Business Environment

Thank you!

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
P1 Purpose of Public, private and voluntary sectors and their legal structures...........................3
P2 Size and Scope different types of organization......................................................................4
P3 Interrelationship between different organization function and their impact..........................5
P4.Evaluation of positive and negative impact of macro environment on organisation.............6
P5. Internal and external analysis of Organisations in order to identify their micro factors.......8
P6. Inter-relation of strength and weakness to macro factors......................................................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Business environment refers to internal and external factors that state how company is
affected by functions including employees, suppliers, management, demand and supply in
business. Burberry is British fashion luxury house which designs trench coats, foot wear, eye
wear, leather goods, perfume and other accessories (Cai, Li and Cai, 2019). Company was
founded in 1856. This report is analysed about different purpose, size and scope of different
organization and also examine the relationship between organizational function. This report
analyse the internal and external enterprise in identifying strengths and weakness, also how they
are interrelated with external environment.
P1 Purpose of Public, private and voluntary sectors and their legal structures
Public company- Companies who have instrumented to sell its registered securities to public. In
this company they have stakeholder, public shareholder and also including administration and
the board.
Legal structure of public company is basically owned by government. It delivers their goods and
services to public sector including military, police, public infrastructure, these are very useful for
social benefits.
For example, Burberry is plc which deals in footwear, perfume etc. (Čepel and et. al., 2018). It
has numerous stores in many countries.
Private company- These are profit based organizations. The company is generally owned by
specified group or individuals. In private company for developing countries to make more profits
they have to make use of required source for growth.
Legal structure, it is either owned by sole proprietorship or having partnership in same business,
and they have limited number of shares for their organization and they have self-directed legal
structure (Eom, 2020). Private company shares are being forbidden by public commerce.
For example, H&M is private limited company is known for its fast fashion including clothes for
men, women, children and teenagers. Which operates in many countries.
Voluntary company- This company are for social welfare which do not have main focuses on
earning profit (Hamilton and Webster, 2018). There purpose for developing benefits for society
without enriching any profit in return and helps in rising their society.

Legal structure, this comes under government social welfare, and they have chained for helping
people from different countries.
For example, cancer research UK is a charity firm. Their main aim is to aware people about
cancer and world largest independent cancer research activity.
P2 Size and Scope different types of organization
Characteristics Micro enterprise Small enterprise Large enterprise
Definition This enterprise has
business with small
finance with very less
employee and their
turnover is less than
convinced measure.
The small enterprises
start their business
with certain amount
and in developed
countries they have
many shares in market.
Large companies
whose firm is
traditionally been less
taken by short term
changes in economy,
that have seen
impressive changes in
their business.
Size The employee count is
low as their initial
investment is very
low.
They have small
number of workers
and do not have high
number of sales
volume.
Employers is more
than micro and small
enterprises
(Williamson, Luke and
Furneaux, 2020).
Business growth in
merging with small
business is successful.
Scope In many developed
countries it covers
wide range of activity
with less required of
technology (Cai, Li
and Cai, 2019). This
enterprise founded to
This enterprise is
owned either by
partnership or sole
trader succession of
business, and they
have opportunities for
developing their
These companies are
multinational company
ad earn very huge
amount of profit
margin in return. It
operates in developed
countries to open their

be successfully in
operating low business
such as Cancer
research UK which
fight against cancer
and save the people
life.
business in many other
countries like
Burberry.
stores and also involve
in processing internal
aspects of company
such as H&M.
P3 Interrelationship between different organization function and their impact
Increase in business competition have build up more risk for company. Here some are
interrelationship between different department organization structure-
Marketing and human resource department- The marketing department helps company for
promoting their products to consumer, the relationship between HR and marketing
communicates the brand of company to their employees (Čepel and et. al., 2018). While by
using technology tools company create a brand image which applies to their employee, consumer
etc. Due to have connection with employee departments they can share brand message that have
been created in marketing with employees through training, employee orientation and induction.
If Both department interrelationship will not be strong that could create conflict for organization
and there can be no hiring for candidates in company and suffers more in loss in this competition
market. Having a lack of technological may also cause losses to company.
Finance and marketing department- Finance and marketing are two pillars of company which
make profits dependent. Marketing and finance both are needed together for produce best results
for company future. Without promoting and advertising about company could not sale their
products without any profits and without marketing their will be required for finance function,
this function try to find out more profits.
In organization if there is no finance function it will become excess and no marketing function
will be important to work in market for company. Without having budget for marketing they
cannot sell out company goods and services.
Human resource and finance department- Recruitment is done by HR and viewed as expense
by finance, from HR view as type of investment (Eom, 2020). There the best relationship used in

top performance, turnover, human capital forecasting and some design created by HR and
finance.
The relationship between both are bad at that time of company hiring, energy and money, while
having recruitment finance departments thinks about expenditure for their company.
P4.Evaluation of positive and negative impact of macro environment on organisation
The components of external environment have reflect diverse impact that can be both
positive and negative on the overall functioning of the establishment and to evaluate that
PESTEL analysis is applied
PESTEL
Political: Burberry is a multinational company so in order to operate in various nations they have
to follow their laws and regulations. Brexit have reflected a negative impact on the operation as
it brings political uncertainties and instability because of that company is unsure about entering
in new market or measuring their operating expense in the existing countries after the
introduction of modified laws. Some nations impose heavy taxes on foreign establishments to
promote their own home brand products.
Illustration 1: PESTEL analysis
Source: How to do a PESTEL
analysis. 2016

Economical: BB Plc is a luxury brand and travellers who visit London tend to buy garments
from this brand as this compliments their financial status as it serves one of the best fabrics and
designed garments. But after the economic downfall hit the UK market the purchasing power of
customers has decreased (David, 2019). People are focused to spend their hard earned money on
essentials rather than spending it on premium products.
Social: Customers belongs to different cultural and traditional background and have different
dress preferences some prefer authentic dressing and some like to try funky clothing, this is
great advantage for the establishment to cater the customers according to their needs, they can
grow as a diversified brand and can attain more customers. Brand involve in some CSR activities
as well. They use social media platforms to connect with their audience and collect their
feedbacks and preferences so on the basis of that they can produce products which compliments
their consumers needs. They have identified that the upper middle class audience can be proved
as potential buyers so to target them they came up with medium range products to also acquire
this segment of market.
Technological: The industry uses social media and internet as a beneficial tool for the company
as large percentage of people are active on these platforms. They uses these websites like
Facebook, Twitter etc. to connect with their consumers and for advertising and promoting their
product. Burberry is known for their advanced online streaming which enables people to easily
buy products from a wide variety of range and get them delivered at their door steps (Pan, Chen
and Zhan, 2019). They have the fastest delivery service which is highly appreciated by people.
Environmental: Natural disasters and calamity can effect the functioning as these are
unpredictable that's why cant be prevented. Cyclones, floods can cause a huge damage to the
outlets and this will block the routes through which company operates. They have strategically
located their stores at locations from where it is easy to cater to customers. Their inner-wears,
socks and pants are manufactured from organic or non-synthetic wool that is not harmful and
easily degradable.
Legal: To maintain healthy relation with the nations, organisation have to strictly follow the
legal guidelines. This can be a advantage for the company as they can patent their products
design so that no one can copy their exclusive styles and pattern. In case someone does that they
can take legal actions towards them. These can minimise the selling and production of cheap
copies of the brand.

P5. Internal and external analysis of Organisations in order to identify their micro factors
In order to identify and understand the internal aspect of the enterprise conducting a
SWOT analysis is the best method, it is applied and discussed underneath.
SWOT
SWOT Burberry Plc H&M
Strength They are appreciated and awarded twice by the
royal family of Queen Elizabeth. They have a
unique checkers design which was followed and
copied by many around the world. Also
recognised for their own specially produced
fabric Gabardine which is a comfortable
according to the weather situations it is of
waterproof and breathable material (Elavarasan
and et. al., 2020).
The visibility of brand and adapting by top class
celebrities on public and media platforms have
triggered the popularity of the brand. They have a
fast fashion strategy which deliver updated styles in
stores in no time. They have premium pricing and
caters to every group of market from high range to
middle class customers. They deals in a wide range
of products apart from clothing, beauty products,
footwear's to décor products and blankets as well.
Illustration 2: SWOT analysis
Source: SWOT Analysis–What is it and
How to do it. 2017

Weakness This is a bit pricey brand which is affordable by
elites only. Their product range is limited to
apparels, accessories, eye wears, perfumes and
cosmetics etc.
Brand don't have their manufacturing unit, they are
highly depend on outsourcing for production. As
fashion changes rapidly its hard to fulfil the
requirements of every fashion lover.
Opportunity The changing lifestyles and demand of highly
fashionable products is beneficial for the
company as they can produce products according
to market demand and cater to wide range or
consumers. Burberry can also expand their
business by widen their product range.
They deal in wide variety of commodities they can
get advantage by expanding their business in sports
wears as well. Also by establishing their own
production units they can avoid the consequences of
outsourcing (Phadermrod, Crowder and Wills,
2019).
Threat Extensive competition from superior brands.
Also the quick changes in the demands and
lifestyle of people because its hard to keep up the
pace with that ever changing attitude (Vlados,
2019). Threat from inexpensive copy
manufacturers of the brand.
The fall down of economic condition and inflation
as it decreases the spending power. Dependency on
Asian countries for raw materials and resources, the
increase in tariffs and tax charges on import.
P6. Inter-relation of strength and weakness to macro factors
Every companies micro and macro components are inter-related and inter-dependent to
each other changes in the external factors will effect the internal aspects of the establishment.
Political: The political changes due to Brexit creates the weakness and threat conditions for the
industry as continuous changes of laws and will make it hard to operate in several countries as
their government impose heavy taxes on cross boarders brands to help in the growth of their
local companies.
Economical: Financial factor is a strength and at the same time also a weakness for the
establishment because it is a superior brand which elites purchase for enhancing their status, and
as they target to the upper class of the market the downfall of the economy will decrease the
spending power of people belongs to middle class and even upper middle class wont invest in
buying super expensive products.

Social: This external factor is an opportunity and strength of the company as Burberry produce
their apparels in accordance with the demands of diverse cultural and tradition preferences of
people. They also keep a track of changing fashion demands and trends by maintain a close
connection with their audience through various social media apps.
Technological: Organisation has technologically advanced distribution channel , through which
they conduct online sales and their delivering process is very fast which people find most
attractive.
Environmental: They are responsible towards the ecosystem and also indulge in various CSR
activities. Their undergarments, socks etc. are manufactured from naturally processed cotton
which is decomposable.
Legal: Through the the juridical regulations they can eliminate the threat of duplicate production
of their apparels designs and patterns by patenting their brand.
CONCLUSION
The above report have conducted a differentiation between the public, private and
voluntary establishments and examined their legal structure, scope and size. Further the relation
between various functions of the organisation and their inter-relatedness with the objective of
the company was analysed. The constructive and unsupportive impact of external factors and the
evaluation of interior and exterior analysis was also conducted. Lastly it was analysed that how
the macro components effect and bring out changes in the micro environment of the industry.

REFERENCES
Books and journals
Cai, J., Li, S. and Cai, H., 2019. Empirical analysis of capital structure determinants in
infrastructure projects under public–private partnerships. Journal of Construction
Engineering and Management.145(5). p.04019032.
Čepel, M and et. al., 2018. Business environment quality index in the SME segment.Journal of
Competitiveness.
David, J., 2019. PESTEL analysis of the UK. Retrieved October. 30. p.2019.
Elavarasan, R.M and et. al., 2020. SWOT analysis: A framework for comprehensive evaluation
of drivers and barriers for renewable energy development in significant countries.
Energy Reports. 6. pp.1838-1864.
Eom, M.T., 2020. Importance of Project Manager’s Leadership in IT Project Scope: Empirical
Study.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Pan, W., Chen, L. and Zhan, W., 2019. PESTEL analysis of construction productivity
enhancement strategies: A case study of three economies. Journal of Management in
Engineering.35(1). p.05018013.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management.44. pp.194-203.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.
Williamson, A.K., Luke, B. and Furneaux, C., 2020. Ties That Bind: Public Foundations in
Dyadic Partnerships. VOLUNTAS: International Journal of Voluntary and Nonprofit
Organizations. pp.1-13.
Online
How to do a PESTEL analysis, 2016 [Online]. Available through:
<https://strategiccoffee.chriscfox.com/2012/10/how-to-do-pest-analysis.html>
SWOT Analysis–What is it and How to do it, 2017 [Online]. Available through:
<https://tallyfy.com/swot-analysis/>
1

2