Business and the Business Environment

This report examines the business environment of KFC, NHS, and Oxfam, analyzing their organizational structures, objectives, and the impact of macro-environmental factors. It explores the interrelation of organizational functions and objectives, examines the strengths and weaknesses of each organization through SWOT analysis, and discusses the positive and negative impacts of PESTEL factors on business operations.

Business And The Business
Environment

Table of Contents
TASK 1............................................................................................................................................1
TASK2.............................................................................................................................................4
P3: Interrelation between organisational function and organisational objectives.......................4
TASK 3............................................................................................................................................5
P4: Positive and negative impacts of the macro environment on business operations...............5
TASK 4............................................................................................................................................8
P5: SWOT analysis for determining the strengths and weaknesses...........................................8
P6: Interrelation of strengths and weaknesses with external macro factors...............................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
.......................................................................................................................................................12

INTRODUCTION
Business environment is a amalgamation of various internal and external factors which
should be regularly analyse by company as it directly affects the working functions of company.
For this report, KFC is taken for discussion which is one of the largest fast food chain in the
world. It has variety of products like soft drinks, fried chicken and owned by Yum! Brands.
Other than this, NHS is taken under non profit organisation and Oxfam under voluntary.
Different purpose of organisation with its size and scope will be discussed. Different functions of
department and how it is connected with each other will be explained. Apart from this, various
factors of external environment will be elaborated with the help of pestle with their strengths and
weakness.
TASK 1
P1 Different types and purpose of public, private and voluntary sector and legal structure
There are different kinds of organisation that has their own objectives and scope for
earning the sufficient amount of capital (Adeoye and Elegunde, 2012). The development and
growth of economy of a country is depend on these enterprise and all these are giving their
contribution in form of taxes and royalty. These organisations divided into three parts such as
private, public and voluntary sector which is explained as below along with their legal structure
and purpose:
Public organisation: It is a type of organisation that are operated and owned by the legal
authority and exist to give better services for its citizens (Ayyagari, Demigod-Kent and
Abramovich, 2014). NHS is a national health care organisation that work under public sector.
Purpose and legal structure of public organisation are define as below:
Purpose: Main purpose of public organisation or NHS is to improve the living standard beside
with the economical and social conditions of the people who are living in United Kingdom by
giving the health treatment as well as care also at affordable prices.
Legal structure: Local government: This type of government is liable for regulating a few part of country,
town or city.
 State government: They are liable for controlling or monitoring the state and for
developing the regulations in the states.
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 Central government: They are responsible or accountable for controlling as well as
regulating the whole country.
NHS Comes under the legal structure of state government.
Private Organisation: It is a part of country's economy system that is regulated by companies
and individuals, rather than the government (Cavalcante, Kesting and Ulhøi, 2011). KFC is
introduce as a private sector which deals in food and beverages industry. Legal structure and
purpose of private organisation or KFC are explain as under:
Purpose: Main purpose of private organisation is to accomplish more market share in the United
Kingdom by giving a different range of goods and services at reasonable prices.
Legal Structure:
 Partnership: It is a formal agreement between two ore more parties with each other for
accomplishing their shared goals or objective and to earn money.
 Sole trader: It is a another type of legal structure of private organisation, in which single
individual is liable for regulating or running the organisation.
 Small and medium size enterprise: It is an independent company and in which less than
250 workers works and the sales or revenue is also less than $ 5 million.
KFC comes under the legal structure of sole trade.
Voluntary Organisation: It is an another type of organisation and in which individuals and
groups comes with each other for uplifting the society (Erasmus, Strydom and Rudansky-
Kloppers, 2016). Oxfam is consider as a type of voluntary organisation which will help a society
by providing effective and healthy services to the people.
Purpose: Main purpose and motive of voluntary or Oxfam organisation is to enhance the
economic conditions of the society.
Legal structure:
 Trust: In this type of company three parties are includes i.e. trustees, beneficiaries and
donors. These are formed or regulated for the motive of giving the financial assist to the
people so that they can attain what they desires.
 Association: It introduce to the different number of persons who came together for a
common purpose or goals.
Oxfam comes under the legal structure of association.
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P2 Size and scope of range of different types of organisation
NHS
 Size: NGO has large number of employees who are permanently working with NHS like
they have more than 10000 nurses and dental staff which supports the primary activities.
Apart from this, 140000 doctors are constantly in touch with the NHS and assist them to
achieve their mission.
 Scope: NHS has large scope as there are many countries which are desperately in needs
of medical facilities.
 Mission: Mission of NGS is to provide highest quality of medical services so that every
diseases would be eliminated from the world.
KFC
 Size: It is second largest restaurant chain in the world and has 20,000 stores in 123
countries. KFC has more than 15000 employees and revenue of approximately 23 billion
dollars.
 Scope: Company is already operating in more than 100 countries but they could open
more stores within it so that customer base of the organisation would increase (Gupta,
2013). Moreover, they can diversify their product range with the aim of acquiring more
customer as compare to competitors.
 Mission: To become the leading food services holder in the world by constantly
providing high quality of product with high customer service.
 Vision: Aim of enhancing profitability, shareholders value and provide sustainable
growth in future.
Oxfam
 Size: Oxfam is a group of 20 charities which are based on various location worldwide.
Oxfam has approximately 20000 volunteers who are regularly devoting themselves with
the aim of enhancement of society.
 Scope: There is no scope of sales or profitability of Oxfam as it is a non profit
organisation. But they still wants to achieve their high potential as they have the ability of
providing help to thousands needy people at the same time.
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 Mission: Mission of Oxfam is to provide necessities to the needy people so that they can
live their life happily.
 Vision: To make the society better by eradication of various problems faced by people.
TASK2
P3: Interrelation between organisational function and organisational objectives
KFC is an American fast food restaurant chain that specialise in selling of fried chicken.
In the organisation different departments are work with each other and having common purpose
to increase sales and profitability of company (Hamilton and Webster, 2018). These departments
needs to assist from many other functions for ensuring that they has needed sufficient resources
for doing their functional work or activity in systematic manner. The interrelation or connection
of these functional unit is explained as under:
Marketing: It is a main department in KFC that play important role in advertising and
promoting products and services of an enterprise. For these advertisements and promotions, such
type of department requires talented and knowledgeable workers which are give by human
resource department of company (Hill, 2018). Also this department requires sufficient amount of
capital for promotion and many other relevant activities which are given by the finance
department. Thus, with the assist of promotional tools and knowledgeable workforce, marketing
manager can complete all activities or task within given time period as well as accomplish long
term goals and objectives of company.
Finance: This is an another important and main department in the organisation that is
accountable for managing the transactions, funds and for preparing proper financial report
(Hillary, 2017). This department requires support from the human resource functional unit for
acquiring the appropriate candidates or recruiters who has the proper knowledge or skill of
handing financial transactions and report. Via these people, finance department of KFC can
perform their work or responsibility without any issue.
Human resource: This department gives the required employees to the enterprise by
recruiting skilled and talented workforce. For recruiting the best candidates, Human resource
department of KFC requires support from marketing functional unit for promoting the job
vacancies (Hilton and Platt, 2013). Also such department need sufficient amount of capital for
the salary and many other required activities which are specially given by the finance
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department. Via these support from finance and marketing, human resource department can
recruit potential and talented workers who can play their role and responsibility with the needed
accuracy for accomplishing goals and objectives of KFC.
Illustration 1: Organisational Chart of KFC
(Source: Organisational Chart of KFC, 2018)
Organisational Structure:
It is a type of business structure that defines activities of a company such as task
allocation, supervision and coordination are directed towards accomplishment of organisational
aims and objectives. KFC is an American fast food chain company that follow two types of
organisational structures such as Hierarchy and functional (Keiningham, Perkins-Munn, and
Evans, 2013). In these types of structure, the company is divided into different number of
departments including finance, human resource, marketing etc. Under Hierarchy structure, an
enterprise following various level of authority and a vertical chain of command. Therefore, all
this departments such as marketing, finance and human resource are play important role in
achieving long term objectives and goals within given time duration.
TASK 3
P4: Positive and negative impacts of the macro environment on business operations
Macro environment is introduce as an effective conditions that present in the economy as
an entire, rather than in a specific region or sector. In addition, it includes trends in GDP,
employment, inflation, spending, and fiscal and monetary policy (Kenney and Neely, 2013).
One of the best example of macro environment is PESTEL analysis which has different elements
are determine as under:
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Political: Kentucky Fried Chicken (KFC) gives the fast-food service to accomplish their goals
and objectives. They make a political system that can lead them or they known as a guide
service. This political system could modify their business strategy as well as make the progress
or success to their organisation (Kew and Stredwick, 2017). For example, they have workers that
run the different activity in the restaurant. They make accurate contract with the workers and
create a pension fee. They also give the alternative in purchasing KFC.
Positive: Government of the KFC has facilitated fast food industry to become
independent in order to take their individual decision making and support fast food industry to
generate accurate amount of funds from other location to raise the business operation.
Negative: Removal of entire United Kingdom from EU has decreased the currency of
United Kingdom on international level, which has influenced fast food sales.
Economical: The economic conditions of the United Kingdom is find out due to the Brexit. The
rate of inflation is also high in United Kingdom, due to which the profitability of the company is
reducing which is negatively effecting the market share or sales (Miller, 2018). The strength is
that the company has taken over the Argos and providing their products online with the help of
delivery services of Argos. Due to this the sales of company is increasing as the products are
provided at discounts to the consumers.
Positive: Company has wide range of goods which are given at reasonable prices, due to
this company has maintained their revenue as well as profit which is positive effect on KFC.
Negative: Due to the inflation rate of food price and economic crises years, the clients of
KFC has become price conscious which is unfavourably effecting the sales of fast food goods
given by company.
Social: Social factors are culture, tradition, belief and how entire of these influencing the KFC.
After going away of Britain from the European Union, amount of fund spent by the clients is
reducing which is unfavourably effecting the organisation as the market share is also reducing
(Montaigne, 2014). Whereas the KFC has retained their broad fast food range due to which the
clients are still buying the goods from KFC which is impacting the revenue in positive manner.
Positive: Maximised population has raised KFC potential to enlarge their own business
functions or operations into the location. Business suitability is favourable for an organisation.
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Negative: People potential to spend proper amount of fund on their individual
requirement rather than providing the food product has developed trouble for company to sell
their product.
Technological: It is identify as an useful and biggest factor that impact the organisation.
Because technology maintains on updating and keeps on developing a cut throat rivalry in the
marketplace. KFC has implemented new technology in their business functions or operations
such as click-and-collect services and online food shopping through which clients can order the
fast food goods online and gather them from the outlet of organisation (Moutinho, 2011). This is
favourably effecting the organisation in enhancing the sales as well as profit also. Technology is
a best factor that help an organisation to achieve better results and outputs within predetermined
time duration.
Positive: Technology factor has positive impact on business operations and functions by
saving time for completion of each activities and tasks in the organisation.
Negative: In KFC, there are different employees in which some workers has lack of
knowledge about the technology. In order to provide training to the unknowledgeable workers
about the technology company need accurate amount of capital.
Environmental: Environmental factors consist of different factors such as scarcity of resources,
pollution and many other. KFC is trying to decrease the resources wastage in the business
operations or functions by taking the initiatives which is positively effecting the brand image of
the organisation. Due to the strict laws and regulations from the government of United Kingdom
after the Brexit, the brand image and operations of company is unfavourably influencing as the
wastage and energy consumption is high in the stores of KFC.
Positive: This has raised various people belief over the fast food industry, which will led
to more investment business to KFC.
Negative: This factor has led large money outflow out of the KFC strength, which will
overburdened capitalist to invent more.
Legal: It is another factor that include rights and laws, health and safety, equality, labelling,
packaging quality, product safety etc. The organisation is applying the employment laws or
legislation which was regulated by the legal authority due to the Brexit which is essential and
valuable for the company in acquiring the assist from legal authority and enhancing the brand
image of company. Whereas the company is importing fast food goods from the European Union
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nations and new regulation are regulated by legal authority for the export and import which is
unfavourably effecting the brand image of KFC in marketplace (Poon, 2016).
Positive: Fast food chain has grown at the biggest rate in United Kingdom industry and it
has change more and more investment into fast food of UK.
Negative: KFC has tucked in several legal issues, which has effected them in risky way
by impacting the financial position of the organisation.
TASK 4
P5: SWOT analysis for determining the strengths and weaknesses
SWOT analysis is identify as an effective framework followed to evaluate an
organisation's competitive position and to create strategic planning. It is most essential and useful
framework used by each organisation to explore their strength, weakness, threats and
opportunities. This framework is highly impact on decision making of an organisation by
deciding what type of policies will be used to overcome weakness and increase opportunities
within predetermined time duration. Therefore SWOT analysis of KFC and its impact on
decision making are define as under:
Strengths:
Strong global presence: Company has their presence in approx 130+ nations and with
over 21000+ stores, KFC is an American fast food chain that has an impressive presence at
global level.
Variety in Menu: It is identify as one of the main strength of KFC. KFC tweak's its food
offering and menu, basis the region or area in which it operates (Reed and et. al., 2013).
Weaknesses:
Supply chain and distribution issues: KFC has faced a main issue of distribution with
the chicken's delivery. This problem became so big that it lead to the finishing of few its stores in
the United Kingdom.
Managing Franchisees: Management of Franchisees is identify one of the main problem
in the success and growth of KFC. It is a biggest issue that highly effect on sales and
productivity of company.
Threats:
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Food quality challenges: Food quality is consider one of the main challenge before KFC.
They has faced criticism in the previous as well for the oils quality it uses for backing or cooking
its food. Also, the laws and regulation related to quality of food has become quite stringent in
various nations and is becoming a biggest challenge or issue for fast food chains (Hill, 2018).
Competition from local and global players: KFC is a fast food chain that faces stiff
competition or rivals from not just local players but also global players as well. Challengers are
introducing new and better quality food products to their menu list to enhance their customer
base and market share within given time duration.
Opportunities:
Expanding to new geographies: Changing lifestyle of customers and their maximising
purchasing propensity as well as emerging economies is allowing fast food giants to identify new
geographies to maximise their revenue and market share.
Exploring new food products in menu: Catering to the modifying food needs and
demands of the millennials, fast food chain has biggest opportunity or chances to inform healthy
food products in their list of menu that are not high in fats and calories (Gupta, 2013).
Therefore, The SWOT analysis is an highly useful and valuable tool for knowing and
decision-making for all sorts of conditions in business and organizations. Thus, SWOT analysis
is more significant and beneficial tool for an organisation or its manager to make appropriate and
accurate decision in implementing useful policies for future development and growth.
P6: Interrelation of strengths and weaknesses with external macro factors
The discussion of interrelation of strengths and weaknesses of factors externally effecting
KFC are discussed as under:
Political Factors: The strength of KFC is the development of strategies in considering the
impact of Brexit on the company. This had reduced the level of negative effect which it can
create on the working of KFC. This is strength of the company as it will increase the profits and
help in the achievement of objectives in an effective manner (Erasmus, Strydom and Rudansky-
Kloppers, 2016). The weakness is the presence of local restaurants and food companies in the
areas where it is established which impacts negatively on the customer base and business of the
company.
Economical Factors: Economic conditions in UK worsened due to Brexit. It has increase the
inflation rates in the country which leads to high prices of goods and also impacted upon the
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customer base of the company. The strength of the company is providing products at discounts to
customers. This has made possible with the help of retained earnings of company which it is
using now to maintain market share.
Social Factors: The Brexit has also influenced the purchasing behaviour of customers as due to
inflation the customers become price conscious This has impacted negatively on the purchasing
behaviour of customers. KFC needs to make changes in their policies and analyse the market
again in order to know about the needs and demands of customers and attract customers
(Cavalcante, Kesting and Ulhøi, 2011 ).
Technological Factors: The main strength of KFC is made changes in their working such as
taking online food orders and providing food delivery to their customers has attracted them and
help in increment of market share. The weakness of the company is high energy consumption
during the production process which leads to increase in the production cost of the company.
CONCLUSION
From the above mentioned report, it has been concluded that business environment is
essential form an organisation to explore their internal and external factor. There are different
types of organisation that has their own size and scope that help them in retaining strong position
at market. In the organisation, different number of department work with each other which will
help an organisation to increase their sales and profitability in given time period. Apart from this,
SWOT and PESTLE analysis are essential tool used by company to explore political,
environmental, economic, social, technological and legal situation of country. SWOT analysis is
also consider important framework because with the help of this company can easily know about
their weakness and threats. Therefore, both framework help an enterprise to expand their
business operations and functions globally and gain better advantages for future success and
growth.
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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.
Ayyagari, M., Demigod-Kent, A. and Abramovich, V., 2014. How important are financing
constraints? The role of finance in the business environment. The world bank economic
review. 22(3). pp.483-516.
Cavalcante, S., Kesting, P. and Ulhøi, J., 2011. Business model dynamics and innovation:(re)
establishing the missing linkages. Management Decision. 49(8). pp.1327-1342.
Erasmus, B., Strydom, J. W. and Rudansky-Kloppers, S. eds., 2016. Introduction to business
management. Oxford University Press Southern Africa.
Gupta, A., 2013. Environment & PEST analysis: an approach to external business environment.
International Journal of Modern Social Sciences. 2(1). pp.34-43.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hill, C., 2018. International business: Competing in the global market place. Strategic Direction.
24(9).
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Hilton, R. W. and Platt, D. E., 2013. Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
Keiningham, T. L., Perkins-Munn, T. and Evans, H., 2013. The impact of customer satisfaction
on share-of-wallet in a business-to-business environment. Journal of Service Research.
6(1). pp.37-50.
Kenney, M. and Neely, A., 2013. Measuring performance in a changing business environment.
International Journal of Operations & Production Management. 23(2). pp.213-229.
Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context. Kogan
Page Publishers.
Miller, D., 2018. Relating Porter's business strategies to environment and structure: Analysis and
performance implications. Academy of management Journal. 31(2). pp.280-308.
Montaigne, A. R., 2014. Factors affecting information satisfaction in the context of the small
business environment. MIS quarterly, pp.239-256.
Moutinho, L. ed., 2011. Strategic management in tourism. Cabi.
Poon, S., 2016. Business environment and internet commerce benefit—a small business
perspective. European Journal of Information Systems. 9(2). pp.72-81.
Reed, O. L. and et. al., 2013. The legal and regulatory environment of business (p. 328).
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Online:
Organisational Chart of Company. 2013. [Online]. Available
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can-ip-help-hr-rd-sales-and-marketing-production-finance-purchase-ceo-or-owner/>
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