Business and the Business Environment

BUSINESS AND
THE BUSINESS
ENVIRONMENT

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................1
ACTIVITY 1....................................................................................................................................1
Different types and purpose of organizations .............................................................................1
Differences on the basis of legal structure ..................................................................................3
ACTIVITY 2....................................................................................................................................6
Pestle Analysis ............................................................................................................................6
Porter's Five Forces Model..........................................................................................................9
VRIO Analysis...........................................................................................................................11
SWOT Analysis.........................................................................................................................12
TOWS Matrix............................................................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES .............................................................................................................................17

INTRODUCTION
Business environment can be defined as the collection of overall internal and external
factors which gives impact on organization functions. Internal factors are financial resources (i.e.
money and investors), equipment, employees, suppliers, infrastructure and human resource
management which gives impact in organization. While external factors are government laws
and regulation, customers need and their expectation, social trends, innovation technology,
environmental factors, socio-cultural factors, political factors, legal factors and technological
factors which gives impact on organization performance. External factors are further classified
into two parts micro environmental factor and macro environmental factor. Macro environmental
factor includes socio-cultural factors, political, legal, technological and demographical factors
while micro environmental concludes supplier, customer, competitors, market that enhances the
operations and performance in company. Business environment supports company to make
realistic plans which can lead effectiveness while implementing plan. It also supports
organization to determine opportunity and threats in business market. It also assists business to
create brand image. As well, it supports organization to identify of growth areas. Business
environment helps organization to generate competitive advantage in competition market.
Additionally, it gives direction to company for growth their product or firm in other countries.
To understand business environment there is an example of Sainsbury company. It is the second
largest chain of supermarket in the UK. Organization has 16 % market share in retail sector. This
report includes different types and purpose of organizations such as public, private and voluntary
sectors and legal structures and links them with their objectives and products and services that
offers by the company.
ACTIVITY 1
Different types and purpose of organizations
Public sector: It is a profit type company which is operated by government and provides
services to customers across the world. It also gives high contribution in country economy. The
main goal of the private sector to provide overall product or services to public. Products are
safety services, hospital services, petroleum services and military services. For example, British
petroleum (BP) is a public limited company which offers worldwide services to customer. BP plc
is a multinational oil and gas company which is headquartered in London, England. Products are
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petroleum, natural gases, motor fuels, aviation fuels and petrochemicals which is offered by
customers. It comes in worlds 6th largest oil and gas company.
Private Sector: It is generally operated by owner independently for private gain. It is non-
governmental type company. It has goal to offers high quality products for making profit along
with generating high revenue by selling their products or services to customers. There is no
control of government while operating various function within company (Yang and Gabrielsson,
2017). For example: Sainsbury is a public sector type company which has main goal to focus on
customers requirement’s and their expectation about products and their services. To meet
customer objectives offers wide variety products by organization. Products are hypermarket,
supermarket, superstores and convenience shop. Organization offers worldwide services to
customer. It is retail industry which trades wide variety of product line i.e. clothes. Groceries,
home accessories and financial services to customer. Organization has 16% market share in retail
sector that automatically enhance country economy.
Voluntary sector: It is non-profit type sector which is operated by group of people. It is
independent of local and national government that’s why also known as non-governmental
sector. There is an example of volunteer sector is Oxfam. It is charitable organization which
focuses on the reducing of global property. Organization gets funds from private and public
sectors. Even they also organize some cultural shows which supports to earn funds.
Difference on the basis of size
Micro size: micro size enterprise is basically operated with more than 10 people. It start
with small amount with minimum people. It is subset of small business community on the basis
of number of employees within company. Such kind business also add values to the economy by
opening micro business. It runs by individual trader or entrepreneur. Micro business gets funds
from bank, friends and relatives for initiating micro level business. They offer product and
services to customer. Such kind business has goal to introduce innovation in product or services
so that people gets different and high quality product and services. The annual turnover of the
small business below €2 million (Micro-, Small and Medium-sized Enterprises Day, 2017).
Small size: it is small scale business in which operates small number of employees. It
runs independently by owned or partnership. It operates with less than 50 employees and annual
income is below €10 million (Small and Mid-size Enterprise, 2019). It is limited in size, revenue
and regulatory authorization. Additionally it is non subsidiary, independent firms that employees
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