Business Environment Report

This report examines the business environment, focusing on John Lewis Partnership. It analyzes different types of organizations, their legal structures, and the impact of macro-environmental factors. The report also includes a SWOT analysis of John Lewis, highlighting its strengths, weaknesses, opportunities, and threats. This detailed analysis provides valuable insights into the company's current position and future prospects.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Types and purpose of different organisation.........................................................................1
P2 Size and scope of a range of different organisations.............................................................3
TASK 2............................................................................................................................................5
P3 Organisational functions are interrelated with its goals and objectives.................................5
TASK 3............................................................................................................................................6
P4 Positive and negative impact of macro environmental factors..............................................6
P5 Conduct internal and external analysis of the company........................................................8
P6 How strength and weaknesses are interrelate with macro factors ......................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment includes both external as well as internal forces which are beyond
the control of management or company (Avramenko, 2012). This can have positive or negative
impact on an organisation. It include customers, competitors, suppliers, government etc., Firm
that is taken in this assignment is John Lewis Partnership which is a Departmental Store in
United Kingdom. The report will focus on different types and purpose of various organisation
whether public, private and voluntary sectors along with its legal structure. Size and scope of
different types of organisation are entitled in this assignment. Relationship between different
organisational functions and how to linked with objectives are included in this report. Along with
this, positive and negative impact in macro environment in a company along with examples is
mentioned in this assignment. Lastly, strengths and weaknesses that are interrelated with
external macro factors of selected firm is incorporated in this report.
TASK 1
P1 Types and purpose of different organisation
Business environment is dynamic in nature and various firms establish their firm in order
to achieve their aims and objectives. Basically, this can be divide into three categorises i.e.
public, private and voluntary therefore, these are explained below:
Public sector: It can be defined as commercial or industrial companies that are
undertaken by the regulatory bodies. Thus, these firms mainly focus on providing maximum
benefits and social welfare to public in societies. Therefore, public enterprise are mostly owned
and managed by either central or state government. Companies that comes under this are fully or
partially regulated by government and rest by private companies (Bagtasos, 2011).
For example: National Health Services provides public health services in United
Kingdom. They work for the betterment of public and for the goodwill of public. This
organisation provides services at minimum cost or usually don't charge any kind of fees form its
customers.
Legal structure
Central Government: Main motive of this is to formulate laws and regulations and
regulate them in entire nation so that public can get equal rights. They go through the present
scenario in order to make the appropriate strategies. Central and state shares same rules and

regulations and collect taxes that are regulated by governmental authorities (Bhaduri and Ha-
Brookshire, 2011).
Local Government: They helps the organisation in order to carry out business properly as
this helps them in making proper decision. In United Kingdom local government is divided into
two categories i.e. county councils or district and borough or city councils. They regulate their
operations in specific locality and non-market bodies.
Private Sector: Companies that come under this sector basically run their business so as
to get maximum profits and competitive advantages. They regulate their firms alone without any
interference of government ownership and control. In context with United Kingdom, there are
large amount of companies who are running their business and generating more and more
revenues and profits as well (Bovee, Thill and Raina, 2016).
For example: John Lewis Partnership is a renowned organisation and famously it is
known for fashion and retail sector in United Kingdom. They are providing better services and
facilities because of which company is retaining its customer's loyalty. Other than this, they are
promoting online shopping as a results it is increasing their sales and profitability.
Legal structure
Sole Trader: Private sector companies that comes under this, largely operate their
business single handedly. Initially they start their business with small amount of money and than
gradually increase their business operations. Whatever loss or profit they gain owners are solely
responsible for it.
Partnership: Most of the organisation that comes under this, prefer to work under
partnership so that work load can be divided equally. This helps them in releasing pressure from
an individual or a group. Therefore, to come into partnership there are certain laws and
regulations that they sign before doing the same.
Voluntary Sector: These companies are established in order to provide basic facilities to
public so that they can increase their living standards of people. This sector includes non-profit
and charity units that are working for giving better services to clients (Budhwar and Debrah,
2013).
For example: National Trust organisation is working in order to protect the cultural
heritage of the nation in a particular area. Their work depends upon the regions and its prime role

is to make sure that all the historical sites are managed properly so that they can tell visitors
about their glorious past.
Legal structure
A Charitable Company: Mainly, organisation that comes under this, work with the
purpose of providing better services for goodwill of the person. In context with the organisation
they are working for securing and safeguarding their historical monuments.
P2 Size and scope of a range of different organisations
Organisation in United Kingdom is divided into three categories and these are based on
its size and scope which are given below so as to understand it in a better manner:
Public Sector Organisation: Firms that comes under this are mainly regulated by
governments and private both. Most of the departments of this company is managed and govern
by regulatory bodies (Cavalcante, Kesting and Ulhøi, 2011).
For example: NHS is a renowned organisation that works in order to provide free
services to its customers. They work for the betterment of the public and is regulated by the
Government of United Kingdom.
Mission and Vision: Their vision is to treat every individual and make them free from all
kind of diseases and for this, they have incorporated all the latest tools and technologies that are
available in the market area. Whereas their mission is to become one of the leading hospitality
care service where people can come for their treatment
Share holders of public sector:
Shareholders: They are the one who provides and invest money in a company in order to
get better results. Stakeholders invest their funds for getting effective outcomes as a result it is
providing success to the company.
Unions: They are formed so as to work for the workers' right and duties thus, they
perform their activities for safeguarding their jobs and other issues that can create problem while
working.
Governance: In public sector, Government plays an important role as they are run by
the funds collected form public (Charter, 2017). Funds for implementing new and innovative
technologies are undertaken by government. Along with this, they help the organisation in
managing budgets, accounting and auditing this will help them in monitoring the performance of
the company.

Private Sector Organisation: This sector perform their activities for enhancing the
economic system of a country. Most of the companies work for achieving maximum profits so
that they can expand their business in different areas as well. These companies have maximum
liabilities and look out for ways through which company can increase profit and how it will be
divided into different shareholders.
For example: John Lewis Partnership is a big company and run its different chains of its
fashion and retail stores. They are providing with services of different brands as a result it is
assisting them with high market shares and profit (Cheng and et. al., 2012). They are giving both
online and store services from where customers can buy their products. John Lewis is operating
its business in a better manner, for this they are considering all the factors that are present in the
market area. Company is operating its business through out the world and around 88,900
employees are working for providing better growth to the company.
Mission and Vision: Like other companies their main vision is to give better services to
its customers by delivering products according to the needs and wants. Further more, they are
collaborating with other firms in order to increase their sales and profitability. Along with this,
they are generating new strategies and plan of action for achieving the desired goals and
objectives in specific period of time.
Voluntary Sector Organisation: It includes those companies whose purpose is to provide
maximum benefits so as to enrich society. Government intervention is comparatively less and
they simply works for the welfare of the society. There are a large number of voluntary sector
who are contributing £11.7 billion in the economy of United Kingdom, as a result it is enhancing
the economy of the nation (David, 2011).
Mission and Vision statement: National trust has worked and provided many
organisation with benefits in terms of donations. Currently they own around 350 heritage
properties which includes famous places of United Kingdom like industrial monuments,
historical sites and many more.
Stakeholders of Voluntary sector:
Volunteers: These are the people who themselves take initiative for supporting the
different kind of activities.
Donors: These are the one who give funds to voluntary sectors so that they can perform
their activities in an effective manner.

TASK 2
P3 Organisational functions are interrelated with its goals and objectives
In a company there are many sectors who perform their activities in order to provide
benefits to its organisation. They are assigned with different roles and responsibilities which are
according to their capabilities Organisational structures of a company defines how a firm
perform their function and this can be seen by the culture that is adopted by the enterprise.
Therefore, in context with John Lewis Partnership they are formulating an appropriate
organisational structure so as to attain their goals and objectives in given specific time. It helps
them in increasing their productivity, marketing, vision, mission and many more. An
organisational structure includes human resource, marketing, finance and many more (Hair,
2015). Therefore, these are explained below in order to understand it in a better manner:
Marketing: Marketing and sales go hand in hand and these both compliment each other
for example: if a company wants to increase its sales than it is necessary that firm implement a
proper marketing tools so that they can reach to maximum number of people. As a result it will
help them in increasing its sales and profitability. Therefore, marketing will assist them in
attracting more and more customers towards their organisation. Thus, John Lewis Partnership is
using all the latest tools and technologies for pulling the attention of maximum number of
people. Henceforth, for operating their business in an effective manner they are hiring eligible
candidates who good in performing the task in an appropriate way.
Finance and accounting: In case of John Lewis Partnership it includes a wide range of
information in order to assist their managers so that that they can forecast their future actions.
Thus, they develop to make cash inflows and outflows that happened in past few years so that
they can have an idea about what strategies they have to implement in order to increase their
sales and profitability (Hamilton and Webster, 2015).
Human resource management: HR department of John Lewis is assisting them in many
terms for example: they are providing with suitable candidates by hiring them through
recruitment and selection process. Giving proper training programs to their old and new
employees in order to increase their skills and efficiency. Along with this, they provides helps
the organisation in maintaining a healthy environment at workplace.
Research development: They assist the organisation in collecting and gathering
information that are required for taking their business in forward direction. This will help them in

using the collected information in a better way so that an effective outcomes can be evaluated.
They primarily work with the production department so as to manufacture excellent quality
products. For this, they take feedbacks from its customers so that they can produce goods
according to the choices and preferences. This will enable them in fulfilling the demands and
wants of consumers accordingly (Karagiorgos, Drogalas and Giovanis, 2011).
Organisational structure of John Lewis Partnership:
From the above diagram it has been concluded that board of directors plays an important
role in making appropriate decisions; along with this, they implement and follow these policies
so as to run their business in an affective manner. After board of directors, president plays a
crucial role and give directions to general manager for how to perform the task so as to get
appropriate outcomes. Further they guide to superiors of different departments of an
organisation. So, they follow a systematic procedure for conducting their business operations.
Therefore, it is essential to have a proper communication throughout the activity s this will help
them in managing and organising an effective organisational structure (Kolk, 2016).
TASK 3
P4 Positive and negative impact of macro environmental factors
Macro environment is considered as an essential part of a company as it provides with an
insight of what factors can create a problem in their business operations. Therefore, it helps them
in determining all the external factors which can affect the company regarding to its position at
market area. Macro environmental factor are explained below so as to understand it in a better
manner:
PESTLE analysis of the company
Political factors: If a company wants to operate its business in a proper manner it is
required that company analyse the political condition of a nation. This will help them in
operating its business effectively. John Lewis Partnership is regulating its business worldwide
thus, it is crucial for them to recognise all the terms and conditions of nations. As good political
environment helps an organisation in expanding their business. Therefore, this it is essential that
an effective relation is maintained between regulatory bodies and organisation. For instance:
because of higher rates for commodities people are avoiding use of luxurious commodities due to
which its sales are decreasing (Meiners and et. al., 2014).

Positive impact: Stable government helps organisation in maintaining a sustainability for
a longer period of time. It helps company in having trade agreements in different firms and
countries as well as a result all the task is performed in a better manner.
Negative impact: Due to flexible political conditions in United Kingdom, regulatory
bodies are making modifications in their policies and laws which is creating difficulty for
enterprise in following them. Therefore, such changes affects in the growth of an organisation as
a result it will present negative image of firm in front of its customers (Nishitani and et. al.,
2012).
Economic factors: This is considered as one of the main factor that must be considered
by a company if they wants to operate their business effectively. Sudden change in economic
policies can create problem for the organisation. As John Lewis is a big company and has it
chains through out the globe so it is essential that they retain economic stability by developing
more and more job opportunities. This will help them in establishing their branches in other
different nations. It will assist them in generating a large number of revenues for its company.
Positive impact: For having a smooth supply of resources and raw materials it is
important that a better interaction is established between political power and strong economic
condition. In context with United Kingdom, labour market and economy of the nation are very
goods as increase in their income can be seen as a result it is helping them in boosting the morale
of employees so as to perform their task effectively (Osterwalder and Pigneur, 2010).
Negative impact: Abrupt modification in economy in terms of recession, deflation,
increase in unemployment etc., can affect the condition of a nation. As a result buying habits of
employees can be affected with this process. Along with this, alteration in foreign exchange can
also have an great impact on business operations and customer's behaviour as well due to which
sales and profitability can vary according to different market situations.
Social factors: With the change in course of time, trends are also changing people are
adopting new things which is creating problem for big companies. As company have to work
according to the current market situation because of which it is taking ample time as well as cost.
So, work according to the taste and preferences of customers is creating issue for firms.
Therefore, to sustain in the market for a longer period of time it is necessary that enterprise
manufacture goods according to the needs and wants of consumers. This will enable organisation
in attaining competitive advancement (Pikka, Iskanius and Page, 2011).

Positive Impact: The people who are of old age are mostly preferring to buy goods in
bulk quantity from retail store rather than buying on-line thus this is the most beneficial factor as
it results in enhancing the overall sales and profitability index.
Negative Impact: It is analysed that the population of UK is getting older as the days as
passing by and this process results in more intense situation. The older persons are retiring from
their jobs thus they are not having any interest to buy new or innovative products.
Technological factors: According to this current market scenario various new
technologies are present that are assisting organisation in performing their task in an effective
manner. Most of the companies are using this for communicating with its customers so that they
can aware its consumers about new commodities they have launched. Therefore, it is assisting
them in increasing its market value and shares as well (Pulver, 2012).
Positive impact: This has increased the process of manufacturing goods as a result now
company can produce a large number of products in specific time period. Giving proper
suggestions has become more easier as compared to earlier times. Large quantity of products are
now can be delivered to its end customers.
Negative impact: As with the change in technology more complex machineries have
evolved which sometimes create problem for employees to understand it in a better manner. Data
protection has become the biggest issue after advancement in technologies.
P5 Conduct internal and external analysis of the company
Due to over dynamic nature of environment, it is essential for business associations to
conduct internal and external analysis so as to determine all those factors which have direct and
indirect impact on firm 's marketing position. In this respect, John Lewis has conducted SWOT
analysis; it involves strength, weaknesses, opportunities and threats of the company thus
management can take necessary business decisions and grab better future opportunities as well.
SWOT analysis of John Lewis: -
STRENGTH WEAKNESSES
The main strength of John Lewis is its strong
client base and effective market goodwill. It
helps the brand to become favourite clothing
retailer of UK; it promotes customers' loyalty.
The firm has started to cut prices so as to
match up with market competition. But it
devalued the brand and reduced its profitability
as well.

Each and every employee work in John Lewis
is treated in well being manner; the firm
focuses on providing healthy and positive
working environment to staff members so as to
improve their skills and capabilities; it results
enhancement in productivity and profitability
of the company.
The brand has placed itself well towards
environmental and green issues. It has acquired
fair trade policy which focus on managing
same quality in all products. It puts positive
brand image on customers' eyes as well as
environmental activists.
John Lewis aggressively markets itself and
recently it also has acquired various celebrities
for its brand ambassadors. It helps in
promoting the brand over the world and helps
people know about the brand and its offerings
worldwide.
John Lewis has been criticised to fuel
accusations of bad managerial incompetence,
lack of transparency, corporate governance
which can infuriate many investors.
The entire performance of John Lewis has
slipped in 2010, while other retailers were
underperformed at this time, John Lewis was
highly exposed in market. The share price of
company also decreased by 50% (Reinhardt
and Stavins, 2010).
OPPORTUNITIES THREATS
In the present scenario, youngsters are getting
more brand conscious, they prefer new and
innovative clothing items to wear. Thus, target
group is raising rapidly.
Improving purchasing power of customers
parity leads to boom up living standards.
Expand network areas, selection of products
and reaching wide range of people by
implementing several stores as well as subway
brands will contribute in gaining high market
Due to political instability and economic
recessions, John Lewis is not able to perform in
these countries cause here its profits and sales
get high affected.
Lack of corporate governance will lead to fall
in reducing profit margins and revenues which
are occurred from cash equity within
businesses.
Raising market competition and the number of
new rivals can affects working activities of a

growth of the company.
Another opportunity for John Lewis is
emerging markets in Asian cities and designing
trendy clothes would attain youngsters.
firm at global level.
Through this analysis, it has seen that strengths and weaknesses of a company give
certain advantages and disadvantages in meeting requirements of targeted market. In this context,
strengths should be market oriented that shows on which level business of a firm has met needs
of customers. While weaknesses reflects limitation faced by management of JLP in
implementing and developing their strategies.
P6 How strength and weaknesses are interrelate with macro factors
Company's strength and weaknesses of a company can be directly linked with macro
environment as it has a strong relationship between them. It can affect the abilities of an
individual in decision making whether directly or indirectly. John Lewis Partnership is big
company with having lots of branches in different parts of the world. Mainly, it is a super market
and provides all kind of facilities to its customers. Through this, they are able to gain customer's
satisfaction and as a result its sales and profitability is increasing (Rose and et. al., 2013).
Whereas due to political instability in United Kingdom most of the companies are not
being able to perform their activities in a better manner. According to the current market scenario
BREXIT is the biggest reason of this. Along with this, different kind of laws and legislations are
acting as a barriers because it is creating lot of complexity in understanding each and every
norms of the nation. Under this, taxes and trading policies regulated by the government is
creating some kind of problem for companies because of which expanding the business in
effective manner.
In this current scenario, as most of the companies are adopting new and innovative
technologies and as a result it is providing them with maximum benefits. It is assisting them in
gaining maximum benefits as a result all the goals and objectives in specific period of time. In
context with John Lewis Partnership they have incorporated all the latest machineries in
producing goods effectively. Therefore, it is assisting them in giving tough fight to it rival
companies. Thus, macro environment affects the internal and external factors of the company
(Sass and Fifekova, 2011).

Political Economic
Different kinds of political rules are needed to
follow by JLP which increases its internal and
external strengths as well as creates weakness
also:-
Strength: Good management system of this
company as well as fair trade policy shows
strength of this company in terms of political
laws.
Weaknesses: Due to BREXIT, import and
export activity of this firm affected a lot.
Good economical condition of UK helps in
increasing profitability of organisations of UK.
Strength: This factor help in getting resources
like raw materials in cheap manner which
reduces cost of production as well.
Weaknesses: Fluctuation in currency rates
affect profitability of business.
Social Technological
Business of retail sectors are affecting mostly
by social factors more.
Strength: Good education background of
people aid firms in offering services as per
their requirement.
Weakness: Requirement of introducing CSR
activities impact on decision making of
management of JLP.
Changing in technologies aids a firm in
providing high quality services.
Strength: Introducing business through online
process aids JLP in delivering products to
customers in more easy manner.
Weakness: It demands to change existing
system which impact on financial performance.
Legal Environmental
Any change in law affects business strategy
and policies most.
Strengths: By running activities in legal
manner, help this firm in carrying out business
in international market easily.
Weakness: Due to legal changes, market share
of JLP has decreased in high rate.
Due to globalization, environment of a country
impact in high manner.
Strength: It assists companies to reduce
wastage and recycle them if possible which
help in utilising resources in a proper way.
Weakness: It consumes much time and money.

CONCLUSION
From the above mentioned report, it get comprehend that business environment has a
vital role in growth and success of every organisation. In present scenario, management is
required to determine all those factors which has a vast impact on firm's market position and
goodwill in direct and indirect manner. The report has stated, types and purpose of different
types of business associations, like – public, private and voluntary sector organisation. In which
public sectors are in under control of government whereas private sector focuses on earning high
profit margins. Apart from this, there are several functions of a business entity, i.e. finance,
human resource, marketing promotion, research and development; all these units must be
collaborate with each other in order to accomplish goals and objectives of John Lewis.
Furthermore, macro environmental factors can be analysed through PESTLE analysis whereas
micro environmental factors are assessed through SWOT analysis. The report has stated positive
and negative impact of macro environmental factors on business activities and processes.

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