Business Environment and Strategic Management

The provided report concludes that business environment helps companies manage their operations more effectively by knowing current market trends. It also assists in making strategies and plans for better company growth. The document references various books, journals, and online sources related to business environment analysis and strategic management.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purpose of organisations........................................................................1
P2 Size and scope of different organisation................................................................................4
TASK 2............................................................................................................................................6
P3 Interrelation between different organisational departments and their link to objectives.......6
TASK 3............................................................................................................................................7
P4 Impact of micro-environment factor......................................................................................7
TASK 4............................................................................................................................................8
P5 Internal analysis of organisation for identification of strengths and weaknesses..................8
TASK 5............................................................................................................................................9
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses 9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment is one of the essential part for an organisation under which
collection of individual are there who work for a common goal. Along with this, it constitutes
factors that may or may not be controlled by the organisation. Business environment are dynamic
in nature and but it has some or the other complexities (Business Environment, 2018). Company
that is taken in this assignment is Cadbury, which is a renowned organisation in operates in
business in all over the world. Report will focus on different types and purpose of company
whether private, public or voluntary along with its legal structure. Size and scope of various
types of organisation for the chosen purpose is mentioned in this report. Other than this,
relationship between different organisation functional are included in this assignment. Lastly,
strengths and weaknesses that are interrelated with external macro factor explained in this report.
TASK 1
P1 Different types and purpose of organisations
Companies those who are working in different field they have their own objective and
legal structure. Here, manager plays an important role as they must guide employees and workers
to follow entire legal laws that has been incorporated in order to perform their task in a better
manner. Further, organisation can be classified into various sectors i.e. private, public and
voluntary. Therefore, some of the roles that are played by these sectors are mentioned below:
Private company
There are some companies that are not in direct control of regulatory bodies and operated
by private firms thus, government doesn't have any control in their operations. Business
operations in private company are solely controlled by them Although, they can gain maximum
profits by implementing different kinds of strategies but these must be under the rules and
regulations. Company that is taken in this segment of assignment is Cadbury, which is a largest
company that manufacture food products for gaining profits and increase their sales. Firm was
established in the year 1866, that includes goods like baby food products, coffee, tea along with
dairy products and many more.
Advantages and disadvantages of private organisation
Advantages Disadvantages
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The biggest advantage of this is that an
individual operates and run the entire business
along with its co-workers.
For working in partnership or any other kind of
activities they have to sign a legal document.
Whether owner or partner they have a limited
shares of liability.
Generating funds is quite difficult.
Purpose of Cadbury:
Firstly, in every company the main purpose of company is to gain a large amount of
profits. In context with, Cadbury there prime motive is to manufacture excellent quality products
that can be delivered to its end customers. Other than this, they are producing goods that are
healthier in as compared with other products that are manufactured by them. Further, while
producing goods they considered the environmental consequences so that it is not harmed at any
cost. Therefore, business activities that are performed by them are directly have a great impact
on a large number of people as they are the one who purchase their products on large scale.
Legal structure of private company
Partnership: It is a kind of formal agreement that is done amongst two or more parties
who agree for the same business proposal. Whatever loss or profits company will face both the
partners share equally although they have equal liability. Thus, main aim who work in
partnership works in order to gain maximum amount of profits in speculated time frame.
Advantages: This help them in reducing burden for a single person and whatever profit
and loss happens is equally shares by both.
Disadvantages: With the clashes in opinions partners business is hampered.
Sole proprietorship: Company that comes under this, operates their business operations
single handedly. Hence, they are known as sole trader, and they have control over entire
operations. They can incorporate various strategies and use ultimate liabilities for gaining
maximum profits and production.
Advantages: They can easily modify business structure as per change in trend in market
area.
Disadvantages: Lack of capital resources.
Limited Companies: This constitutes two kinds of companies that are limited with shares
and guarantee. Only thing that separates them from others are legal entity. Organisation that
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come under this have limited liability that means owner along with shareholders have restricted
liability.
Advantages: Minimising personal liabilities, helps in tax efficiency policies.
Disadvantages: Need to pay registration fee to various organisations that are at higher
level.
Public Organisation
Companies that come under this are operated and regulated by government of the
country. They perform functions like military, police operations, public organisation, health care
and many more. Therefore, they have a consequent control over the entire operation that come
under public organisation.
Organisation that come under this is BBC which is a broadcasting organisation that
provides information regarding what is happening in an around the world.
Advantages and disadvantages of Public Company
Advantages Disadvantages
Work for the betterment of the public To provide better facilities they have limited
funds which is the biggest drawback for
disadvantages.
Provide with all the resource that are required
by people.
Financial freedom act as a barrier in this.
Purpose of NHS:
The main purpose of BBC is to give authentic information to its public so that they can
have better and relevant message to every one in the society. They consider both national and
international perspectives for giving better outcomes.
Legal Structure of public company:
Central Government: Companies that are included in this are supervised by departments
that are under state and central government.
State Government: They play their part and give some or the other contribution in the
functioning and activities that are performed by state government.
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Local Government: Their prime role is to manage public organisation so that they can
operate their business in a better manner.
Voluntary organisation
People who work in organisation that comes under this perform their activities with their
own will. Hence, they are known as volunteer, and they majorly work for development and
betterment of the society and not with the purpose of gaining profits.
Oxfam is the organisation that is considered in this segment and their main motive is to
remove poverty from the society so that people and improve their living standard in the society.
Other factors and field in which they are working are disaster relief, advocacy etc. Oxfam was
formed in the year 1942, and with the help of their volunteers they are giving services to
worldwide.
Advantages and disadvantages of voluntary organisation
Advantages Disadvantages
Through this, organisation gathers financial
information that can be utilised in future
operations.
Because these activities are not planned so
some organisation find it difficult in grabbing
opportunities.
There are many fields in which these
organisation can work.
Purpose of Oxfam
Main purpose of this, is to take out the best solutions for the issue that are facing by
people and along with this they are working against injustice that happen in public. They provide
services so that a person can create better future that is safe and secure as well.
P2 Size and scope of different organisation
Various companies have different size and scope whether it is a private, public and
voluntary organisation. These are basically depends upon the areas in which they are situated or
operating its business. Below some of the points are mentioned that are related to size and scope
according to different sectors.
Cadbury
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Size: Cadbury, is a big company that manufactures food related products and people love
them from whatever age they are. Their products are excellent in quality and have a good brand
image in market area. Company was established in the year 1824, and since than they are having
around a large number of factories in 50 different countries. To assist them in gaining maximum
profits close to 71,657 number of employees who perform their activities in order to make
products that are good in quality.
Scope: There main scope is to reach to maximum number of people with their new and
innovative products. Along with this, they wants to established their business in other countries
where they have launched their company yet.
Vision: There vision is to manufacture and provide safe products that in quality terms are
higher and for this they incorporates raw materials that are good and excellent.
Mission: To become a leading company by giving wide range of food items and
beverages.
BBC
Size: Organisation was established in the year 1922, in England and they are serving to
around of large number of people residing in different parts of the world. According to the
current market scenario, BBC comes under top most largest organisation who work for the
betterment of the society.
Scope: Their prime scope is to provide their services to every section of the society at
free or minimal cost price. Along with this they provide basic facilities that are needed by people
in the society.
Vision: Their vision is to provide authentic information to people so that they can know
about the happenings which is going in the world.
Mission: Their prime mission is to give services to every person who live in the society.
Oxfam
Size: There are around 20 organisation that works under Oxfam and do their work so as
to eradicate poverty from the society. It was found in 1942 and by the time large number of
people started working together for the betterment of the society.
Scope: Health care service is the prime duty which they perform but along with this they
also function activities such as disaster relief, removing poverty and many more.
Vision: World without poverty, so that every person can live and enjoy their life.
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Mission: To use all the resources that are available to them so that they can remove
poverty along with this can enhance the living standard of people.
Stakeholders analysis:
They are the one who perform their task just to provide benefits to the organisation and
these can be in form of employees, customers, investors, regulatory bodies etc. they basically
helps company in gathering a large amount of money so that company can use them in future
proceeding. Some of stakeholders according to the interest are like a person who is having high
power are the most fascinated people and so on.
TASK 2
P3 Interrelation between different organisational departments and their link to objectives
Every department in an organisation play their role and responsibility for providing
maximum benefits. In context with Cadbury, with the help of mutual understanding they have
maintained a better relation amongst different departments. This help them in improving their
strengths and weaknesses which further aid them in achieving their set goals and targets in
speculated time frame. Cadbury is using organisational structure which is multi-divisional
structure and this is helping them in processing their activities in a systematic manner. Every
single department is playing their role in order to provide maximum benefits to its organisation.
Thus, they are following democratic style of working in which every individual have right in
expressing their views and thoughts if they are facing difficulties in executing their plans in a
right manner. Therefore, this kind of structure is helping them in clarifying the accountability
and take proper decision for their business operations. Interrelation of departments in an
organisation are given below:
Advantages and disadvantages of voluntary organisation
Advantages Disadvantages
Through this, organisation gathers financial
information that can be utilised in future
operations.
Because these activities are not planned so
some organisation find it difficult in grabbing
opportunities.
There are many fields in which these
organisation can work.
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Human resource management: They are considered as the most important part of a company as
they provide all the basic requirements that are needed by company. Basically, they hire eligible
candidates for their work.
Marketing department: This sector can be directly linked with sales and production
department as to increase sales it is required that they make proper marketing plans. Further
Cadbury, incorporates modern tools and technologies for the same.
Finance department: To improve the capability of production and sale it is essential that
they have adequate amount of funds which they can use for manufacturing a large number of
commodities. It also enables company in implementing advances tools and technologies.
Production department: to sustain in the market for a longer period of time production
department produce goods as per the need and wants of customers so that it can be delivered to
its end customers in speculated time frame. Further they are linked with distribution department
so as to give quality products to its end customers.
Organisational Structure
Further these are divide into categories that are explained below:
Function based: Under this, departments perform their task in according to the work in
which they are specialised. For example: marketing, finance, human resource etc.
Geographical based: Organisation that comes under this are divided on the basis of
regions and sectors.
Product based: These are categories on the basis of variety of products and commodities
that are provided to its consumers.
Customer based: In this, company try to make products according to the choices and
preferences of consumers so that they can keep on their sale for longer period of time.
TASK 3
P4 Impact of micro-environment factor
Micro-environment plays a important role in every organisation so it is essential that they
consider all the factors such as political, economical, social, technological and legal along with
environmental factor. Further all the factors that are mentioned help an organisation in attaining
the set targets in speculated time frame. Positive and negative impact of various external factors
are mentioned below:
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Political Factor: Cadbury, they are delivering their products in almost around all the
nations. So, it is important they follow rules and regulations that are formulated by regulatory
bodies. This includes taxes, excise duty and more.
Positive: Working under rules and regulations will provide maximum and this is the
positive impact on business operations.
Negative: Rates of taxes can create problem in this as paying them can be very high for
most of the organisation.
Economic Factor: This is the important factor through which company get to know
about the economic state of the country it assist organisation in fixing the rates and prices of
commodities according to the people in that context to which they can able to pay.
Positive: This help them in gather information related to inflation and various income
level.
Negative: Lower down in the level of income is the biggest drawback of economic factor.
Social Factor: This includes customs and value of a society, and company must work
without hurting their sentiments of people.
Positive: This assist them in analysing the nature and behaviour of customers and
improve sales and profitability.
Negative: To having proper knowledge of commodities creates a problem for
organisation in selling their commodities.
Technological Factor: Now a day's a large number of technologies have evolved and
these are helping them in manufacturing goods and products right on time and with best quality.
Positive: Through this company can now reach to maximum number of people and tell
their about products they have implemented.
Negative: Use of complicated tools and machineries can sometime create problem for
employees to understand them in a better manner.
TASK 4
P5 Internal analysis of organisation for identification of strengths and weaknesses
For evaluating the strength and weaknesses internal tools are very effective and give
appropriate results for the same. Therefore, in context with Cadbury, managers of this company
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decided to conduct SWOT analysis and as a result it is giving them better outcomes. Hence,
some of the points are explained below:
Strengths:
Most popular brand: Cadbury, is one of the biggest company which delivered quality
products to its customers. Under their single brand they sell variety of goods that are according
to t he need and wants of customers. For example: their mostly popular for making best quality
chocolates amongst which Silk is very popular and preferred by most of its customers.
Effective distribution channel: As the organisation is huge so they have effective
distribution channel which is helping them in delivering commodities right on time. This mainly
includes supply chain, street market and many more. For example: their products can be easily
found in stores and different outlets.
Weaknesses:
Brand structure: As under Cadbury there are many products that are manufactured by
them so for managers it sometimes become difficult in handling all the process in an effective
manner. For example: Execution of plans for them sometimes creates problem because of
which defective products are being made. Controversy of worm in chocolate is very famous and
this has created issues in regaining customer's loyalty.
Opportunities:
Improvement in their product: Along with the changing trends there company must
make some improvisation in their products as it will help them in increasing their sales and
profitability. For example: Company can use best quality of raw material for making superior
quality products that can be delivered to its customers.
Expansion of market: In context with Cadbury, they have a large opportunity of
expanding their business in more areas and for this they are boosting their supply channels.
Threat:
Increase in competition: With the change in course of time an increase in competition
has increased and to sustain in the market for a longer period of time it is necessary that Cadbury
make products that are according to the current market trends.
Variation in price: As the market area is increasing because of which customers have
many substitute form where they can purchase good and products.
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TASK 5
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses
This is considered as an important factor that are inter related with external and internal
factor in order to know the strength and weaknesses. This help company in knowing the positive
and negative outcomes of business operations. PEST will help us in doing so and through this
strength and weakness of Cadbury can be evaluated.
Political: This is considered as an important factor through which company can grow and
expand their business activities. This includes all the rules and regulations that are created by
government of particular place.
Strengths: This gives proper knowledge about taxes and other policies that are applied by
regulatory bodies so that company can operate their business in right manner.
Weakness: Understanding different language and laws implemented are quite difficult
which can harm the entire procedure of business.
For example: knowing political factor is helping them in establishing their business in a
better manner according to the choices and preferences of customers.
Economic: Changes in economic conditions can be different according to the various places. So
it is important to understand policies implement by the regulatory bodies. Inflation and deflation
are considered in this.
Strengths: In Asia, company is growing good and the are earning a large number of
revenues from there.
Weaknesses: Exchange rates in different countries and its higher rates can have a adverse
affect on business.
For example: With the modifications in tax policies these companies make changes in
the products as a result it gives them competitive benefits.
Social: Nature of people are considered in this, such as attitudes, beliefs. Through this, company
can increase their sales and demands so it is required to make commodities according to them.
Strengths: Social factor will help them in knowing the choices and preferences of
customers.
Weaknesses: With the change in perception of employees or customers can create
problem executing the task in a better manner.
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For example: It is helping them in manufacturing goods according to the choices of
people and it is increasing their sales and profitability of company in speculated time period.
Technological: Innovations and implementing new tools and technologies are considered in this,
so it is prime responsibility to adopt those machineries through which they can gain maximum
benefits.
Strengths: New technologies are helping them in manufacturing goods in proper manner.
This is also used for improving skills and knowledge of employees.
Weaknesses: Because of implementing costly technologies the rates and price of
commodities have increased due to which customers are moving towards different subsidiary.
For example: earlier making chocolates was very difficult as mixing of various
ingredients was quite impossible. Therefore, after coming of new technologies it has made it
more easier for companies and employees as well.
CONCLUSION
From the above report, it has been concluded that business environment helps in
managing the entire process of business operations in a better manner. As it help them in
knowing the current trends that are going in the market area. Further macro-environmental assist
companies in making strategies and plan of action for better growth for company.
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REFERENCES
Books and Journals
Avramenko, A., 2012. Enhancing students' employability through business simulation.
Education+ Training. 54(5). pp.355-367.
Bovee, C. L., Thill, J. V. and Raina, R. L., 2016. Business communication today. Pearson
Education India.
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
Press, USA.
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).
pp.324-344.
Pulver, S., 2012. Business and the Environment.
Reed, O. L. and et. al., 2013. The legal and regulatory environment of business (p. 328).
McGraw-Hill/Irwin.
Reinhardt, F. L. and Stavins, R. N., 2010. Corporate social responsibility, business strategy, and
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.
Online
Business Environment. 2018. [Online]. Available
through:<https://www.slideshare.net/NikhilSoares/business-environment-
featuresmeaningimportanceobjectives-porters-model>
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