Table of Contents INTRODUCTION...........................................................................................................................3 TASK 1............................................................................................................................................3 P1 Different type and purpose of organization: private, public, voluntary and legal structures.3 P2 Size and scope of different types of organisations................................................................5 P3 relationship between different organisational functions.......................................................8 TASK 2..........................................................................................................................................10 P4 positive and negative impacts the macro environment has upon business operations.......10 P5 internal and external analysis of specific organisations.......................................................12 P6 strengths and weaknesses interrelate with external macro factors.......................................13 CONCLUSION..............................................................................................................................16
INTRODUCTION Business environment is refers as the aggregation of both micro and macro element that determine firm operation exists in it. It is dynamic in nature that gives direct impact upon firms working (Hilton and Platt, 2013). For this report the choosen company is Zara which is a private sector and retail sector company. It is established by the Americo Ortega and Rosalia Mera in year 1975. Its headquarters is in Arteixo, Spain.In this assignment, public, private and voluntary sectors are discussed.This assignment is going to describe various types of organisations involved in business environment along with their purpose as well as legal structure. There are various division within firm and their working is interconnected is highlighted below. Moreover, factors of macro environment has huge effects on the business operations in both context positive as well as negative. Apart from this SWOT and PESTEL is performed for finding the external and internal environmental factors. TASK 1 P1 Different type and purpose of organization: private, public, voluntary and legal structures Business environment includes different types of organization in which these are doing their business activities (Bharadwaj and et.al., 2013). As every business organization have their own decided goals, objectives mission and vision. Business environment includes mainly three types of organizations such as public, private and voluntary. Apart from that, organisation is a group of those peoples who are together for achieving a common goal. There are a wide range of external factors which gives various impact on business organization. These factors are as follows: Private organisations:This includes the small entities including LTD and private limited firms in which owners have limited liabilities and these companies may consist around 50 shareholders accordingly.These companies have imposed prohibition towards shares policy as well as on trading. For instance, the private organisation can consider Zara company that has business of providing clothes and accessories to desired customers.Zara is theprivate sector company which deals in clothes and accessories.Legal structure of that type of organization are as follows:
Sole trader:These type of traders are individuals who run their business activities by their own and also these traders have no separate legal entity from their business. The owner of that type of business is solely responsible for all the business activities. Partnership:partnership refers to the involvement of two or more than two persons, same as in partnership business the twoormore than two person invest capital jointly in a specific ratio to run a business. In that type of business, all the partners are liable for business activities as per according to pre decided criteria. PLC (public limited company):That type of business organization is running by Govt. for enhancing the economic situation by introducing new product and services to people for their high living standards (Berg and Kilambi, Siebel, 2014).For example, NICE is public sector company and they are providing services to required person as well as most important is that, they focus on health and care for public.Main basis behind providing services is to upliftment of United Kingdom population. Legal structure of that type of organization are as follows: Central Govt. department:The organization is running by the central Govt. bodies. Local authority:These authorities are those who manage and run organization of particularcity. Voluntary organizations:These are also non-profit organization that are working for the social welfare of society. For example, wellcome trust is a type of voluntary organization of England.It is the largest research providing companies. Legal structure of that type of organization are as follows: Trust:That type of business organization has not any members but these have trustee who donate some funds for running out these organization. Unincorporated association:These business organization can be called as management committees which have don't distinct identity from trustee. Others:Royal charter bodies, community and several others. There are various factors which leads to growth of international environment, which are as follows: sales and profit:As in the international market the business get a higher sales and large profit volume so that the international business environment grow day by day.
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Diversification:Diversification is the way of expanding any business in many other areas and outside the boundaries of a country. It helps in entering into a new market with the existing products to attract various targeted potential consumers. Demand for various products are affected by many cyclical as well as seasonal factors. The consequences of such factors leads to sales fluctuation and various risks in operation of any business. Difference between public, private and voluntary sector: Public sectorPrivate sectorVoluntary sector Publicsectorisgovernment ownedanddifferentfrom publicly held entity. Privatesectorisnot government owned and goods aredeliveredoutsideof organisation. Voluntary organisations is an non profit organisation that ar notgovernmentorganisation and makes grants on basis of other charities. Inpublicsectorincludes organisationthatprovide public services such as armed forces, policing and roads and education with health. Theyworkforbothprofit making and social welfare. Theprivateorganisationin which individual and group of individuals with primary aim to earn profit. Example shops, manufacturers,financial services. Theyworkforonlyprofit making objective. Voluntarysectorisdifferent fromboththesesectors becausetheyarenot government controlled. Theyonlyworkfor development of citizens. P2Size and scope of different types of organisations Business environment studies various type of organization such as public, global , Cooperatives, private, transactional, MNC and so on. Such types of organizations has various features which are discussed below: Private limited:As discussed above that, this type of organization is only working for more and more profit. The shares of these companies can't be traded publicly. The owner of the organization is liable for all the business activities. Zara is a private sector organization and constitute the following features:
Background:The company is established in year 1975 and owner of this organisation is Amancio Ortega and Rosalia Mera. The products which the company serving worldwide are clothing and accessories. Products:the companycurrentlyoffering the clothes and accessories for all the categories. Size:The organization have approx. 7500 stores all over the world according to the data of year 2016. Objectives:ThemainobjectiveofZaraistocontributetowardssustainable development of the society and to the environment with which they can interact. Structure:Zara operates in such an organisational structure which adds more customers value by utilising less resources rather than traditional. Vision: Provide best and attractive services at every store. mission:"Zara Textile mission is to achieve consistent improvement in the systemby providing products & services to its customers through on time delivery & enhancing customers satisfaction by means of quality and value." Scope:TheScope of Zara brand is very wide as it provides wide variety of products. Public limited company: These type of organizations are running by the Govt. bodies for upgrading the living standards of people with the help of providing better products and services (Schaltegger, Lüdeke-Freund and Hansen, 2012). For example, NHS ltd. is the public sector enterprise and it is one of the largest company. The major stakeholders of company are BlackRock, Inc., Norges Bank, Schroders plc, etc. Public limited company:These type of organizations is running by the Govt. bodies for upgrading the living standards of people with the help of providing better products and services (Schaltegger, Lüdeke-Freund and Hansen, 2012). For example, NICE ltd. is the public sector enterprise. Background:NICE organization was founded in 1986 and its headquarter in Israel. Products and services:The services and products are offerning by that respective organizationsuchas,Software,businessintelligence,speechandvideoanalytics, business and IT consulting. Size:The organization provide its services first in 1989 in Israel and after that it formed partnershipwithTekelecenterprisewhichisUSbasedcompanyprovidinbg
telecommunicationservices.Accordingtothestatisticaldataof2016,respective organisation has approx. 5000 employees. And its operating income is approx. $135 million and net income is $ 177 million. Vision:The organisation wants to become the most famous and prestigious organization through all over world performance so that the values for their stakeholders also be created more and more. Objectives:The main objective of the company to provide high standard products and services to its customers. Mission:NICE LTD. Mission is to be produce products and services as innovative and informative. Structure:The organisational structure of respective organization is Matrix Voluntary sector-These organizations mainly work for the social welfare.Wellcome Trustis based on biomedical research in United Kingdom which working with the approx. 2100 employees according to data of session 2017 (Ballard and et.al., 2012). the main principles of the organization are to provide best service to its customers and improve their health issues. Vision-respective company vision is to achieve extra improvement in health of human beings and animal for whom they are doing research. Mission-to do work in such a manner that no other and bring brightest mind in the field of biomedical research and medical humanities. Objectives:the main objective of the respective firm is to provide high class medical facilities to its clients. Size:Approx. 2100 employees working in the organization according to the statistical data. Products and services:The company providing research about health issues so that the better medical services can be provided to its clients as human beings and animals. Scope:it has wide scope in future due to innovative and informative work. stakeholders:Baroness, Eliza Manningham-Buller (Chair) Dr Jeremy Farrar (Director). The Wellcome Trust has a £25.9 billion investment portfolio (at 30 September 2018) which funds all the work. Background:The organization founded in 1936 by sir Henry Wellcome. Its headquarter in London, United Kingdom.
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P3 relationship between different organisational functions It is the blueprint of overall organisation which shows interrelation of each and every department in the company. In general term, it can be said that organisational chart is the diagram which directly shows internal structure of the organisation. Illustration1: Organizational chart Source: Organisational Chart of Company. 2013.Every type of organisation has various divisions and all these are interlinked with several objectives of the organisation (Werbach and Hunter, 2012). Every department is linked in the sense of working done by them at every phase. Same as, Zara also have different departments and these which is linked with goals and objective of respective organisation. Description is as follows:- Finance department Finance department is a department in an organisation that manges the inflow and outflow of the money, this department helps the organisation to check its resources and raise the funds. Some function of the finance department is to control the cost, credit controlling and billing is also done by the finance department. This department helps the organisation to pass the project through application of different techniques such as investment appraisal techniques and capital budgeting techniques. Main function of the finance department is to handle the tax issues of the company and preparation of the final accounts.Finance department has close relationship with other departments such as marketing department. Finance department give and take
important data and information to other departments such as HR department to select candidate for finance department and accordingly they choose the best candidate. Human resource department:It is most important department of the company. Because it manages all the manpower in the organization so that the all of business activities can be done impressively. It is related with all the departments because without it every department is meaningless. The all of the activities are depend on the manpower of the company which will be managed by human resource department.Human resource department has close relationship with every department it gives important insights and information to other departments and other departments also gives information to recruit best candidates so that majorly contributes in organisational development. Marketing department This department of Zara helps in doing its promotional activities such as advertising, brand promotion etc.Marketing department is related with the production and manufacturing department as well as sales department because without the promotional activities sales can't be enhanced and without increment in sales the production and manufacturing workload can't be measured.Marketing department also relate with other departments and grab knowledge and information from other departments such as it take permission about investment in particular field before investing money that an organisation have capacity or capabilities. On other hand it gives information to departments of organisation about recent changes and development and accordingly they produce goods. Research & development The research and development is interrelated with production department because if that department of Zara can't do proper research then appropriate production is not possible. The main reason behind conducting proper research is that, the appropriate product can be produced according to customer’s specification.Research and development department is closely relate with other departments and share information to them to take important decisions. It by taking data from finance department take important decision before conducting research. Production department same as other department Zara have its distinct production department because the sales departmentandfinancedepartmentisdependentonthisdepartment.Iftheappropriate production unit is not measured, then financial resources can't be acquired timely for producing
requiredstandardproductionandsalesdepartmentalsodependonthatbecausewithout production sales are meaningless.Production department is one of the important department which take important insights from marketing department by knowing taste and preferences of consumers and accordingly produce goods and services for them. Hence all departments relate to each other and closely related to gain goals and objectives so that they can enlarge business opportunities and grab large market share. In case of Zara they have different departments that share roles and responsibilities to each other. TASK 2 P4 positive and negative impacts the macro environment has upon business operations Introduction:Macro environment factors are considered as the external components of enterprise surroundings that provides huge effects on Zara in both the way positively and negatively (Vitale, 2011). So, PESTLE analysis is done to identify the negative and positive impact upon business activities. PESTEL–It includes various macro environmental factors which effect the company. PESTEL of ZARAare as follows: Political Factors It is the factors which includes government policies and various lawful features. If these factors changes then it effects the operations activities of Zara. Negative impact:Zara wants to expand its roots of enterprise into several another countries. Also in this changing government policies of other nationimpactoperation of selectedorganisation in negativeway.Hence, Zara musthas understanding regarding whole system of expansion before taking kind of permanent action. Positive impact:European country political factor are changing rarely so, the expansion in that country is effective for company Zara. This provides positive effects upon their operations. Economic Factors It is the factors that involve the changing tax rate, inflation of economy, interest rate and exchange rate. It impact the business activities of Zara positively and negatively that are as follows:
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Negative impact:This effects have been rising into economy so, few retailers are accessing the large items of company because of Brexit money effects. Positiveimpact:Incaseofenlargementgainingindividualsintensityhavebeen increased because of expandable assets accessibility.Social Factors It is the factors that highlight changing trends into communities and their impact upon company's customers. Negative impact: Continuous changing trendsprovidesnegative impactuponoperations of Zaraas it hasto produce newdress as well asaccessories as perrecentrequirement of consumers. Positive impact:This factors helps Zara to connect with clients for developing the effective connection with them. Technological factors Thisconcentrates mainly on technology advancementas well asimprovedtechnology effect on Zaraand their consumers. Negative impact:Advance technologies are generally expensive and for companies this is not so simple to execute this types of technologies into their operations. Positive impact:Due to advancement in technology Zara introduce its application for online shopping. That outcomes in negative way as well as clients will not prefer to visit shops. Rather than this it initiated to buy products from apps. Legal Factors This factors includes the rules and regulations and also legal proceedings which Zara have to go through. Changing upon this factors provides huge effects on respective firm operations. Negative impact:Various nation has its own firm policies version because of this Zara has to change its operations as well as set policies according to the specific country judicial policies. Positive impact:The firm Zara is considering overall legal factors so it can grow its business in various another country easily. Environmental factors
It is the factorsthat connect environmental as well as ecological aspects which will effect the demand for organisation products. Negative impact:Natural calamities effects the operation of Zara negatively. So, earthquake in Japan effects chain of supply as well as sales of chosen firm. Positive impact:In Asian weather are changing oftenly as well as population of that countries need clothes as per its climate that outcomes in enhancing sales and producing profitability. As per the above task it have been find out that factors of macro environment has impact Zara operations in positively and negatively manner. So, PESTEL analysis tool are utilise to identify all these factors. P5 internal and external analysis of specific organisations Zara is a very famous and prestigious company in clothing retail brand. It has to analyse its internal as well as external environmental factors for better performing its business activities. These factors can be analysed through SWOT because strength and weakness are internal. On the other hand, opportunity and threats are external.Discussion of about these factors are as follows:- Strength:-High quality and trendy products:Zara attract their customers by providing exclusive designersproductsandaccessories.Therespectivecompanydesignandintroduce products on regular basis and with attractive designs.Operatingbusinessatgloballevel:Zarahavestrongpresencebecausetheyare expanding their business around the globe. They serve there products ranges across various countries such as India, United Kingdom and many more. Launch latest design :It launches approx. 1000 of new design and collection of various ranges of products every year in the market which is its major strength (Janita and Miranda, 2013). Weakness:-Lack of advertisements:Respective company not so investment in advertisement and promotional activities. Due to which they are not able to attract more potential customers on high ratio.
Not specific in particular field:Zara is not specialized in every field of fashion so that the customer doesn’t find products according to their specification and move towards its competitors. Opportunity:-Online selling:-Digital portfolio is very foremost opportunity for it to sale its products on online sites as with their store outlets.By this they also able to attract those group of customers who not able to visit stores on regular basis. Expansion:-The expansion in the size of market is also opportunity for respective organization because it provide new business opportunity.They can expand there business by introducing new range such as traditional wears. By this they attract those customer who prefer traditional cloths in order to enlarge there customers bases. Threat:-Increase Advertisement:Zara have to increase their advertising skills because for them it became threat (Avramenko, 2012).So it responsibility of managers of ZARA to develop strategies related to advertisement and promotions by which they cover and attract more customers. Competitors:There are lots of competitors for Zara such as M&S, H&M, Mango and so on.Those are dealing and offering same products range in almost same pricing which attract customers and reduce customers loyalty. From the explained SWOT analysisit has been evaluated that Zara is an multinational brand name and It has vast opportunities and opportunities that help it to grab attention of large no. of consumer base. It has the ability that it can easily change weaknesses into strengths and grasp large market share. P6 strengths and weaknesses interrelate with external macro factors Political Factors These factors are related to policies of government which involves various legal and economic aspects. When these political factors get change it give wide impact on working of the Zara. Strength:it is one of the multinational organisation that can easily expand in intenational market with their resources. In itsbrand loyalty UK governmentalso give large contribution to establishing into that sphere.
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Weaknesses:it is new in market and there are huge competitors that localised in UK that have better strategy from zara. Economic Factors This factor mainly exhibits the modification in taxation, inflation in growth of economy, rate of exchange as well as rate of interest. These factors give positive as well as negative impact on the operation of Zara. Strength:it economically sound and easily face any type of depressions that arise in economy and grab attention of large consumer base. Weaknesses:By using its brand loyalty it can increase price of their products and easily enlarge business opportunities. Social Factors This highlight changing trends in the society and its impact on the company's customers. Strength:it became the strength for organization as toconnect with clients for building up long haul connection with them.By its huge investment power it can easily develop products according to consumer interest. Weaknesses:Zara is not able to provide a variety of innovative products so it become a weak point for them, because continuous changing trend brings a high demand for new collection.It has large product chain which canit to manage simultaneous is very hazardous work for them. So sometimes build various products according to consumer demand is very difficult for them. Technological factors It concentrates mainly on advancement of technology and the developed technology effect on Zara as well as its customers(Weiss, 2014). Strength:The respective factor is also a major strength of Zara because it provides an online platform for the organization to expand its business operation.It uses advance technology by using social media and other sources which work as a strength to enlarge business opportunities because it can expand Weaknesses: Technological change is also a weakness for the organization because latest technologies are expensive and for companies it is not easy to implement these technologies in business easily. Legal Factors
It is related to laws and legislation as well as legal procedure that Zara has to undergo. Modification on these factors give wide impact on operation of same organisation. Strength:it is the major strength of the organization because it has a separate legal department for maintaining regulations perfectly. Weaknesses:legal factor create a weak point for the organization because Several countries have their own version of corporate policies due to these Zara have to alter their operations andsetpolicies as per the particular nation setted legal policies which is very complex step for the organization.It has flexible legal structure in which they can mould according to the country to country and accordingly set up their business in different spheres. Environmental factors It includes factors related to environment such as global warming, greenhouse effect, natural calamities and etc. weaknesses:Natural calamities gives negative impact on working of the Zara. For instance, earthquake in Japan affect supply chain and sales of respective organisation. so it is a weakness of the organization because it is unable in maintaining/ignoring these factors.But it is strong enough to deal in adverse circumstances and reap opportunities out of them. It is an multinational organisation that deals in different nations by different product chain so it can easily adopt any changes that are necessary for market.Strengths:it is a major strength for the organization that in Asian Countries weather rapidly change and population of those nation require clothes according to atmosphere which result in increasing sales and generating profit.By its strength it can make its consumer base loyal enough and enlarge business opportunities. It position is sound in market so that it can easily adopt any changes. Strong brand:Zara have strong presence in global market because they are offering or serving their products and service around the globe. Which attract more and more customers that help in increase in profitability. Along with this it also help company in gaining competitive advancement in effective manner. By this respective company able to attract more and more customers which reduce there threat of competitors. Strong brand image help a company in attracting customers even if they not doing advertisement.
Product Differentiation:The respective provide variety of products for all range peoples such as kids, women and men. Which attract customers on the high ratio and increase profitability. By various type of products and services ZARA able to attract more customers and gain competitive advancement. By this also they can expand there business in large marketplace. Customers Loyalty:Customers of respective company know that the products offered by ZARA are of high quality and they also introduce new and attractive designs on regular basis. That makes customers loyal towardsbrand and products. This will help respective company in gaining competitive advancement in effective and appropriate manner. Even if they introduce online shopping sites they able to attract more and more customers. Business Action Plan:- GOAL To enhance promotional activities through social and digital media. ActionDepartment Responsible Date of Begin Date DueResources Required Outcome Toenhance promotional activitiesto attract more customers. Marketing Department 14thmarch 2019 5 monthsDigitalmarket experts, Socialmedia professional Bythiscompany able to attract more populationwhich leads to increase in salesand profitability. CONCLUSION From the above discussion it has been concluded that, business environment is full of external and internal factors which gives direct impact on working of organisations. There is requirement of analysing all these in effective manner for getting higher benefits. Moreover, external factors are beyond the control of individual and give positive as well as negative impact on working of the organisation. Whereas, internal factors are in the control and can be managed by the owner of the business. For identification of internal elements an enterprise can do SWOT analysis. On the other hand, for external factors PESTEL can be conducted.
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