Business Environment Analysis and Strategies

This report provides a detailed analysis of the business environment of an organization, including different types and purposes of organizations like public, private, and volunteer sectors. It also describes various organizational functions and their connection with the objective and structure of the organization. The report concludes that both PESTLE and SWOT analyses are essential in calculating the strength and weakness of an organization and taking appropriate measures to overcome these issues.

BUSINESS & THE
BUSINESS ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION..........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purposes of organization; public, private and voluntary sectors
and legal structures .............................................................................................................1
P2 Size and scope of a range of different types of organization:......................................3
TASK 2............................................................................................................................................4
P3 Relationship between different organizational function and their objectives and
functions:...............................................................................................................................4
TASK 3............................................................................................................................................6
P4 positive and negative impact of macro environment...................................................6
TASK 4............................................................................................................................................7
P5 Internal and external analysis of business:...................................................................7
P6 Strength and weakness linked with external macro factors:......................................9
CONCLUSION............................................................................................................................10
REFERENCES.............................................................................................................................11

INTRODUCTION
Business environment is considered as the surroundings and the internal and external
factors that influence the business. It also consists of various factors which provided impact and
alternations in business accordingly. Managers in organization are responsible to analyse these
factors in order to make effective decisions for accomplishment of organizational objectives. The
factors involve employees, shareholders, clients, government, supply, demand, law and the other
which provided impacts on decisions of business (Hilton and Platt, 2014). Present report is based
on analysis of Halifax Bank which is one of the leading and most respected banks in UK. It is
private limited bank that provided various services which involves commercial, investment and
market personal as well as financial services and other financial services. As a client manager of
Halifax bank, there are various kinds and purposes of organization have been discussed along
with their size and scope as well as legal structure. Further, essential relationship between the
different organizational functions and ways through which they link to organizational objectives
and structure are also determined. In addition to this, some positive and negative impacts of
macro environment on business operations have been identified. At last, internal and external
analysis of Halifax bank is also accomplished in order to identify the strengths and weaknesses.
TASK 1
P1 Different types and purposes of organization; public, private and voluntary sectors and legal
structures
Business is termed as converted process of basic skills and the materials as per the
request of customers or which deliver service as per the needs of consumers. Business
environment also contains different factors like customers, government, suppliers, competitors,
local communities and distributors etc. Global business enterprise like Halifax Bank should also
seek to gain their competitive advantage by providing commercial, investment and personal
banking services as well as marketing strategy (Hillary, 2017). It has been considered that
business prospective of business of banks have been affected by several factors such as
government intervention and change in technology. Further customers are identified as vital for
survival of business enterprise and its prosperity. In this context, as a client manager of Halifax
Bank, there are various kinds of organizations are analysed which can be their customers and
take financial services provided by them. They also provide financial resource's organization for
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regulation of their business operations. Different types and purposes of organization are
mentioned below:
 Sole trader: A sole business structure is analysed as personal which is trading as the
individual who is legally responsible for all the important aspects of business (Sole
trader, 2017). This business involves any debts and losses which will not be shared with
the others
Purposes: the main purpose behind establishment of sole proprietorships is to maximize
profitability and increase brand recognition in market.
 Partnership: Business enterprise which is established by two or more person by sharing
a specific amount of capital as investment and also share profits as per decided ratio. It is
also considered as formals arrangement under which two or more organization or
individuals cooperate with each other to manage and regulate a business (Kew and
Stredwick, 2017).
Purposes: The main purpose behind establishment of partner’s business enterprise is to
earn profitability and fulfilment of requirement of customers in market. Partners these
organization aims to achieved high return on investments. It is considered as effective because it
contains limited liability. Private sector: It implies to organizational structure in which ownerships and
management of business is controlled by private individuals. These ventures are
developed by individuals or organization a small or international level on the basis of
personal investment and financial institution (Cai and Yang, 2014). They are not able to
provide or issue their shares and securities in market for getting investments. For
example; Sainsbury is private sector retail business which is developed to maximize
profitability. Halifax Bank is also private organization which provides its financial and
banking services to its customers.
Purposes: Main objectives of these enterprises are to maximize profitability and
providing new and innovative products in market to achieve recognition from customers.
There are different types of private organizations such as sole traders, partnership,
limited company, cooperatives. Public sector: It has been observed that economy of public sector in UK has been
directly controlled by government. Business operations are regulated by different kinds of
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organization on behalf of its citizens and for their wellbeing. Further, National Health
Service is highly recognised public sector enterprise in UK.
Purposes: The main purpose of these organizations is to earn profitability through
increasing market share and sales by attracting customers. These are mainly responsible
to provide growth and development to the economy of country.
 Voluntary Sector: Also recognised as social ventures which are established as
charitable, business communities and voluntary bodies in order to resolve problems of
individuals as well as society. These are basically identified as non-profit and non-
government enterprise which gets investment in the form of charity. Cancer research is
identified most popular voluntary organization of UK.
P2 Size and scope of a range of different types of organization:
There are generally five kinds of business enterprises such as private, public,
cooperatives, charities and NGOs. In this context, there are various different sizes and scope of
these organizations is mentioned below:
 Public organization: These business enterprises consisting of three different sizes such
small, medium and large scale (Bah and Fang, 2015). These are also analysed as limited
companies which consist of limited which is established by two or more owners. These
organizations are developed in order to fulfil the requirement of people in customers.
 Scope: Their scope is to provide service to national and international customers with their
different business segments (Bouckaert, Peters and Verhoest, 2016). Further, they also try
to make innovation in their products and service to enhance its customers and providing
them various benefits in order to increase the sale.
 Private Organization: Privately owned and controlled organizations which are usually
established at small and large scale in order to maximize profits. These companies need
to have shareholders but these organizations cannot issue large number of share to public.
 Scope: Their scope is to provide services by themselves only to the customers. They are
the only owner of the business. Their only motto is to earn money for their business so
that they can expand it more in the market.
 Cooperative Organization: Cooperative organization are those which consists of two or
more parties which works together to settle their business in the market. They work as a
partnership which shares both profit and loss together.
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 Scope: The scope of the cooperative organization is to enhance their business by coming
up with new ideas to implement. They try to make balance with organization as well as
with the customers.
 Charities: Charities are those organizations which works for the betterment and welfare
of the society. They try to make people happy by doing works which are related to the
society.
 Scope: There is a great scope in charities. They can widely be used in different fields
such as education, safety policies etc.
 Non-Governmental Organisation (NGO's): NGO's are those organisations which
works independently. It is a non-profit organization whose purpose is to work for social
or political issue. Many factors came in this organization like health, education,
environmental issues etc. NGOs also rely on external funds which can come in the form
of donations, membership dues and grants etc.
 Scope: There is a huge scope in NGO's. They can work in various fields. Many people
are interested in working with NGO's now-a-days. They also give employment to many
people who are not educated to well. It is an emerging business in today's world.
M1 Structure, size and scope of different organisation
Public limited companies usually operates their business in the form of partnership and
joint ventures because it involves ownership of many individuals. Scope of this organisation is
meet the requirement of customers and achievement of high profitability as well as recognition in
industry.
Private limited companies usually operates in the structure of partnership, sole trader,
small business enterprise. They usually have their operations at national and international level.
Their scope is to provide services by themselves only to the customers. They are the only owner
of the business.
Cooperative Organization regulates operations in the form of charitable trust, joint
ventures of partnership as it also involves ownerships of two individuals. The scope of the
cooperative organization is to enhance their business by coming up with new ideas to implement.
They regulate their operations at national and international level, also have their ventures in
overseas nations.
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TASK 2
P3 Relationship between different organizational function and their objectives and functions:
Functions applied by the organization in order to produce their product and services to
their customers is known as organisational functions. There are different organizational functions
in the company which can be applied by them, such as sale and marketing, HR department,
production, research and development, accounts and finance, etc. All these functions works
together to fulfil the required objective of the organisation.
 Sales and Marketing Department: This department basically helps to generate new
products and strategies to satisfy their customers. A detailed study has to been done to
make new plans. Studying what their customers needs are and accordingly executing the
plan (Hillary, 2017). To make aware of new plans and services different promotional
activities are also organized by the marketing department.
 Human Resource (HR) Department: The function of human resource department is
mainly recruiting new staff for the organization. The HR department makes sure that the
people they are recruiting are well qualified to justify their work for the company. Giving
proper training and enhancing their development skill is also their part of job. The HR
also makes sure that the employee has no complaints against the company. This will
make sure that the staff potential to work is also increased.
 Production Department: The function of the production department of the company is
to ensure the generation of new services and products for the betterment of the company.
The production department mainly works on planning and scheduling. They supervise
and control the production team (Kew and Stredwick, 2017). They are also responsible to
ensure the best production method is applied. Production department generally deals with
the capital, labour, material, energy of the company to work.
 Research and Development (R & D) Department: The main function of the R & D
department is to develop or produce new products and processes for the company and to
improve the services which are already in use by the company. This department works
with the marketing department to make sure that they are providing services according to
the customers needs and interest. Before applying any new plan or service in the market,
proper research is done to examine the pro's and con's of it, this enables to increase the
profitability of the company.
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 Administration Department: This department basically deals with the handling all the
administrative tasks which includes dealing with enquiries and complaints received from
the customers (Bouckaert, 2016). They will also responsible to do the documents
developing work like forms, newsletter etc.
 Accounts and Finance Department: The accounts and finance department deals with
financial statement of the company by keeping a record of the cash which the company is
receiving and giving to different organisation. These records can be manual or electrical.
All these records later on are used to plan different strategies to increase the business.
These financial statement are also used to calculate the profits and loss of the company,
hoe much tax the company is paying, etc.
All these organizational factors are linked to each other and helps to achieve the objectives of the
company in some or the other manner. With the help of these factors it becomes easy for the
organization to work effectively and increase their rate of productivity.
M2. Analysing advantages and disadvantages of organisation functions
Marketing functions may or may not be helpful in the growth of a company. If the
structure and development of a company is depends on its strength and functions then growth of
company is necessary. The operational speed and operational clarity of a company is affected by
the functions. Sometimes it may be weaken the common bonds and lack in coordination between
employees and managers which may lead to territorial disputes and affect the financial position
of a company. From above, it is concluded that organisational functions do affect the structure
and growth of an organization.
TASK 3
P4 positive and negative impact of macro environment
The Helifax Bank has both the positive and negative impact on the macro environment
and we can demonstrate it by using Pestle tool. There are many factors in the macro environment
that will affect the decision of the managers of any organisation. To help analyses these factors
managers can categorise them using the PESTLE model.
Political Factor:The first comes P stands for political factor, in this the political factor
relate to government policy such as degree of intervention in the economy. Political decision can
impact on many vital areas for the business such as the education of the work force, health of the
nation, and the quality of the infrastructure of the economy such as the road and rail system.
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Theses are the positive impact on the macro environment. If the government policy are not
working according to the need of the person then it creates the bad effect on person as well as the
environment too.
Economic factor: Next factor comes economic factors which directly affect the economy
which include the interest rates, taxation changes, economic growth, inflation and the exchange
rates. Now let us contrast the positive and negative impact on the environment, higher the rate
may deter investment and it creates more to borrow which creates wrong impact on the
environment. A strong currency may make exporting more difficult because it may raise the
price in terms of foreign currency. Inflation may provoke higher wage demands from the
employees and raise cost. If the national income growth id higher that may boost demand of the
firm's product.
Social Factor: Third affecting factor is social factor, the change in social trend can affect
the demand of the firm's product and willingness of the employees too. Let's take an example in
UK the population is ageing, which has increased the cost for the firms who are committed to
pension payment for their employees. The ageing population also has an impact on the demand
and the negative impact is as the trend changes continuously but if the person will not change
according to the need then it affects the environment and economy too.
Technological Factors: Next comes the technological factor as the new technology
creates new product and new process. On one single day each technology creates new product
which compete the old one and the demand also increases according to the need of the customer
and if the trends will not follow by the customer then it creates a lot of hindrances in the growth
of the economy as well as the business environment. Technology can reduce the cost, improve
quality and lead to innovations. This development can benefit consumer as well as the
organisation providing the product. Online shopping bar coding and computer aided design are
all improvement to the way we do business as a result of the better technology and on the other
hand if we do not follow the trends according to the need of the customers then the bank will
remain the same as their initial position only.
Environmental factor: The best factor which affect the macro environment is the
environmental factor which include the weather and the climatic changes. Change in the
temperature can impact both positive and negative impact. The major climatic change occurring
due to global warming with great environmental awareness becoming the significant issue for the
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firms, banks. Insurance etc. The environmental factor affect mostly in terms of the demand
pattern and creating business opportunities.
The last factor comes to affect the macro environment is legal factor and these are related to
legal environment in which firms are operated. In UK during recent years there have been many
significant legal changes that affect the behaviour of the firms. The age discrimination and
disability discrimination there is the increment in the minimum wage. Legal changes can affect
the firm's cost and demand of the customers too. By using PESTLE framework we can analyse
many factors in the firms macro environment.
M3 PESTLE Analysis:
There is a great advantage of PESTLE analysis to understand the external macro
environmental factors which can affect functioning of Helifax bank. Various factors can be
calculated by this analysis such as political, economic, social, technological, legal and
environmental factors. It gives them the opportunities to improve their functioning system
operating in the bank.
TASK 4
P5 Internal and external analysis of business:
Internal and external analysis of the organization is done to identify its strength and
weakness. There are several factors which affect business. These factors can come from inside as
well as from outside the organization. To study these internal and external factor SWOT analysis
for internal and PESTLE analysis for external factors are applied by the organization.
SWOT analysis of Halifax bank is as follows :
The Halifax bank usually starts a SWOT analysis by studying its strength, weakness,
opportunities and weakness.
 Strength or S : Strength such as strong brand name or good reputation, which help the
company name to give rise and popularity among other companies as the strength is the
sole focus of any company and if the name is good and innovative then it must creates the
good impact on the others.
 Weakness or W : Next comes weakness like inexperienced management and poor
distribution of the company which may fall the image of the company and creates wrong
impact, to solve this Halifax Bank should promote the management team and have good
distribution among the employee as well as the managers too (Hillary, 2017).
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 Opportunities or O : Opportunities can include an unfulfilled need of consumers or new
technological arrivals. Nowadays, Internet became a new way to market products in mid
century. Also, a competitor can go out of business and provide a company with a new
market segments in which to sell its product. Thus, it is a way by which a company can
grow and help to make run in the competitive world.
 Threats or T : Threats which means that changing technology threatening the position of
the business as if the business will not go through the flow of new trend and would not
satisfy the need of the customers then the business will stands as it is and whatever the
obstacle faces by the company try to solve that and move according to market demand.
This is all about the SWOT analysis of the macro analysis which creates a link how to
satisfy the need and change according to the demand of market.
PESTLE analysis of Halifax bank is as follows :
 PESTLE analysis is usually done by the Bank to analyse its external effects which
can affect the working of the bank. This analysis generally consists of factors like
political, economical, social, technological, legal, and environmental factors. All these
factors together works to overcome the external factors.
 Political Factors: There are many political factors which affect the bank directly or
indirectly. Change in government or governmental law has a great impact on the bank,
for example new regulatory capital rules. For many UK banks, 2016 was really a tough
and challenging year for political environment (Bouckaert, 2016).
 Economical Factor: UK's exit from the Europe has a significant impact on the banking
sector. Economic factors includes changes like inflation change rate, interest change rate,
etc. It generates the economic risks and uncertainty of the banks. These factors easily
influence this sector. Economic factors like recession, inflation etc. bank experiences
backlash. They should be always ready for such challenges.
 Social factors: These factors also affect the banking environment. The social factors
include change in the lifestyle of the people, change in demography of the country.
Change in cultural influence for example buying behaviour and necessities greatly impact
on the thinking of how people use and see the banking services and options.
 Technological Factors: Technology is changing very rapidly now-a-days. Talking about
banking industry in terms of technological environment, they have attained to such a
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level where every work can be done on internet for example, from opening an account to
transfer money to other's account (Drucker, 2017). All these now can be done from home
only which is a great thing for customers to have. The financial innovations having
power to revolutionize finance includes block chain technology, biometrics, robotic
automation and the rise of Fin-Tech firms. Moreover, the bank is continuously trying to
come up with new and innovative technological ideas to implement in their banking
system. Banks are utilizing technology within their work station for example
telecommunication to perform various meeting.
 Legal Factors: In banking sector, they have to follow the legal rules and regulation
which the government has made for them which can be related to laws, trade, privacy
policies, etc. It is a mandatory factor as it is heavily regulated area.
 Environmental Factors: There are some environment factors also which the bank has to
take care of, for example reducing their carbon foot print. Helping in making sustainable
environment. By using technology, installing banking apps has reduced the use papers in
the banks (Hillary, 2017). By using mobile app of the bank the customers can solve his
own problems which also saves time.
By conducting these internal (SWOT analysis) and external (PESTLE analysis) analysis
of the bank, we can identify the strengths and weakness by studying these factors and
implementing related measures to overcome such issues in the banking. All the analysis of the
factor should be done by keeping in minds the customers needs and interests.
M4 SWOT Analysis:
SWOT analysis is a method through which internal analysis of the organization is
explained. It is used to analyse the strength and weakness of the Helifax bank. By understanding
all these factors it becomes very for the organization to work properly in the system, From this
analysis organization can also calculate threats and opportunities which are present in the market
for them.
P6 Strength and weakness linked with external macro factors:
The factors that affects the bank from outside the organization is known as external
macro factors. Strength and weaknesses both are related with macro and micro environment
factors. Management of the organizations deals with this weakness and tries to convert it into
company's strength. These factors are used to analyse the strength and weakness of the
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organization by studying several methods such as models like PESTLE and SWOT analysis.
They are known as the business tool of the organization. These types of models gives us the
detailed scenario of the organization, like where they are lacking, and what is their strong points
etc. These models has a great impact on macro environment factor of the bank (Kew and
Stredwick, 2017). Sometimes, bank itself is nor able to identify its various factors such as
customer perception, competitor's strategies, policies etc. Macro analysis can be done by
applying SWOT analysis by the management team of the bank and can identify the strength and
weakness. It also helps to identify the upcoming threats and opportunities to the bank. Both these
factors are interrelated to each as it helps the bank to overcome the risks and threats. From this
analysis we can identify the pro's and con's of the banking sector. Using this analysis related
strategies to solve these problems can be planned. We can evaluate the current market place also
from this (Cai and Yang, 2014). These two analyses, PESTLE and SWOT, helps the
management team of the bank to identify the advantages of market analysis and also helps to
overcome the threats. It helps the management team to design the policies which can benefits the
bank as well as to their customers.
CONCLUSION
In this report give a detailed information on the business environment of the organization
and also on different types and purposes of the organization like public, private and volunteer
sectors and legal sectors as well. It also describes different organizations, their size and their
scope of development in the market. Also, it concludes the relationship between different
organizational functions and their connection with the objective and structure of the
organization. From the above report it gives information that both the analysis, SWOT and
PESTLE, plays a great role in calculating the strength and weakness of the organization and with
the help of these result appropriate measures can be taken by the bank to overcome these issues.
From PESTLE analysis we can calculate both positive and negative influences which impacts the
macro environment of the organization.
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REFERENCES
Books and Journals
Bah, E.H. and Fang, L., 2015. Impact of the business environment on output and productivity in
Africa. Journal of Development Economics. 114. pp.159-171.
Belás, J., and et.al. 2014. Significant attributes of the business environment in small and medium-
sized enterprises. Economics & Sociology.7(3). pp.22.
Bouckaert, G., Peters, B.G. and Verhoest, K., 2016. Coordination of Public Sector
Organizations. Palgrave Macmillan.
Cai, S. and Yang, Z., 2014. On the relationship between business environment and competitive
priorities: The role of performance frontiers. International Journal of Production
Economics. 151. pp.131-145.
Drucker, P.F., 2017. The Theory of the Business (Harvard Business Review Classics). Harvard
Business Press.
Hair Jr, and et.al. 2015. Essentials of business research methods.
Hillary, R., 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.
Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context. Kogan
Page Publishers.
Online
External Factor of Business Environment Assignment. 2018 [Online]. Available through:
<https://www.locusassignments.com/solution/unit-1-external-factor-business-environment-
assignment>
Sole trader. 2017 [Online]. Available through:< https://www.business.gov.au/info/plan-and-
start/start-your-business/business-structure/business-structures-and-types/sole-trader>
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