The Impact of Business Environment on Firms

The assignment analyzes the crucial role of the business environment in shaping the success of young firms. It delves into topics like business model innovation, competitive strategies, and the impact of factors such as regulations, technological advancements, and market dynamics on financing options and overall firm performance. The World Bank Economic Review, academic journals, and prominent business thinkers' works serve as sources for this exploration.

Business And Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purpose of organisations as public, private and voluntary with legal
structure.......................................................................................................................................1
P2 Size and scope of different types of organisation..................................................................3
TASK 2............................................................................................................................................5
P3 Relationship between different organisational functions that link with objectives and
structure.......................................................................................................................................5
TASK 3............................................................................................................................................7
P4 Positive and negative impacts the macro environment upon business operations.................7
TASK 4............................................................................................................................................9
P5 Conduct internal and external analysis to identify strengths and weaknesses.......................9
P6 Explain strengths and weaknesses interrelate with external macro factors.........................10
CONCLUSION..............................................................................................................................11
REFRENCES.................................................................................................................................13

INTRODUCTION
Business is generally known as enterprise which starts by a person for the purpose of
generating revenues or profits. They come up with unique ideas and creative thinking for running
an effective organisation so that maximum profits or outcomes can be achieved. Business
environment is related with several factors that affects on the operations as well as impact on the
climate changes (Aterido, 2011). There are different natures of businesses which are existing
such as public, private and voluntary etc. who have various purposes to generate profits and
create wealth in the market. Environmental always influence on the business procedures and its
activities which have major effects on profitability, productivity and growth. These forces may
or may not be controlled by management. This report is based PRIMARK which is clothing and
accessories company and its headquartered in Dublin, Ireland. This assignment will explain
different types of organisations with their purposes, size and scope. It defines organisational
functions that link with its objectives and structure. It will identify positive and negative impacts
of macro environment upon business operations and conduct analysis of internal and external to
identify strengths or weaknesses and how they interrelate with external macro factors.
TASK 1
(Covered in PPT)
P1 Different types and purpose of organisations as public, private and voluntary with legal
structure
Every business is classified into three categories such as public, private and voluntary
which have different objectives or purposes for their running organisations. They all are
organised, owned as well as controlled by various authorities for achieving their defined goals or
targets in an appropriate manner. The major difference among them is their purposes and legal
structures which totally different and it helps in describing their visions, missions as well as
objectives in efficient manner. In this defined the process of adaptability of several skills which
required for providing products or services to meet their desired expectations and needs in an
appropriate manner. Business environment comprises with number of forces including suppliers,
resources, distributors, competitors, financial systems, rules or regulations, current industry
trends, innovations, people and industrial growth and many more. Therefore, it must be required
to consider various forces and focus on adopting effective tools or techniques to survive from
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these factors and critical environment. Organisations have to manage and maintain all available
resources such as human resource, physical, material and fiscal for running business operations
or activities in an efficient ways. Every global businesses like PRIMARK always consider entire
environmental forces while making effective decisions about adoptions of new strategies or
innovative ideas so that they can achieve competitive advantages through pricing and
promotional strategies.
There are different types of organisations which have various purposes and legal
structures such as;
Public sector: These organisations are owned and controlled by government authorities,
agencies and legal bodies as they are responsible for operating businesses in an appropriate
manner. They run several firms on the behalf of their societies for the purpose of their well-being
as well as welfare. Public sector contributes more to the country development and economic
growth by stating owned enterprises as well as commercial companies that are operating by
public ownership. In this included various structures that works for people protections, fire
fighting, road constructions, infrastructure development and hospitals, social programs and
transportations services etc. National Health Services (NHS) and Audit commission are the best
examples for public sector companies.
 Purposes: Public sectors firms always have specific purposes and objectives as they
want to provide better services and products to the public for meeting their requirements
and demands. Audit commission is best firm who works for controlling as well as
commanding on the economy of the country. They focus on providing social care
services not to earn profits or generate revenues.
 Legal structure: Every public firms are running under the control of state as well as
local government of the nation. Therefore, Audit Commission always legal structure and
raise it through tax policies, financial growth and many others. The main aim of these
kinds of organisations are providing social care services to public for their welfares.
Private sector: In this, individual and group of people come to start their own venture and
these businesses are owned and controlled by them. Their main aim is to generate profits or
revenues by running an organisation. There are no any interferences of government bodies as
well as legal authorities but they grant permissions or licenses to people for starting their venture
and new businesses. They generally focus on earning money and get return more from investing
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limited funds. For example PRIMARK which is multinational clothing and accessories company
and retail firm.
 Purpose: Private firms are different as people starts or set up business enterprise with
the aim of getting higher returns and generate more funds while running an
organisation. PRIMARK is one the example of private sector who provide several new
fashioned cloths to its targeted audience for satisfying their needs or wants so that
maximum sales can be increased.
 Legal structure: In this defined that every private organisations are owned and
controlled by private owners, individuals as well as partners who have desired to make
profits in an appropriate manner.
Voluntary sector: These kind of organisations included several entities like voluntary
bodies, community of businesses and charity etc. They are also known as non-profit organisation
as well as non-governmental firms. It can be consider the example of Well-come trust as they
provide several services related to Biomedical research charity. Their main aim is to provide
health care services to those people who can not afford expensive treatments. Purpose: The major purpose of voluntary sector is to provide better quality of social care
services to the people without making any profits. Well-come trust also consider several
health care services not only for human but also for animal.
 Legal structure: These organisations are controlled and owned by government bodies and
NGO for providing effective facilities and services to social people. They work on
particular project so that government provides them appropriate funds and necessary
resources.
P2 Size and scope of different types of organisation
In this defined that there are different types of organisation with contrary nature which
have scope and sizes as per their nature such as public, private and voluntary. They are
responsible for managing and maintaining their size and scope for achieving set goals or targets
in an appropriate manner such as;
Public sector: In this consider those businesses that are established for providing services
regarding economies to develop every individuals. Therefore, it can be analysed that
organisations are corporate association which are related with certain legal identities and specific
rights. These properties and authorities or rights are owned by various companies as well as
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possessed by their members. In such businesses, entire assets of its members are not for their
firm to use when running an organisation. Therefore they both are different as personal and
professional. Pubic sector has large structure and size as compare to other sectors so government
contributes more for developing economic conditions of the country. The example of Audit
Commission as its size and structure is wide than other firms.
 Shareholders: Public organisations are controlled by government authorities and legal
entities at state and local level. Audit commission also working under the local
government authority finance act 1982. this organisation is based on government
bodies of the country.
 Scope: Public sector has wide scope as it owned and controlled by government so that
every firms can be managed and maintained in an appropriate manner. In the Audit
commission, company focus on appointing employees or auditors for public bodies to
set the appropriate standard.
 Visions and missions: Public sectors are focusing on providing various social cares
and services in an appropriate manner. The main purpose of Audit Commission is to
hire or appoint best suitable auditors for creating better organisation and build
effectiveness by considering standard.
Private sector: Every private firms generally belongs to various industries such as
manufacturing and service sectors that provide effective goods and quality services to its
customers for satisfying their needs or wants in an appropriate manner. On the other side, private
sectors have several legal structures and criteria that company needs at least one share holder for
the purpose of running business and they have rights to offer huge amounts of shares to the
public at the marketplace. So that every individual can purchase company's shares who get
interested and ready to sign any agreement of business. In the NEXT company, its size and scope
are very different as compare to others such as;
 Shareholders: NEXT is retail firm which deals in selling cloths or home appliances in
the market. Here are more important shareholders of this firm such as BlackRock
Investment Management (UK) Ltd, Invesco Asset Management Ltd., Norges Bank
Investment Management and Capital Research and Management Co.
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 Scope: Next is one the most famous clothing firm which has approx 700 stores across
the country including Europe and Asia. They focus on providing various services and
products to the public.
 Visions and missions: This firm generally deals with number of products or services as
their mission and visions is to capture target audiences and generate more revenues in an
appropriate manner. They manage gross as well as net profits during business
operations.
Voluntary sector: In such types of businesses has broad structure so its size and scope
also huge rather than others as they focus on providing social services to people without
expecting profits. Well-come Trust is best example of voluntary sector as they work for services
number of societal facilities or services regarding their health care.
 Shareholders: There are various shareholders who provide financial support and
economies facilities to these kinds of businesses so that they can be run in an appropriate
manner. In this included government authorities, different businessman and any
individuals who wants to contributes to provide services for achieving set goals or
objectives.
 Visions and missions: Well-come trust is belongs to a charity which provide health care
services to the public such as Biomedical research charity.
 Scope: In this firm, it is necessary to make better services and health care facilities in
more appropriate way so that goals or objectives can be achieved in an effective manner.
Its main scope is to make possible changes in the health care sector.
TASK 2
P3 Relationship between different organisational functions that link with objectives and structure
In this considered that every organisation focus on their functions and activities so that it
can be run in an effective manner and goals or objectives can be achieved (Hallward and
Driemeier, 2011). Functions of organisation are human resource, marketing and sales, production
and operations, research and development, finance and accounts, administrations or IT and
customers services etc. these all are very necessary to performed in an appropriate manner. They
play vital role in running business operations or activities and maintain effectively so that goals
or objectives can be accomplished. Every functions are interrelated with business goals or targets
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that must be achieved in limited time period. Here are clear descriptions of such functions which
are given below;
Marketing department is the major bridge of relationship in the market which helps to the
organisation in providing better satisfaction to customers. Marketing is very effective and
supportive for people whether they are consumer and suppliers to analyse specific trends, current
situations and conditions of the market through environmental study (Cantwell, 2010).
PRIMARK also consider this and focus on providing proper informations regarding new
fashions and trends in cloths or accessories by using appropriate strategies and tools or
techniques so that they can aware to target audiences. It will support in achieving goals or
objectives in an effective ways.
Finance is back bone of the every firm as it support in running the business organisation
as finance must be required to operate business activities in an effective manner. It is generally
related with expenses or expenditure while operating functions and how organisation utilise its
available resources to overcomes all these costs so that set targets can be achieved in an effective
manner. This is an essential that provide valuable reports by considering PRIMARK financial
performances and positions in business planning. This firm concentrate on allocating available
funds among several business activities so that business can be run in more appropriate way.
Primark also maintain its cash flows, financial statements and many more so it is the
responsibility of internal auditor for checking and monitoring financial performances within the
firm.
Research and development play vital role in analysing effective goods or services so that
customers needs or wants can be satisfied and also their desired outcomes can be meet. Primark
also organise such program and conduct study to analyse current trends, consumers desired
expectations, and market positions by undertaking appropriate tools or techniques to get
adequate information (Carroll and Shabana, 2010). Company also apply its formulated policies,
rules and regulations while conducting research or survey. It is most important element that helps
in producing effective goods or services. it also responsible to increase productivity and
profitability while running business operations.
Production functions is a major functions which must be performed in appropriate
manner because organisation is depends on its products and services that are going to provide to
the targeted audiences and achieve set goals or objectives. This is an essential that support in
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satisfying customers desired needs or expectations by serving them quality of goods or services.
For every firm, it is necessary to satisfy their target audience so that better relations can be build
among them (Cavusgil, 2014). Company is required to focus on this department for the purpose
of manufacturing best products as per clients requirements as it will support in influencing
buyer's behaviours towards purchasing and they get ready to spend money for buying particular
goods. Primark also identify customers needs and wants as well as manufacture new fashioned
cloths so that number of customers can be attracted.
Human resource management is one the most important function for every business firm
as they are responsible for managing entire team or workforce within the organisation. In this
concern with people management while running business as tasks are performed by them so that
targets or goals can be accomplished in better manner (Chavis and Klapper, 2011). It play vital
role in managing and maintaining the entire tasks or activities by dividing work among people
within the firm. Primark focus on employees development by organising learnings sessions as
well as training and development program so that their skills or abilities can be enhanced in an
appropriate manner.
Accounting and finance department is also play crucial role for managing the business
operations so that predetermined goals can be attained. Primark firm manage its accounting
department in more appropriate ways as division are responsible for maintaining commercial
activities in which priority is given to the enough funds according to demands and specific
marketing requirements. Primark focus on its financial functions and activities as utilise them in
effective or efficient manner so that maximum outcomes can be get and profits also can be
gained.
TASK 3
P4 Positive and negative impacts the macro environment upon business operations
In this considered that every firm has affected from several environmental factors which
is surrounded over them. It is necessary to analyse those major forces who direct effects on the
business firm and its operations (Love, 2011). In this included internal and external factors which
affects on the operations or activities and result may be failure to run an organisation. They
generally affects on the several procedures such as decision making, taking corrective actions,
make strategies and adaptation of tools or techniques so that predetermined goals or objectives
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can be achieved in an appropriate manner. Company have to required to make effective and
appropriate strategies so that they can survive from such factors in an effective manner. It can be
possible to manage and control over the forces so that it can not affects in negative factors.
Primark have to consider some suitable techniques and strategies for avoiding such negative
effects in an appropriate manner (Chesbrough, 2010). Environmental factors involved several
elements like legal, political, social and technologies and economical forces etc. these are as
following;
Political and legal factors: In this consider those forces that cannot be controlled by
businessman and these are based on several changes in governments policies and procedures. It
has major impacts on the business operations as they may create barriers while making any
decisions regarding business. Primark also have to required that analyse legal factors and
consider several rules or regulations of the government authorities which have negative and
positive impacts such as; Positive impacts: in this defined various legislations and laws that can affects on the
country and also create values of any organisation. These are very support in reducing
negative approaches so that crime or illegal works can be minimised.
 Negative impacts: Government have rights to formulate various policies and code of
conducts against the laws, therefore the major impact on protocols that helps in corporate
firms in their plan executions and procedures.
Economic factors: It has involved number of forces which directly affects on the
business firm in achieving set goals or targets. It has major impacts on the economic conditions
of the nation and procedures. There are broad legal structures and trade organisation etc. Positive impacts: This factor support in proper planning and formulating effective
strategies for the purpose of generating revenues and profits (Chow, 2011). It directly
affects on the economy contribution for country development and its growth.
 Negative impacts: In this consider some tax rates, inflations and other fluctuations in the
economy system so it can be effect on the business enterprise.
Social factors: It is one the major factor which affects on the sales performances as it is
related with customers needs or wants that must be satisfied with providing effective goods or
services in an appropriate manner. Primark also try to analyse customers needs or demand as per
the fashions and trends and get information about them by conducting survey so that effective
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good and services can be provided to them. This factor is flexible in nature that can be changed
according to environment. Positive impacts: There must be necessary to analyse market and customers as well as
their purchasing behaviours so that Primark can produce quality of products such as
cloths and accessories (Commander and Svejnar, 2011). It is an essential to meet their
demand and desired expectations in very appropriate manner.
 Negative impacts: In this can be find poor quality of services and products because
customers demands generally changes according to environmental changes so that it is
necessary analyse current trends and fashions for Primark company. It has negative
impacts on the business firm as they can decrease their sales in the market.
Technological factors: This is a major factor as it also changes as per the changing
environment. Technologies are launching day by day and most of companies focus on adopting
suitable methods for achieving competitive advantages. Therefore, PRIMARK requires to use
effective techniques and strategies for running an organisation in critical circumstances such as; Positive impacts: Advance technologies make business smooth and achieve growth in
every firm so it must be considered in the primark.
 Negative impacts: Number of factors available which affects on the business operations
such lack of skilled employees as there will be difficulties in getting knowledge about
new technologies.
TASK 4
P5 Conduct internal and external analysis to identify strengths and weaknesses
For every successful organisation, there is requires to analyse strengths and weaknesses
of the company so that effective strategies can be formulated (Drucker, 2017). It can be possible
through internal and external analysis as these support in identifying advantages and
disadvantages so that company can meet their desired outcomes.
Strengths of PRIMARK:
 There are around 50000 people all over the world.
 It deals in number of products or apparels such as menswear, women wear, footwear and
accessories in the market.
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 Sales are increasing on every year.
 Strong brand image across the Europe with having 300 stores.
 They are focusing on advertisements such as word of mouth that helps in decreasing
costs.
Weaknesses:
 There are very less chances to earn profits due to slow economic growth of EU
(Fernando, 2011).
 Next weakness is outsourcing for producing goods or apparels may be inconsistency
regarding quality.
Opportunities:
 There are more opportunities for Primark to open further stores in several cities like
Lisbon, Madrid and Berlin.
 Primark can also open stores in other countries such as Indian, China and South Africa.
 They can segment in sportswear also.
Threats:
 EU is facing economy crises which is major threats for Primark.
 Lots of competitions in the market that can affects on the business.
P6 Explain strengths and weaknesses interrelate with external macro factors
Macro environment have create impact on firm performance as well as productivity. All
company has surrounded form several elements related to business operations which affect their
sales as well as profits (Gecevska, 2010). It create negative and positive impact on PRIMARK.
Management of firm required to consider all macro factors which create negative impact on
operations. Some macro environmental factors are political, economical, legal, technological,
social and culture, its create major impact on business strategies. Manager of Primark are
consider all these external factors for develop effective plan of action which are improve growth
and productivity at market place. External business environment consist modification that create
impact on operational activities. It has reticulated with enterprises strength and weaknesses with
all macro environmental elements in several ways are explain as follows:
Social factors: This factors is based on customer's needs and wants which are full fill by
organisation through producing goods and services. PRIMARK develop effective marketing plan
in order to find out clients needs and wants or accordingly produce commodity. Social elements
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lifestyle, value, ethics, norms etc. are consider by manager which are occurred due to consumers
preferences, perception, needs, choices, taste and wants and many more. It is also explain that
how these kinds of elements may related to company to gain high profits in adequate manner.
Technological factors: Through latest technology firm are able to produce high quality
product and services, it helps to gain competitive benefits as compare to their competitors in
same industry which rise growth (Hamilton and Webster, 2015). Technology are rapidly change
in current business environment which affect firm working process in a negative ways. They are
required to adopt latest technology and techniques to produce product and services in order to
full fill needs and wants in a specific time period. They can be sever equipments, machines and
other durable assets for producing parts. It helps to make more quality goods effective in given
time frame.
Economical factors: Some economic factors like rate of interest, taxation policies,
inflations, balance of payment and many more are affect enterprises presentation as well as
financial position in the industry. So that, it is a management responsibility to analyse market
conditions and changes that affect organisation performance as well as incomes. PRIMARK also
concentrate on organising, managing, controlling all business activities in an effective ways as
per innovative ideas as well as creative thinking.
Political and legal factors: Government make rule and regulation like taxation, trade
policies, globalisation, labour laws etc. It is very necessary for all company to follow these laws
in order to run whole business activities in an effective manner (Klapper and Lewin, 2011). It
helps to preventing various disputes that reduce negative impact on an organisation performance.
Through this, firm are able to achieve competitive benefits in industry. To gain sustainability at
market it is compulsory to meet desire expectations of potential clients in effective manner.
Environmental factors: Every enterprises has operated their business operation which
are surrounded form various environmental factors like natural resources. Therefore, it is
necessary for management to analysis these elements which create impact on the business
operations.
CONCLUSION
From the above report, it has been concluded that business environment consist with
several factors such as internal and external that can affects on the business operations. Company
have to undertakes its effects and formulate better strategies and adopt several tools or
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techniques to survive in various situations. This report defined different types of organisations
with their purposes, sizes as well as scope. It also described internal and external factors that
must be analysed for making strategies and decisions. This assignment is based on PRIMARK
firm and in this analysed PESTEL as well as SWOT of this company.
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