External and Internal Analysis of Companies

The provided document focuses on the importance of conducting an external and internal analysis of companies to determine their strengths and weaknesses in relation to the business environment. It draws from various studies and research papers, highlighting the need for businesses to adapt strategies to mitigate negative impacts from external environmental factors.

Business & Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................4
Task 1...............................................................................................................................................5
P1 Different types of organisation and their purposes and legal structures.................................5
P2 Size and scope of different types of company........................................................................6
TASK 2. ..........................................................................................................................................8
P3. The relationship between different organisational functions and how they link to
organisational objectives and structure........................................................................................8
TASK 3............................................................................................................................................9
P4 Identify the positive and negative impact which macro environment has upon the business
operations.....................................................................................................................................9
TASK 4..........................................................................................................................................11
P5. Internal and external analysis of specific organisations in order to identify strengths and
weaknesses.................................................................................................................................11
P6 Interrelation of strength and weaknesses with external environmental factors....................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business environment is the collection of individual, factors and other activities, that may
or may not be under the control of business entity (Aithal, 2016). It can affect business
performance, profitability and growth of business organisation. The main aim of this report is to
make understand the importance of business environment and how its impacts on business entity.
To understand his John Lewis has been taken that is private company. It was establish in 1929 by
Spedan Lewis. It is a chain of high end departmental stores operates business throughout the UK.
It provides different types of products and services to its customers. This report discusses about
different types of organisation such as private, public and voluntary their purpose, legal structure
and size of the organisation. The report will also state the different organisational functions and
their link to company's objectives and structure. Moreover, report will covered positive and
negative impacts on business operations and strength and weakness of organisation that
interrelates with external macro factors.
Task 1
P1 Different types of organisation and their purposes and legal structures
Company is the entity which comprises many people for completing the work and
achieving the goals. It is the collection of people where they works collectively in order to
achieve goals and objects. The main aim of organisation is to minimize the wastage and
maximize the profitability. There are three types of organisation such as public, private and
voluntary. It involves internal and external factors which impacts on business industries. The
description of companies are described as:
Public company: It means an organisation whose securities can be traded freely on stock
exchange and it arranges funds from public sources (Allison, 2015). There is need to have more
than $10 million in capital and number of shareholders are 500 who works for non profit. BBC is
British broadcasting corporation that was founded in 18 October 1922 by John Reith. It provides
different services such as television, radio and broadcasting.
Legal structure: It means a legal entity who has capacity to involve in to a contract and
agreement for running a business successfully. The pubic company follows various types of legal
structure like as central government, state government, general government, state government
and other local authority who permits to business concern for running a business.

British broadcasting is following central government legal structure to run a business in
different market place. The central government give permission to BBC for entering in to new
market and provide product and services.
Purpose: Its main purpose is to provide accurate and impartial news that help people to
understand about the world. Moreover, it want to become support of learning for all age's people.
Private company: This means a business entity who run a business by collecting capital
from internal sources like relatives, own capital and friends (Calabrese, 2018). The shares of
private company are not freely traded on stock exchange. John Lewis is a private company that
deals in departmental stores in United Kingdom. Is was founded by Spedan Lewis in 1929. The
main aim of this organisation is to increase the productivity and profitability within organisation.
The manager of this organisation works independently and focuses on profitability.
Legal structure: Private sectors considers sole trader, cooperatives, private limited,
partnership and public limited as legal structure. John Lewis is private organisation that follows
private limited legal structure which help to increases the profits by selling the different types of
services.
Purpose: The main purpose of John Lewis is the happiness of its members by satisfying
people by proving products and services. Additionally, to become more successful business in
the world.
Voluntary company: The meaning of voluntary organisation is to run for social welfare
and non for making profits. Its main aim is to give highly satisfaction to people by providing
services. Oxfam is the charitable organisation which was founded in 1942 by many trusties who
works for social welfare. The aim of this organisation is to reduce the poverty and maintain a
lifestyle of people. It mainly propounded for poor people who are living below poverty line.
Legal structure: The legal structure of voluntary company involves unincorporated
association, a trust and organisation limited by guarantee (Cavusgil, 2014). It is used by
voluntary groups for providing social services. Oxfam is using trust legal structure that helps to
remove the poverty and the living standard of poor person.
Purpose: Its main purpose is reduce the poverty and give a good life to poor people. It
also wants that rich people should treat equally to poor people.

P2 Size and scope of different types of company
All company has different size and scope that make decision what need to do and when
need to do in order to run a business successfully. Organisation has different types like as public,
private and voluntary that has different vision and mission (Crane, 2019). The size and scope of
business entity relied on internal and external structure of business. Internal structure involves
employees, manager, capital etc that works for organisation in order to run a business. The
external structure involves outsiders such as creditors, shareholders and other investors who has
invested amounts in company for getting return something. The size and scope of various
company are defined as:
BBC
British broadcasting is public company that operates its business through different
channels. It is a world news department that charge the production and distribution of
commercial global television channel. It works with BBC news group,BBC studios and channel's
distributors. It provides news to all people that help to know what is happening in the world.
Size and scope: BBC is large size of organisation that has over 20,950 employees in
total, 16,672 out of them are working in public sector. It is a mass media industry that has total
assets £308.6 million and net income is £129.1. Its products are broadcasting, radio and web
portal that provides news to customers.
Vision and mission: To enrich people's living with new programmes and also provides
services that help to educate and entertain the people or others.
Objectives: The main object of BBC is to become the world's best organisation and
inform the all ages people through different ways. Moreover, to increase the audience by
providing accurate and correct news.
John Lewis
This is six biggest departmental stores which operates business across the United
Kingdom. It deals in home ware, furniture and fashion industry which influences customers. It
mostly focuses on customer's demand and provide them different types of products and services
as customer wants.
Size and scope: This is medium size of organisation that operates its business in different
sectors. It has 51 stores and revenues is 378 million GBP.

Vision and mission: To increase the sustainability and ability of organisation in order to
enhance brand position. Its main mission is to increase the productivity and profitability by
enhancing the business activities.
Objectives: The main object of John Lewis is to make high amount of profits from
trading and operating activity. To become biggest distributor company by providing products
and services in large market.
Oxfam
This is voluntary entity that mainly focus on social needs and wants and trying to provide
that services. It works for social welfare such as remove the poverty and increase the living
standard of people. It make plans or strategy how to overcome the poverty and can provide better
life to people.
Size and scope: The size of Oxfam is big that run a business in market place for helping
people. It involves federation of 20 independent charitable industry that focuses on global
poverty. Its scope is defined as serving services across the globe that help to work for people.
Vision and mission: The vision and mission of Oxfam is to be the high valued business
all around the world by providing the services. All people should be treated equally and can
work collectively.
Objectives: Its main object is to remove the poverty by providing employment
opportunities to people. Its mainly works for eliminating the poverty and increase the living
standard of people.
TASK 2.
P3. The relationship between different organisational functions and how they link to
organisational objectives and structure.
The business organisations are operating their functions and activities. These function are
interrelated with each other so that goals and objectives can be achieved effectively (Gillon,
2014). Herein, it is important to know by the companies that each and every function has their
own objectives and goals. Eventually, in the absence of the interaction among different
departments and functions of the companies it can be difficult to achieve their overall common

goals. In the aspect of John Lewis company their different departments are related with each
other and it is mentioned below:
Marketing Function: This is consider as important function in growing businesses like
John lewis, which is self owned partnership company. It has owned brand and non brand food
product, other than these good they also manufactures furnitures across the nations worldwide.
The owners should take into consideration effective communication channels used in
promotional activities, for instance using social media platform for advertising product with
different sale offers, as most of the consumer are using smartphones user. For an example, by
implementing this strategy, market share will increase directly as compared with previous sale
growth assessment.
Financial Function: The accurate allocation of funds, plays a crucial role in operating
activities in working environment for effective growth of business (Goss, 2015). In reference
with John lewis partnership firm, finance manager has to estimate budget used for giving
insurance on car as well on travel. This initiatives taken by management, results in raising
market share which will influence gaining competitive advantage of business. Also, allow
shareholders to invest in company share and give more benefits to employee as well to
consumer.
So each department of the John Lewis company are aligned with each other.
Additionally, the organisational structure is also connected with the functions and activities
which help in achieving the goals.
TASK 3
P4 Identify the positive and negative impact which macro environment has upon the business
operations.
There are a wide range of factors and aspects which can impact to the business activities
of the companies as well as their decision-making process. So it is necessary for the companies
to conduct the PESTEL analyse to evaluate the positive and negative impact on the
organisational functions. In broad sense, these factors are mentioned below:

Political factor- It is a kind of factor which is related to the various kind of laws, acts
and regulations that must be followed by the companies to make their operations legal (Heaton,
Linden and Teece, 2014). In the aspect of UK, their government establish various kind of
regulations that are necessary for all kind of companies. As well as political relationship among
different countries also effect the business. In the context of John Lewis and BBC company, they
are required to apply all the laws and regulation for smooth running of business.
 Positive impact- The positive impact of this factor is that if company follow all the rules
and regulation in their system then they will be able to perform their activities in an
ethical and legal way.
 Negative impact- The negative impact of this factor is that certain changes in the rules
and regulation forces to the company to follow.
Economic factor- This factors is related with the different kind of financial aspects such
as interest rate, exchange rate etc. If any huge fluctuation occurs in these elements then it can be
difficult for the companies to sustain in the market. Same as in the John Lewis company, if
market and economical condition of the UK fluctuate in a negative manner then their all
functions can be effected.
 Positive impact- If economical conditions are in the favour of the companies then it can
be useful for them to sustain. Like if interest rate decrease then it will be beneficial for
the John Lewis and BBC to get the loan at lower rate.
 Negative impact- The negative impact of this factor is that it is not under control of the
companies and due to this organisations have to face the many issues.
Social factor- It is a kind of factor which is related to the people's like, dislike, religion,
culture etc. Companies are required to follow these elements and try to provide services
accordingly. In the absence of following this, companies may face different kind of issues like
lack of sales, customers etc. In the context of John Lewis and BBC company, it is necessary for
them to make their policies and plans accordingly.
 Positive impact- The positive impact of this factor is that if companies will follow this
factor then their sell will maximize and profits will increase. Same as in the context of

the John Lewis and BBC if they will provide products and services as per the customer
preference then it can be profitable for them.
 Negative impact- The negative impact of this factor is that it is difficult for the companies
to satisfy the need and demand of all the customers.
Technological factor- The technology is a kind of factor which updates continuously
(Niemann-Struweg, 2014). If companies will not follow this then it can be difficult for them to
sustain. So it is necessary for the John Lewis and BBC company to make their plans and policies
as per the new advanced techniques.
 Positive impact- The positive impact of this factor is that it can be beneficial for the
companies if they will apply new techniques in their operations.
 Negative impact- The negative impact of this factor is that companies can not update
their plans and policies in short time period. Due to this they unable to adopt the new
techniques that result in negative impact.
Legal factor- This factor is related with the legal laws, legislations which are related to
the protecting the rights of customers and employees. So it is mandatory for the John Lewis and
BBC company to implement all the acts and regulations.
 Positive impact: The positive impact of this factor is that if companies will follow all the
rules and legislations then there would be a positiveness among employees and managers.
 Negative impact: The negative impact is that companies can not follow all the aspects in
their different activities which becomes a reason of conflict.
Environmental factors- It is a kind factor that is related to the elements like natural
environment condition, climate conditions etc. In the aspect of John Lewis and BBC company, it
is necessary to protect the environment by evolving less harmful policies of production.
 Positive impact-If companies will provide environment protecting products and services
then it can beneficial for them to attract more customers.
 Negative impact-This factor is not under control so any natural disaster like flood can
effect badly to the companies.

TASK 4.
P5. Internal and external analysis of specific organisations in order to identify strengths and
weaknesses.
Swot analysis- It is a kind of analysis which is used for analysing the micro environment
factors (Reynolds and Rohlin, 2014). Herein, below swot analysis of BBC and John Lewis
company is mentioned below:
SWOT analysis of BBC
Strength:
 The BBC company has a wide range of
employees which are 23000. It is a
huge strength of them. Through this
they can satisfy the need of different
customers.
Weaknesses
 One of the weak point of the company
is that their operating cost is too high
and due to this profits are decreasing.
Opportunities
 They have a huge opportunity which is
to enter into new market segment with
new product. It can be profitable for
them because their brand image is
good.
Threat
 They have threat of competitors in the
market. Due to this they are required to
be aware about their competitors plans
and policies.
SWOT analysis of John lewis
Strength Weakness
 John lewis is continuous performer in
the market in terms of Revenue, growth
and having huge market share in
partnership with waitrose.
 Organisation's global presence in only
52 countries
 company's profit are unstable at new
location

 It is totally Focused on product
innovation and development
 Company has massive market
reputation at different location with
strong online marketing platform
 John Lewis is the Major player in the
industry of home care and finance.
 Organisation has strong brand
recognition across the global world.
 Enhancing the customer services with
quality improvement and introducing
new feature in its products.
 John lewis does not have any effective
pricing policy to decide the price of
brand at certain location. It may known
as cultural price differentiation.
 Entity has high cost of branding and
promoting the brand.
 Company does not take advantage of
competitiveness
Opportunities Threats
 John lewis has a great scope to
entrance in new market segmentation
 Company is raising fund in services
market as its demand continuous
increasing
 Organisation is concentrate on Quality
and healthy foods for enhancing the
number of quality products
 Unique marketing technique
technique
 Strategies partnership in corporates
 Company has a great problem of cash
Flow in new market
 Stringent Rule and regulation of
authority at different location.
 John lewis has a threat from dominance
of the particular market by strong
competitor.
◦
P6 Interrelation of strength and weaknesses with external environmental factors
It is essential for every organisation to evaluate their strength and weaknesses in critically
analysed way in order to perform organisational roles and responsibilities in well-defined manner
(Schaltegger, Lüdeke-Freund and Hansen, 2016). It further facilitate towards coping with
numerous issues that may directly and indirectly affect their functioning. Mentioned below

strength and weaknesses in context with John Lewis and BBC is evaluated in a well descriptive
manner:
Political Factor:
In this factor there is a involvement of elements that are related to, regulations and
policies that impact upon organisational functioning along with its day-to-day operations
(Taipale-Erävala, Heilmann and Lampela, 2014). Thus, it become essential for both BBC and
John lewis to effectively consider political factor in all those regions and nations where they
operate their functioning. In addition with this, with the help of formulating best effective form
of relationship with respective government and following all related guidelines both of the
organisations can gain more developmental advantages.
Environmental factor:
This factor covers aspects which is mainly related to environmental concerns and laws. In
this regard John lewis and BBC is required to take proper consideration in this. In regard with
BBC company can take advantage of flexible form of digital production while in relation with
John Lewis company can produce their commodities with recyclable waste materials in order to
generate low waste. With this the help of which both companies can able to perform their
operations in eco friendly manner.
Social factor:
This factor cover elements which is related to society norms, culture, believes and aspects
(Upward and Jones, 2016). In order to conduct operations in well effective manner protect
society feelings it is essential for BBC and John Lewis to conduct their operations in social
manner. This will effectively aid both organisations towards gaining large base of customer
attract and loyalty towards organisation.
Technological:
With the advancements in technology on day-to-day manner, technical aspects is
changing in dynamic manner. For this there is a requirement for both BBC and John Lewis to
effectively consider technological changes on continuous manner and invest adequate amount of
funds as to implement best technological measure in organisation structure. This will effectively
benefit both companies to serve their customers with current trend and preferences.
Legal factor:

Legal factor covers aspects which covers laws, policies and legislations that directly and
indirectly affect on organisational performance (Veit and 2014). In this regard BBC and John
Lewis is required to go through with all government related measures and understand legal
measures. This will effectively aid both organisations to conduct their performance within legal
framework.
Economical factor:
Economical factor include elements which is related to interests, tax and other
economical measures (vom Brocke and Schmiedel, 2016). All these factors if change may lead
towards brining significant impact on organisational functioning. For this it is essential for both
BBC and John Lewis to take advantage of economical strategies with the help of which they can
effectively able to reduce negative impact of all these measures and further formulate business
operations in more profitable and productive way.
CONCLUSION
Business environment consists internal and external factors which develop impact on
functioning of business. Type and scope of company is based on the size of organisation. At
workplace, there are various business functions which are interrelated with each other by
considering the disadvantages and benefits. Each function of business are interrelated and focus
on attaining the specific aims and objectives in an effective manner. For analysis the internal
environment, SWOT Analysis has been conducted through company. It will help in determine
the effectiveness and efficiency of business operations. For analyse the different macro
environmental factors, PESTLE analysis has been studied. Through this, company can able to
develop effective strategies in order to reduce negative impact of external environmental factors.
External and internal analysis of companies in relation to determine weaknesses and strengths
has been discussed here.

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