Business Environment Report

This report analyzes the business environment of Burberry Group Plc, a British luxury fashion house. It examines different types and purposes of organizations, the size and scope of various types of organizations, the relationship between different organizational functions, and the positive and negative impacts of the macro environment on business operations. The report also includes a SWOT analysis of Burberry Group Plc, highlighting its strengths, weaknesses, opportunities, and threats. The report concludes by discussing how Burberry Group Plc can leverage its strengths and opportunities to overcome its weaknesses and threats and achieve sustainable growth.

BUSINESS ENVIORNMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purposes of organisations..................................................................1
P2 Size and Scope of various types of organisations.............................................................3
TASK 2 .....................................................................................................................................5
P3 Relationship between different organisational functions..................................................5
P4 Positive and negative impacts of macro environment has upon business operations.......6
TASK 4............................................................................................................................................8
P5 Internal and external analysis of company to identify strengths and weaknesses............8
P6 Strengths and weaknesses interrelate with external macro factors for the chosen
organisation............................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment term can be understood as and filled with all internal and external
elements which may put both positive and negative impact on functions of an organisation
(Business Environment, 2018). Both of these factors are consists with some major components
through which business can get run in an appropriate sense and these are: employees, customers,
directions, supply along with demand, laws and many more (Reed and et. al., 2013). If a
company is looking into these factors and considering them in a proper manners it is may be
possible that company will gain competitive advantages. Burberry Group Plc has been taken
under this report which was introduced for the first time in UK's market in 1856 and founded by
Thomas Burberry. This organisation is dealing in clothing and fashion sector. Under this
assignment, various things are going to be included like: size and scope of many companies that
are doing business in United Kingdom's marketplace. Along with this, assignment will also show
relation that antithetic organisational functions carries.
TASK 1
P1 Different types and purposes of organisations
Today's business environment is filled with ample number of opportunities. Government
of United Kingdom and of other countries as well have distributed organisations as per
turnovers, number of employees, operations, scope and many more. On the other hand, when
Brexit took place business environment of United Kingdom raised many chances for business
organisations in all over world to do business at a whole new market (Nishitani and et. al., 2012).
All of these firms that are doing business in United Kingdom's marketplace have been divided
into three major sections which are: private, public and Voluntary. All of these have been
described beneath:
Basis of
Comparison
For Profit NPO NGO
Meaning Under this, it has been
analysed that all the firms
that are coming under this
sector, carries main aim to
earn profit with the help of
Delivering services and
products to society in order
to standardise them
without keeping an aim or
motive of generating
Non- government
organisation term in
which any company is
coming does its
business and deliver
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delivering products and
services to targeted
customers.
revenue or to earn profit. products and services
to customers.
Area of
Operations
Organisation's operational
activities can be done in
both big and small area
according to business scope
and aim.
Operations is being done at
limited, targeted area only.
Organisations under
this does business at
larger scale.
Objectives Delivering satisfaction to
customers and through this
generating maximum
revenue as much as they
can. This can be understood
as an objective of these
organisations.
Promotion of art, scientific
disciplines along with
commercialism can be
stated as the main aim of
organisations that comes
under this section.
Making independent to
the people who are in
need of United
Kingdom and this can
be done through many
ways.
Three major sections in which organisations have been distributed:
Public Sector- Government of United Kingdom mostly does runs organisations that
comes under this sector. It has been analysed that this sector comes on second number who gives
employment to citizens of UK. BBC can be considered as a good example under this section
which is doing business in all over world.
Purpose– Enhancing economical conditions, transportation, developing infrastructure,
telecommunication are some major motive under this sector of governmental business
organisations and bodies.
Private Sector– Companies under this sections Under this, main aim of private sector
company is to earn profit. This is being done with the help of delivering products and services to
customers right on time according to their needs and demands. Burberry Group Plc which is
doing business in all over world and are delivering fashioned clothes comes under this section.
Purpose– The fundamental reason behind the foundation of organizations in private
segment is to discover and dissect the taste, inclination needs and needs of the clients and to give
them the requested items and administrations.
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Voluntary Sector– These are the sort of organizations which are run and oversaw by the
general population who intentionally joins a consent to accomplish some shared objective or to
work towards a typical reason. OXFAM is one such UK based intentional association which
advances the privileges of the youngsters in creating nations and give them help and support to
carry on with a superior life.
Purpose– The fundamental motivation behind these association is to build up the country
by giving advantages and welfare to the general population of the general public (Kolk, 2016).
Legitimate Structure of the Sectors:
Private Sector: The Structure under this is being filled with ample number of many
operations on the other hand, any person can do business at international level.
Sole Proprietorship– It is a unincorporated business which is claimed and control by a
person with no different legitimate substance of the business and the proprietor. As a sole
proprietor the individual is qualified for every one of the benefits and is additionally in charge of
the considerable number of liabilities.
Partnership– Under this, at least two individuals goes into business as co proprietors and
sign an association deed in order to lawfully entitles top follow up for the benefit of each other in
business.
Public open Sector: Under this, lawful structure of these sorts of organizations is
depicted as takes after:-
State Government– Organisation which is doing business under this, state government
intercession are submit to all the arrangement that has been authorized by the legislature. These
organizations are portrayed by their particular authoritative document and tasks in business
exercises.
Neighbourhood (local) government: Local governmental bodies are fundamentally
occupied with giving items and administrations to society for its advantages.
P2 Size and Scope of various types of organisations
Today's business environment of United Kingdom is filled with various opportunities for
business people from both domestic and international level (Reed and et. al., 2013). Because UK
got evicted for European Union and these are attracted people who were willing to expand their
business or for entrepreneurs as well. Whole new government of United Kingdom have given
many offers to foreign business firms to invest and do business in this country through
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developing favourable policies and strategies as well. Firms that comes under private, public and
voluntary sections carries various sort of scopes along with size as well and these are being
discussed beneath:
Private Sector organisations– Organisations under this sector mostly deals in different
areas along with this, employment to people of UK is being given by companies that comes
under this section (Shigang, 2010). Around 50% of occupations is being given by small and
larger business organisation under this section. Burberry Group Plc can be stated as a good
example into this sub section which has been developed by government. Minimal requirement
that an organisation needs to have into this are:
 Minimum employee numbers- 2 Maximum Members- Up to infinity.
The size of Burberry Group Plc are given beneath:
 Approximately this firm is having around 500 stores in United Kingdom and in other
countries.
 More than 10,000 employees Burberry Group Plc is having who are serving and
delivering services to customers in an appropriate sense.
Public Sector companies– Under this section, both the things like scope along with size can be
stated as properties and this depends on purpose of business which is being done by government.
Along with this, organisations that are coming under this section carries various joint ventures as
well. Under this size and scope is given beneath:
 Minimal staff members- 7 Maximum number of employees- Unlimited
The size of BBC is being done beneath:
 BBC was found in the year of 1992.
 4.954 billion pound is the net income of BBC which was made in the financial year of
2016- 2017.
 Around 20,950 staff members are continuously working in different offices of BBC
Voluntary Sector – Into this sub-section, funds which is being majorly raised by
government and people who likes to raise charity for NGO. Oxfam is being considered as a
charity firm which can be stated as an organisation that delivers products and services to needy
people in order to improvise their standards.
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Objectives differentiation:
Micro Small Medium Large
Firms that mostly
develops revenue in
order to survive comes
under this section like:
small outlets, shops
and so on.
Organisations under
this section deals in
different areas and
tries to deliver
products and services
to customers so that to
earn money. Like:
consultancy firm
which is having
around 10 to 50
employees.
Companies which is
doing business at
domestic level and
putting efforts so that
to expansion can be
done and business can
get lead to
international market.
Sainsburry's, Burberry
can be stated as firms
that are doing business
at international level.
These firms under this
sub section carries
main aim and single
motive is to earn
profit.
TASK 2
P3 Relationship between different organisational functions
It has been located that, in order to run business it is required for business organisations
to handle all the functions in an appropriate manner. In present context, Burberry Group Plc is
doing business at international level (Reinhardt and Stavins, 2010). Basically, type of business
this organisation is carrying is of British luxury fashion house. It is mandatory for this
organisation to deal in different sections so that benefits can be gained in an appropriate manner.
Some of organisational functions are being discussed beneath:
Marketing: One of major function that an organisation needs to take care in an
appropriate sense. Basically, if marketing department of a company is not effective enough than
it is may be possible that firm may loose its goodwill. Burberry Group Plc is doing business in
all over world and are delivering clothes to its consumers in all over world. On the other hand, it
is being analysed that whenever manufacturing of products gets completed and in order to
deliver information to customers Burberry Group Plc goes for promotional activities and this
action can be taken as a major part of marketing. With the help of this, Burberry Group Plc can
gain many competitive advantages and along with enhancement of business can be done.
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Human resources: Another function of organisation that aid in running business in
successful manner. It is HR manager's responsibility is to conduct interviews and select best and
befitting candidates for the job so that firm's goals and objectives can be grabbed right on time.
In present scenario, it is required for Burberry Group Plc to have high end human resource
management so that they can develop appropriate policies and strategies in order to recruit, give
training and to improvise retention level in a befitting way (Cavalcante, Kesting and Ulhøi,
2011).
Finance: Finance department of Burberry Group Plc, needs to be effective in nature and
with the help of this, organisation can develop its reputation in an appropriate way (Karagiorgos,
Drogalas and Giovanis, 2011). On the other hand, less effective financial phase may take
company to face various issues that are related to funds and finance. Good reputation may lead
this firm to go through different risks factors in an easy way. Example can be taken of Burberry
Group Plc that if they will keep good reputation then it is may be possible that Bank and other
financial institute will easily lend money to them.
Operation: Manufacturing of products and services comes under this sub function of
organisation. On other hand, Burberry Group Plc makes trendy clothes for their customers so that
to better serve them. But, this can only be done if this function will be effective in nature. Trends
and demands of customers get changes. Thus, it is required for them to develop products
according to their needs.
Henceforth, it is must for Burberry Group Plc, to keep a healthy interconnection in
between these organisational functions to gain competitive advantages. Along with this, it is very
much required for them to hit their targets and this can be taken under in use in order to grab
good position in befitting time. All the objectives of Burberry Group Plc can be attained if all
these functions will work together in an appropriate way (Kolk, 2016).
P4 Positive and negative impacts of macro environment has upon business operations
PESTLE analysis is being done underneath of Burberry Group Plc in order to see all the
negative and positive impact on operations of organisation:
Political factors: Rules and regulations that has been made by government comes under
this sector. This element can put impact on business of Burberry Group Plc. Positive impact: Cost of products can be reduced which will directly improve
profitability of Burberry Group Plc in an appropriate sense.
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 Negative impact: New tax policies and others laws may impact badly on working of
Burberry Group Plc.
Economic factor: Economical conditions of a country usually affects operations along
with sales of products and services of Burberry Group Plc. These can be both positive along with
negative at the same time. Positive impact: If customer's pocket is filled with monitory then it is may be possible
that they do not think twice before buying (Nishitani and et. al., 2012).
 Negative impact: Economical crisis may reduce products and service's demand and this
needs to be properly taken care in an appropriate sense.
Social factors: CSR activities are there that may aid Burberry Group Plc is gaining good
reputation at marketplace of United Kingdom. Positive impact: Sales and reputation can be improvised of Burberry Group Plc in
appropriate manner.
 Negative impact: Products and service's demand gets reduces in a rapid manner if CSR
activities are not being done in a proper way.
Technological factors: New and updated technology may aid Burberry Group Plc in
developing their products and it can also put both positive and negative effects. Positive impact: Latest technology may help this organisation in modifying products and
services as per the requirements of customers. Negative impact: It may require high funds in order to adopt updated tools and
technology.
Legal factor: Rules and regulations which has been developed by government of UK
may put impact on Burberry Group Plc. Positive impact: If organisation will work in a legalised manner then it is may be possible
that firm may lead to deal enhancement in their reputation (Osterwalder and Pigneur,
2010). Negative impact: Rules if not been followed may lead organisation to go through
different sort of penalties.
Environmental effect: Atmosphere may put both positive and negative impact on
Burberry Group Plc.
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 Positive impact: Pollution free products may lead business organisation in developing
their reputation among society.
 Negative impact: Manufacturing plant of Burberry Group Plc if pollutes air then it is may
be possible that they may go through different phases.
TASK 4
P5 Internal and external analysis of company to identify strengths and weaknesses.
External analysis is being done by in order to look into different aspects like threats and
opportunities, which may aid administration in taking initiatives and through this products and
services can be effectively developed in an appropriate sense (Osterwalder and Pigneur, 2010). It
has been analysed that marketing strategies, market position, sales, brand image and more can be
understood as some major elements that can be taken under in use by Burberry Group Plc and
SWOT analysis is being done beneath of Burberry Group Plc:
STRENGTHS WEAKNESS
 One of the largest fashion retailer is
Burberry Group Plc.
 500 stores all over United Kingdom
and other countries are helping these
organisation in developing its brand.
 Huge Brand image (What SWOT
Analysis is in simple words, 2016).
 More than 10,000 employees in all over
UK and in other nation as well.
 Burberry Group Plc carries limited
areas to expand their business.
 Rise in competition have reduced its
image in front of society.
 Chains of this company are lesser than
its competitors which has decreased
their reputation.
 Firm is filled with ample number of
issues like: low retention level of
employees, outdated technology and
many more (Pikka, Iskanius and Page,
2011).
OPPORTUNITIES THREAT
 Burberry Group Plc can expand its
business in countries like India,
Australia, China as they are carrying
 Rise in competition may reduce
profitability and productivity both at the
same time of Burberry Group Plc.
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good economical conditions at current
time.
 Dealing at online phase like developing
an application and then introducing it in
front of customers (Pulver, 2012).
 Burberry Group Plc is going through
various price wars with other retailers.
P6 Strengths and weaknesses interrelate with external macro factors for the chosen organisation
Micro and macro environment factors are analysed by management of Burberry Group
Plc to analyse relationship of components with each other. PESTEL analysis is appropriate
technique used by superior to have complete information about market situations. This help
company to acknowledge strengths and weaknesses for making system function effectively
(Hair, 2015).
 Political: This is essential factor which influence on growth of business operations.
Government frame rules and regulations which require to be followed and managed by
administration of Burberry to establish good position and image in UK.
◦ Strength: Every nation have different legal teams, Burberry Group Plc pays taxation
and management have formulated policies to make system function legally.
◦ Weakness: Burberry has branches in different nations which impacts on business
which require to function in respect to government. This makes management tasks
complex and difficult (Hamilton and Webster, 2015).
 Economical: Interest rate, exchange rate and inflation are various components which are
determined by government on basis of conditions and state of economy. This impacts on
import and export of Burberry, which depend on market situation of UK with other
nation.
◦ Strength: Burberry has strong market reach and customer base, as there is inflation in
UK which help people to have adequate income to purchase things in respect to their
taste and preferences.
◦ Weakness: Interest rate in high in UK which determine on amount of funds available
with Burberry.
 Social: Demographics, work ethic, lifestyle trends and so on are components which
depend upon sales and profitability of Burberry.
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◦ Strength: Research and development helps Burberry to have complete information
about market trends and provide things accordingly.
◦ Weakness: Customer's taste and preferences keeps on changing with time, this
impacts on sales and profitability of Burberry.
 Technological: Burberry uses latest tools and techniques which help firm deliver latest
products and utilise resources efficiently ().
◦ Strength: Burberry has strong market image and goodwill which is due to trendy
items provided to customers.
◦ Weakness: Burberry require to make changes in tools and technologies which
impacts on business and funds.
CONCLUSION
From above mentioned report, it is being analysed that business environment is filled
with ample number of opportunities for business organisation that are carrying different scopes
and sizes at the same time. On the other hand, external environment is filled with both various
positive and negative impact which needs to be understood in an appropriate sense so that firm
do not face any issue while doing business. Along with this, SWOT approach is helpful in
developing strategies through which goals and objectives can be attained right on time.
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REFERENCES
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McGraw-Hill/Irwin.
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the environment. Oxford Review of Economic Policy. 26(2). pp.164-181.
Shigang, Y., 2010. Competitive strategy and business environment: The case of small enterprises
in China. Asian Social Science. 6(11). p.64.
Karagiorgos, T., Drogalas, G. and Giovanis, N., 2011. Evaluation of the effectiveness of internal
audit in Greek Hotel Business.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Nishitani, K. and et. al., 2012. Are firms' voluntary environmental management activities
beneficial for the environment and business? An empirical study focusing on Japanese
manufacturing firms. Journal of environmental management. 105. pp.121-130.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Pikka, V., Iskanius, P. and Page, T., 2011. The business enabling network–a tool for regional
development.International Journal of Innovation and Regional Development. 3(3-4).
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Pulver, S., 2012. Business and the Environment.
Avramenko, A., 2012. Enhancing students' employability through business simulation.
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Cavalcante, S., Kesting, P. and Ulhøi, J., 2011. Business model dynamics and innovation:(re)
establishing the missing linkages. Management Decision. 49(8). pp.1327-1342.
Hair, J. F., 2015. Essentials of business research methods. ME Sharpe.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
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Online:
Business Environment. 2018. [Online]. Available
through:<https://www.slideshare.net/NikhilSoares/business-environment-
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