Business Environment and Strategic Management

This assignment delves into the business environment, covering topics such as ethics, CSR, sustainable development, and dynamic capabilities. It also explores the effects of work environment on training transfer and the importance of a network perspective on business models. The analysis includes a meta title and meta description for SEO purposes.

Business
Environment

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT............................................................................................................................1
TASK 2............................................................................................................................................1
P3 Relationship between various functions of organisation and its link with structure and
objectives.....................................................................................................................................1
TASK 3............................................................................................................................................3
P4 Positive and negative impact of external factors on business environment...........................3
P5 Internal and external analysis to know strengths and weaknesses.........................................6
TASK 4............................................................................................................................................7
P6 Interrelation of strengths and weaknesses with external factors............................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment is known as mix of various internal and external factors that
largely impact the decisions taken by a business enterprise to remain competitive in market.
Internal factors are known as those elements that remain inside the enterprise and are
controllable by the management. External factors are known as those elements that exist outside
the entity and impact actions of a business enterprise on large level. These factor are also known
as macro environment. Identify and analysis of external elements is most essential function of a
business enterprise. One of the main benefit of this analysis is that it make the manager aware
about the current market trends which support in offer better products to customers. IKEA, a
firm that operate on international level and deal in various type of products such as furniture,
home and kitchen appliances is taken under this report for study. Various type of organisations
with its purpose and legal structure is all mentioned in this. Further, relationship between various
functions of an enterprise and its link with the structure adopted by entity is all described under
this. Various tools that can be use by business enterprise to undertake internal and external
analysis is also given in this.
TASK 1
Covered in PPT
TASK 2
P3 Relationship between various functions of organisation and its link with structure and
objectives
Various type of functions are perform by a business entity in order to satisfy the needs of
its customers and to attain its set goals and objectives. It is very important for every business
department to perform its roles and responsibilities in effective way as this help entity in get
competitive place (Kolk, 2016). Effectiveness of business activities is based on various factors
such as its final objectives and the structure follow by firm. Before assign roles and
responsibilities to different department one of the major thing that require to be consider by
manager of firm is that the function perform by various department are interlink with each other.
With this, manager can bring and maintain cooperation among various business functions and
can get better satisfy the needs of its customers. Functional, matrix and divisional are the three
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most popular type of business structure. Matrix organisational structure is follow by IKEA, all
employees are divided into groups which ensure effective monitoring of their actions and
activities. Entity follow matrix organisational structure in order in attain its final aims and
objectives. Main aim of entity is to increase its profit by achieve economies of scale. Needs and
requirements of customers is one of the main focus of entity and various efforts are done by
entity to satisfy the same. Relationship between different organisational functions can be
understood by the points given below:
 HRM: This is known as one of the most important department of every organisation.
Manager of this department formulate policies in order to manage employees and their
actions at workplace so entity can attain its set goal and can generate more number of
profits. Performance of staff members largely affect the success of entity as these are the
one who manufacture products for satisfy the needs of customers (Li and et. al., 2011).
Proper training should be offer to employees so they can perform their job roles in
effective manner. IKEA follow a matrix structure and in this it is very important for
manager to utilise all its employees in an effective manner. With this, entity can offer
better and effective services to its customers.
 Marketing and sales department: Various promotional activities are carry out by
marketing department of entity in order to promote its product and to influence
individuals to buy the same. Activities of sales and marketing department are interlink
with each other because when promotion activities are carry out by marketing
department then in directly increase the sales of company’s product and this support sales
department in attain its objective (López-Gamero, Molina-Azorín and Claver-Cortés,
2011). Structure follow by entity encourage sales and marketing department to decide its
activities in group which provide benefits to entity.
 Information technology: In today’s business environment, technology is use by every
business organisation for carry out various business activities and IT provide support to
all. This provide an opportunity to manager to collect and store large amount of
information in one place which help managers in take better decisions which increase
effectiveness of business operations.
 Production department: This department carry out manufacturing of products as per the
needs of customers and this activity largely affect success of organisation. As entity
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follow a matrix structure so this ensure analysis of products and features offer by entity
to its customers. This help in get customer satisfaction and help in retain them for a long
time period. In this way entity can maintain its market share.
TASK 3
P4 Positive and negative impact of external factors on business environment
There are various elements that impact business in positive or negative way. There are
chances that due to change in these factors organizational operational gets effected. Targets can
be achieved with the joint efforts of employer and employees which help to achieve activities in
specified manner (Al-Swidi and Al-Hosam, 2012). PESTLE is the technique through which they
can talk about use of policies which are efficient and effective to perform business related
activities in positive manner. PESTLE analysis of IKEA is as under-
Basis Positive Negative
Political There are various policies
which are framed by
government and it is essential
for association to follow them.
Political factors means
government related element
which are associated with
business. These are not
directly related with business
but to make policies in better
and effective way. As per
requirement, they have to use
market and then take actions
which help to achieve targets.
Due to excess interfere, there
are possibilities of negative
impact on image of
organization. As regular
contact may distract
management of IKEA from
achieving targets in effective
and efficient way.
Economical This is most component
company to run business.
There is requirement of funds
through which actions can be
This factors has negative
aspects too. In case of
increment in interest rate of
loans,. Then it affects profits
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taken in effective and efficient
manner. While raising funds,
company has to make their
financial position in better
way. Through which they help
company to attain goals. There
are various sources of rising
funds through which actions
are also taken properly
because there is need of
repayment of loans.
for company. If funds are not
readily available, then it
creates hurdle in regularity of
business. Economic aspects is
also related with technological
as it may affects requirement
of machines.
Social IKEA is biog organization,
which operates in various
parts of company, so it is
essential to talk about change
in demands also. IKEA has to
analyze market and then take
actions. as there is change in
demand, so if manager of
IKEA keeps in mind then it
helps to make good image in
market. This is beneficial as it
helps to achieve targets in
better and effective way.
Due to social factor,
organization has to keep in
mind, variations in demand.
Sometimes to make garb all
aspects, it is not possible to
satisfy all demand. Sometimes
due to change in demands
stock becomes death and it is
wastage of post.
Technological As these days technological a
changes are taking very fastly,
so it is important to accept
those changes. This helps in
reducing time of production
and wastage. Employees are
also satisfied that they are
With change in technology,
there is requirement of factors
which help to judge plans
through which they can
achieve targets. There is
requirement of huge cost with
and time of manager as well as
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working with latest technique.
IKEA is also competent with
competitors. With the use of
new technological quality of
product and services are good.
employees. Training is
required for workers to work
under new techniques.
Employees are not
comfortable to work under
new environment, this affects
their efficiency.
Legal There are some laws related to
workers, environment, nature,
etc. which IKEA has to
follow. These are some
mandatory laws and this helps
to achieve targets properly.
These acts are important and
at the same time, these provide
some authority to employees
too. In case any misconduct is
taken in organization, then
legal actions can be taken.
There are many changes in
these laws, so managers
cannot concentrate on their
actual targets. In case of any
legal proceedings, this is long
proceedings of court and legal
actions. This is wastage of
time as well as money.
Sometimes in case of failure
of law related proceedings,
image of IKEA also get
affected.
Environmental Environment is the factor
which was to be conducted
with the help of change in
plans ad policies which can e
achieved with the help of
achieve targets. Due to change
in environment related factors,
they can perform actions of
business properly.
This factor affects business the
most. Due to change in
environment demand of
society varies and this facts
actual business operations.
Change in climatic factors of
various places affect demand
of workers, so this makes
decision of management
wrong.
From the above decision it is clear to know impact of external factors PESTLE is the best
technique. Through this they can perform actions to achieve targets in better and efficient way
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(Bryman and Bell, 2015). It is essential to know what changes are making in business so there is
no need of change in business related policies. There is requirement of PESTLE analysis so
competition can be done with firms and this helps to take corrective measures to avoid negative
results of external forces.
P5 Internal and external analysis to know strengths and weaknesses
STRENGTH
 Customer preference is one of the
important concepts which help to make
grate in comparison to other.
 They have varieties of product at low
cost, so every income group can prefer
this brand.
 They believe in innovating new ideas
with the help of employees and
research in market.
 They satisfy demand of customer very
frequently by accepting what is
currently in trends.
 They have good supply chain
management through which furniture
and other home appliances can be
delivered effectively.
 Market goodwill of IKEA is very good
due to their durable and innovative
style.
WEAKNESS
 They have many advertisements but
they put some question marks.
 Employee’s absenteeism and turnover
is high because they do not give much
preference to them.
 Sometimes to make cheap, they reduce
the quality of raw material, which
affects their brand image.
OPPORTUNITIES
 They can expand their business in
various other regions of country.
 Online marketing is one of the best
opportunities which makes society
know about their product and services.
 They must launch online selling
services which yelp to compete with
other brands and they can reach more
customers in limited time.
 There issue of resources which are eco
friendly and hence they can promote
CSR activity which helps to attain
achievement over others.
THREAT
 As scope of furniture and home
appliances are increasing at the same
time, competition is also increasing.
Many new and trendy outlets are open
which affects growth and business in
achieving business objectives.
 Many businesses operate in different
streams which may affect their sales
and profits.
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TASK 4
P6 Interrelation of strengths and weaknesses with external factors
From the above discussion of PESTLE and SWOIT analysis it is clear that these are two
accepts which are related to internal and external factors of business (Christopher and Holweg,
2011). To make change in plans an d policies, they have to work with employees and other
internal components. Due to change in technology, employees may get affects and this affects
business operations in adverse way. But as the same time, if managers of IKEA give motivation
to workers, they can get better results as result to others. If training is provided ads per aspects of
all workers, then this is beneficial for them, as well as organization.
There is need of funds which help to achieve targets in better way. There are changes in
business targets, so achieving them is not possible with consistent component (Cross and Miller,
2011). There are various internal and external forces of raising funds, but due to change in their
interest rate, components, etc. They can analyze market in effective and efficient way. Brest
alternative through which goals can be achieved has to be selected. In this case, there are changes
in business operations too. Employees may get diverted from their actual actions. There is
requirement of proper communication in organization, so this makes them achieving that in
effective way. IKEA is the origination which works to perform activities in efficient manner.
While making changes in operations they have to analyze market and then perform activities in
efficient way. It is important to work as per change in plans and policies and manger ahs to alter
business policies as per business environment.
Legal factors may get affects due to some internal person of business. There are many
factors which help to achieve business in efficient way. While making plans they have to analyze
market and then take corrective actions. if policies are not according to market then this may
make customer dissatisfied and they can switch to other brand. Internal and external factors are
related to one another, in efficient way. As per change in government they have to analyze
market and take actions after use of policies. Business runs in society, so it is important to work
as per business. it can be done by top level management of IKEA. There are numerous rt5etail
stores, so they have to make policies as per requirement. In case of increases in cost by supplier,
then this affects profits of company. to avoid such situation manager ahs to make good relations
with various pother supplier too. Excess government interference may dilute the concentration of
mangers and they cannot take care of actual business operations.
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Strength and weakness off IKEA is related to external factors. There are chances in
business goals and objectives then this must be delivered to workers so they also take actions as
per requirement. Society is the place which is most essential component. In CSR activities,
company has to pay back top society as they use natural resources. Manager had to motivate
employees to give their best to achieve targets. This can be made clear with concept ofr
development of business means satisfaction of their needs. There are various concepts of external
business which h help to achieve targets, so it is important to take care of their needs. Customer
is the key of business, so it is important to work as their satisfaction (Dibrell, Craig and Hansen,
2011). There is change in demand, so organization ahs to alter their plans policies. R&D
department of IKEA helps to know what changes are taking place in business and how can be
implemented in business operations. It is not possible to accept all changes so options which are
best as per requirement are selected. Profit is ye main motivate of organization, which can be
gained by reducing cost. Policies aof competitors also have to be analyzed, so better strategies
can be achieved in better way. If business run in ethical legal way, there is no doubts on its
performance by stake holders. But at the same time, in reserve case image gets affected and this
makes them dissatisfied. Hence, internal and external factors are related with each other, though
external factors are not in control of management of IKEA (Gharajedaghi, 2011).
CONCLUSION
From the above report it is clear that organization has to make policies in better and
effective way. There are possibilities that due to change in factors of business, it has impact on
whole business. There are various types of organizations having different targets. These
companies are owned and governed by private, trustees or government. In case to make changes
in roles and responsibilities, they have to analyze market then select approach which is effective
for achieving goals and objectives. As there are various departments which help to achieve
targets on time and in appropriate manner. In case of alteration in business policies, workers are
required to be motivated, so they can analyze market in efficient manner. Manager has to guide
workers to perform activities in specified manner and to keep eyes on activities of employees
that they are performing operations in specified manner or not.
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REFERENCES
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business environment. 2018. [Online]. Available through:
<http://www.yourdictionary.com/business-environment>.
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