Business and Business Environment

This study material explores the different types of business structures, interrelationship between organizational functions, PESTLE analysis of Coca-cola company, Porters five force analysis, and more.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
SCENARIO AND ACTIVITY 01:..................................................................................................3
1) Different types of business structure......................................................................................3
2) Interrelationship with the different organizational function...................................................5
SCENARIO AND ACTIVITY 02:..................................................................................................7
I) PESTLE Analysis of Coco-cola company..............................................................................7
II) Porters five force analysis......................................................................................................8
III) Value chain Analysis Model.................................................................................................9
IV: SWOT Analysis of coca-cola company..............................................................................11
V) TOWS matrix:......................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business environment refers to the collection of all the internal and external things which
is required in examining the overview of the business. There are various factors which resulting
in affecting the integrity of the business such as measuring the needs of the person regarding
producing the accurate products, dealing in demand and supply of goods or services or managing
the stakeholder in the business (Kasemsap, 2018). Through this manner, it helps companies to
gain major advantages and also they sustain their reputation through dealing in wider range of
business. Present report is based upon the Coca-cola company, which is the multinational
American company founded in 1892 by John smith Pemberton. Due to carrying the innovative
concept in respect of drinks, they are earning the huge profits in the market and also retaining the
customer needs for longer way.
Report will include the matters relating to examining the different types, size and scope
of various types of business such as profits, not for profits and non government organization
companies. It also includes the matter relating to various interrelationship between the different
function in the organization. It further describes the matters relating to the examining the positive
and negative impact of the environment on the business. At last, it describes the matters relating
to the internal strength and weakness of the business and their interrelationship with the external
factors.
SCENARIO AND ACTIVITY 01:
1) Different types of business structure
I) Difference between various types of organisation
There are three major types of business such as:
 Profits: In this type of business, their main motive is gain profits in the business through
undertaking any of the activity which results in sustaining longer term gain. In respect of
gaining profits, they issue the stock and shares in market and also attract the customer to
invest money in the company (Hamilton and Webster, 2018). For e.g. Coco-cola is the
profit earning organization which main motive is to gain profits through attracting
customer towards providing the diet drinks.
 Not for Profit: It refers to the tax exempted organization in which their main motive is to
satisfy the needs of the person instead of focusing on earning money. Usually such

organization are managed by the norms and condition imposed by the government. Thus,
their main purpose is to enhance the shareholder interest through providing the valuable
services and also satisfy their needs regarding providing the quality services or products
(Ajayi, 2016). For e.g. In this case the BBC company mainly deal in such type of
business as they are mainly operated and managed by the government regulation in
context of fulfilling the customer demands. Non governmental organization: It is mainly called as non-profit companies in which
their main motive is to help the needy people through providing the basic amenities such
as food, clothing, shelter. They mainly engaged their interest in context of organizing the
charity function or any donation camp where they support the poor people to settle their
life in better way. For e.g. Oxfam is such company in which deal in such types of
activities and their main motive is to help needy people and reduce the poverty in the
country.
II) Difference between micro, small and medium-sized business
Micro business: It refers to the micro companies which are available at any places and thus to
set up the business, it requires less capital. This business is carried by maximum 10 people which
are liable to work and manage the overall integrity of the business. They mainly carry the
business limited to the particular area (Difference Between Micro, Small & Medium Enterprises
and their Validity, 2016). The risk in this business is high as in case of not preferring their
products, it results in shutting down the business.
Small business: This types of business is mainly exit in all types of industry and thus the people
working in small business are around 10 to 50 people. The small business is privately owned by
the owner and thus the chances of risk in this business is also very high. Usually this business
carry the less charge to manage the integrity but the chances of risk regarding buying or selling
of products is higher.
Medium sized business: In this business, the employees are engaged with around 250 people
which are responsible to carry the major activities which are carried in this business (Prajogo,
2016). The chances of growth of this business is higher as they invested high revenue in the
business and also the profits which is gained through dealing in various activity is higher.
III) Examining different form of organization with various factors

Private sector: Private sector organization can be operated as a sole trader and also can be
operated as the partnership form. Private sector organization also used to operate on all the scale
i.e. small, medium and large scale. Looking at the scope of the private sector organization, it can
be said that private sector organization is having the wider scope as they can operate at on both
local as well as in the global market. Private sector organization are legally recognized as pvt.
Ltd. Organization.
Public sector: Public sector organization also can be operated on the sole trader as well as in the
partnership form but there is one circumstance in the same, that public organization is having
more than 51 share in the operation of the business. Public sector organization are recognized as
public ltd. Organization. Looking at the scope of the public sector organization it has seen that
they are having thin level of scope as this type of organization used to operate in the same nation,
do not used to operate at the global level. Also, this sector firm are not operated on the small
scale, they are generally operated on the medium or the large scale only in the market (Bendell,
2017).
Voluntary Sector: Voluntary sector organization is the organization which is generally owned
in the partnership form. They are generally not formed as a sole proprietorship organization.
This organization is recognized as the NGO in legal eyes. Also, this type of organization used to
operate at all the scale, and they are also having good sort of scope in the market, as they can
operate at both the global as well at the local level in the organization.
2) Interrelationship with the different organizational function
Marketing and the HR functional: Marketing is the main criteria of promoting the business at
global level. Thus, in case of examining any vacancies in the business, they approach to the
marketing department to promote the job vacancies of the Coco-cola company. Similarly, in case
of HR, they recruit the efficient and trained employees and also they appoint the skilled person in
the marketing department to enhances the business at larger scale.
Marketing and finance department: Marketing helps the finance department to set profits
through which they maintain their budget in the business. In such manner the relation with the
marketing and finances is that marketing promote the business in the market through which they
attract the customer to prefer the products (Saleem, 2017). Finances in return make the budgets
for the company through planning for the future activities. Thus, the interrelationship determines

in respect of setting the appropriate budgets by the finances department and the marketing
department had to expand their operation according to the set budgets.
Information technology department with the Finance function: Finance function mainly set
the budges for the IT department regarding innovating the new software in the business and thus
in return IT had to work according to the set budgets (Sarkis, Meade and Talluri, 2017). In case
of IT, through the unique software they provide profits in the business which in return helps the
finance department to prepare the financial report and statement in better manner.
Organizational structure and objectives:
In respect of determining the objectives of the organization, it is stated that organization
must carry the work ethically and also reduces the impact on environment through dealing in eco
friendly products. Usually, Coco cola carry the flat organizational structure in which the
employees can freely shared any information tor ideas to any of the managers. As there is no
level of management and thus there are no barriers regarding doing or sharing any of the
information with the superiors.

SCENARIO AND ACTIVITY 02:
I) PESTLE Analysis of Coco-cola company
Political factor: This factor is moderate for the Coco-cola, as there is good level of political
stability in the organization which help organization in going forward with the same policy for
loner period of time in the organization, At the same time uncertainty about the Brexit has
created variety of the different issue for the Coco-cola. As there are many restriction in trading in
the neighbourhood company of an organization.
Economic factor: This factor also used to create the variety of the different issue for the
organization to be operated in the UK market (Besley, 2015). As UK economy is one of the
strongest economy in the world, this eventually help the company in getting funds for the
organization more easily in the market. As interest rate is at favourable side in the UK. At the
same time as rate of water is increasing in the UK, this is impacting the organization very
adversely as water is one of the important resources for the Coco-cola in production of their
product in the organization.
Social Factor: Social factor also used to create variety of different impact on the
performance of the business. As need and wants of the consumer in the market is changing on
the rapid basis in the market, which eventually forces the company to take different decision in
the organization. This eventually impact the performance of the business. At the same time as
organization in having good financial position in the market, they used to produce different
product in the market to attract the eye of the customer and satisfy their need in the market.
Technology factor: It is another factor which is very favourable for the organization. As
co cola uses good amount of the technology in the organization to produce the good quality of
the product in the market. At the same time adopting the different type of the technology in the
organization used to increase the cost of the company in the market (Hamilton and Webster,
2018). Also, as there is good demand of having a wastage saving technology in the organization,
it has impacted the organization to adopt the same. As this technology has increase the cost of
the company but this has helped the company in becoming more sustainable to the environment.
Environmental factor: This factor has also impacted the business in the long run as
change in the climate of the nation has impacted the organization, as it used to create the variety
of the restriction in the process of transportation and conveyance. At the same time it also ask
organization in using more environmental friendly raw material in the organization. To defend

the same challenges organization uses the recycling raw material in manufacturing different
packaging product in the organization.
Legal factor: This factor also used to impact the organization in long run, as
organization has to compile their operation of the business with variety of different legal laws in
the organization, this eventually used to impact the performance of the business. As it used to
consume a good amount of time for the organization to compile different activity with the legal
perspective of the nation. At the same time this also help the organization in promoting good
image of the company in front of the consumer and employee in the market (Kljucnikov and
et.al., 2016).
II) Porters five force analysis
This is a tool or technique which is being used by the companies in order to analyse the
competitiveness of the company within the industry. This is a tool which help Coca Cola to
analyse its position within the whole industry in more specific manner. The discussion of Porter
five forces is being done in following points-
Bargaining power of buyers- This refers to as the power which is in the hands of
consumer in making the product and service of Coca Cola successful or not. This is high because
the if the consumers will not like the product of Coca Cola then the sales and revenue of the
company will decrease. This is majorly because of the fact that if consumers will not consume
the products then the sales of company will decrease so as the consumer base. This has negative
impact over business operation as if the taste and preference of consumer changes then the
company has to make changes accordingly.
Bargaining power of suppliers- this refers to as the power within the hands of suppliers.
This power is driven by suppliers only when they are large in size and the companies have no
other option then those suppliers. In case of Coca Cola, the power of supplier is low as the
company has many options for suppliers and if one supplier is not addressing the issues of
company then they can go for other suppliers (Stott, Stone and Fae, 2016). This has positive
impact over business operations of company as they not have to depend on over suppliers.
Threat of substitute products- the substitute products are one which can be used in place
of the other goods and services provided by any other company. The threat of substitution is high
because of the reason that there are many products similar to coca cola. This has a negative
impact over the business operation because of the fact that for this company has to increase its

efforts in analysing the products of competitors and provide some extra benefits to the consumers
so that they do not switch over to competitors. This has a negative impact as if substitution is
high then Coca Cola will have to invest much in development of product.
Threat of new entrant- this refers to as the new people and companies entering the same
industry and adding to the competition within the industry (Gaganis, Pasiouras and Voulgari,
2019). But the barriers to entry of new entrant is high as the investment for operating in soft
drink industry is very high and also the existing competition is very high. So this has a positive
impact over the operations of company as more new entrants are not coming in the market.
Competitive rivalry- this refers to as the number of companies working in same industry
and this is very high in case of Coca Cola. This is majorly because of the reason that high
competition decreases the consumer base and the sales of Coca Cola. This has a negative impact
over operations of business as they have to continuously work over the changes taking place
within the business environment and then need to apply within the practice. Also, this increases
the cost for Coca Cola as fighting the competition they have to promote the product using the
different promotional techniques.
III) Value chain Analysis Model
This model is mainly created in respect of identifying the business overall objectives and
also determines the value of the company. It can be explained through undertaking the two
aspects such as:
Primary activities: It carries following factors such as:
Inbound logistics: By examining the value in the Coco-cola company, they mainly carried the
good relation with the suppliers. As water is the main ingredient of the company and thus every
product are designed though using their factors (Coca Cola Value Chain Analysis, 2020). Thus,
in such case they carry the strong bond with the US based supplier regarding taking timely order
from them and also follow the rules and regulation which is imposed to them.
Operations: Coco-cola operated in around 7 groups and thus they mainly deal their business in
various products such as in case of beverages or syrups. But they not carry any direct relations
with the bottling partner who design the bottle for the Coca-Cola company. Thus, in such manner
the quality which they are provided are more beneficial for the customer to retain them towards
the business.

Outbound logistics: it is stated that coco-cola is dealing in around 200 countries and also serving
9 million of their products per day. Thus, it indicates that they carry the strong link with the
customer. Thus, customer are attracted if they find the new concept in the products and thus
coco-cola is adapting these things to retain the customer needs (Parboteeah and Cullen, 2017).
Marketing and sales: In context of undertaking the matters related to sales, they are increased
upto 31% in comparison to the previous year sales. The marketing strategy which they are using
is relating to promoting the products of the coco-cola through advertising or also building the
public relation through personally interacting with the customer. Thus, through this manner
customer feel important and prefer the products in better way.
Service: Company mainly deal in maintaining the customer interest through adapting the online
chat concept in which they personally communicate with the customer and take feedback
regarding the products quality and taste. Thus, customer are attracted if they find that their
reviews are taken in right manner.
Secondary activities:It refers to the following aspects such as:
 Infrastructure: It mainly refers to the interior or work places which is provides to the
employees and also customer are attracted if they find the friendly work place in which
the employees are working. In this, the management is to be done through managing the
HR, financial and technological infrastructure in the business.
 Human resource's management: The accurate management is to be undertaken by the
coco-cola HR department in respect of recruiting and appointing the skilled and
experienced person to handle the matter's in better way. As it is also stated the employees
are getting satisfactory salary which results in retaining their needs towards the business
for longer way.
 Technology development: They mainly focus on adapting the advanced technology and
also the views and customer taste which is to be conducted through carrying the research
and development department (Lee, ed., 2017). Thus, by these aspects, they bring
innovative ideas in the business and also updates their websites by creating new and
virtual effects in their online sites.
 Procurement: Company mainly procure its business by directly dealing with the farmers
in respect of buying any products or dealing in any of raw materials from the suppliers.

Thus, through this manner, it indicates that they carry the good relation with the
suppliers.
Thus, by these aspects the strength which is analysed from this value chain analysis is
that they carry the strong relationship with the suppliers. Through this manner, the quality of the
products which they are using are unique and different from the other products. The weakness is
examined through using the plastic bottles which is banned by the government and also not
attracting the customer interest to prefer such products (Madhavaram and Hunt, 2017).
IV: SWOT Analysis of coca-cola company
By conducting the internal analysis of the business, it helps in identifying the internal
strength, weakness, opportunities and threats which they gained in sustaining in the competitive
environment (SWOT of Coca Cola, 2019). Thus, it includes the following such as:
 Strength: The major strength which the company is carrying is relating to carrying the
strong brand image in the market. As the products of the coca-cola company is sold out
through its renowned brand name only. Due to carrying the innovative marketing
strategy, the products of the coco cola are sold out in around 200 countries and also they
are serving in around 9 million products per day. The main motive which they carry is to
satisfy the customer needs through building the customer loyalty and trust by providing
the quality products. Thus, by these aspects they are getting the positive reviews from this
perspective.
 Weakness: The weakness is to be interpreted regarding facing aggressive competition in
the market through supplying the same products such as Pepsi is the major competitors of
the coca-cola. The another weakness is examined regarding not diversifying the products
as they carry the low product's diversification but in case of other competitors, they
mainly deal in wider varieties of products. Coco cola company not survey their products
during the testing in the laboratory, as the report published is against the company
integrity.
 Opportunities: They carry wider range of opportunities such as diversifying the products
in the market and also enter into the new market to promote the services and products for
longer term gain (Eling and Schaper, 2017). They mainly deal in the drinking water
concept such as kinley, but they had to increase their segmentation regarding dealing in
healthier drinking products.

 Threats: Coca cola faces threats in respect of the plastic bottle which they are using to
producing the products. As now days customer are demanding eco friendly and less
polluted products in market. Thus, the major threats resulting in providing the products in
plastic bottles (Almalki, Al-fleit and Zafar, 2017). The another issues which they face is
relating to the water management. As lot of complaints are raised in respect of polluting
the water or also putting waste in the water. Thus, certain norms are imposed in respect of
expanding the business into such countries.
V) TOWS matrix:
This can be identified through undertaking the following aspects such as:
Threats
 In this people are
expecting to get
healthier drink instead
of preferring the drinks
with extra calories.
 The another threats
which is faced by coco-
cola company is related
to increase in taxes on
fizzy drinks which
results in charging
higher price on
particular products.
Opportunities
 People are demanding
the products which are
eco friendly and thus
can be reused, in such
manner coco-cola carry
the opportunity to deal
in such perspective.
 Customer mainly
preferring the coke on
alternative to the
alcoholic drink, thus, it
indicates that they are
mainly consumed by
the customer.
Weakness:
Due to not getting the
appropriate result in testing,
they get the negative publicity
in the market and thus most of
the customer distracted from
In respect of the company, the
weakness which prescribe
through paying high taxes
resulting in affecting the
working of the company. If the
customer is demanding
If the customer demanding the
eco friendly products, the
weakness which the company
is undertaking is relating to
using the plastic bottle. Thus,
in such, coco-cola had to deal

the taste of the coco-cola
products.
healthier product, then they
had to change their working
type which results in facing
losses in storing the exiting
products.
in producing the healthier
products. Through this
manner, they enhance the
brand image in the market.
Strength:
 They are carrying the
renowned brand image
in market due to
supplying the products
in around 200
countries.
 They also carry the
strong marketing
techniques, thus results
in attracting large
number of customer
towards the business.
As coco-cola carry the strong
brand image in the market and
thus, in case of increasing the
prices in products, it results in
retaining the customer needs
towards the services for longer
way (Sheikh, Shahzad and
Ishaq, 2017).
In respect of undertaking the
technology advancement, they
can take the advantages in the
business through using the
innovative technology to
promote the business through
undertaking the marketing
campaigns
They also deal in making the
healthier drinks which results
in sustaining their business in
market for longer time
period. .
CONCLUSION
From the above study, the report concludes the matters relating to examining the
usefulness of the business environment and its impact upon smooth working of the business. In
that report has concluded that public, private and voluntary organization used to operate on the
different scale, size and scope in the market. Also, report has summarized the relationship
between the different function of the organization which provide them a good help in the
organization to improve the performance of the business in the long run. After that the report
conclude that the there is high level of the competition available for the organization in the
industry and also there are many factors of the organization which used to impact the
organization in long run of the business. After that report conclude that there are many valuable

elements of Coco-cola which will help the company in showcasing the good quality of the
company product in the market.
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