Analyzing SKODA's Business Environment

This assignment requires an in-depth analysis of the business environment affecting SKODA company, focusing on tourism, farming, and agriculture. It involves identifying climate, geographical location, weather patterns, global changes, and other factors influencing the company's operations. The task also entails analyzing strengths, weaknesses, opportunities, and threats (SWOT) to understand SKODA's position and potential improvements.

BUSINESS AND BUSINESS
ENVIRONMENTS

INTRODUCION
In this report the explanation of organizations types and its purposes are focused in
different sectors like public, private, voluntary and legal structures which are evaluated sincerely.
The introduction of size and scope of different types of organization is also involved in various
methods and well explained. In addition to that it includes the analyzation of interrelationship
between organizational functions, their advantages and disadvantages with impact upon SKODA
structure. In this report it has an identification of different macro environmental factors with its
impact on business operations and also the positive and negative impact by PESTLE analysis. A
SWOT analysis of SKODA is also conduct the internal and external analysis of organization.
Finally, the strengths and weakness interrelation with external macro factors within SKODA.
P1 Explain different types and purposes of organization’s; public, private and voluntary sectors
and legal structures
PUBLIC SECTOR
The public sector is that in which an economical system is controlled and managed by the
local government or national and state provincial. Public sectors work for the services not for the
profit or earnings. The funding of public sectors is managed by a different kind of methods
which are raising the tax rates, petrol prices and fees. Governments are different for all the
countries and they have their own methods and services to provide. For example, in UK the
lottery corporation is an organization which is owned by the head operator and still have ability
to act like a public organization (Drucker, 2017). The lottery corporation generates 1.17 billion
dollars that it is able to invest back in its organization. Sometimes the public sectors merged with
the private sector and its called public private partnership. These organization work together for
providing best services for the business ventures or communities. Examples of public sectors
include education, electricity, fire services, gas and oil, healthcare, police, law, infrastructure and
social services and much more.

PRIVATE SECTOR
The private sector is a part of economic system of a country which is operated and
manage by any individual or company. There is no role of government in this and private sectors
works for making profit and earnings. The private sector is freer from the public sectors that
government impose a few restrictions on it. An organization starts its business in any sector and
may move to the other sector like turning a public organization into a private is called
privatization. At the other end if a private organization turns into a public sector is called as
nationalization, municipalization or it depends on the involvement of government. Examples of
private organizations includes partnerships (legal, accounting), large multinationals (apple,
Disney, tesla), trade unions (American postal employee union), sole proprietors (developers,
plumbers, repairmen, designers).
VOLUNTARY SECTOR
The voluntary sectors are those who have no policies of making profit or earnings they
just work to provide benefits and services to the people who are not able to earn them or accept
them in term of money issues or any other (Carroll, and Buchholtz, 2014). It collects money from
people to help people in many ways that means organization invests itself to run the business.
The purpose of voluntary sector is to create social wealth rather than managing material wealth.
Examples of voluntary sectors includes charities, foundations, community groups, social welfare
organizations and recreational sports.
LEGAL STRUCTURE
Business structures has different ways legally. The best structure for a business depends
on its decisions which made for choosing the best one. The help of solicitor, accounted or
financial adviser can make an effective business structure for SKODA to avoid the legal, tax and
financial issues. Each business structure has its own requirements which need to be fulfill.
Examples of business structures includes sole proprietorship, general and limited partnership,
business trusts and professional corporations.
P2 Explain the size and scope of a range of different types of organizations.
There are five types of organizations generally such as private, public, government,
cooperatives and charities and NGOs. Generally, the organizations have their own legalization
and scopes to their own rights. The properties and the assets of the company generally owned by
the company not its employees or members. On the other side the assets of individual employee
or a member is not for the organization use. The liability of a member is sometimes limited. The
limited companies are run by two or more than two members. The private companies should
have a one shareholder of their own company but company can offer any amount of share to the
market shareholders or purchasers. The public limited company maintain their rules and
legalization according to their businesses (Prajogo, 2016). The scope of any company depends on
the products of the company. In example the coco cola company supply soft drinks but it also
focusses on fruit juice, coffee, tea, sports drinks to explore its business with the help of sectors.t

the organizations select its goals, missions, objectives and visions to improve their businesses
and position. This refers to the main purpose of the company. The operation of any business
organization depends on the stake holders and shareholders. Stake holders are who interested in
the business which can be individual or a group and affected by the business activities. The
business activities of SKODA can change according to the business needs or regular changes in
the demand of customers or it can be change to the innovation in generation. The mission of the
company refers to the purpose and visions are referred for the position where the organization
wants to stand its business. The main reason of vision and mission is to provide the scope of
organization that it can achieve its set targets and goals which will help it to earn profits.
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structures.
FUNCTIONS OF SKODA
HUMAN RESOURCE DEPARTMENT
Human resource department of SKODA is concerned to increase the effectiveness of
human performances. Human resource department work to improve the work level of employees
and make them efficient enough to achieve their individual and organization goals and targets.
The human resource manager of SKODA has some responsibilities to accomplish the
organization goals and targets which are analyses the job, requirements of manpower, resources
requirement, selection of employees (Wild, Wild, and Han, 2014).
PRODUCTION FUNCTIONS
Production functions involves the services and goods to help the process of production in
a certain way. Production of services and goods depends on some functions which are raw
material, manpower, money power, and other facilities to operate the production function. The
duties of a production manager of SKODA is to ensure that the raw material and services are
available, requirements of employees and should meet the delivery dates and perform the all
production operations.
MARKETING FUNCTION
Marketing is a function where services and goods meet the right customers according to
their needs and satisfaction. Marketing is a function where the products of company SKODA
meets their customers and transfer the relationship and services to each other. Marketing function
includes the products, physical or transport distribution, promotion, packaging, branding,
salesman ship and publicity. It also includes the process and policies which help to increase or
setting a profit ratio for SKODA.
FINANCE FUNCTION
Finance functions of SKODA is normally responsible for some decision for their
implementation in organization is to take decisions regarding investments, financial and

budgeting of capital. Capital budgeting includes the short and long terms, fixed and working
conditions and decision for dividend in the SKODA organization (Bryman and Bell, 2015).
Organization try to maintain their relationship for financial markets which involves the
shareholders, institutions and borrowings to rise the capital and minimize the risk management.
INFORMATION FUNCTION
SKODA or any other organization collects the information about finance, marketing,
production and human resources which is really essential and important for them. The modern
business can not run without the information function. The main use of information is to make
effective decisions and policy formation for especially executives. The manager of SKODA
collects information from market and competitors to make necessary changes in the organization
and its techniques.
INNOVATION AND RESEARCH
Innovation is a process where the products improved, marketing procedure involves,
business practice and external relations are implemented in the SKODA organization. Innovation
is the second name of research and development (Crane and Matten, 2016). In this modern stage
innovation is required to compete the others and also for own product and process development
techniques. Innovation is stimulated by the creative thoughts of the manager and parts of peoples
who are willing towards outside the box.
P4 Identify and discuss the various macro environmental factors that impact on the business
operations, highlighting the positive and negative impacts by taking examples using PESTLE
analysis.
MACRO ENVIRINMENTAL FACTORS
SKODA business will affect by the macro environment forces and factors. This factor
can affect the need of product in increasing or decreasing way. In the sense new targets can be
made or change in old ones.
DEMOGRAPHICS
SKODA need to be aware of the changes in population. Major changes are hard to find
also analyses the population in the cities that people are shifting to other places. Demographics
defines the population community changes.
ECONOMIC
Economic factors affect the income of people that they lose their jobs and don’t know
what is happening to them. If the customer is using his disposal income to purchase the item,
with this SKODAA can find its economic cycle according to the people and make their plan
production.
SOCIAL AND CULTURAL

Every country has its own cultural which change according to the generation. Changes in
this social culture also affect the purchasing power of a customer (Belás, Demjan, Habánik, Hudáková,
and Sipko, 2015).
TECHNOLOGICAL
The regular updating in technology also affect the needs of a customer. For example,
there are lot of choices for customer in a single product or service. It depends on the wants of
customer and what company is making is an advantage for customer.
PESTLE ANALYSIS FOR SKODA
POLITICAL
Political factors determine if government change or impose a new duty and tax will affect
the whole organization or may change the price or service of SKODA according to the political
changes.
ECONOMIC
These factors determine the economic performance which impact the SKODA in long
term. Economic changes affect the services and price of SKODA. It also affects the purchasing
power and demand and supply. Some economic factors include interest rate, inflation rate and
foreign rates.
SOCIAL
Social factors include the environment of social markets, cultural trend, population
analysis and demographics. Demand will increase during the holidays or vacations when
population increases with their purchasing power.
TECHNOLOGICAL
Technological changes affect the SKODA operations. The innovations and development
in technology techniques may affect the SKODA company in both favorable or unfavorable. To
manage the customers the company should adopt the latest innovative technologies.
LEGAL
Legal factors have two sides which are internal and external which impact the laws of
company and business environment in a certain way. The company maintain their laws in which
country company is doing its business respectively also establish the policies and process.
ENVIRONMENTAL
The environment factors include the surrounding environment which affect the business
by tourism farming and agriculture way. The factors of a business environment analysis include
the climate, geographical location and the weather also the global changes offsets.

P5 Applying the SWOT tool, conduct internal and external analysis of Skoda Auto and a similar
organization in order to identify their strengths and weaknesses
SWOT ANALYSIS FOR SKODA
STRENGTHS
SKODA has strengths that it has a wide range of car variants, in both diesel and petrol.
The SKODA has some great looking interiors also a wide space for passengers in both front and
rear legroom as well. The head space for driver is also very good. The technology use of
SKODA is also innovative and it includes EBS, MSR, anti-skid breaking and telescopic and
much more. It has a high brand recall in the Europe and UK also has a production outputs over
8,50,000 cars per annum which is very good number and employees with 24,000 counts.
SKODA is a high-performance car for racing events and on road off road driving. SKODA is
famous for its branding and global name in automobiles also received so many rewards for its
cars segments in different models.
WEAKNESSES
In this extreme competition in segments there is a slow growth for SKODA in market
share. Company is trying to establish itself towards this competition in the economies. The
competition is so tough that company can not find its name which it wants to express for the
people.
OPPORTUNITIES
SKODA can collaborate with other automobiles to go deeper in the automobile markets
to distribute better services. A beneficial market for SKODA is augmenting automobile. It can
also use the augmenting for manufacturing and producing of more cars with better capabilities in
the market. The cheap and hybrid cars will help company to grow its market reach and effective
impression to the customers (Cavusgil, Knight, Riesenberger, Rammal, and Rose, 2014).
THREATS
The regular changes in technology innovations implement the upcoming cars of SKODA.
The competition from the international car manufactures can decrease the market share of
SKODA. The new and latest hybrid cars and concept cars are the threat for SKODA.
COMPETITORS
There is a tough competition for SKODA in automobile market. To stand in a better
position company should beat the all competitors in all formats of market to achieve a good place
and brand image in front of customers. The competitor companies for SKODA is Honda Motors,
Toyota motor corporation, Chevrolet, Fiat, Nissan motors, Maruti Suzuki, Tata motors,
Volkswagen, Ford motor company and Mitsubishi motors, these are the automobile companies
related to SKODA.

SKODA entered in the business with a good price for customers but forget to look on its
technology and design. After the merging of VW with SKODA brings the best designs and also
the latest technologies which improve the sales rate and satisfaction of SKODA. The recent
market research tells that the SKODA cars are now in the top ten and making value for money.
P6 Explain how strengths and weaknesses interrelate with external macro factors discussed
above for Skoda Auto.
Strengths and weakness of the SKODA business is related with the factors micro and
macro environment. Management of SKODA compare their strengths with the macro
environmental factors which are economic, political, technology, social and the cultural and with
help of this company creates its strategy and operation policies. The changes in the macro
environmental factors affect the decision-making process of SKODA management. The inter-
relationship between macro environmental factors and the strengths and weaknesses of SKODA
is given below:
ECONOMIC FACTORS
These factors determine the economic performance which impact the SKODA in long
terms. Economic changes affect the services and price of SKODA. It also affects the purchasing
power and demand and supply. Some economic factors include interest rate, inflation rate and
foreign rates. These factors will not affect the price, policies and strengths of company if the
financial position of the company is strong.
POLITICAL AND LEGAL FACTORS
Political factors determine if government change or impose a new duty and tax will affect
the whole organization or may change the price or service of SKODA according to the political
changes (Welford, 2013). The company maintain their laws in which country company is doing its
business respectively also establish the policies and process which impact the business
environment of SKODA in a certain way.
SOCIAL AND CULTURAL FACTORS
Social factors include the environment of social markets, cultural trend, population
analysis and demographics. Demand will increase during the holidays or vacations when
population increases with their purchasing power. The generation is changing and the now the
demand interrelate with trends and new innovation so company SKODA should capable of
managing the taste and preferences of a customer.
TECHNOLOGICAL FACTORS
Technological affect the SKODA operations. The innovations and development in
technology techniques may affect the SKODA company in both favorable or unfavorable. To
manage the customers the company should adopt the latest innovative technologies and strong
(financially) to accept all the new innovations.

ENVIRONMENTAL FACTORS
The environment factors include the surrounding environment which affect the business
by tourism, farming and in agriculture way. The factors of a business environment analysis
include the climate, geographical location and the weather also the global changes offsets.
Strengths, weakness and macro environmental factors are interrelated and also affect each
other in a certain way. If SKODA company can not find its strengths and weakness then it will
also not able to analyze the macro environmental factors and fail to be manage its strategies and
plans. The weakness will affect the company if the company is no capable of fulfilling the
customers demand and supply will a cause of decreasing profit of the company SKODA.
CONCLUSION
The conclusion of this report analyzes the private, public and voluntary sectors and their
purposes which clears the mission and vision respectively. We have also evaluated the different
types of organization their objectives, functions and interrelationship with external and internal
factors of macro or an environment. The PESTLE analysis of SKODA defines the position of
company and the affecting factors within political, economical and social and technological. In
this conclusion the strengths and weakness are also detailed for SKODA to improve its future
production. The SWOT analysis of company will also help it to understand the unknown factors
within the company and its work. The macro environment factors also explained the factors from
which company can make its new name in the market.

REFERENCES
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Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of
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Charter, M. ed., 2017. Greener marketing: A responsible approach to business. Routledge.
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