Business Environment Analysis

This assignment requires students to conduct a thorough PESTLE analysis examining the various external factors influencing business operations. It emphasizes understanding how political, economic, social, technological, legal, and environmental (PESTLE) forces shape the business environment and impact entrepreneurial endeavors. Students will analyze case studies and real-world examples to illustrate their understanding of this crucial concept.

BUSINESS AND
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1 ...........................................................................................................................................3
P1 & P2 Covered in PPT .......................................................................................................3
P3 Relationship between different organisational functions and how they link to
organisational objectives and structure..................................................................................3
TASK 2 ...........................................................................................................................................5
P4 Positive and negative impact of macro environmental factors ........................................5
P5 Internal and external analysis of business organisation ...................................................7
P6 How strengths and weaknesses interrelate with macro environmental factors ................9
CONCLUSION ...............................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
Business environment is a combination of all entities, individuals and entities that may
or may not be under control of organisation which will put a huge impact on firm's performance,
growth and profitability as well. This is made up macro and micro environmental factors Along
with this, business environment is a consolidation of internal and external factors that will affect
company's existing situation. Management changes, employee morale and corporate culture are
consists with internal elements Competitors, suppliers, customers, shareholders are the external
factors of business environment (Mkude and Wimmer, 2015). Hotel Hilton is the chosen
organisation in this present report which is a global brand of hotel services and resorts. There will
be discussion on various types of business organisations and their purpose. Also, there will be
study on the macro environment of business organisation. Apart from that, SWOT analysis is
done in order to make internal and external analysis of company.
TASK 1
P1 & P2 Covered in PPT
P3 Relationship between different organisational functions and how they link to organisational
objectives and structure
An effective organisational structure is a system which consists of implicit and explicit
institutional rules. It is also helpful in task allocation, supervision and coordination among
business activities towards the achievement of company's goals and objectives. Along with this,
Hotel Hilton needs to be flexible, creative, innovative and efficient for accomplishing a
sustainable competitive advantage. Organisational structure grants the expressed allocation of
roles and responsibilities for various processes and functions to different entities, i.e. branch
divisions, group or an individual. Marketing, human resource department, production &
operation, research & development, customer services, information technology, finance &
accounting etc. are the various functions of business organisation; they all are responsible in
order to achieve goals and objectives of company from target market.

There is given brief explanation of all functions of business organisation, such are as: - Marketing – Marketing have an significant role in business entities; it helps managers to
reach potential customers. Without this, customers may not be aware of the products and
services of the company. Along with this, the process of marketing planning, supports to
managers in forecasting of sales. So as they can produce products and services
accordingly. If managers of Hotel Hilton provides quality products and services to
customers so they can easily attracts towards company. This will helps in achieving goals
and objectives of firm from competitive market. Marketing manager is also liable to
recognise needs and wants of buyers; and focuses on producing the same (Zalengera and
et. al., 2014). Through which , the sales and profits of cited company are rapidly
increased.

 Finance and accounting – It is the main role of finance department is to forecast
financial position of the company. The main aim of finance department is to achieve
three benefits, such as – business support service, effective control over environment and
lower costs. Finance is needed in order to promote or develop a business, implement
certain goals, developing products, advertisement and run market surveys. Apart from
this, in Hotel Hilton the accounting unit is responsible to make annual budgets and profit
& loss statement of the company. The division is also helpful in managing cash flow of
the organisation's and ensuring that there are enough funds available for day to day
payments. Customer services – The department is liable to interact with customers and provide
them necessary information as well as resolve their queries. Many companies invest high
amount to make effective customer services; this will also help in increasing sales of the
business organisations. Customer service department is also liable to make healthy and
strongly relationship with buyers; it will aids into achieve goals and objectives. Human resource department – In many business enterprises, human resource manager
have various roles and responsibilities. Such person is liable for developing and
formulating strategies and polices; the department of HR is also focused on attaining and
reattaining employees towards business enterprises. Along with this, human resource
specialist are conducted training and development assistance for employees in order to
improve their productivity and efficiency (Ghinolfi and et. al., 2014). It involves
assessing training needs, facilitating instruction, creating training manuals and ensuring
training objectives which have been met. The unit is capable also handles the labour
relations and conflict resolution in the firm; their aim is to provide healthy and positive
working environment to workers so that they can work freely. In Hotel Hilton, HR
manager is culpable for quality and cost control, that is directly related with the
successful achievement of company's goals and objectives. Production & operation - The production and operation department have a significant
role for running businesses successfully; the unit has ultimate accountability for profit &
loss. Along with this, production division is seeks with maximise return on investment
for the shareholders. In the manufacturing process of the product; operation department
gives guidance about product designing, time acquisition, ensuring adequate number of

trained employees etc. In Hotel Hilton, the operational manager is responsible for
making sure that raw materials are timely provided and they are effectively made into
finished goods. The person also ensure that work in carried out smoothly. If cited
organisation is capable to produce effective and innovative goods and services; so as it
can attracts many buyers from market to achieve its goals and objectives.
 Research and development – The research and development department is conducted
market researches for new products and find out new solutions to bring out customers
from marketplace. In order to achieve competitive advantage, business organisations
always needs to identify new ways for technological development of product range. It is
prime role of research manager is to ensure that the new product meets the product
specification (Aithal, 2016). The person also liable for researching the product as per the
allocated budget and developing the product to comply with regulatory requirements and
specified quality needs. If company is able to maintain its quality standards, therefore it
can easily its aims and targets from competitive market.
TASK 2
P4 Positive and negative impact of macro environmental factors
A macro environment is broad and wide set of economic conditions. It put impact on
overall business organisation rather than a specific sector or department. The macro environment
of the company is capable to determine whether business will expand and will consumer spend
more etc. Along with this, managers are conducted macro environmental analysis to identify the
potential opportunities and the factors which will impact on future performance of company.
This can be done through PESTLE analysis. Below mentioned are the factors which are
involved in macro environment, such are as follow: - Political factors – Political stability is the basic requirement to achieve success of the
industry. In hotel industries, political factors can persuade the number of visitors,
business travellers and tourists who are visits to a country in direct and indirect ways.
Hotel Hilton is engaged in worldwide with its products and services; so that it is affected
with tax policy, tariffs, trade restrictions, environmental regulations etc. Along with this,
if the government of UK has reduced the taxes and duties on hotel and travelling

business; as it is beneficial for cited organisation to extend its market share and market
area as well (Fertel and et. al., 2013). Apart from this, due to the terrorist attack in
London, on 7 July 2005; risk of terrorism is reduced the number of visitors in London
and UK, it was also put a negative impact on the performance of Hotel Hilton in specific
market. Economical factors – National and internal economic conditions also impact on hotel
industries and resort business. In UK, during the time of Olympic in 2012, mostly hotels
and resorts were occupied and fully accommodated over the time. This was helpful in
increasing the sales and profits of Hotel Hilton. But the due to financial crisis in 2007 -
2009, sales went down by 20% and profits by 40% by the 4th quarter of 2008. it has been
over eight years passed but UK economy is still faced many challenges and a risk of
another economical crisis. Social factors – Social factors have an positive impact on the business of hotel and
travelling industries, because the number of person who are interested to travel
internationally are rapidly increased day by day. Now people are spending their large
income on travelling. Along with this, Hotel Hilton is very well well known among
visitors at global level; a wide range of social factors which impact on cited company
include emerging trends in customer's lifestyles, the growth rate of population, impact on
role models in buyer's decision making etc. Changing patterns of the family in societies
and associated morals or values also have certain effects on the business of Hotel Hilton
in the UK market (van Wijngaarden, Scholten and van Wijk, 2012). Technological factors – Technology have a great impact on the growth and success of
hotel industries in the form of online rental services. Now, hotel bookings are also
become sophisticated than ever before. Any person can easily get the full information
about hotel and book room with the help of internet. Hotels are taking help of social
media in order to increase or promote their business in global market. In this modern
world, technological landscape are changed and they could also put a negative impact of
products and services of the company. Hotel Hilton has to pursue the new and innovative
ways of providing services to customers, effective ways of communicating with target
market etc.

 Legal factors – These factors also having a significant role in the development of
business organisations. They forces the manager of hotel companies to follow all ethical
laws and rules; also take care of customers beliefs and values. It will help in generating
high number of visitors towards cited hotel. Legal factors involves any changes in UK
jurisdiction, rules and regulations of getting visa (Srdjevic, Bajcetic and Srdjevic, 2012).
For example- if UK government has made strict process of getting visa; therefore it
reduces the number of visitors in Hotel Hilton.
 Environmental factors – These factors refers environmental and ecological aspects such
as- weather and changes and climate. For example- due to Iceland's Volcanic Ash, mostly
flights and airports of UK are closed. So as the business of the business of Hotel
industries is also affected by the situation.
P5 Internal and external analysis of business organisation
In the business organisations, internal and external analysis can be done through SWOT
analysis. It helps managers to understand the strength, weaknesses, opportunities and threats of
the company. Whereas strength and weaknesses are the internal factor; opportunities and threats
are the external factors of the firm. Below mentioned SWOT analysis of Hotel Hilton: -
STRENGTH
 Hotel Hilton is served its services
worldwide over 100 countries more
than the 140 million guests.
 Due to the large scope of its business
operations, the company benefits from
the economies of scale to a
considerable extent, developing and
creating the potential for its further
growth and success.
 Effective customer retention schemes-
Hotel Hilton provide a wide range of
benefits to its customers includes
discounted prices, free internet access,
WEAKNESSES
 Limited market share inspite of good
brand recall.
 Operations are affected globally due to
government policies and parameters.
Over dependence on the US market –
Hotel Hilton generate its 80% revenue
by UK market and only 6% revenues
are covered by global market.
 High level of debts.
 Little global market share, despite the
large portfolio of brands.
 Lack of flexibility due to this large size.

late check out and others (López-
Gamero, Molina-Azorín and Claver-
Cortés, 2011).
 Strong property portfolio – it has 4610
properties all over the world. It is major
strength of the company from a
financial point of view.
 A high level of service customisation
achieved via technological integration.
 Strong and effective leadership.
OPPORTUNITIES
 High potential in emerging markets and
innovation in customer services.
 Digitization and better use of
technology.
 Formation of strategic alliances and
further international market expansion.
Focusing on research and market
development. Establishing presence in the mid level
budget hotel sector.
THREATS
 Threats of terrorism and political
situation.
 Adverse change in macro economical
climate.
 Ethics related issues in Hotel Hilton
 Loss of key talent and personnel
(Agarwal, Grassl and Pahl, 2012).
P6 How strengths and weaknesses interrelate with macro environmental factors
The strength and weaknesses of every business organisation is depend upon its external
market factors. If organisation has already made strategies and policies in order to compete with
such factors so as it can easily achieve competitive advantage. Along with this, there are many
macro environmental factors which may reduce the organisational performances and its market
position as well (Boons and Lüdeke-Freund, 2013). Macro environment is consists with –
political, economical, social, technological, legal and environmental factors. For example- if the

government of UK has regulated higher rates of taxes on the services of Hotel industries; so that
it can reduce the number of customers in Hotel Hilton. If cited company is not following all legal
rules and ethics, so as the market position of business organisation is goes down. This will also
decrease customer relationships.
Apart from this, if Hotel Hilton is delivering quality products and services to customers
so as they can easily attract towards company; it will help in generating sales and make higher
profits for the company. It is also very important for business entities to adopt new and
innovative techniques of production in order to bring numerous customers from global market.
CONCLUSION
From the above mentioned file, it has been concluded that business environment has a
huge impact on growth and development of the company. The present report is based on Hotel
Hilton. Along with this, it encompasses with various types of business organisations and their
purpose as well, i.e. public, private and voluntary sectors. There are different types functions of
organisational structure are also included, such as- marketing, finance, production etc. The
another phase of this report is described the positive and negative impact of macro environmental
factors. SWOT analysis of Hotel Hilton is also described. At last the interrelationship between
strength and weaknesses with external macro environmental is explained.
REFERENCES
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A Pestle Analysis Of The Uk Hospitality Industry, 2017. [Online]. Available through :
<https://brightkite.com/essay-on/a-pestle-analysis-of-the-uk-hospitality-industry>.
[Accessed on 20th July 2017].
What Is the Relationship Between Organizational Functions & Organizational Structure?, 2017.
[Online]. Available through: <http://smallbusiness.chron.com/relationship-between-
organizational-functions-organizational-structure-18571.html>. [Accessed on 20th July
2017].