SMEs and Business Simulation

This assignment delves into the use of business simulations within a virtual environment to aid in the development of knowledge applications specifically for Small and Medium-Sized Enterprises (SMEs). It analyzes various aspects of this approach, including the potential benefits for SMEs, challenges they may face, and relevant research on the topic. The focus is on understanding how simulation-based learning can contribute to the growth and success of SMEs in today's dynamic business landscape.

UNIT 1
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION ..........................................................................................................................1
Task 1 ..............................................................................................................................................1
P.1 Types , size and scope of the organisation. .....................................................................1
P.2 Scope of the organisation. ...............................................................................................2
P.3 Function of the organisation. ...........................................................................................3
Task 2...............................................................................................................................................6
P.4 In organisation positive and negative impact on business environment .........................6
P.5 Analysis the overall strengthen and weakness of the organisation. ................................8
P.6 Analysis of interrelationship among the internal and external factors ..........................10
Conclusion.....................................................................................................................................10
References......................................................................................................................................12
Books and journals...............................................................................................................12

INTRODUCTION
In corporate sector one of the most important part is business environment. Business
environment will affect the overall business in a particular market. In business environment
affect internal as well as external factor in the organisation. H&M group will be focus on
business environment to improve the performance inside as well as outside the organisation.
Business environment will affect different types in the organisation. H&M group will be focus
on all such kind of factor to improve the performance in market. H&M group is one of the
largest group in fashion retail in Europe. They believe in high quality affordable price in the
market so customer will buy easy. H&M group will be focus on the environment to improve the
performance in the organisation structures. This group will focus on the strength and improve the
weakness in the organisation. H&M group will be focus on the total market structure as well as
organisation structures.
Task 1
P.1 Types , size and scope of the organisation.
In each and every organisation have different types. In organisation types will affect the
organisation structure inside organisation. In each organisation types will be helpful in the
organisation to improve the performance internal as well as external organisation(Taipale-
Erävala and et.al 2014). Type in the organisation will improve growth inside the organisation.
Different types will help to arrange all the work in side the organisation to help in earn profit in
the organisation. Different types of organisation are as follows:-
 Line organisation :- In line organisation is very important to each and every organisation.
In line organisation work will be divided according to the line in the organisation. Line
organisation is simple and use fixed responsibility to all the workers in the organisation.
H&M group will be focus on it to improve internal structure. In line organisation
flexibility on the working condition in the organisation. Flexibility is important in each
and every step in the organisation(Alqahtani and et.al 2013). In line organisation
authority and responsibility proper in each department.
 Functional organisation :- In functional organisation is very important to improve the
performance in the organisation. In functional organisation distribution of work in
different function. In organisation finance, marketing, human resources. All the work is
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distributed in different department. It is very important to work can be divided in
different function it is easy to do work on time and achieve growth. Different function is
helpful because each department will do their own work in the organisation(Budhwar,
P.S. And et.al 2013). Different function is help to remove miss communication in the
organisation. Each function do their own work in the organisation to help them to achieve
profit in the organisation. H&M group will be focus on this type of organisation. Each
function their own roles and responsibility and authorities in the organisation.
 Line and staff organisation :- In each organisation there will be focus on the line
members but in this function one special officer is appointed to guide others line
members in the organisation about there work in the organisation. This person is
appointed by top level or CEO of the organisation(Solomon, M.R., 2014. ). Line and
staff organisation is very important to guide new employees in the organisation or
function structure. H&M group will use this function in the organisation to improve the
internal function in the organisation or to guide other subordinate in the organisation.
 Committee organisation :- In committee organisation to be parer a small group in the
organisation for specific project in the organisation(Klapper, L and et.al 2015). This
group is not a permanently group in the organisation. This group is only for the same
special porous in the organisation. All the group members will be change time by time in
the organisation, according to the tasks and other group activity in the organisation.
P.2 Scope of the organisation.
This is all the types in the organisation. All the internal environment of the organisation is work
according to the work allotted team members in the organisation.
In each and every organisation scope is very important to solve any kind of problems in the
organisation. Scope of the organisation are as follows :-
 H&M group is one of the largest group in Europe in retail sector. It is private based
organisation in clothing filed(Saleem, M.A., 2017.). They are focus on the customer
satisfaction in the different market.
 In scope the employs will be focus on the project activity or can say new project in the
organisation. Other team head will be fuscous on the cost of the project.
 In such kind of project will be allow project manager to control all the project an there
cost in the organisation.
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This is all the such things will be inculcate in scope in the organisation. All such scope will be
most important part in the organisation.
In the same H&M group will be focus on the size of the organisation. Size is very important in
each and every organisation. Because some time size will be affected the overall environment in
the organisation(Dragoi, G and et.al 2013.). In business environment size will be positive or
some time negative impact in the organisation. If size of the organisation is good not too
long ,other member's of the organisation will easily contact to each other. All the internal
working environment will be depend on the size of the organisation. Size will affect the overall
working environment of the business. In size all the functional department will be inculcated in
the organisation(Ceptureanu, E.G., 2015). All such things will be affected the overall business
environment if size is too large.
P.3 Function of the organisation.
In each and every organisation function is very important part of the organisation. Function plays
very important role in the organisation to each and every activity of the organisation. Functions
of organisation are as follows :-
 Design and production :- In each and every organisation is focusses on the design
department. Because all the work is depended on how to design a work in the
organisation and production will be depend on the design department in the organisation.
If design good and work according to the design will achieve profit and growth in the
market(Ratten, V., 2014). In H&M group design is very important in this organisation.
This organisation is focus on the retail part in the organisation and work on the
fashionable items in the store. Internal design is very important to attractant the
customer and improve the profit margin in the organisation. In design department will be
focus on the each and every activity in the organisation related to design and production.
To maintain the growth rate in the market it is very important to focus on the design and
production activity(Faria, A.J. and Wellington, W.J., 2014). H&M group is focus on the
design to achieve growth in the market.
 Human resources' department :- In each organisation hr. department is very important to
solve any king of internal problems in the organisation. Hr. department will be focus on
each and every employs the organisation to maintain all activity like requirement .
Selection and training and placement in the organisation. Hr. department will be focus on
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training to new employees in the organisation. Training is very important in the
organisation to achieve success rate. Human resources' department will focus on the
development in the organisation to achieve profit in the organisation(Faria, A.J. and
Wellington, W.J., 2014). Human resources' department will be focus on all the internal
part in the organisation and work on it. hr. departure control each and every activity in the
organisation.
 Finance :- It is the most important department in the organisation. Finance help to
control all business activity. Finance will control all the activity in the organisation
related to the finance. Finance is backbone of each business. All the internal and external
work will be depend on the finance activity. Finance department will control cash flow
and fund flow statement in the organisation(Cavusgil, S.T and et.al 2014.). In finance
department there will be focus on how much part of money invested in which field.
Finance department will be focus on the investment part in the organisation. Investment
is very important to growth in the organisation. H&M group will be focus on the
investment part ,which is useful to the organisation. In finance filed inculcated all the
account revealed activity in the organisation.
 Sales and marketing department :- In each organisation marketing department will work
on the sale product in the organisation. In this department is use promotional activity in
the organisation. In marketing inculcated the all the marketing activity in the organisation
like sales , promotion , advertisement , publicity etc. all such things will be important to
each and every organisation(Corcoran, A. and Gillanders, R., 2015.). In each
organisation is focus on the marketing intermediaries it inculcated the agent, distributor,
wholesaler and retailer etc. Agent is very important to every new business because agent
will help to more and more marketing in different place. Distributor and wholesaler are
affect the marketing strategies. Organization increases the productive in particular filed .
To expand the market need to implant organization activity to improve the performance
in the organisation(Carroll, A. and Buchholtz, A., 2014. ). Organisation may be impact
the company performance in market condition. Modern market economic and enterprise
is most important in marketing organization.
 Research and development :- organisation use research department because to some
changes in the organisation. Research is very important part in the organisation. With the
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help of research changes will be allowed in the organisation. Research work is very
important to solve any problems in the organisation, with the help of research changes
will be done and changes is help to the development in the organisation. In each and
every business research work is very important to expand the business in any filed. With
the help of the research work any changes can be done in research report. All the changes
in any filed in side the organisation or to expand the market condition it is very important
to help research work or do research in market related to the product(Carroll, A. and
Buchholtz, A., 2014. ). Research work help to expand the market in the organisation and
help to achieve great result in the organisation in the future. Proper research is help to
increase the growth rate in the market. In each and every organisation is focus on the
research is help to the development of the organisation. It will analyses the position
overall position of firms products and services in a particular market and provide
various suggestions to provide new products and services is use full to the customer .
There is all the function of the organisation which is help full in all the sector in the organisation.
They all organisation function is helpful to achieve objective in the organisation. All such kind of
function is helpful to the each and every organisation in different field. Marketing a finance is
most important function of each and every organisation because all the function will be depend
on it. Marketing is helpful to promote new products in the market and H&M group will be focus
on this factor to promote products in market and achieve objective in the organisation. Finance is
helpful to each sector of the organisation to control all the finance activity in the organisation and
new investment is favour in the organisation. In all the department work are interrelated with
each other such as finance filed will be help to the new research department in the organisation
will help to the future plans. Requirements for the activities to be accomplished in the future.
Research department also provides a forecast in humane resources' department will help to
expand the business in a particular filed. Marketing will help to coordinate the overall activtiy in
the organisation. Finance department will cover all the activity related to cost , income ,
expenses etc. all such activity is control by finance department and achieve objective in the
organisation.
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Task 2
P.4 In organisation positive and negative impact on business environment
H&M GROUP is one of the biggest organisation in the fashion field in the retail sector. The
company work in the clothing and as per the demand of the customere they provide new prodcut
in the market. . Nowadays each and every corporation may heavy impact on macro on business
operation because in every organisation macro factor may affect the overall business
environment and all the business polices in the organisation. In business environment macro
factor inculcates lot many activities are as follows :-
 Political factor :- In each and every organisation is affected on the political factor. In
political factor that determine overall regulations and policies that are formulated by
political parties related to the each and every business which directly affect to the
working environment of company. That political party affect the overall business
environment of the organisation performance in and every activity or can say functions in
the organisation(Arasti, Z and et.al , 2014.). This political factor may inculcated different
market in many products. H&M group is focus on political factor to remove it in the
organisation. At strating stage of the business they have focus also faced various issues
while introducing the clothing stores in different countries as it depends upon the
prevailing political environment in nation. Further, there are various rules and rules that
are formulated by government and have to be followed by firms such as employee
remuneration policy in the business environment and other polices etc. this all kind of
services is regulated by the government and some political factor may affect the
organisation work and working culture(Gold, S.C., 2014.). Political factor also effect the
time when one company is sale their own product in different countries, this time
political factor may affect the organisation. Analysis of H&M group has provided an
understanding that they have adopted all polices and regulating their operations by
following all the procedures that developed by political parties in that polices.
 Economic factor :- This is also a factor that affect the business polices and economic
growth in the organisation. This economics factor may be affected at the time of change
in economics condition is impact on business performance in the organisation. It is very
Clarence defines that the growth of the business factor is depended on the economic
condition of the business. In economic factor affect the overall business environment.
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The research work will help to expand the market in a particular filed in the business. In
business research work will help to expand the marekt and economic growth in the
organisation. In economic condition in change in inflation rate will be change in
business conditions. This growth of the organisation will be depend on the in economy
has increased standard of living of people in Europe and other countries. and also raised
the income level of consumers. H&M group has also achieved a continuous growth in
sales as they have targeted premium customers to sell their products(Kolk, A., 2016.). All
sales part will be depend on the economic condition of the business. Economics condition
will mange all the sales of the business in different countries. Intervention of government
in the free market and services that are related to consumers. In economic condition
continuous changes in currency rate . In economic condition currency rate is very
important to all the organisation they deal in export and import market. In the same case
cost of labour is very important to each and every organisation. All such things will be
de-paned on the economic polices.
 Social factor :- Social factors help to incense customer traffic and full fill needs and want
of other people. In social factor that impact on the business and performance of business.
H&M group will focus on the customer and work according to the needs and wants of the
customer(Kolk, A., 2016.). in the business point of view there will be focus on the society
persepction and other work in the business environment. In present context, business of
H&M group also gets affected by continuous changes in preference of people in society.
In society all the consumer they change need and wants every week. Customer will focus
on something attractive in the market. Organisation is focus on the different need and
want of customer in the market. Customer will focus on income group also, then
purchases products. In customer point of view there will be focus on price of the product.
Social factors influence the market demand of people or cultural trend , population
analytics etc(Gilboy, G.J., 2016.). To increase the demand will be de-paned on society.
Demand is very important factor in the organisation.
 Technology factor :- In each economic condition is technology is very important part in
the organisation. All the economic condition will be depend on the economic condition to
improve the performance of the organisation. Technology factor is one of the most
important nowadays because to change in condition in market. Rapid expansions has
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provided various impact on the operations of business enterprises and provided
opportunity to expand the promotions of their products and services among the
customers. Customer will focus on the technology nowadays. Therefore, they have
applied new and effective channels that are provided by the technology for the promotion
and achieved a continuous growth in market. Other than this are also some technological
factors that provide great impact on business of H&M group. In use of the technology
will be affected with the help of different plan and new techniques will be introduce in
the market. In business market all the organisation is focus on the change and adopt new
technology in the market. There are some changes in the market will affect are as
follows:-
 Affect the total structure of the organisation.
 The all affect in the technology and other factor in the organisation.
 Rise in the rate of the business polices.
There are all such factors that affect the business operation. Technology will be affected all the
working environment in the organisation.
 Legal factor :- In legal factor all the rules and regulation by government in the
organisation. In each and every business there may be affected by legal factor in the
organisation. In legal factor inculcated the all lows related to the business and
organisation. The analysis of macro environmental factors has provided an understanding
that they will provide both positive as well negative impact on the business of H&M
group . In each business achievement is of the each objective legal factor will be consider
in the organisation. Legal factor will affect the organisation performance .
P.5 Analysis the overall strengthen and weakness of the organisation.
In each and every organisation to human resource department about the requirement of
employees for the accomplishment of task and duties. Finance also coordinate with the
marketing to identify the requirement for the promotions of new products and services that firm
will introduce in market.ion their own strength and weakness will be there to work in the
organization. In each organisation use the SWOT analyses to improve the working conditions in
the organisation(Carneiro, J. and et.al 2014). SWOT analyse is very important to each and every
organisation to identify all employs working condition.
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Strengths: These is to be considered as
capabilities of each and every organisation
that provides helps to expansion of business
and achievement of objectives. Some of main
capabilities of H&M are as follows:
 Strong brand reputation among the
business class people.
 Quality products and services at low
prices.
 In different countries 400 stores in
Europe.
 Excellent customers service in there
store.
 Wide range of products and services.
 High financial positions in
 Large in the no. of internal store to
control the overall area of business.
Weaknesses: These are some Loop holes that
has been analysed to understand their impact
on business of H&M such as:
 Lack of customer satisfaction in fashion
sector.
 Ineffective marketing policies.
 High prices of some products and
services is good in U.K. Market.
 Low quality products as compared to
substitutes.
 Less skilled employees.
 Decrease in market share.
Opportunities
 Continuous growth in each and every
market in the organisation in fashion
sector.
 Favourable political conditions have
provided great opportunity on firms for
the expansions of business in other
countries.
 Continuous rise in technology has
provided an opportunity expand the
promotion of business across countries.
Threats
 Large numbers of competitors such as
99 p stores , Zara etc.
 Continuous fluctuations in currency
exchange rates in the different countries
in the organisation.
 Change in customer demand in the
market.
 Affect of government policies and rules
will affect the organisation.
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This is all the SWOT analyse of the H&M group. This is help full in the organisation
performance and working condition. As per the internal analyses of the organisation is focus on
company performance.
P.6 Analysis of interrelationship among the internal and external factors
In each organisation sector two factors is most important internal and external. In H&M group is
focus on both the factor in the organisation. In organisation is very important to analyses all the
factor in the organisation(Eurich, M and et.al 2014.). In internal factor that inculcated all the
activity inside the organisation. In internal activity focus on the team work in the organisation
and size of the organisational structural of the company. In internal factor that inculcated all the
function in the organisation and focus on the function of the organisational to improve
performance in the organisation. Both the factor is very important to achieve profit in
organisation. H&M group focus on the different sector in the organisation to achieve profit in
market and growth rate in competitive sector. In external factor that inculcated political factor ,
legal factor , technology factor. This all factor is very important to the organisation. Political
factor is very important to solve any problems in the organisation related to government rules
and regulation. Technology factor is very important to change the technology in the organisation
will affect the market demand. Nowadays technology is very important to each organisation.
Work should be done with the help of technology or can say use the latest technology in the
organisation. Economic factor also consider that the continuous fluctuation in currency exchange
rates that has provided a great impact on companies business operations that will affect the
overall business. In internal and external both are important to the organisation. Both factors will
help top the organisation top earn profit in particular market. There for they have to apply
various strategies to remove the threat of increase in prices of goods and services(Eurich, M and
et.al 2014.).All internal as well as external factor is very important to analyses the business
position in different Market.
Conclusion
As per the above report H&M group will be focus on the team , skills , types of the organisation.
To achieve success in the market. In this report focus on the each size of the organisation and
scope of the organisation and work on them. This is all inculcated the internal performance of
the organisation. All such things is very important to improve the performance inside the
organisation. In this report is use internal as well as external factor in the organisation. In
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external factor inculcated all those factor that is not control by the organisation. In external factor
that inculcated the political , legal , technological , social factor are inculcated. All this factor are
to be affected the business environment in organisation. This factor will be positive or negative
impact in the organisation. In this report focus on the strength and weakness of the organisation.
Both are very important to H&M group to achieve profit in the organisation.
References
Books and journals
Taipale-Erävala and et.al 2014. Survival competence in Russian SMEs in a changing business
environment. Journal of East-West Business. 20(1). pp.25-43.
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Alqahtani and et.al 2013. Impact of Social Networks on Customer Relation Management (CRM)
in Prospectus of Business Environment. Journal of American Sciences. 9(7). pp.480-486.
Budhwar, P.S. And et.al 2013. Human resource management in developing countries.
Routledge.
Solomon, M.R., 2014. Consumer behavior: Buying, having, and being (Vol. 10). Upper Saddle
River, NJ: Prentice Hall.
Klapper, L and et.al 2015. New firm registration and the business cycle. International
Entrepreneurship and Management Journal.11(2). pp.287-306.
Saleem, M.A., 2017. The impact of socio-economic factors on small business
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Dragoi, G and et.al 2013. Knowledge applications development at the SMEs level in a virtual
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Ceptureanu, E.G., 2015. Research regarding change management tools on EU SMEs. Business
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Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and stakeholder
management. Nelson Education.
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Arasti, Z and et.al , 2014. Business failure factors in Iranian SMEs: Do successful and
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