Determining Strengths and Weaknesses of Cement Industry in Nigeria

The assignment discusses the importance of organizational structure and external factors in determining an organization's success. It highlights the significance of understanding target audiences, employees, volunteers, and other stakeholders in the organization. The document also emphasizes the need to consider environmental, political, social, and technological (PEST) factors that can impact the organization's performance. Additionally, it discusses different types of organizational structures, including functional, divisional, matrix, and network structures, and their benefits. Furthermore, the assignment provides information on SWOT analysis, which is a tool used to identify an organization's strengths, weaknesses, opportunities, and threats.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1) Organizational structure most likely to be applicable for Tuffstuff Ltd.................................1
2) PEST analysis and alternative tool for PEST.........................................................................5
3) Key factors to be considered with regard to Tuffstuff's proposed venture.............................9
CONCLUSION..............................................................................................................................13

Illustration Index
Illustration 1: Functional Structure..................................................................................................3
Illustration 2: Divisional Structure...................................................................................................4
Illustration 3: Matrix Structure........................................................................................................5
Illustration 4: Network Structure.....................................................................................................6
Illustration 5: PEST-ANALYSIS....................................................................................................7
Illustration 6: SWOT analysis..........................................................................................................9
Illustration 7: Porter's five forces...................................................................................................10
1

INTRODUCTION
Business environment can be determined as all the external and internal factors which
affect the organization. Both internal and external factors work together and influence each other
and affect the business. These factors are effective in influencing performance, outcomes and
development of a business (Björklund, 2011). This report talks about Tuffstuff Ltd. which is a
cement manufacturing located in UK. Firm wants to establish their business at Rwanda which is
in Africa. Tuffstuff Ltd. has no distribution experience and for this purpose they have consulted a
business development advisor. This report covers organizational structure which can be adopted
by the organization. Further, it covers benefits and limitation of PEST analysis, possible
alternative tools which can be used in place of PEST. Moreover, it also covers key factors which
would affect positively or negatively with regard to Tuffstuff's proposed venture.
TASK 1
1) Organizational structure most likely to be applicable for Tuffstuff Ltd.
Organizational is a group in which individuals work together for achieving desired goals
or objectives. For achieving these goals and objective firm should distribute the task in such a
way that all the members in the group understand tasks which will help them in performing and
coordinating effectively (Welford, 2013). This is possible with the help organizational structure.
It is helpful in clarifying roles and responsibilities which has to be performed by employees.
Following are the importance of organizational structure:
Communication: Organizational structure is very helpful in assigning authorities. It is very
helpful for the employees in communicating their issues or problems. Form the first day itself
employees know to whom he/she needs to respond. In most of the organizations main decisions
are made by top management and then they are conveyed through the leaders of each
department.
Achieving Goals: - Organizational structure help in following chain of command.. In addition to
this, it is helpful in improving team efficiency and assist in working together for achieving
common goal (Iskanius, Page and Anbuudayasankar, 2010).
Evaluating performance of employees: It is helpful in evaluating the performance of employees.
It allows superiors to better evaluate employees. As they have a direct interaction with them.
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Employee’s drawback can be identified and they can be provided with suitable measures which
will be helpful in improving their drawback.
There are mainly four types of organizational structure which are commonly used by the
companies and are as follows:
Functional Structure
Divisional Structure
Matrix Structure
Network Structure
Functional Structure: In this structure, firm is divided according to small groups which
are based on functional areas like marketing, finance, operations, HR, etc. (Xue, Shen and Ren,
2010). In other words, organization is grouped according to similarities in skills, resources or
profession. Each department is handled by a leader who will be expert in that area. Leader of
each department will provide guidance and assign task to his department member.
Divisional Structure: This type of structure is useful when the organization has many
markets, products or regions. In other words, it is a type of structure which groups the functions
of organization into divisions (Craig and Campbell, 2012). It helps in increasing the performance
of the organization. Firm as divisions are flexible which assists in reaching to specific
circumstances.
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Illustration 1: Functional Structure
(Source: Organizational Structure impacts, 2013)

Matrix Structure: This type of structure is very helpful in bringing together managers
and employees to work together in achieving objectives. It is basically combination of divisional
and functional structures (Definition of Matrix Organizational Structure, 2013.). It allows
sharing of resources of other department. Main disadvantage of this structure is that it leads to
accountability problems.
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Illustration 2: Divisional Structure
(Source: The marketing place, 2014)

Network Structure: It is the most flexible and decentralized organizational structure.
Further, in this structure teams are distributed geographically, physically or in different
organizations. Product coordinator will provide all the required information to other departments
(Organizational structure impact, 2013).
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Illustration 3: Matrix Structure
(Source: Definition of Matrix Organizational Structure, 2013)

Among these structures Tuffstuff Ltd. should adopt functional organizational structure. As it will
be helpful in dividing the firm in different department under an experienced or professional who
assign task and guide members so that they can perform effectively (Moutinho, 2011). Being a
cement factor there are many processes which has to be performed in order develop cement.
Thus, this organizational structure will be helpful in dividing all the departments which are
actually involved in making cement which will be controlled by leaders. In addition to this,
functional structure will be helpful for the leaders in determining the drawback of each employee
and these employees could be trained according to their drawback. Further, it will be helpful in
developing a healthy relationship with each member which will aid the employees to share their
ideas and innovation.
2) PEST analysis and alternative tool for PEST
PEST analysis involves all external macro environment factors which affects the
organization. It is an important tool which helps in understanding the decline and growth of
market. In simple words, it a business tool for business. It evaluates all the factors which affect a
business to grow. Factors like political, economic, social and technological. Business is benefited
through PEST in number of ways like in developing marketing plan, research reports, product
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Illustration 4: Network Structure

development and strategic planning (Aterido, Hallward-Driemeier and Pagés, 2011). It measures
situation and potential of market, indicates the decline or growth and moreover it analysis the
business potential, suitability of business and attractiveness. In addition to this, it uses four
perspectives, which are discussion, presentation, decision making and understanding which
provides a logical structure. These are many other variations or extinction which can be used.
PESTELI which is one of its extinctions in which it includes factors like Ecological or
environmental, legal or legislative and analysis of industry. STEEPLED is another or modified
form of PEST which includes factors like Social, Technological, Economical, Environmental,
Political, Legal, Ethical and Demographical. But among all this types most preferred one as
PEST as it covers all the required information.
There are many disadvantages for PEST, which are as follows:
All the external factors which are considered during analysis can change and are dynamic. In fact
these changes many also occur with time span of one day, which makes it difficult to predict that
how these factors can be considered in affecting the future or present of the project (Halbert and
Ingulli, 2011). Even at initial stage, environmental changes which may have an adverse on the
project many remain unnoticed. Due to uncertainty of change in factors may result in achieving
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Illustration 5: PEST-ANALYSIS
(Source: PEST ANALYSIS, 2013)

the primary stage carrying out PEST. Factor may change frequently which make delay in
decision making or any other process for which this analysis was conducted.
In conducting a simple presentation for PEST can be considered as a limitation. Primary aim of
PEST is to list out the environmental factors which affect the project. This is only possible if all
the factors are critically examined in terms of degree of impact. It becomes a limitation for
presentation when finding's through the analysis do not seem to have much importance
(Hamilton and Webster, 2015). Through this analysis it is possible that what all results were
expected many not be same. In addition to this it is possible that the findings many not have
value at all.
Another limitation occurs enormous data is collected from right sources. With this it consumes
lot of time. The data collected may be very important but it consumes lot of time and costly. In
collecting relevant data it requires lot of research and resources to be used. In addition to this
also creates a problem to relate all the relevant information. Further, also collecting the latest
data and updating it with previously collected data becomes a problematic issue (Gecevska and
et.al., 2010). One more problem which occurs due to collection of enormous data is that it makes
difficulty in making assumptions. This results in less on actual facts and more on assumptions.
Assumptions which are not mentioned or assumptions which the analyst failed to point out may
lead to disaster in planning. To overcome this kind of issues, some tools should be used which
will be helpful in cross-checking the data collected.
For conducting a PEST analysis, lot of information has to be collected. It very difficult in
handling all the data collected. Moreover, it also results in confusion. Actual problem occurs
when then user get confused regarding the actual data which will be beneficial among all the data
(Wetherly and Otter, 2014). In addition to this, in prioritizing the important data may lead to
entire planning to fail.
PEST analysis scans only external factors of environment which is insufficient for developing
strategic planning as it completely ignores the competitive scenario and internal factors which
are involved in environment. To over come this issue other tools should be used which would
help in developing strategic planning. The tool which can be used in developing strategic
planning will be SWOT. PEST do provides various techniques which are helpful in finding out
the environmental factors which affect the business but its effectiveness depends upon the
accuracy or reliability of data collected.
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It may cause dangerous effort on the small firms as most of the data collated through this
analysis is collected through assumptions (The market places, 2014.). There are chances that the
data assumed may not be correct always. As a result the strategies which may be applied because
of assumption may be wrong and could have dangerous effort on the organization. With this the
firm has to apply another strategy which will result in unnecessary increase in cost (PEST
ANALYSIS, 2013).
There are other tools which can be adopted in place of PEST. Alternative tools are as follows:
SWOT: It is analysis which helps to know the weakness, strengths, opportunities and threats
which are involved in a business ventures or in a project.
This is used in the initial stage of preparing strategic plan. In addition to this, it is helpful in
making decisions in adopting new strategies, in knowing possible areas which will have a change
in program, redirecting and refining effective mid-plan (SWOT analysis definition, templates,
2012).
Porters five forces: Another tool which can be used in place of PEST. This tool analysis and
identifies five forces of competitiveness which are helpful in shaping the organization. In
addition to this, it also helps in determining the strengths and weaknesses of the firm.
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Illustration 6: SWOT analysis
(Source: SWOT analysis definition, templates, 2012)

Porter-s-five-forces includes:
Threat of new entrants: This is helpful in knowing all the barriers which may occur in
expanding the business (The Five Forces, 2014). It evaluates the competitors and what all
strategies which they adopt.
Threat of substitute service or products: In includes the existence of product similar to the firm's
product which is conducting this analysis. It helps in identifying the strategies which can be
adopted in order to compete effectively.
Rivalry: It is the major determinant related to competitiveness of the organization.
Bargaining power of buyers: It is described as the market of outputs. In simple words it is the
ability of customers sensitivity for changing the price.
Bargaining power of supplier: It is described as the market of input.
3) Key factors to be considered with regard to Tuffstuff's proposed venture
Rwanda is a sovereign state which locate at east of Africa. This state is bordered by
democratic Republic of Congo, Burundi, Uganda and Tanzania. The economic growth is raising
due to remarkable performance of secondary sectors and Republic. Form this it is clear that the
economic growth is not pressurising on the natural resources.
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Illustration 7: Porter's five forces
(Source: The Five Forces, 2014)

Country information of Rwanda:
Population: 12.46 million in the 2014
GDP: $7.201 billion in the year 2014
Life Expectancy: 65
Following is the PEST analysis of Rwanda:
Political: Head of state is the President of Rwanda, who has the power to develop
policies in conjunction with commanding the armed forces, signing presidential orders, cabinet
and declaring a state of emergency or war. Population of the state elects the President and which
is held in every seven years. Population of the state is the one who selects the Prime Minister and
other members. Legal system of this state is largely based on Belgian and German civil law
system (Oh, 2010). Human rights of Rwanda are strictly followed and it has abolished death
penalties. The country is growing and as a result it will be favourable or beneficial for Tuffstuff
in establishing a cement company in Reanda as the government will approve or accept new
business as this country is growing so they will provide opportunities to the organizations.
Economical: The economy of this state is mainly based on agriculture. Tea and coffee
are main cultivation through which they get major cash through export. In addition to this the
tourist is growing rapidly as its natural beauty attracts the people from other countries. Moreover,
it is among two countries among which gorillas can be safely visited. Further, tourist highly pay
for tracking gorillas. The culture of this country highly influence people to visit Rwand. Its GDP
from industrial sector is contributed up to 15.7 in 2014. These are many manufactures which
includes soap, furniture, agricultural products, plastic goods, shoes, cigarettes and textiles. This
factor will be favourable for Tuffstuff's in establishing cement industry as the economy of the
country is highly growing. The competition is very low and has a high market coverage (Yu and
Ramanathan, 2012). The economy of this country is strong in terms of per-capita GDP which
contributes unto $2.432 in the year 2014. United States, China and Germany which are the main
export markets. Traditional crafts and arts are developed all over the country. Tuffstuff's will be
highly benefited as this country is growing rapidly. This could be determined with the help of
contribution done by the industrial sector. This shows that the country is contributing highly
through industrial sector which shows that Tuffstuff's has a great opportunity for expanding their
business there.
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Social: The government of Rwandan focus on funding supply of water which has helped
in increasing the national budget share. When compared with 2005 the safe water assessed by the
population was 55% but in the year it has raised up to 83% in 2014. Local language of this
country is Kinyarwanda which most commonly spoken. In addition to this, country is surrounded
by mountain which adds to its beauty. Further, the climate of the country is subtropical, which
includes two dry seasons and two rainy seasons each year. From this it can be said that the social
factors of the country is also favourable as the resource are available in abundant (Aula, 2010).
For establishing cement industry, the firm will get all the required resource which are required in
developing cement according to their requirement.
Technological: They develop electricity with form hydroelectric sources. In addition to
this the power stations on lake provides up to 90% electricity for the country. Moreover, the
government of Rwandan provides free education. The use of technology is rapidly increasing and
supply of electricity is through hydroelectric sources which has proved to be helpful in providing
electricity at all the parts of the country. Moreover, government has planned for providing
education to all the children which will be done within 2020. Further, government has spent
about 6.9% compared to 2010. Further, they have mandatory for having applying for healthcare
for all the people from 2008 and within they covered about 90% of the population in 2010. Form
this it is clear for establishing cement industry, Tuffstuff will get highly benefited with the
technological aspect as they are using the new technology in developing the country.
SWOT analysis: It is very helpful in analysing the strength, weakness, opportunities and threats
of a business. In addition to this, it is helpful in determining the opportunities which prevail in
the market in terms of expansion of the business. It is helpful in determining the internal ans
external factors which affect the business (Björklund, 2011). Moreover, it is the first stage in
preparing strategic planning. It is helpful in making decisions for the organization for selecting
the best strategy which can be adopted in order to improve the performance of the organization.
First two letter helps to determine the internal factors which are strength and weakness. This
states the experience and resources which are available for the organization. The areas which are
considered in these factors are:
Resources related to finance like investment opportunities, funding and source of income.
Resources related to physical like facilities, equipments and companies location.
Resources related to man power like target audience, employees and volunteers.
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Natural resources, patents, copyrights and trademarks.
On the other hand, opportunities and threats are helpful in determining the external sources,
which consider factors like:
Market treads such as technology, new product.
Funding like legislature and donation.
Economic trends such as international local and national financial trends.
Environmental, economic and political regulations (Welford, 2013).
Also determines the relationship between partners and suppliers.
Following are the templates which are used in this SWOT analysis:
Weaknesses:
Can have impact on environment
Costly
Makes the project complex
Strengths:
Leadership is strong
Makes the fund available
It provides political support
It also makes fund available
Threats:
Delays time
Environmental constraints
Make changes in opposition
Opportunities:
Improves local economy
Improves safety
Boosts up the organization
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CONCLUSION
From this report, it can be articulated that organizational structure plays a vital role in clarifying
the roles and responsibilities which has to be performed by the employees of the organization.
According to the report, in establishing cement industry, Tuffstuff should adopt functional
structure as it divides the organization into different departments which is handled by leaders
who are expert in there respective areas. This is very helpful in coordinating and in providing
proper guidance to the employees. In addition to this, performance of the employees can be
closely examined and improvements can be made so that they perform effectively. Further,
PEST analysis plays a vital role in providing the organization appropriate strategies which will
help in expansion of business.
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