and
services offered by River Island through investing amount in adoption of marketing tools and
techniques such as TV advertisement, print media, social media etc. This will help company in
reaching the information about the products and services to the targeted customers with an
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objective of influencing their buying behaviour so as to increase sales figure of company and
generate huge revenues.
Finance department: This department is considered as the backbone of the company
which gives financial support in order to execute business activities in an effective and efficient
manner. Adoption of production equipments and marketing tools required huge amount of funds
thus required to get adequate support from finance department. Therefore, all activities are done
with the help of funds due to which the company can able to meet customer's requirements in
order to achieve desired goals and objectives (Yoon, 2012)
Production department: This is a department which is held liable to produce clothing
products with the help of utilising available resources in an optimum manner so that profitable
outcomes can be received. Gathering information from marketing department help production
department to produce demanded products in order to meet market needs. This will help in
increasing revenue of company and attain strong image in market.
Organisational structure:
There are different organisational structure which are formed on the basis of:
Function based: In this, the organisational structure is based on the functions which are
performed within an organisation such as human resource, marketing function etc.
Geography based: In this, the organisational structure is formed on the basis of locations
in different countries where the maximum crowd are available to sell its products and services.
Product based: In this, organisation structure is formed on the basis of diversification of
products for example River Island offers wide range of clothing products to all age groups.
Consumer based: Such type of structure is formed on the basis of targeted customers
which includes kids, young people and old age people (Business Environment, 2018).
TASK 3
P4: Impact of micro-environmental factors
Macro-environmental factors includes political, economical, social, technological etc.
which affects and influences the business operations of company either in negative or positive
way. Such factors are uncontrollable thus need to make an effective decisions and plans in order
to overcome the affects of such factors. River Island has operated its business across worldwide
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thus the chances of getting affected from such external factors are more. Thus, there is need to
analyse such factors through conducting PESTLE Analysis which are briefly described as below:
Political factors: River Island is a company which has operated in multiple number of
countries thus the chances of getting affected from political system are more. Fluctuations in
political system may affects the revenue of company thus required to consider all influencing
factors by the management of River Island. Positive impact: If the taxation rate on clothing products decreases on clothing products
then it directly make positive impact on the sales figure of company. Negative impact: High taxation and tight important export policies restrict the company
to expand its business to other countries (What SWOT Analysis is in simple words, 2016).
Economical factors: It is related with economy of country which can affects their business
operations of country. Fluctuations in economy may influences the existence of company. Positive impact: Increase in economy of country increases the income of people due to
which they can afford more to buy clothing products. Negative impact: Decrease in economy of country may negative impact on the buying
behaviour of customers.
Social factors: It is related with the factors which includes thoughts and belief of the targeted
customers due to which it makes impact on business operation of company. Positive impact: Considering the interest of customers build good image of company in
society. Negative impact: Absence of knowledge among customers regarding quality affects the
sales figure of company.
Technological: It is related with techniques and methods which is used to execute different
business activities. Positive impact: Invested money on adoption of advanced technology help in minimising
the wastage of resources. Negative impact: Not focusing on adoption of updated technology will bring
disadvantage to company.
Legal factors: There are different legal regulations which are provided by government which is
need to follow.
 Positive impact: Long term advantages if comply with legal rules and legislations.
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 Negative impact: Imposed penalties or the existence of company may comes in danger.
Environmental factors: It is related with protecting environment so as to make positive impact
on the customers. For this, certain legal laws and regulations are required to follow in order to
protect environment. Such factors also includes CSR activities of River Island. Positive impact: Build good image in society which strong the existence of company.
 Negative impact: Imposed penalty or fines by government if not following environment
related laws and regulations.
TASK 4
P5: Internal analysis of organisation for identification of strength and weaknesses
In order to analyse internally, the management need to conduct SWOT analysis which are
described as below:
Strengths:
 It has operated more than 350 stores in UK itself due to which capturing large market
share.
 It has attained huge customer base due to having more in demand of clothing products.
 Collaboration with Rihanna increases sales figure and revenue of company.
Weaknesses:
 Not offering discounts
 Not provide plus size collection
Opportunities:
 Need to collaboration with known celebrities.
 Need to adopt marketing strategies
Threats:
 High competition
 Changing in weather causes damage to the sales of company
TASK 5
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses
It is vital for every business organization to determine positive relationship among
internal and external department of the company. This happens to be more effective in terms of
attaining more reliable benefits in coming period of time. It has been the entire role of an
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organization to make use of all resources in reliable manner so that their weakness can be
remove in more effective and quick manner. By the wide number of benefits, they are gathered
from River Island are having competitive advantage and good brand image. To determine the
implication, they need to deal with PEST analysis so the all impacts can be analyses in proper
manner (Shigang, 2010).
Political: It is considering as one of the vital factors that are affecting the overall growth of
activities that are related with the business performance in all overall the nation.
 Strength: There is certain strength those are helpful for building appropriate image of the
company for the long time phases.
 Weakness: There is certain limitation that are associated with the company are needed to
be followed in proper manner so that impacts can be reduce in more effectively.
Economic: In every nation, it has been various situation and have wide level of cash flows in
other nations. River Island required to implement various laws and regulation so that they can be
faced in hard time like inflation and deflation.
 Strength: This has been positive operations in various Asia in which condition can be
better.
 Weakness: Upper exchange rate in more nations can affect the overall profitability of the
company.
Social factors – Social factors are those external factors which are related to an individual's
religion, culture and beliefs which can affect an organisation's business activities (Cavalcante,
Kesting and Ulhøi, 2011).
 Strength: Nestle deals in multiple countries, due to they hired a team of professionals
who can research about various cultural and religions which are followed in a country.
 Weaknesses: Due to diversity in the business activities of Nestle limited, they have to
deal in various countries having different societies and individuals, which is relatively
difficult for Nestle.
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Technological factors – Technological factors like technology up gradation and innovations
brought by competitors are major factors which effect an organisation's business activities.
 Strengths: Nestle is an international brand which always sets an benchmark when it
comes to introducing new technologies and innovations.
 Weaknesses: Nestle deals in food products which has number of competitors which may
results in pressure from market for not coping up with the competition.
CONCLUSION
It has been concluded from the above project report that it is essential for management of an
organisation to ready to face challenges occurred due to internal and external factors with some
effective strategies and plans. For this, the management need to first analyse internal strengths
through conducting SWOT analysis and external factors through PESTLE analysis.
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REFERENCES
Books and Journals
Auzair, S., 2011. The effect of business strategy and external environment on management
control systems: a study of Malaysian hotels. International Journal of Business and
Social Science. 2(13).
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.
Cavalcante, S., Kesting, P. and Ulhøi, J., 2011. Business model dynamics and innovation:(re)
establishing the missing linkages. Management Decision. 49(8). pp.1327-1342.
Hall, T. J., 2011. The triple bottom line: what is it and how does it work?. Indiana business
review. 86(1). p.4.
Hamilton, L. and Webster, P., 2015.The international business environment. Oxford University
Press, USA.
Nishitani, K. and et. al., 2012. Are firms' voluntary environmental management activities
beneficial for the environment and business? An empirical study focusing on Japanese
manufacturing firms. Journal of environmental management. 105. pp.121-130.
Oh, S., 2010. New role-based access control in ubiquitous e-business environment. Journal of
Intelligent Manufacturing. 21(5). pp.607-612.
Pulver, S., 2012. Business and the Environment.
Shigang, Y., 2010. Competitive strategy and business environment: The case of small enterprises
in China. Asian Social Science. 6(11). p.64.
Wild, J., Wild, K.L. and Han, J.C., 2014.International business. Pearson Education Limited.
Yoon, J., 2012. Detecting weak signals for long-term business opportunities using text mining of
Web news.Expert Systems with Applications. 39(16). pp.12543-12550.
Online:
Business Environment. 2018. [Online]. Available
through:<https://www.slideshare.net/NikhilSoares/business-environment-
featuresmeaningimportanceobjectives-porters-model>
What SWOT Analysis is in simple words. 2016. [Online]. Available through:
<http://pestleanalysis.com/swot-analysis-examples/>.
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