Business Environment Analysis and SWOT/PESTLE Analysis

The provided document is an analysis of the business environment, which involves identifying factors that impact company policies, procedures, and strategies. The assignment references various books and journals, including 'A Critical Review of the Interplay Between Policy Instruments and Business Models' by Al-Saleh and Mahroum, as well as other sources. It also mentions SWOT analysis, PESTLE analysis, and organisational chart illustrations. This document is suitable for students looking for past papers and solved assignments on business environment analysis.

Business
Environment
Analysis

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 An Explanation of Different Types and Purposes of Three Types of Organisation.........3
P2 Information About Different Organisations......................................................................5
TASK 2............................................................................................................................................8
P3 Relationship Between Different Organisational Functions...............................................8
TASK 3............................................................................................................................................9
P4 Impacts of Macro Environment on Business Operations of John Lewis..........................9
TASK 4..........................................................................................................................................12
P5 SWOT Analysis of John Lewis.......................................................................................12
P6 Strengths and weaknesses interrelate with external macro factors for the chosen
organisation..........................................................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business Environment can be defined as the influence that is created by the internal and
external factors on the working of a company (What Is Business Environment? - Definition &
Factors, 2019). The assignment is based upon three different types of organisation which are
Private, Public, and Non-Profit Organisation. In the private organisation, John Lewis Partnership
is taken, in public sector organisation, Cabinet Office is taken, and in the NPOs, Regenda
Limited is taken (Al-Saleh and Mahroum, 2015). The main focus of this assignment will be on
John Lewis Partnership which is headquartered in London and deals in clothing, watches,
cosmetics, furnitures, beds, etc. Further it will also provide knowledge about the different
departmental functions within the organisation. It will further discuss the impact of external
environment on its workings and the strengths and weakness and opportunities and threats which
the company have.
TASK 1
P1 An Explanation of Different Types and Purposes of Three Types of Organisation
Private Organisations:
Private firms are the organisations which are run by single or some individuals with the
motive of earning profit. The main purpose of these organisations is to earn profit by providing
services to their customers. In the following assignment, John Lewis is a private organisation
which deals in clothing, watches, jewellery etc. Further the Legal Structure of these
organisations are classified as under:
Sole Proprietorship: In this type of private organisation, the business is run by only a
single individual and is solely responsible for all the profit and losses earned by the company.
Partnership: It can be defined as the organisation in which there are two or more
individuals join together to do some lawful business with the motive of earning profit. In this
type of organisation, the minimum number of partners is 2 and the maximum limit is 25.
Company: It can be defined an artificial legal person, having a separate legal entity than
its partners which is run with the motive of earning profit. It differentiates between the liability
of the partners and the company. The minimum number of partners in company is 2 and a
maximum of 200 partners can join the company.
Public Organisations:

These are the organisations which are owned and controlled by the government whether
state, local or central and the 51% shares of the company are in the hands of government to say
an organisation as a public organisation (Bar-Isaac and Shapiro, 2013). The main purpose of
these organisations is to provide services to the citizens of the country. In this assignment, the
public sector organisation is the Cabinet Office which creates conditions for making the
businesses carried over in UK as successful one. The types of Public Organisation are discussed
as under:
Central Government: This is the apex body that formulates policies for state and local
governments of a country.
State Government: State Government helps the central government in implementing the
policies laid down by Central Government.
Local Government: The local government of a country deals with the day to day activities
of the local firms of the country.
Voluntary Organisations:
These are the organisations which are working for social service. These type of
organisations have paid as well as volunteer staff also. The main purpose of these organisations
is to serve the society and making public benefit through their services. In the following
assignment, the Non profit organisation taken is the Regenda Limited which renovates the places
for further use such as for sale, for rent which then is used for providing services to society
(Campling, 2012). These are also further classifies which are discussed as under:
Charitable Trust: A NPO which is established in order to promote health, education and
safety, relief of poverty, or any other purpose in the light of society can be treated as charitable
trust.
Unincorporated Associations: It is another form of voluntary organisations which is
made by a group of persons in order to fulfil a common purpose for the benefit of the society as a
whole.
Growth of International Business Environment:
Internation Business Environment includes the involvement of political risks, cultural
risks, exchange risks, legal and taxation risks for a company when it is operating in may
countries. All these type of organisations such as private, public and non voluntary, makes their
contribution in the international business environment. Like Private Sector Organisations work

with the motive of earning profit and expands their business to spread it across the international
boundaries and develop the economy. On the other hand, public and NPO both work in order to
provide services to the citizens of the country so they are also making their contribution on
global level.
P2 Information About Different Organisations
Different types of organisations have their different sizes, visions, objectives as the
purpose of their establishment is not same. So under explained is the information about the
organisations taken in this assignment (Cassell and Blake, 2012). The information is related to
their Vision, Mission, Business Objectives, etc. are explained under:
BASIS PRIVATE PUBLIC VOLUNTARY
Explanation These are the
organisations which are
owned and controlled
by private individuals.
These businesses are
owned and controlled
by government of a
country.
These are those
organisations which
are run for serving the
society not for earning
profit.
Name of Organisation John Lewis Partnership Cabinet Office Regenda Limited
Background Was founded in 1929,
in London and is
dealing in clothing,
cosmetics, furnitures,
etc.
Was founded in 1916,
in London and defines
and delivers the
Government's
objectives.
Was founded in 2001,
in Bolton, and rebuilds
places for sale, private
rent.
Products & services It deals in clothings of
men women, furnitures
for houses, jewellery
items, etc.
It drives connection,
quality, and policy and
works to different
Departments.
It provides services to
people by providing
them renovated homes
for sale, rent, etc.
Size Currently employing
83,000 employees, and
having a revenue of
£10.2 billion annually.
Currently employing
1668 employees and
having a current
turnover of £ 2.1
Currently employing
around 700 people,
and a turnover of £ 65
Million annually.

billion (Chadee and
Roxas, 2013).
Vision John Lewis's vision is
to become number one
company by its work
performance.
Driving efficiencies
and reforms that will
make government to
run better.
Provide opportunities
for people to advance
their social and
economic well-being.
Mission To make our members,
happy through their
worthwhile, satisfying
employment in a
successful business.
To support the Prime
Minister and Cabinet
in implementing rules
and policies for
developing the
country.
Is to convert places to
make opportunities for
people.
Objectives Realise potential
markets, increase
advantage of partners
and growing
efficiently.
It objective is to
strengthen the civil
service.
To make employees
feel proud in working
with us, to create
positive media
coverage.
Legal Structure The company has to be
registered under the
Companies Act, 1956.
It also has to fulfil
several requirements
and then sent to the
registrar which then
issue a Certificate of
Incorporation to them
for giving them a legal
presence.
Public Sector
Organisations are the
nationalised industries
work for providing
some services to the
general public.
Cabinet Office is
the department of
Government of UK
responsible for
supporting Cabinet
and Prime Minister of
United Kingdom.
As these organisations
work for social welfare
so they do not follow
any legal structure but
have to act in an
ethical and goo manner
which led to overall
improvement of the
society. These
organisations are also
exempted from
payment of tax under
IRC 501 (c)(3)

Classification.
Scope Company deal in
different kind of
products including
watches, clothes,
financial services and
many more.
Organisation can
expand its business
activities in different
areas in order to
improve its global
presence.
The scope of this
department is to make
good policies related
to the trade practises.
In order to restrict the
investors fraud and
illegal practices for the
development of the
country.
The scope of this
organisation is to make
orphan houses and old
age homes for the
needful.
Stakeholders The key stakeholders
of John Lewis are
customers, suppliers,
managers, employees,
shareholders.
The key stakeholders
of this organisation are
various government
agencies and bodies.
Major stakeholders of
Regenda limited are all
the parties who support
it to carry out
execution of its
services.

TASK 2
P3 Relationship Between Different Organisational Functions
(Source: Organisational Chart, 2018)
Like all other companies, John Lewis also have several organisational Functions that it
have to perform for the smooth and successful running of the business. All the Functions in an
organisation are interlinked with each other in some or the other ways (Dima, Grabara and
Modrak, 2014). The interrelation of all these Functions and their dependence and how they help
in the achievement in the goals and objectives of the company are discussed as under:
Human Resource Function: This Function can be defined as the Function which is aligned with
the task of acquisition of employees for the company. It is interlinked with all the other
Departments of the company as for the successful accomplishment of all the tasks of the
company there comes a requirement of employees who will complete the tasks in Departments
such as finance, production, marketing, etc. All these Functions of John Lewis Company are
Illustration 1: Organisational Chart, 2018

linked with Human Resource Function as this Function will provide the skilled and efficient
employees who will make from their work possible to achieve the goals and objectives of the
company. The company is dealing at a very high level so it is using Network Organisational
Structure which is mostly used in the cases of big firms only.
Finance Function: The following Function is concerned with the controlling and planning of
financial in an organisation. In John Lewis, the finance function involves the acquiring and
proper utilisation of funds which his necessary for successfully operating with various operations
of the company. This function is also interlinked with all other functions of the company as this
is the only one function which will provide finance to other department such to the marketing
department it will provide funds for making advertisement, and to production department it will
provide funds for purchasing the raw materials (Hintermeister and O'keefe, 2012). So with the
proper management of finance the goals and objectives of the company can be easily achieved.
Marketing Function: This function can be defined as the function which is related to the
identification of the potential market where the products of the company can be sold. It will be
made with help of advertisement, promotion,etc. This function is also linked with the other
function of the organisation as this function will provide information about the demand of the
product in the market. It will guide the production function about the extent to which it has to
carry out the production. (Hoffman and Georg, 2012). Along with this, this company is also
emphasizing on the participative decision making where the ideas from the employees are also
appreciated.
The company is following the Hierarchical Structure in its operations. This interrelation
between different departments also impacts upon the working of an organisation as it will help
in motivating the employees and their coordination will also increase the efficiency of both the
company as well as the employees. This impact will be positive of the interrelation of
departments on the structure of the company.
TASK 3
P4 Impacts of Macro Environment on Business Operations of John Lewis
For understanding the impact of macro environment on the working of an organisation,
PESTLE Analysis is used. This Analysis is a framework or tool which is used by the companies

in order to find out the positive and negative impacts of the external environment on the working
of a company (Liu, 2013). So for understanding the impact of external environment on John
Lewis, this framework is applied to this company and the discussion is now followed as under:
Source: PESTLE Analysis, 2018
Political Factors:
These are the factors which determines the extent to which the government can influence
the working of a company. These factors includes the tax policies, fiscal policies, etc. in a
country. Positive Impact: The government of UK is also deciding to decrease the corporation tax
from 30 % to 28 % which will help John Lewis in covering and increasing their profit
margins again.
 Negative Impact: The continuous change in policies and the exit of Brexit has weakened
the pound and reduced the profit margins of John Lewis.
Economic Factors:
These factors determiners of the performance of an economy which directly impacts upon
the working of a company. In case of John Lewis, the impact can be described as under:
Illustration 1: PESTLE Analysis, 2018

 Positive Impact: The positive impact can be if the bank allows better and flexible credit
policies to their customers than it can become an advantage to the company as their sales
will be increased which will directly lead to increase in the profit of John Lewis.
 Negative Impact: Due to the regular change in the policies of import and export and the
uncertainty, the company is not able to make strong business plans which is affecting the
future progress of John Lewis.
Social Factors:
These are those factors examines the social environment of the market such as the current
market trends, demographics, market analysis. The impact of this factor is also shown under: Positive Impact: In this time, the customers preference is to get everything in their hand
so John Lewis can also provide home service to their customers (MacGregor, Doyle and
McEachern, 2015). This will attract them as their time will be saved and will result in the
increase in the sale and profit of the company.
 Negative Impact: The continuous change in the fashion and preference of the customers
leads to decline in the sales of John Lewis as due to availability of several new brands in
the market.
Technological Factors:
These are those factors which refers to the innovation in the technology that affect the
working of an organisation in a positive or negative way. In case of John Lewis the impact will
be clear from the below information: Positive Impact: John Lewis can provide online services to their customers as online
website allows more revenue generation for companies than a general store.
 Negative Impact: Rapid changes in the technology also leads to demotivation for
employees as the human behaviour do not accept the changes easily so this can create a
loss of personnel for John Lewis.
Legal Factors:
These factors can be defined as the laws which the affects the working of an organisation.
The rules and regulations are different from country to country. Positive Impact: John Lewis is following all the rules and regulations which it has to
follow so it is easy for the company to expand its business at global level (Onetti and et.
al., 2012).

 Negative Impact: Regulations such as environment laws has also laid down some rules
which John Lewis must have to follow on which will make an increase in the cost of
production of the company.
Environmental Factors:
These are those factors which are determined by the influence of company on the area
which it is surrounding. The impacts are as under: Positive Impact: Adoption of environmental friendly practises will help the company in
creating a good image which will also help in improving the profits of the company.
 Negative Impact: The use of renewable source of resources will increase the cost of
production of the company so it will also create a negative impact on the working of the
company.
TASK 4
P5 SWOT Analysis of John Lewis
For analysing the strength and weakness of John Lewis, SWOT Analysis is done. This
analysis is used for the identification of company's internal and external environment by
identifying their strengths, weaknesses, opportunities and threats which are discussed as under:

(Source: SWOT Analysis, 2019)
STRENGTH WEAKNESS
 The strong online presence of John
Lewis is its greatest strength.
 The brand image of this company is
also very high which works as a
strength for the company.
 In the weakness of John Lewis, it is
found that the company is not operates
at global scale which restricts it from
enjoying economies of scale.
Opportunities and Threats to John Lewis:
OPPORTUNITIES THREATS
 The growing demand of online
products is also an opportunity by
which the company can extend its
market over the boundaries of the
countries.
 The continuous changes in the rules
and regulation, polices leads to the
instability in the policies of the
company which is a weak point for the
it.
Illustration 2: SWOT Analysis, 2019

 The company also have the scope to
enter in the new markets as the image
of John Lewis is well established.
 As the company does not have global
presence, so it have to face severe
competition from the globally present
companies and from the local
companies of that country or area.
P6 Strengths and weaknesses interrelate with external macro factors for the chosen organisation
Business environment is a combination of internal and external factors. The external
factors are uncontrollable and each factor poses strength and weaknesses. External environment
of business is very broad consisting all the elements which are existing outside the business
organisation. Every macro factor is related with strength and weakness which is very crucial to
consider for accomplishing goals of John Lewis and they are discussed below :
Political Factors : These factors are concerned with the governmental polices. It includes stability
of the country, rules and regulations, taxation, etc (Oriesek and Schwarz, 2016). When the
government will have stable policies and lower taxation rate then it will be treated as strength for
John Lewis as it will give them chance to expand their business but at the same time if the
government does not stable polices which kept on fluctuating and taxation rate is also high then
it will be treated as weakness. In such conditions, business will suffer and decisions will
fluctuate in the organisation.
Economic Factors : These factors are concerned with the economic system, policies, inflation,
deflation, interest rates, etc. When the interest rates of the banks will be low then it will treated
as strength for the John Lewis which will give them the chance to invest more. But during the
period of inflation when prices goes up and interest rate also increases then it will treated as
weakness for the company which will decrease the sales and profitability.
Social Factors : They are concerned with demographic changes and influencing factors related to
age, gender, religion, preferences, buying behaviour, etc. When there is no discrimination in the
society and work place then it will be treated as strength for the company. People will be able to
work with full motivation for accomplishing organisational goals. But when there is a
discrimination on the basis of age, race, colour, etc. then people will feel uncomfortable and they
may not be able to work properly and it will be treated as weakness.
Technological Factors : It is the most important element in current business world. From
customers to production units, every thing is technology oriented. It consist factors like adopting

updated technologies in working, mobile applications, etc. When people will be trained about
how to use the technology like purchasing clothes online with mobile application, returning the
same online, etc. then this will increase sales and give people ease to save time which will be
treated as strength (Wheelen and et. al., 2017). But if organisation lacks the use technical devices
then customer may feel frustrated and opt for the products of competitors which will
tremendously decrease the sales and treated as weakness for John Lewis.
These factors also influences the decision making process of the managers. For example,
the unstable policies of the government will also lead to the unstable policies of the company
which reduces the efficiency of the company also.
CONCLUSION
From the above report it has been concluded that business world is dynamic in nature and
needs to be managed effectively and efficiently. It explain the different types of organisations
that exist in business world that is public, private and voluntary. This defines the roles, purposes
and objectives of these organisations. Further it is also concluded that effective interrelation
among different departments leads to the good working of the company. PESTLE is a tools
which can be use by organisation for carry out analysis of external environment, with this
company can identify all the factors exist in business environment which have a great impact on
policies, procedures and strategies of company.