Business and the Business Environment

This report explores the different types and purposes of organizations, the impact of macro environment on business operations, and the relationship between organizational roles and objectives. It discusses the various types of organizations, such as public, private, and voluntary, and their respective purposes. It also analyzes the positive and negative impacts of the macro environment on business operations, and the relationship between diverse organizational roles and objectives. The report focuses on Burberry, a public limited company in the fashion industry, as a case study. The report provides insights into the size and scope of different types of companies, and the relationship between organizational roles and objectives and structure.

Business and the business
environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
P1. Different types and purpose of the organisations..................................................................2
P2. Size and scope of different types of companies:...................................................................4
P3. Relationship between diverse organizational roles and relationship with their objectives
and structure.................................................................................................................................5
P4. The positive and negative impacts of macro environment upon business operations...........6
P5. Internal and external analysis in order to identify strengths and weaknesses.......................8
P6. Scrutinize the strength and weakness relation with external macro environment...............10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
1

INTRODUCTION
The term Business environment refers to both the exterior and interior aspects and how
they are inter-related and dependent and their impact on the business functions. The following
report has put emphasis on various types, size and opportunity of organizations surveyed with
the interrelatedness of numerous organizational purposes with direct connection to their
establishment structure. The report will further analyse the positive and adverse effect on the
macro environment of a corporation. Lastly an external and internal evaluation will be
conducted in order to classify organisational weaknesses and strengths. Burberry is a public
limited company deals in fashion merchandise with its origin in London. The company was
established in 1856. This is a family owned self-governing company. They deals in wellness and
beauty products, stitched and tailored clothing and accessories, eyewear’s, footwears, scented
perfumes etc.
P1. Different types and purpose of the organisations
Public:
These are non-profit government possessed establishments their whole and sole motive is
to provided services for the social purposes. The public limited company have a freedom to
lawfully provide their share to general public. They are not bound to sell their shares if they
don’t want to but they have a choice in case they need or wanted to publicly sell their shares.
Purpose: Public segment organisations are government possessed entities that distributes
communal and administrative belongings, civil services which includes armed forces, law
enforcement agency, communal establishments, municipal transportations etc. for the
advancement of civilisation (Canare, Francisco and Price, 2017).
Relation with the organization: Burberry PLC is United kingdom’s one of the primary
challenging fashion industry. The company emphasis is located on the tactic that seek out to
propose decent worth for the consumers and present its huge share for the betterment of the
society.
Legal structures of Burberry: One of the chief fashion brands in UK, they have concentrated in
designing and dispensing tailored merchandise which include their best seller trench coats,
perfumes, beauty products, footwears, leather items, shades and glasses etc. they are focused on
manufacturing merchandise which can be wear outdoors in different seasonal conditions.
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Company succeeded in producing one-of-a-kind materials which is known as gabardine, which
consists of features like, they are totally waterproof as well as airy (Carvalho and Gomes, 2020).
One cannot feel all sweaty and exhausted wearing clothes made up of this material. By their
marketing and revenue generation they contribute a fair part for the development of the country
and their society.
Private:
These types of organisation functions to acquire maximum profit, they are basically profit
centric. Private companies are owned by individual entities or groups or in partnerships. They
have their separate working structure and functions but are not completely independent (Evans,
2017). They have to follow certain policies and regulations according to the legal and
government norms.
Purpose: These contribute or play an important share in the economy of the nation. These are
possessed by means of generating revenue, and the large amount of income goes to the
individuals or the groups who are the owners of these firms. On the other hand, they have some
positive aspect too private establishment helps in the overall development and advancement of
the country and increasing the gross domestic product.
Relation with the organization: TESCO is a British based multinational retail and groceries
enterprise. The company is in search of laying their complete focus on producing high returns
and they are aiming at attaining the best position in the market out running their competitors
(Freixanet and Renart, 2020).
Legal structures of TESCO: The establishment s dealing in variety of products ranging from
groceries to furniture’s, financial services, books, fuel, electronic appliances, software’s,
telecommunication and net services etc. They have expanded their business by concentrating on
superstore, hyper malls and accessibility stores.
Voluntary:
Charitable organisations consist of those corporations who carry forward community
work without the expectation of acquiring profit in return. Such establishments basically include
NGO’s.
Purpose: Their main purpose of these entities is to do social work for the betterment of the
underprivileged. They work selflessly to collect funds to help them fulfil the requirements and
needs of the specific society of people. Non-government organisations tie up with various
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establishments or groups which provide them financial help in sponsorship to arrange various
charity programs (Lambin and Thorlakson, 2018).
Relation with the institution: The RPCA society which stands for prevention animal cruelty. It
is a charitable trust in which people work voluntarily to protect animals and work for their
welfare. This trust is one of the worlds eldest and largest organisations.
Legal structures of RSPCA: The Royal Society for the Prevention of Cruelty on Animals main
determination is to prevent the animals from extreme cruelty and using them an experimental
object in various labs (Paul, 2020). By bonding with the various charitable organisations working
for the same objective the activists succeeded in developing a strong infrastructure.
P2. Size and scope of different types of companies:
Characteristics Micro enterprises Small enterprises Medium and large enterprises
Definition These are the micro level
enterprises. In these the total initial
venture capital is very low with
having very less employees.
Such companies are possessed
by the autonomous figures.
Their investment is also low so
they hire workers in
accordance with that with an
intention to enlarge their
business by achieving their
short-term objectives and work
on increasing their sales (Sadq,
2019).
They have sufficient funds and
workforce to begin with. They
have their outlets and
establishment located in
domestic areas as well as
internationally. Large
enterprises comprise of over
thousand or more employees.
Enterprises Mantons Cards is an home-grown
micro establishment which deals in
selling greeting cards and presents.
They work with the coordination of
regional distributers and artists so
that they can sell customised and
provincial themed cards.
Davison Canners is baking
company who manufactures
bakery items and consumables
and also provide catering
facility for various occasions.
Pharmacy2U is one of the
largest online pharmacy
organization in United
kingdom. They have acquired
a large percentage of customer
base over the years as they
deliver prescribed medicines at
people’s doorsteps.
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Scope Almost in every developing or
developed countries, micro industry
like Malton cards are flourishing.
They have played their part in
adding value to countries monetary
income and also help in providing
platform for better opportunities of
revenue generation and growth
prospect and minimizing the
operational cost (Dandage, Mantha
and Rane, 2019).
Organisations like Davison
canner is the best suitable
example of small enterprise.
They are secluded bodies
possessed by solitary owners.
They tend to function in
groups or corporations and
their infrastructure and capital
investment formed
accordingly.
These are the international
companies which functions
with the alliance of
government guidelines and
corporations. Pharmacy2u is a
growing company and earning
a large amount of profit. The
amount of income they have
earned is preserved for the
fulfilment of long-term goals
and focus on develop their
operational functions for
internal development and
growth.
P3. Relationship between diverse organizational roles and relationship with their objectives and
structure
The continuously increasing competition along with developing market risk reflect a strong
impact on various operational departments of the company. These departments work towards
providing a strong back support to help in maintaining a standard position.
Marketing department: This is one of the utmost essential function of operations which enables
the company and their workers to develop a strong relationship with the consumers and help in
maintaining contacts various businesses. They are accountable to represent and build a reputable
image of the brand and are responsible to carry out promotional activities. Marketing department
is also responsible to handle inter- departmental communications, conducting extensive market
study, managing liaison with the local retailers and vendors, they also execute promotional
campaign and arranging all the essentials for advertising. This section have dedicated personals
to handle social media activities and generate innovative content for company websites also keep
the portal up to date with latest information’s and new launches or offers.
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Finance: They are responsible to manage the finances and transactions of the establishment and
efficiently handling all the monetary functions and investments and calculate the profit. The
finance department is also in charge for smooth running establishments cashflow and make sure
that company have adequate resources to fulfil daily transactions. They are responsible for
recommending and obtaining extended financings. It may be attained through commercial or
private banks and by issuing shares to investors.
Human Resources: HR tends to carry forward operative and tactical administration and the core
work procedure by applying all of the possessed resources and capitals proficiently. They also
manage the hiring and selection process and emphasise on selecting the potential candidates
which are efficient enough to contribute in the overall growth and productivity. The HR division
is in authority for scheming and applying plans and strategies which enables the leader to handle
the workforce. Provide head count data and investigation to firm management. Recognising
headship breaches and recruit individuals who are talented enough to bridge those gaps. It
defines the methods to align experienced and inexperienced teams. Accomplishing an ideal
equilibrium among outward employment and inner transfers. Forming an HR control panel that
collects data from variable sources.
Operations: It supervise the whole production and manufacturing progression by carrying
forward effective and efficient service to accomplish the expectations and desires and
requirements of customers. Operations section is in control for handling actions which are related
to the construction of possessions and amenities. Their main responsibility consists of
supervising operations, implementation, scheduling, regulate, presentation enhancement, and
processes strategy. Their secondary tasks comprise cooperating with other functional expanses
inside the organisation.
Organisation structure: This is an arrangement that summaries that how several functions are
directed towards attainment of establishment goals, which includes various activities like duties,
responsibilities, guidelines and role. It also determines the transmission of information between
hierarchical levels in the industry. For example, in centralized organisations the flow of ,
verdicts is high level to low level, and in decentralized the information and authority flow
between several levels of the company.
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Functional Structure: This is related to bureaucratic structure which make division on the
basis of skillsets of the employees. Mainly the micro-mini and small enterprises applied such
kind of structure. One of the main purposes of this kind of business formation is to divide the
enterprise into different functional departments like, marketing, production, finance etc.
Divisional or Multidivisional Structure: This is practiced basically in large scale industries
having various units. Such companies form group-based management leaders based on the
functions they operate.
Flatarchy Structure: It is new type of structure; it is generally applied to entrepreneur firms. As
the name suggests, this is a flat form of hierarchy which empower employees with autonomy.
Companies that use this type of structure have a high speed of implementation.
Matrix Structure: This is one of the confusing formations which is the reason it is rarely used.
This structure segregate workers in various managers, partitions, or branches. An individual
working in such kind of firm have to fulfil two or more roles together like working in sales and
fulfilling the responsibility of customer care executive as well.
P4. The positive and negative impacts of macro environment upon business operations
To evaluate the influence of macro environment on the operational activities of an
establishment, PESTEL analysis is applied.
PESTEL analysis
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Figure 1 PESTEL analysis
Source: What is a PESTEL Analysis? 2017
Political: Burberry being a multinational company have to face political influences. Every
country has different rules and laws which the company is abided to follow if they wish to
operate their business hassle free. In some of the country’s government enforce high taxes on
foreign products so that their local brands can flourish (Lin, Song and Lee, 2020). These heavy-
duty taxes cause a direct impact on the overall profit ratio and increase the operational cost of the
company. The unsteadiness of politics hinders the functioning of supply process in outlets.
Burberry also have to encounter abrupt competition with the local brands which manufacture
inexpensive duplicates. B PLC is a premium brand, so to maintain that status they only
collaborate with prestigious firm, that makes their products too expensive. This led to the
emergence of low-priced replications.
Brexit is also one of the main political reason which effect the operating of the organization. It
brings out uncertainties in the market. Establishments are in confusing situation that what will be
the new rules, what new changes they will make etc.
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Economic: Most of the travellers and visitors tend to purchase from Burberry. The reduction in
leisure industry leads to a lessening in the sales. The worth of the product will decrease if
comprising is done with products quality (Paul, 2020). This will deviate customers to other
brands. To maintain the competitive advantage, establishment need to keep a tract of the actions
of their competitors and look after various pricing and discounting factors. The downfall of the
economy will directly affect the spending power of the consumers. In such condition’s customers
tend to spend their money on more inexpensive and affordable products rather than on premium
and luxury items.
Social: Customers belongs to diverse cultural background which reflect on their preference of
attire they like to wear etc. People belong to different cultures will prefer products in accordance
with that, hence Burberry has to keep I mind all those aspects while distributing and
manufacturing products. Company take active part in communal activities to fulfil their
corporate social responsibilities. They tend to involve with their customers to collect constructive
feedbacks through various social media platforms or from walk-in customers in their stores, to
understand their satisfactory level and needs regarding the commodities (Gaganis, Pasiouras and
Voulgari, 2019). The organisation is mainly focused on the Higher-class customers but through
market studies they find out that the middle-class people proves to be more potential consumers,
which results in launch of their mid-range merchandise to acquire this sector also.
Technological: Burberry adapted the latest technological applications and platforms in their
promotional procedure to reach out to a large quantity of potential customers. For example,
Company started a live streaming program which enable people to buy and order products of
their choice and make payment online or at the time of delivery at their doorsteps. Shopping
through online applications or websites is more convenient and efficient because through that
people from all around the world can purchase products without any hassle. For maintaining
competitive advantage establishment provide quick delivery services which is appreciated by the
people. To keep up the pace with the technologically advance world Burberry uses different
social media platforms to maximize their sales and for advertising purposes.
Environment: Burberry products include inner wears, socks etc. are manufactured from total
organic yarn cashmere which is not at all harmful for the environment. Occurrence of natural
disasters is critical to predict and so as to prevention from that calamity is hard. These disasters
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such as cyclones, floods etc. will destroy the stores which will cause immense loss to the
company. The enterprise has decided to reduce their carbon foot prints from their several
production units. Company has also targeted to use recycle and reusable resources to decrease
environmental pollution and for the welfare of all the living beings (Canars, Francisco and Price,
2017).
Legal: The organization have to follow all the mandatory legal regulations and laws imposed by
various nations administration in which they do business. Laws reflect both positive and negative
effect on the firm’s overall productivity and profitability (Phadermrod, Crowder and Wills,2019).
This enterprise has to follow all basic employment laws and workers law and also have to permit
a license to manufacture and distribute their products in the open market. Benchmarking or
patenting their products can help them to minimize the circulation of duplicate cheap copies.
Organization is required to keep track of changing regulations and guidelines of laws to prevent
complaints from their customers.
P5. Internal and external analysis in order to identify strengths and weaknesses.
To examine both the interior and exterior environment for identifying strong and weak
points of the industry SWOT analysis is conducted below
SWOT analysis
Figure 2 SWOT analysis
Source: Know Thyself, 2016
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Strength
1. Burberry have a large chain network of
retail outlets around the globe.
2. This is the most famous fashion brand
in United Kingdom, who deals in a
wide range of products ranging from
scents, accessories, cosmetics and
merchandise etc.
3. Company have alliance with top notch
celebrities for their branding
(Phadermrod, Crowder and Wills,
2019).
4. They are famous for producing Trench
coats for the first world war.
5. They are also well recognized for
supplying top quality and durable
garments.
6. The establishment have received royal
appreciation twice from Queen
Elizabeth and Prince Charles, by which
they become proud distributer of royal
family.
Weakness
1. Company is facing losses because of
inexpensive artificial products
circulating in the market (Čepel and et.
al., 2018).
2. They are a premium brand with very
expensive pricing due to which they
find it hard to target the upper middle-
class customers.
3. Organization is only into apparels,
beauty products, eyewear’s etc. but
their competitors have broadened their
scope by dealing in furniture’s and
interiors décor etc.
4. They receive high percentage of bulk
demand from Asian countries, so any
changes in those countries law will
effect the purchasing power of
customer and it will effect the sales and
profit margin of the company.
Opportunities
1. They should follow new innovative and
creative marketing and promotional
techniques.
2. By collaborating with various genuine
brands, they can provide little less
expensive products.
3. Efficient utilization of online trading
can help them to reach out to large
Threat
1. The enterprise is having threat from its
competitors as they provide wide range
and more affordable products.
2. From continues changes in fashion
trends.
3. Available substitute brands in the
market.
4. Affordable duplicate cop
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number of consumers.
P6. Scrutinize the strength and weakness relation with external macro environment
For examining the inter- relation of strength and weakness with the exterior function of an
organization TOWS analysis is executed.
TOWS matrix
Figure 3 TOWS matrix
Source: What is the TOWS Matrix? And how it is used? 2019
Strength- Opportunities Strategies: Company can use more extensive marketing strategies to
fascinate more customers. They can also designate a dedicated team to stay active on all the
social media platforms to build brand image and engage with more people to attract them.
Development of eco-friendly products and cosmetics which are animal cruelty free. Can also
offer occasional discounts and offers to trigger high sales (Mugo and et. al., 2017.).
Weakness - Opportunity Strategies: Establishment should focus on acquiring self-owned outlets
and stores including the warehouses and storage units instead of renting them. Management
should provide attractive benefits and bonuses to their member of staff by conducting employee
recognition and reward programs which keep them motivated and satisfied so they become loyal
to the brand and can prevent less turnover and can achieve high workers retention rate.
Strength – Threat strategy: They should build an efficient distribution channel to compete with
the substitute products and new participants in the market and to acquire large market segment
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(Akhmetshin and et. al., 2017). Invest in attaining copyright and patent authorization to stop the
fake manufacturers who are circulating and selling copies of premium brand products and also
restrict other brands to copy or replicate their most famous checkered design.
Weakness – Threat strategy: Give more emphasis on R & D to develop more effective and
stronger infrastructure and conduct operational activities to efficiently compete with rival
companies. Provide harmonious and healthy working culture to workers and improve employee
engagement by appreciating talented workforce to make sure that they won’t leave the
organization for better opportunities and join opposition establishments.
CONCLUSION
The above research was aimed to attain better information and understanding constructed on the
Burberry business firm and how its functions are carried forward with the broader professional
settings, study be located on numerous sorts of enterprises, having different dimensions and
possibilities and techniques to run them. This evaluation has aided to discover varied array of
opportunities and connection between the various industries surveyed by influence of external
atmosphere. Further the report analysed the interior as well as exterior factors and their inter
dependency with the strong and weak points of the firm.
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Online
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< https://corporatefinanceinstitute.com/resources/knowledge/strategy/pestel-analysis/>
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