Macro-environment of Burberry

Business Environment INTRODUCTION 1 TASK 1 1 P1 Different types of organisation with its purpose and legal structure1 P2 Size and scope of different types of organisation 3 TASK 24 P3 Relationship between different organisational functions and their link with organisational objectives and structure 4 TASK 35 P4 Positive and negative impacts of macro health environment 5 TASK 46 P5 SWOT analysis of Burberry 6 P6 Inter-relation of strength and weakness with external factors of company 8 CONCLUSION 9 REFERENCES

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 .....................................................................................................................................1
P1 Different types of organisation with its purpose and legal structure.....................................1
P2 Size and scope of different types of organisation..................................................................3
TASK 2 ..........................................................................................................................................4
P3 Relationship between different organisational functions and their link with organisational
objectives and structure...............................................................................................................4
TASK 3 .........................................................................................................................................5
P4 Positive and negative impacts of macro environment...........................................................5
TASK 4............................................................................................................................................6
P5 SWOT analysis of Burberry...................................................................................................6
P6 Inter-relation of strength and weakness with external factors of company...........................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business is defined as an organisation which emerge in commercial, professional and
industrial activities that helps to satisfy the needs and demand of society. Further, this is divided
into two different parts one is business entities that perform its activities to earn profits and
second is business organisation which work for social cause. Business environment is the
combination of internal and external factors that impact on business activities in direct or indirect
ways. It helps to identify business opportunities which determine the profits, growth and
sustainability of an organisation for longer period. This assignment is written in context of
Burberry which is British luxury organisation that offers its products in clothing segment. The
organisation was founded in the year 1856 and its headquarter is established in London. This
report covers the purpose and legal structure of different types of organisation (public, private,
voluntary) which contain unique objective in order to accomplish their goal. Along with this,
PESTLE and SWOT are implement to analyse or predict business environment.
TASK 1
P1 Different types of organisation with its purpose and legal structure
An organisation is surrounded with different factors that support or create barrier in the
expansion of company. These business environment factors help business to analyse the threats
and challenges that are present in environment (Babu, 2012). It helps to overcome from different
problems that hinder the activities of business that are present in the surrounding environment of
company. Each organisation or company is divided into different groups public, private and
voluntary which are given as below:
Private company- The private company refers to those organisation that are control by
small number of shareholders which raise funds to operate their activities from different sources
such as banks, venture capitalist etc. In this, owners are whole sole responsible for the profits and
loss of organisation. In context of Burberry, it is one of luxury brand that operates its business in
overall globe. Effectual purpose and legal structure of an organisation helps Burberry to earn
sufficient amount of profits from a century as it helps them to accomplish their goal in minimum
time period.
Purpose
1

The main purpose of Burberry is to maintain loyalty and quality of their products and
brand. Along with this, management put continue efforts to adopt new technology that increase
value of organisation's products.
Legal structure
Under this task, legal structure of private strucutre is mention below: Partnership- This is the form of legal structure in which more than one person come
together to operate business activities and bear similar risk for accomplishing
organisation targets (Bingham and Walters, 2013). Sole proprietorship- In this type of business in which a single individual is responsible
for controlling all activities of company. Private organisation- In these types of organisation there are two or more directors are
decided by management which are responsible and authorise to complete the organisation
goal. They manage funds from banks and other financial institution in order complete
their activities. Public organisation- Their types of companies are present in industry as well as in
market through which it is easy for them to complete their goals which determines that
they raise funds from public to complete their goals.
Advantage of private company- For the success of an industry private sector organisation are
playing an essential role. They increases employment opportunities in country which helps
individuals to raise the living standard as now they all generates income.
Disadvantage of private company- Private organisation charge high rate prices form customers
as they provide quick services to customers compare to public sector organisation. This generates
unethical practices in industry as organisation develops execute cheap raw material that leave
negative impact on consumer.
Public company- The companies that trade their security on registered stock exchange
through which individuals are open to sell and purchase its shares as it helps investors to
determine the worth of their shares. National health service is one of the top company that deals
into healthcare sector. It provide dental care, optical care etc. to people at lower price. Purpose
and legal structure of this company is as follow:
Purpose
2

The purpose for which NHS is working is to provide better health services to people by
charging minimum price from them. It works with motive to protect the society from harmful
diseases.
Legal structure
Legal structure that follows by public company is as follow:
 Central government- They holds the power of an organisation in this they formulate
policy or result for whole country. Companies which came under central government has
to follow all rules and regulations that are formulate by government. State government- In context of state government companies that come under this sector
and their function or departments are followed by government has to follow policy that
is formulated by government (Blyton and Jenkins, 2012).
Advantage of public organisation- this organisation help the customer to purchase products at
effective prices. In context of public they work with motive to serve society with earning
minimum profits from them.
Disadvantage of public organisation- In public organisation it is difficult for organisation to
manage all the resources that are developed by them. This results that organisation is not able to
maintain good quality of their products.
Voluntary- The organisation which is concerned with the society and work for providing
more benefits to its people are known as voluntary sector. Oxfam is one of largest organisation
that work for not to earn profits but to serve the society and to increase the living standards of
society.
Purpose
The major purpose of Oxfam is to treat equally all the individuals of the society. Along
with this, its purpose is to remove poverty from nations so, all people lead healthy life.
Legal structure
 Trustee structure- To complete all the activities and task organisation that include law,
charity etc. are included in this Oxfam. With the help of Donors and trustee organisation
is able to accomplish their goal easily. Association- Usually this is the most common structure of voluntary organisation in this
different groups of people combined their efforts to work on similar project (Deasy and
3

et. al., 2015). This association groups are developed by constitution which defines
objective of an organisation and rights of its members.
Advantage of voluntary organisation- This organisation helps the society to raise their living
standards along with these it also helps them to remove poverty, conflicts and other harmful
issues which determines that they increases goodwill of society.
Disadvantage of voluntary organisation- Voluntary organisation includes complex process that
helps an organisation to increase their difficulties in the completion of activities. This results that
organisation create ineffective results for the organisation.
P2 Size and scope of different types of organisation
Every organisation has different size and scope that depend on their goals or vision. The
size and scope for each organisation are given as below:
Burberry
Burberry is the successful and well known brand of UK that deals in clothing, cosmetic
and accessories products. It is founded in the year 1856 which determines that it made its
presence from a century in industry.
Vision and mission- The vision of Burberry is to maintain in sustainability in overall
world by providing inferior quality goods to its products they make their products reliable and
unique that helps to improve the profitability for business. While the mission statement of
Burberry is to find out different technique which helps organisation to update its products.
Size and scope- In context of Burberry, more than 1,45,000 employees are working in
the company that helps to accomplish its targets. In present scenario ,company is operating its
business or stores in more than 51 countries. Company has wider range of products through
which they satisfy more customers along with this it helps to generate faith in its customers
(Carim and Warwick, 2013).
Business objective- The main objective of Burberry is to identify new segment so they
covers all markets by creating emotional connection between customer and brand. It helps them
to sustain their business for longer period.
Size and scope- Large number of workforce is working to attain the vision of national health
service that operate its business in all world. For this organisation is able to cover wider scope
because they provide effective services to its clients.
4

Stakeholder- Employees, physicians, patients and government are the major stakeholders
of NHS. They all combine their efforts through which organisation provides effective health
services to its customers.
Oxfam
Oxfam is the global organisation that is commenced in the year 1942 (Klem, 2013).
Presently more than 20 voluntary organisation are working under Oxfam with motive of
removing poverty from the society.
Vision and mission- The vision of Oxfam is to remove injustice from the society while
the mission is to provide better life-style to individuals of society.
Size and scope- The size of organisation is very large they are operating their
organisation in more than 90 countries along with 19 international organisation.
Services- They provide various services that all are for the benefits of society. It includes
hospitals, education, clinics, employment etc. through which an individual adopt better life-style.
Business objective- Oxfam has the major objective to remove poverty from the world in
minimum time period. These helps country to increases the raise the standard of their living.
Expansion strategy- to increase the market areas of an organisation they implement joint
ventures and franchising method which is explained as below:
Joint venture- When two companies combine their activities together in order to achieve
the similar goals of the organisation then it is known as joint ventures. This includes that they
share similar characteristic, vision and objective to capture the market.
Franchising- It is the form of business through which an organisation or owner distribute
the product, service and method to another persons through which they generated more income
from their investment.
TASK 2
P3 Relationship between different organisational functions and their link with organisational
objectives and structure
In an organisation more than two individuals are combine together with an similar aim
that helps to accomplish their vision. For this each and every department of an organisation are
inter-relate with each others. Link between departments or functions of Burberry's are as follow:
5

Marketing and human resource department- Marketing and human resources function
both are essential for the success of the organisation. Each company promote and advertise their
products through marketing function. Similar human resource department hire effective and
talented workforce because it helps them to gain their goals with in limited time period. For
effective marketing it is necessary for organisation to hire skilled employees. As they provide
creative and unique advertisement in newspaper, magazine which helps them to attract more
customers (Lee, Kao and Yang, 2014). Along with sale and marketing of product is also done if
organisation has potential candidates.
Finance and marketing department- These both departments or function helps an
organisation to domain or lead the organisation. Under this both has to work together so that
organisational goal is achieve with in minimum time period. In this marketing department is
responsible for generating revenue by advertising, promote and sale of products. While finance
department is responsible to ensure and transport those revenues as it help to increase wealth
maximisation of an organisation.
Relation of functions or department to organisation structure and objective
Each department and function of an organisation is related with organisational goal and
objective. It helps an organisation to fulfil their purpose along with this it also helps to attain
organisational goals. In context of Burberry's board of director and CEO are the decision makers
that decides goals of company (Rathi, Given and Forcier,2014). Under top management
assistance chief officer and different committees are responsible to carry out business objectives.
Moreover each function of organisation impact on an organisational performance because they
all are inter-relate with organisational goals. Apart from this organisational structure create
effective working culture according to organisational goal and objectives. For this management
allocated all essential resources that are required to attain the objectives of an organisation
through which better working conditions and productivity is improved.
Types of organisational structure
Tall structure- Large and complex organisation that are operating their business at multi-
national level needs to implement taller hierarchy. These helps them to perform their activities in
simplest form which determines long chain of command is essential for multi-national
organisation.
6

Fall structure- This structure states smaller organisation will be benefited with execution
of flat structure as in these smaller level of structures that helps to achieve organisational goal in
smaller and simplest form.
Matrix structure- This is the modern approach through which an organisation executes
effective results for organisation. In simple words it is defined that employees will report to more
than one person that is functional and operational manager.
TASK 3
P4 Positive and negative impacts of macro environment
This task identify the impacts of macro environment on operations of Burberry. For this
PESTLE model is implemented in the report which is given as below:
Political factor- Rules and regulations that are formulated by government are included
under this factor such as foreign exchange, tax policy etc. Burberry is the largest fashion house
that is operating their business in different countries of world. As for positive impact
organisation need to explore those countries that has flexible and liberal policy this help to
capture unexpected market share. While if Burberry violate rules and regulation formulated by
government then management has to face difficult challenges (Siewiorek and et. al., 2012).
Positive impact- It helps an organisation to provide simple and straight framework that helps
them to formulate strategy according to policy of government.
Negative impact- This factor rely on the principles that are simply achieve so it create
inefficiency among its operations.
Economical factor- The economic factors are considered all the financial matters. It
includes inflation and interest rates, economic growth etc. It is essential for company as supply
and demand of products depend on this factors. Burberry sell their products in developed
countries because of stable economy as it create positive results for company. While in
developing countries company is not able to generate more profits because of low economic
conditions.
Positive impact- This helps an organisation to implement goals with functional skills as well as
expertise in particular field.
Negative impact- If organisation invest their money in developing countries then it creates dis-
satisfaction because it cannot generates more profits.
7

Social factors- Culture, features, demographic section, norms, value etc. are included
under included under social factor. This helps an organisation to target their customers easily. In
positive case management of Burberry gather information from social media that helps to
identify demands of society. While in global expansion create difficulty for organisation as each
society has different demand this create negative impact on organisation as each society has
different demand.
Positive impact- It helps to reduce the threats that generates by the society in an organisation
through predicting market environment.
Negative impact- This increases the analysis of organisation through which it is difficult for
organisation to attain goals within time restrication.
Technological factor- Update or change in technology impact on working of the
organisation. For the positive impact Burberry improve its technology in production process that
helps to gain competitive advantages among its rivals. While if company does not adopt new
technology company has to loose its market share this results negative sales on company (Rebora
and Turri, 2013).
Positive impact- Technology helps organisation specifically Burberry to update their products in
market and gain competitive advantage.
Negative impact- The changes that are implement in technological methods increases cost for
management.
Legal factor- Laws that are related with employees, products etc. are included under
legal factors. It also includes intellectual rights for company which are patents, copyright and
trade-mark for company. Is Burberry is aware about company rights then they analysis are in
benefits from its competitors. As laws are formulated in a way that are favourable for
organisation as well as for country this bring positive results for company. The negative effect is
that if Burberry violate laws of country then they has to bear fine or trade restrictions.
Positive impact- Legal factors helps an organisation to perform their operations with in
framework for country.
Negative impact- Organisation has to face restrictions if they not follow rules of country while it
is not easy for them to accomplish all rules in the organisation.
Environmental factors- Climate, weather, pollution etc. are different forces that create
impacts on environment factors. To overcome from this problem company implement those
8

materials that can be redeemable and recycled in future. While in case of company produce
products that are harmful for environment then consumer does not purchase this products which
impact negatively on company business.
Positive impact- It is essential for organisation to follow environmental guidelines because it
helps them to generate faith among customers.
Negative impact- To produce products according to guidelines of environment then organisation
has to bear large cost that result in increasing price of products.
TASK 4
P5 SWOT analysis of Burberry
To take better decision management of company implement SWOT in the organisation.
As it helps to increase their strength and to overcome for weaknesses. Along with upcoming
threats and opportunities are also predicted through this model (Walker and Jones, 2012).
Strength
 The strong presence in international
market helps Burberry to strength their
operations as they has more experience
from its competitors.
 In present scenario Burberry is
operating its 500 stores in different
countries which helps to gain
knowledge from different countries.
 Design of Burberry's products is unique
that brings positive results for company
because of this company is one of the
leading and luxury brand of UK.
Weakness
 Products of Burberry are of high price
through which it is not afford by price
conscious customers.
 Students and middle class persons are
not able to buy products from Burberry
stores as they has not enough amount to
purchase the products.
 Company has limited line of products
through which customers are not
provided large number of options to
purchase the product.
Opportunities
 Organisation has option to expand their
product line as wide range of products
help company to satisfy more number
Threats
 Today all business are globalised and
developed in digitalised way so
Burberry has to face competition from
9

of customers.
 Company deals in luxury products only
which show British culture. While they
has option to manufacture simple
clothing also.
 As Burberry's reach to its customers
through stores. So company has option
to develop digital platform because
now people are buying products
through online medium.
local as well as from international
competitors. This generates low sales
for company.
 Organisation charged high price from
their customers. So they has to assure
that they provide products of inferior
quality. As the expectation of
customers is high when they buy
branded products.
This table cover SWOT analysis of Marks & Spencer
Strength
 Organisation offer wide range of
products to its customers that help to
generate more income. M&S is strong in their E-commerce
and traditional way to approach the
customers.
Weakness
 The companies if totally relies on the
market of UK. So decisions are
favourable for local industry only.
 Company does not approach potential
customers in developing countries such
as India, China etc.
Opportunities
 Company has opportunities to covers
potential buyers through implementing
simple model. M&S need to reshape and design its
clothes products that increases their
customer base.
Threats
 Brexit impact heavily on the sale of
M&S products that results they has to
decrease their price.
 Their is strong competition is present in
UK market in which M&S is operating
their business.
10

P6 Inter-relation of strength and weakness with external factors of company
This task cover inter-relation between external factors of company with macro
environment which is explained as below:
Political- This factor includes governmental rules and policy that is developed for
welfare of society (Warren, 2015). Burberry has most of its stores in developed nations as in
these country ruling governments are more stable in nature.
Strength- Stable government does not make changes frequently as it help an organisation
to earn high profits because they developed their policy as per rules and regulations of
government.
Weakness- Lack of government policy create barrier in an organisation to operate their
business activities. This effect negatively on its operations and decrease goodwill of company.
Economical- The factors that are included in economical factors are inflation and interest
rates. Developed and developing has different economical conditions. In context of Burberry
their strength and weakness is given below:
Strength- Countries in which there is high inflation organisation has option to earn more
profits. These help company to raise funds easily and to earn sufficient amount of profits.
Weakness- Low cash generating countries bound the organisation to limits their activities
which reduce their scope to earn required revenue
Social factor- In social factor culture, value and norms are explained that help an
organisation to divide products as per market segmentation. Along with these it also helps to
identify the needs and demand of particular society.
Strength- With the analysis of social factor it is easy for Burberry to explore needs of
organisation and develop their products as per need & demand of society.(Wilson, Williams and
Kemp, 2012).
Weakness- It is difficult for company to satisfy the needs of all customers as trends of
market changes regularly. Their is frequent changes in demands of customer which create
complications to make their products.
Technological- The changes that take place in technology are quick as it plays an
essential role to improve products. This help Burberry to make their unique and creative change
in the product.
11

Strength- Technological changes helps an organisation to develop their goods that beat
its rivals and helps organisation to gain competitive edge through which production process is
more effective and developed
Weakness- In the technological changes organisation has to invest more money to make
develop the products. This result in generating low income and revenue from organisation.(Yu,
Cao and Tan, 2019).
CONCLUSION
According to the above given information it is concluded that different types of
organisation or business are present in industry. They all has different purpose which are depend
on their organisational structure, size and scope. Organisation work to achieve their vision and
want to accomplish their goals effectively and efficiently for this the internal and external
environment of company is analysed through the implement of PESTLE and Swot in the
organisation. This helps Burberry to evaluate their daily activities and to modify changes that are
necessary to overcome from loopholes.
12

REFERENCES
Books and Journals
Babu, K.V.S.N., 2012. Business intelligence: Concepts, components, techniques and
benefits. Components, Techniques and Benefits (September 22, 2012).
Bingham, T. and Walters, G., 2013. Financial sustainability within UK charities: Community
sport trusts and corporate social responsibility partnerships. VOLUNTAS: International
Journal of Voluntary and Nonprofit Organizations, 24(3), pp.606-629.
Blyton, P. and Jenkins, J., 2012. Life after Burberry: shifting experiences of work and non-work
life following redundancy. Work, Employment and Society. 26(1). pp.26-41.
Carim, L.A.R.A. and Warwick, C., 2013. Use of social media for corporate communications by
research-funding organisations in the UK. Public relations review. 39(5). pp.521-525.
Deasy, and et. al., 2015. User interface for controlling use of a business environment on a
mobile device. U.S. Patent 8,954,050.
Klem, J.B., 2013. System and method for tracking information in a business environment. U.S.
Patent 8,583,514.
Lee, J., Kao, H.A. and Yang, S., 2014. Service innovation and smart analytics for industry 4.0
and big data environment. Procedia Cirp, 16, pp.3-8.
Rathi, D., M. Given, L. and Forcier, E., 2014. Interorganisational partnerships and knowledge
sharing: the perspective of non-profit organisations (NPOs). Journal of Knowledge
Management. 18(5). pp.867-885.
Rebora, G. and Turri, M., 2013. The UK and Italian research assessment exercises face to
face. Research policy. 42(9). pp.1657-1666.
Siewiorek, A and et. al., 2012. Learning leadership skills in a simulated business
environment. Computers & Education. 58(1). pp.121-135.
Walker, H. and Jones, N., 2012. Sustainable supply chain management across the UK private
sector. Supply Chain Management: An International Journal. 17(1). pp.15-28.
Warren, T., 2015. Work-time underemployment and financial hardship: class inequalities and
recession in the UK. Work, Employment and Society. 29(2). pp.191-212.
Wilson, C.D., Williams, I.D. and Kemp, S., 2012. An evaluation of the impact and effectiveness
of environmental legislation in small and medium‐sized enterprises: Experiences from
the UK. Business Strategy and the Environment. 21(3). pp.141-156.
Yu, M., Cao, D. and Tan, J.Y., 2019. CSR-consumption paradox: examination of UK apparel
companies. Journal of Fashion Marketing and Management: An International
Journal. 23(1). pp.124-137.
Online
Identifying and understanding business environment 2018.[Online]. Available Through:
<https://www.toppr.com/guides/business-environment/>
13