Sustainable Business Models for Innovation

This assignment delves into the realm of sustainable business models and their role in driving innovation. It requires you to critically analyze various business models, focusing on their sustainability aspects. You will utilize the SWOT analysis framework to evaluate their strengths, weaknesses, opportunities, and threats within the context of environmental impact. The goal is to understand how businesses can create value while minimizing their ecological footprint.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT...........................................................................................................................1
TASK 2 .....................................................................................................................................1
P3 Relationship between different organisational functions.......................................................1
TASK 3............................................................................................................................................3
P4 Positive and negative impacts of macro environment upon business operations..................3
TASK 4............................................................................................................................................5
P5 Internal and external analysis of company to identify strengths and weaknesses.................5
P6 Strengths and weaknesses interrelate with external macro factors .......................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment can be defined as the sum total of all internal and external factors –
all employees, partners, institutions , government and other forces that significantly influences
the overall productivity, performance and growth of the enterprise. It is the place where all the
operations and activities related to a firm are conducted effectively and efficiently so as to attain
goals and objectives of a firm. It is of vital importance for a company to analyse and understand
its business environment to identify opportunities that can be grabbed and threats that can be
avoided so that the business can efficiently exploit its limited resources to produce maximum
output and to earn huge profits with minimum risks (Adeoye and Elegunde, 2012). Argos is a
retail company which was founded in 1972 and is situated in United Kingdom and Ireland. This
company trade through two main sources that is online media and physical stores. They have
products from different brands which include health and beauty products, skincare and nail
products etc. This report will give a brief about the nature, size and scope of the different
organisation that are operating in different types of business environment. Moreover the project
will also discuss the relationship of an organization with the objectives, highlighting both
negative and positive impacts micro-environment on its working.
TASK 1
Covered in PPT
TASK 2
P3 Relationship between different organisational functions
Argos is a unique multinational retail brand based in United Kingdom. Argos is a
registered owner of no of brands which deals in general merchandise and other household
products (Auzair, 2011). The business structure of the company compliments Argos in
maintaining its operational functions and to manage certain income and profit ratio. In addition
to it, the organizational structure followed by the company give prime focus on its customers to
provide them with a enjoyable shopping experience. Using this structure , the firm strives to
provide efficient services in each and every of its business division . Below mentioned are
organisational functions of Argos and their influence upon other organisational divisions:
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Marketing: Marketing serves as one of the most important function of a business
organization as it is performs varied functions that helps the firm to identify the needs and wants
of the customers and to manufacture and modify its products and services according to that so as
to provide customer satisfaction with maximum output. By performing various important
activities like advertising , sales promotion, positioning, targeting, segmentation etc. marketing
assists the company in building customer base and brand image of the product and services.
Moreover it also conducts various market surveys and research to ascertain the prevailing trends,
, taste, preference and competitors strategies etc. so as to forecast the expected demand and
supply from customers and buyers. Argos marketing strategy is associated with the low price
and more choice motto (Boons and Lüdeke-Freund, 2013). Argos marketing objectives
comprises to reach out its customers as far as possible. The promotional strategy of the firm
includes intensive use of advertisements through distributing brochures, organising innovative
and creative ad campaign and developing various promotional activities to capture the attention
of its customers. Argos also make use of discounted offers to attract large customers to sell large
volumes of products.
Human resources: The Human Resource management helps the organization to achieve
its objectives timely and efficiently with maximum returns by managing various functions of
HRM. By ensuring right person, at right job, at right time it enhances the performance and
productivity level of the firm. The recruitment and selection process followed by Argos implies
identifying the talent, selecting the talent and then motivating them to work with best of their
abilities Argos identifies the employees in store and conduct interviews accordingly. It make use
of both internal as well as external sources for recruiting employee. For instance in case there is
requirement of workforce in other functional unit, Argos appoint the employee which possess
desired skills and capabilities in that post (CGA, 2010). To maintain the competitive edge over it
competitors and to motivate and enhance the skills and knowledge of the most valuable
resources- its employees Argos conduct various training an d development program so as to
make it employees confident and proficient enough to take bigger challenges.
Finance: Finance forms the most important and crucial functions of an organization as
decisions related to allocation of limitedly available funds to each departments is taken by the
finance department. The activities of finance department are kept confidential and it involve
appointment of various experts so as to carried out the performance evaluation process. In
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Argos,it is the responsibility of the accounting manager to handle all financial decisions related
to taxation, operational cost, billing return on investments, etc. The functions and process
carried out by the finance department are critical for the success of the company.
Operation: Argos operational department works efficiently towards catering the needs
and demand of its customers. Operation merges the outcomes of all the other functional units
including marketing,finance and human resource. The information provided by these units
serves as a important source to formulate policies and procedures that enables the organization to
be competitive in the business market and fulfil the needs and aspiration of its customers.
Information technology: With advancement in technology, there comes new functional
unit in organisation which is information technology (Chow and et. al, 2012). Use of IT has not
only minimized manual work but also helped by providing reliable information that result in
effective decision-making. Argos uses RFID in all of their tags used on products to provide their
customers with fast and error-free service. Also, company has started accepting plastic money
which in turn resulted in hassle free purchasing. Use of IT in Argos, has provided company with
managing abilities to handle large segment of customers in reasonable time period. By
introducing online stores again use of IT is proven as a boon for company. It has not only
increased customer base but has also increased target market area.
Above mentioned functions shows how they are relatable to various other functional units
in company. It has been observed that using these functions company reaches to its corporate
objective by using strategic action plan. While processing, each functional unit again create their
own functional strategic action plan which is completed in desired time frame. These actions are
governed by head of every department and they evaluate them as per guidelines. This approach
helps company to achieve their business objective by integrating every functional unit for one
purpose (Ghazinoory, Abdi and Azadegan-Mehr, 2011).
TASK 3
P4 Positive and negative impacts of macro environment upon business operations.
There are different factors which help in impacting the environment. It includes the
PESTEL analysis of the company which can influence the firm. Hence PESTEL analysis of
Argos company are:
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Political factors: These are the rule and regulations which are created by the government.
So it can impact positive or in a negative manner to firm in producing their goods and services.
Positive impact: As UK participates in various free trade agreements with nations like
China, Costa Rica , Africa etc. that provides various opportunities to Argos to diversify its
business in these emerging economies without much of legal restrictions.
Negative impact: Due to Brexit the sourcing cost of non food products for Argos
increased by 10% leading to sharp decline in sales. (Gond and et. al, 2012).
Economic factor: There are various factors such growth rate and inflation which can
affect the sales and production of the Argos.
Positive impact: UK economy is counted in one of the most stable economy that provides
a smooth flow of household articles and consumerable goods. This assist Argos to conduct its
retail business. Also, as firm offers products and services at reasonable price levels even in times
of inflation company is not much affected by economic crisis as demands of daily use products
remain almost same.
Negative impact: As in comparison to its other competitors Argos is not much diversified
its business internationally, thus it still highly depends upon UK markets and impacted by market
fluctuations. Also, in 2011, when company has to face decline in its sales by 3.5% due to
prevailing unemployment and shrinking of economy.
Social factors: They are the activities which firm has to do for the society. Thus it can
increase the reputation and image of the firm. Positive and negative impact are -
Positive impact: Company has created products according to requirements of a ll the
customers. They can evaluate demand of users through online applications. Hence they can
increase sales and can increase the profits.
Negative impact: It has created such chain of items that are not according to latest trends
and changes. So hence it reduces the sales and profits of firm (Helms and Nixon, 2010).
Technological factors: It includes latest technology that is prevailing in the market and
the way it is adopted by Argos and impacts its business.
Positive impact: Argos is intensively using latest techniques such as use of RFID in all
its products tags that results in fast product scanning and reduction of waiting time of its
consumers. Also, firm has adopted digitisation in its payment system such as plastic money, use
of online sales promotions etc. that has significantly increased its market share.
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Negative impact: As compared to its leading contenders like Walmart, Tesco etc. Argos
is still far behind in using the latest advance technique like robots in their grocery warehouse and
stores to assist its customers as well as for back office inventory management.
-Legal factor: They are the rules and laws which is to be followed by the company. They are
executed by the firm (Hilton and Platt, 2013).
Positive impact: If Argos implements all rules and laws of govt then company can create
good products. It can maintain good and positive image in front of all users.
Negative impact: Sometimes when the company follows rules of govt then it leas to
mismanagement and disrespect to company management rules and policies. Hence it has a
negative impact on the firm.
Environmental effect: It incudes the factors of environment . It can give positives well as
the negative impact.
Positive impact: Red tap-ism can be decreased by following all the rules of environment.
So hence work can be performed in efficient manner (Iskanius, Page and Anbuudayasankar,
2010).
Negative impact: If the company cannot change the plans and policies according to changing
environment then it cannot survive in the market.
TASK 4
P5 Internal and external analysis of company to identify strengths and weaknesses.
It is of critical importance for a business to analyse and evaluate the internal and external factors
while formulating policies and procedures for the business as they significantly impact the
growth and productivity of a firm and its operations. SWOT analysis helps the company in
determining its strengths and weakness and act accordingly so as to take advantage of the
strength and to eradicate all weaknesses.
Internal analysis is related to exploring the firm's internal competencies such as cost , its
capabilities, employees relations, its strength and weakness availability of resources etc. that cam
be controlled and managed by the firm (Klapper, Lewin and Delgado, 2011). They are important
for the firm as it is efficient management of these factors that ensures that whether company is
working in desired manner or not, whether it is able to accomplish company's mission and
vision.
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External analysis identifies the threats and opportunities of the company that are likely to
impact its decisions related to marketing strategies,market position,sales, brand image etc.
Proper analysis of both factors can be represented by SWOT method. This analysis of Argos
company includes:
STRENGTHS WEAKNESS
 It is the largest retail supermarket chain
in UK
 It has over 800 stores in different
countries catering 130 million
customers.
 Its owns some of the most famous
famous brands such as Elizabeth Duke,
Bush, Chad Valley etc.
 Strong Brand image.
 It has huge working force of around
51,000 employees..
 Business is cost effective.
 Have efficient cost control measures.
 Argos still has limited market share.
 Having limited share results in facing
problem to operate in competitive
market segment.
 It is less globally recognized brand as
compared to other retail chains..
 It faces issues like employees
employee turnover due to unsatisfied
wages.
OPPORTUNITIES THREAT
 Argos require to make global presence
by expanding its business chain in
other fast growing economies.
 With the introduction of online stores
there is high percentage of sale which if
proper utilized will result in higher
productivity level.
 Expansion of other international brands
like TESCO being the major
competitors makes the competition
tough for Argos to earn higher profits.
 Argos has to face price wars with other
retailers.
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With the help of above SWOT Analysis, Argos has a advantage to formulate and alter its
policies and procedures to strengthen their areas of lacking and work towards expanding their
business in the areas where there is opportunity of getting good responses (Macintosh and
Quattrone, 2010). There is a need for company to take effective decisions to balance all the
probable market threats coming to them and to grab and utilizes various opportunities that can be
helpful in increasing it market share.
P6 Strengths and weaknesses interrelate with external macro factors
Relationship of various factors of macro and micro environment need to link up by the
management of a company so that better and supportive working lead to get done. There are
various strength and weakness with opportunities and threats reflect to a business in order to
manage things properly. Although, such factors need to link up with the macro factors or
elements like political, legal, technological etc. this enables and facilitate to work in a define
frame which further assist an organisation maintain and manage such factors which further
contribute in defining their strategies properly (Pondeville, Swaen and De Rongé, 2013). Argo is
one of famous retail section company of the UK whom have diverse number of operations and
have good quality products as well. They required to align their work of macro environment with
micro environment so that better and supportive working relationship required to get done and
manage. The interrelationship of macro factors with micro environment sections define as
follow: Political: Political factor like government trade policies, export import laws, etc. forms
an important factor in deciding growth and sustainability of a business. As UK
government is having free trade agreements with some of the emerging fast growing
economies like China, Africa etc. this comes to be a positive opportunity for Argos to
expand its business operations in these nations and to generate high profits through
capturing large market share across world. Economical: As UK forms one of the most stable economies of the world It provides
Argos with opportunities of business diversification and to capture new untapped markets
globally. However due to limited market share in comparison to its leading competitors
that forms its one of the weaknesses Argos is totally dependent upon the UK economy.
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Due to this during 2011, at the time of inflation going in nation firm has to face 3.5%
decline in its sales volume due to crunching of economy from high unemployment. Technological:. By adopting latest technology in its business operations such as RFID
and other digital technology for updating its payment systems, making use of online
promotion tools like website, social media sites etc. Argos is getting positive response of
its customers that is reflected in its growing market share that is counts in one of its
strength.
 Social: Argo have to determine the social factors properly which reflect that they have
good command over on market which is a result of their active and appropriate
contribution in its development and growth (Pulver, 2012). This social aspect will enable
management to provide strength and reflect better working.
CONCLUSION
The above assignment concludes that for effective operation of a business, it is necessary
to have talented and skilled staff. Employees and other staff should be proficient enough while
handling their tasks. Managers can take different ideas and opinions form their employees and
implement best ideas in their strategies to achieve their target goals and objectives. With
completion if target vision, company can achieve their desired success and establish their name
in market. Leader and superiors should ensure proper discipline among organisation and should
ensure that standards of company are being met in every activity they perform. Every department
are inter related to each other and managers should encourage team work to achieve targets in
effective manner. With collaboration of hard work, company can achieve success and can satisfy
needs of customer as well as of employees.
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REFERENCES
Books and Journals
Adeoye, A.O. and Elegunde, A.F., 2012. Impacts of external business environment on
organisational performance in the food and beverage industry in Nigeria. British Journal
of Arts and Social Sciences. 6(2). pp. 194-201.
Auzair, S., 2011. The effect of business strategy and external environment on management
control systems: a study of Malaysian hotels. International Journal of Business and
Social Science. 2(13).
Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-
the-art and steps towards a research agenda. Journal of Cleaner Production. 45. pp. 9-
19.
CGA, H.C.B., 2010. External environmental analysis for small and medium enterprises (SMEs).
Journal of Business & Economics Research. 8(10). p. 19.
Chow, A.T and et al, 2012. Computer readable medium with embedded instructions for
providing communication services between a broadband network and an enterprise
wireless communication platform within a residential or business environment. U.S.
Patent 8, 155,155.
Ghazinoory, S., Abdi, M. and Azadegan-Mehr, M., 2011. SWOT methodology: a state-of-the-art
review for the past, a framework for the future. Journal of business economics and
management. 12(1). pp. 24-48.
Gond, J.P and et al, 2012. Configuring management control systems: Theorizing the integration
of strategy and sustainability. Management Accounting Research. 23(3). pp. 205-223.
Helms, M.M. and Nixon, J., 2010. Exploring SWOT analysis–where are we now? A review of
academic research from the last decade. Journal of strategy and management. 3(3). pp.
215-251.
Hilton, R.W. and Platt, D.E., 2013. Managerial accounting: creating value in a dynamic business
environment. McGraw-Hill Education.
Iskanius, P., Page, T. and Anbuudayasankar, S.P., 2010. The traditional industry sector in the
changing business environment–a case study of the Finnish steel product industry.
International Journal of Electronic Customer Relationship Management. 4(4). pp. 395-
414.
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Klapper, L., Lewin, A. and Delgado, J.M.Q., 2011. The impact of the business environment on
the business creation process. In Entrepreneurship and Economic Development (pp.
108-123). Palgrave Macmillan, London.
Macintosh, N.B. and Quattrone, P., 2010. Management accounting and control systems: An
organizational and sociological approach. John Wiley & Sons.
Pondeville, S., Swaen, V. and De Rongé, Y., 2013. Environmental management control systems:
The role of contextual and strategic factors. Management accounting research. 24(4).
pp. 317-332.
Pulver, S., 2012. Business and the Environment.
Teece, D.J., 2010. Business models, business strategy and innovation. Long range planning.
43(2-3). pp. 172-194.
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