Business Environment - PESTLE and SWOT Analysis

Business Environment

Contents

INTRODUCTION
It is a collection of internal and external factors which affects the operations of the
organization is termed as Business Environment. This clarifies from above definition that it
identifies the business performances, profits of business and opportunities which affects the
macro-environmental factors within which a company is functioned (Andersson, Forsgren and
Holm, 2015). Moreover, in a globalized economy, it plays an important role in an establishment
because it help them to understand internal or external environment, economic system and
policy, market condition and many more in order to gain competitive advantage in an innovative
manner. For this report, John Lewis is considered, which is one of the reputed and high end
departmental stores in UK and it is commenced in the year of 1864. In this study, it includes
several kinds of organization as well as overview about their size, scope, legal structure, purpose.
Moreover, an interconnection among different business purposes, implementation of PESTLE
and SWOT analysis to understand business environment and lastly pros and cons of macro
external factors.
TASK 1
P1
Organizations has various purpose and objectives which should be attained while
developing the business in market. However, few firms primarily operates their function to gain
maximum profit whereas some organizations mainly operates to meet requirements of their
customer. Therefore, motive of all company are not exactly same. There are various types of
companies active in the market which are private, public, voluntary, small scale, medium and
large companies. However, making various rules and norms is one of the principal decision in
the beginning of an organization as it outlines in the manner company is systematized and allows
them to analyze legal laws and can earn reputation within competing market. Therefore, the
various objectives and legal obligations of several organization is described below:
Private
This sector is operated and run by individuals and their main goal is to earn profit, grow
their business and increases market price, and increase sales. For e.g. franchises, partnership,
sole trader are some type of private sector. Along with this, they are they are not allowed to trade
their shares to general public. However, to understand the concept of private industry, John

Lewis is regarded for this. It is multinational branded company which is established in the year
of 1864 and serve across the globe.
Purpose
Their ultimate aim is to generate high level of satisfaction and happiness to all customers
by producing valuable and good quality of products or services in essence to acquire top position
among industry (Apăvăloaie, 2014).
Legal Structure
However, some of the legal structures of John Lewis are discussed below:
Sole Proprietorship:It is a small business which is runs by single person and it is owned
and managed by individual person who is accountable to manage the whole business function as
well as bear all risk and profit by its own.
Partnership:In this, it is operated by two or more people who equally distribute roles and
responsibilities with each other and also share profit or loss in equal manner for accomplishing
firm goal in an impressive or productive style.
Corporation:This is voluntarily arrangements in which two or more entities engage in a
mutually beneficial exchange instead of competing and aims to obtain maximization of profit
with an optimum utilization of resources.
Public
It is manages and runs by the government for people as well as they are
authorized to trade their shares to public as well as they have to list the same over stock
exchange trade. Along with this it is very much similar like private firm but they differ from each
other in terms of trading and selling shares on market. In order to acquire accurate and relevant
meaning about the term public, BBC has taken which is a leading British public service provider
in UK and internationally. However, it is regulated and monitored by Ofcom which issues an
operative framework and license for UK audience in an innovative and creative. The purpose of
BBC are mentioned below:

Purpose
Its core aim is to render impartial data and information to assist people and engage them in the
world as well as reinforce learning for all people. Along with this, it shows and serve various
communities of all UK nation and regions in order to enhance economy across United Kingdom.
Voluntary
It is refer to those organizations whose primary motive is to create social welfare rather than
profit. It is called the third sector, welfare society or not for profit sector. They achieve their
objectives through a broad range of activities, such as serving services or other forms of direct
support and proposal to group for attaining maximum level of growth and proficiency. In order
to gain detail understanding of this sector, World Vision is regarded which is the non-profit
organization which is highly devoted to develop living standard for establishment and search
ways to wipe out poverty or unfairness among people or societies. It is monitored by trust legal
structures. Some of the structures are described as:
Trust: It is overseen by trust deed which set outs the goal of trust, names of trustees and
delivers to government of trust. One of its benefit is that its creation provides steadiness in life of
organization even after the death of owner or trustee.
P2
An organization is a method of splitting effort into appropriate tasks or responsibility, of
alignment such duties in the firm of post of empowering authority to each spot and of assigning
skilled manpower to be liable that the task is carried out as designed in order to finish common
goal or aim. Along with this, every organization has its own purpose and legal structure which
enables it to operates or govern its business operation and function for fulfillment of high level of
profitability in an proper mode (Cairncross, 2014). There are various kinds of organization with
its purpose and legal structure which are discussed below:
Private: John Lewis

Vision: To bring gladness to all unit, through worthwhile, satisfying employees in efficacious
business, with success dignified on its capability to endure and boost place both as an
outstanding distributor and as a blossoming example of employee ownership.
Mission: To act in the integrity and deliver a best product with fair and affordable price in
order to attain increased level of proficiency and sales growth.
Business objectives:To obtain enhanced level of growth and profitability by maintaining
transparency, trust and relationship with internal and external driving power of business
environment.
Size: It encompasses of 38,100 workforce who are highly skilled and talented that benefit
firm by acquiring innovation as well as allow them to gain competitive advantage.
Scope: It comprises huge scope as it deliver haberdashery and household as well as fancy
goods with 51 stores or outlet cross ways the world with a valuable and best quality of product or
service.
Organizational structure: It implicates hierarchical structure which help them to build a
better and healthy working environment and invite its manpower to participate in business
activities which lead them to obtain high level of satisfaction and motivation.
Stakeholders:In this stakeholders are employees, suppliers, consumers, welfare society,
and others.
Public: BBC
Vision: To challenge our customers, the market by presenting quality and value for
money in order to become most innovative organization in the world as well as keep all human
being informative or knowledge by offering transparent and relevant evidence (Cavusgil And et.
al., 2014).
Mission: BBC core goal is to improve people lives with programs and services that
spread awareness, educate and entertain in order to acquire best positioning within marketplace
as well as generate positive attitude among audience.

Business objectives:To gain competitive advantage among competitors by adapting or
embracing innovative and latest technology as well as make use of all available opportunities
which lead the to expand their market share and size in an impressive way.
Size: It has of 35,402 manpower who are allotted with several task of work and each of
them finish it on respective shifts like part time and full time for obtaining maximization of profit
with an optimum utilization of resources.
Scope: It’s scope is huge and wide as it operate 10 communication system television
services, 10 network radio services, 46 radio service plus an extended presence and also offers a
range of carrier in the zones of journalism, telecommunication, technology as well as embodied
functions such as HR, legal finance and administration.
Organizational structure: It uses line structure that enables them to quick judgment
which build a positive attitude among employees that reflect in the enhancement over increased
productivity and proficiency.
Stakeholders: Its stakeholders are workers, customers, public bodies, and general public.
Voluntary: World Vision
Vision: Its primal aim is to work with children, families and communities and work with
full dedication to overcome over poverty and injustice from nation as well as societies.
Mission:To completely eradicate scarcity and inequality among human being and make
them understand the value of respect, love and trust and bear them witness to the good news of
Kingdom of God.
Business objectives: To build a healthy relationship with all common group of people and
modify their living standard by providing them education, basic rights, well nourishment, valued
within community or society (Charter, M., 2017).
Size: It has 22,500 personnel who put their full contribution towards removing poverty
and injustice from children, families and communities.
Scope: It's scope is vast as it involves the basic amenities of children and societies well-
being.

Organizational structure: It involves corporate structure divison of every single unit, the
basis of which is product,function, geographical boundaries and project to accomplish
organization pre-determined goal (Wheelen and et. al., 2017).
Stakeholders: It consists of government, employees, charitable trust, and association,
public.
TASK 2
P3
In an organization, it consist of different departments which is interlinked with each other
yet it come together to achieve business goals or objective in an effective and efficient way
within desired time limit (Business Environment. 2019). Each of these business function contain
unique set of roles and purpose which defines its position or vision towards John Lewis
Company. The interconnection among numerous John Lewis’s departments are explained below:
Human Resource and Marketing: In a relative sense, both function complement each
other as marketing branding to larger audience to effect sales while human resource is handling
and engaging with the current employees adding brand value to a company by making gateway
for perspective employees to other. However, John Lewis marketing department conduct job
fare, campus recruitment, advertisement in newspaper or online etc. in order to attract large
crowd towards company premises for attaining profitability (Cohen and Kietzmann, 2014).
Marketing and Finance Department:These two functions are interconnected with each
other as John Lewis’s marketing section is responsible for helping company acquire and keep
profitable customers and therefore relate its function directly flows to cash flow. However, John
Lewis receives money from finance division in order to promote the product by arranging
advertisement, sales promotion, direct selling, online trading etc. which benefit them to target
wide range of audience as well as enrich firm’s productivity or profit margin. At the same time
finance function examines all required budget and provide all suitable support to marketplace

However, every department of John Lewis are connected. In the same manner
organization structure is also interrelated with functions the help them to achieve their vision in a
productive manner (Shenkar, Luo, Yand Chi, 2014). Although, it leads to enlarge John Lewis
proficiency yet it produce various difficulties which has direct impact over business operation
and productivity. Some of its positive and negative side are as follows:
Advantage Disadvantage
 It ensure that upper management has
complete control over entire function
of organization which helps them to
response towards manpower issues in
a better way as well as help them to
generate an effective working
condition within business premises.
 There is a possibility of arising conflict
of interest or dispute due to repetition
of task which lead to delay in
accomplishing company’s vision in a
productive way within prescribed time
period.

TASK 3
P4
There are various ranges of factors that may affect business operations along with their
decision making process (Dima, Grabara and Modrak, 2014). Some of these factors within macro
environment include technological factor legal and political factor demographic factor, economic
and natural factors some of these micro factors are evaluated below:
Political Factor: This element is concern towards different types of laws and regulation
which is required by an organisation to effectively undertake as to perform their activities in well
defined manner. Government of United Kingdom frame different types of regulations which are
mandatory for all organisations to abide. Some of these regulations include free trade zone
Industrial Revolution, Union directives and subsidies. John Lewis is required to implement all
related laws in order to ensure your smooth and continuous functioning.
Positive Impact:
If the company follows rules and regulations in the company then the company will
perform their functions in ethical and legal way. John Lewis should run its business effectively
by adopting ethical rules and regulations (Schaltegger, Hansen and Lüdeke-Freund, 2016).
Negative Impact:
The rules and regulations of the company keep chaining with time. Various rules like
Import quotas, currency control and export financing affects the operations of John Lewis. It
stops this company to borrow funds from international banks
Economic Factor: Elements within economic sector includes price of overseas blending
rates and taxation policies that are framed by UK Government. It is essential for John Lewis to
consider these factors before making business transactions as it lead towards impacting them in
direct or indirect manner.
Positive Impact:

United Kingdom government incorporated relaxtions had benefitted John Lewis which
freely allows flow of product and services resulting in increasing overall profitability and
productivity (Saleem, 2015).
Negative Impact:
With the increasing interest and tax rates business functions get adversely affected of
John Lewis which results in loss of shares and stability of a company in market. Rising rates of
interest will impact John Lewis finance department to obtain funds from different financial
institutions and use them for the organisational functions.
Social factor: It includes society cultural belief in context with specified geographical location.
In order to effectively satisfy customers need it is essential for John Lewis to evaluate their
preferences believes and taste (Erasmus, Strydom and Rudansky-Kloppers, eds., 2016). It will
help company to protect interest society while ensuring company services in acceptable manner.
Positive Impact:
By concerning social factors John Lewis can effectively able to maximise their sales
margin and overall end results. Along with this, CSR activities also prove to be beneficial for
company to increase brand image within society.
Negative Impact:
John Lewis is required to follow CSR activities as negligence of this may harm company
brand image along with reduction in their goodwill rate.
Technological factor: It includes change in Trends and fashion of a particular location,
change in style and change in technology. Technology is changing at a rapid rate in today's
world. Thus, in order to gain effectiveness John Lewis is required to make continuous
involvement in there technological base. This can be done with the help of framing Strategies
and making technological change in well effective manner.
Positive Impact:

John Lewis with the help of innovative technological measures can able to increase
effectiveness of their products and services. As company offer different types of goods and
services by getting help of technological advancements in their manufacturing process company can
effectively increase their sales margin ratio.
Negative Impact:
Modifications in the product require a huge investment. Innovation also needs talented
employees and training for workers. John Lewis should change their internal structure for
becoming competitive in the marketplace. This will help in increasing cost of input of John
Lewis and for conducting a continuous research (Georgescu and Popescul, 2015).
P5
Internal and External Factor helps an company to effectively locate various strength and
weaknesses that directly helps them to conduct their operation in effective manner. Mentioned
below there are SWOT analysis for John Lewis and BBC:
SWOT analysis of John Lewis
Strength
 John Lewis one of the leading
organisation, that holds specialisation
in selling Clothing, house wares, direct
services, jewellery, beds and bedding
and more.
Weakness
 John Lewis have rivalries with H&M,
M&S , ASDA and more (Quinlan and
et. al., 2019).
.
Opportunities
 John Lewis by enlarging there service
area in ethnic segment can gain more
advancement in organisation growth.
Threat
 Company fails to fulfil customers
expectations as per according to current
fashion and trend.
SWOT analysis of BBC
Strength

Weaknesses
 Due to high nature of operations BBC

BBC being a big leading broadcasting
entity employee estimated number of
23000 employees. That acts as a major
strength for company to serve
consumers with best workforce.
face increase in their operating costs
that will reduce their profitability and
profit reserve ratios.
Opportunities
 With their magnificent brand image
BBC have opportunity to enter into
new market segment which us
entertainment as to increase overall
market share of company.
Threat
 Competitors threat (CNN) acts as
hindrance for BBC as to gain large
market segment.
TASK 4
P6
In relation with John Lewis mentioned below there is some certain strength and
weaknesses define:
Political factor-John Lewis’s one of the leading and strongest company in United Kingdom
that offer different types of products while having their own brand level. Company may find
difficulty in maintaining all resources in a specified period of time (Glova, Sabol and Vajda,
2014). Thus, company is required to take advantage of different strategies to challenge factors in
political environment.
Social factor- It include different types of norms which is required by organisation to
follow in order to satisfy society. Thus, it becomes essential for John Lewis to effectively protect
consumer base nature within UK market as it helps them to effectively attract large amount of
attraction towards company and facilitate more growth.
Economical factor- To carry out a business effectively, it is important and compulsory for
organisations to measure rates that are related to tax, interest and other essential sector. As if a
small change occurs in labour price that will lead towards impacting company overall cost of

manufacturing. As John Lewis produce products in a bulk rate thus companies required to frame
strategies with the help of which they can reduce economic factor which is related to risk (Kolk,
2016).
Legal factor- It includes different types of policies and laws that lead towards impacting on
organizations overall performance. Thus, John Lewis is required to thoroughly understand
guidelines for the legal sector.
Environmental factor- John Lewis is a largest organisation that offer numerous range of
products and services as per according to John Lewis. Is required to offer their products by
ensuring environmental consequences while offering them in eco friendly manner.
CONCLUSION
It has been stated from the above explained report that it is important for every corporate
firm to have a knowledge about business environment as it enable them to understand the
changes happening in a market structure and getting insights of it. Along with this, every
establishment is classified into several types which contain its own objective and goal as well as
every department of firm has interrelationship with each other in order to reach to its goals
effectively and promptly. Furthermore, PESTLE and SWOT analysis plays an integral role in
examining current and demerging trend of marketplace for attaining high profitability and
productivity ratio.

REFERENCES
Books and Journals

Online
Business Environment. 2019. [Online] Available
through<http://www.businessdictionary.com/definition/business-environment.html>