This assignment requires a comparative analysis of Hennes & Mauritz (H&M) and Marks & Spencer, examining their business strategies, functional departments, and overall performance. Students are tasked with identifying the strengths and weaknesses of each retailer and comparing them within the context of the fashion industry.
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Business Environment
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Table of Contents INTRODUCTION...........................................................................................................................3 TASK 1............................................................................................................................................3 P1 Various types of organisations..........................................................................................3 Legal structure for public, private and voluntary organisations.............................................4 P2 Size and Scope of various types of businesses or organisations......................................5 P3 Various organisational functions linked to the structure and objective of the organisation..7 TASK 2...........................................................................................................................................8 P4 Impacts of macro environment on various business operations........................................8 P5 Internal and External analysis........................................................................................11 P6 Relationship of strengths and weaknesses with the external macro factors...................13 CONCLUSION.............................................................................................................................13 REFERENCES..............................................................................................................................15
INTRODUCTION Business Environment refers to all the external as well as internal factors or elements affecting the various functions of an organisation including the customers, employees, business regulations, management or supply and demand of the company. These factors are sometime controllable and sometime not, the report will analyse and determine all those factor which are affecting the various types of organisations in a market. This report will identify and describe the size as well as scope of various types of organisations. The report will focus on identifying the factors affecting the business operations of Hennes & Mauritz(H&M), a UK based apparel brand along with the SWOT analysis. Furthermore, the report will also describe various functions of an organisation and their relation with the business objective or structure. TASK 1 P1 Various types of organisations There are many types or organisations or businesses within a business environment, these organisations have different business operations, nature, objectives and purposes. The various types of organisation operating in a business environment are as described below - Private organisations– The Private organisations are the firms or companies which are establishes and operated by private investors and individuals. A person or individual plans, develop and implement different organisational strategies to a business as well as personalgoalorobjective.Thepeoplearemakingtheirinvestmentsindifferent organisations in order to generate income and profit. The private owners of various organisations or businesses focus on generating revenue form different types of business or economic activities in a marketplace. Further segmentation of the private organisations includes sole proprietorship, co-operation and partnership firms. The sole-proprietorship company or organisation is operated and owned by a single individual, investor or owner. All the losses and profit is handled and managed buy a single person or the sole proprietor of the organisation. The other type of private organisation is a partnership firm, a partnership firm is establishes by two or more than two individuals or investors for a common goal of generating profit. The profit and loss of this type of organisations is distributed among the partners of the company. There are many successful and leading private companies generating high profit within the market for example – Marks and Spencer's, Tesco etc(Popescu,2013).
Public organisations– These organisations are established, owned and operated by government bodies, The government of a country or nation establish many businesses and organisations to provide various types of effective services to the people within a society or community. The main objective or goal of Public organisations is to supply public services for the welfare of the society. These organisations are established by a government of the country, the tax paid by the citizen of a nation is used for developing and operating these public organisations. The public organisations do not focus on achieving high profit or revenue from the public, the main motive of these types of organisations is to offer effective services to the public and ensure their welfare or well- being. They provided various kinds of services which assist in the development and growth of the community or society. Each and every services provided by the public organisations are designed according to the government legislations or policies. The revenue generated by these organisations are further used for the establishment of new services or expansion of the exiting organisations related to public welfare and services. The different types of public organisations operated by government are government schools, hospitals, fire department etc(Teece,2015). Charity– The organisations working for the society by offering service free of cost is knownasCharityorsocialorganisations.Thesetypesoforganisationsfocuson providing various types social and health care services to the people of the society. These bodies provide social and health care services to the people without any cost, these organisations are established and operated by funds generated from the charities or donations from the public or individuals. There are many such organisations such as Red cross and Christian aid in UK which are offering effective services to the people without charging any cost for the care of the people. These organisations provide services like food and shelter, care to old age people. Poor people, homeless people etc. These organisations generate donations not profit for the development of their own services or facilities. Legal structure for public, private and voluntary organisations Private organisations The private sector is generally combined of organizations that Public organisations The public sector is composed oforganizationsthatare Voluntary organisations Therulesgoverninga voluntary group are set out in a
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areprivatelyownedandnot part of the government. These usuallyconsistscorporations both profit & non-profit and partnerships. operatedandownedbythe government.Thisconsists federal,provincial,state,or municipalgovernments, depending on the country or state.Privacylegislation normally calls organizations in the public sector a public body or a public authority. constitution, the exact kind of which depends on the adopted legal structure. There are three importantlegalstructures utilized by voluntary groups; a Trust,anunincorporated Associationandacompany limited by guarantee. P2 Size and Scope of various types of businesses or organisations. According to the goals and objectives, each and every business or organisations design its size or structure of their business and company. The Hennes and Mauritz(H&M) is a successful MNC in retail industry or company which operates around 4,500 retail stores in almost 62 countries all around the world. The H&M has more than 1,32,000 employees working together to achieve the organisational objectives. The various types of organisations have different size and scope of their businesses. The size and scope of various organisations with respect to their types are as described below - 1.Private organisations – The private organisations can be established at both a small and large scale depending upon the availability of resources as well as business goals. The owner or proprietor of a private organisation is the main person who controls and manages the organisational operations or policies. The investment on a specific company or business is deciding the size of an organisation or firm. The private organisations focus on selling or distributing their services and products to the customers to gain an impressive position in the market as well as generate high revenue. The Director of a private organisation is responsible for designing, developing and implementing the
organisational strategy which is followed by various number of employees in order to achieve the business goal. The scope of a private organisation depends upon effectiveness ofbusinessoperationsaswellasmarketpositionofthefirm(Iskanius,Pageand Anbuudayasankar,2013). 2.Sole trader – This type of organisations are generally established and operated at a small scale. The owner of this business is a sole trader or proprietor who establish, manage and operate each and every activity within the business or firm. The size of a sole trader firm is the smallest among all the other types of organisations or businesses. The size makes a great reduction in the risk involved within the business or trade. The goal or objective of this type of organisation or business is to earn profit with a small scale firm avoiding high risk and investment. 3.Partnership firms – Size of a partnership organisation or business highly depends on the number or investors or partners which are collaborating in order to establish the company or firm. Each and every partner comes with some financial resources or investment which decides the ratio he or she will share in the profit or loss of the business. The decision making power is distributed equally among the partners of the partnership organisations. The size of these organisations is large due to the availability of financial resources and investments, the private organisations are generally huge companies with a lot of employees working in a specific organisational structure. Huge investment also helps in providing a better scope for the business, production of these organisations is high which have a direct impact on the profitability of the firm or organisation(Kim,Suresh and Kocabasoglu,2013). 4.Public organisations – The organisations which are established and operated by the government are known as the public organisations. The government utilise and invest a huge amount of financial resources on the public organisations. The size of the public organisation is relatively large as compared to the other types of organisations. These organisations provide a high employment for the society as well as focus on offering effective services and products to the public and community. These organisations generate profit but further use it in the development and growth of the society as well as providing public services. The main objective of these organisations is to contribute in the economic, social and infrastructural development of a country.
5.Charity – The size of these organisations or firms depends upon the level and area it is operating its activities. These firms are established with the help of donations and fund collected by the people. The main objective of these organisations is to offer free of cost services to the people such as social and health care services. These organisations can be operated at small as well as large size, but the objective remains same at every size or scale which is to offer priceless services to the people in need. These organisations work for the welfares and well-being of the people of the society or community. The major example of this type of organisation is the Oxfam, it is a multinational volunteer firm that works with an objective of reducing poverty, providing disaster relief and other social or health care services to the people. The Oxfam focus on providing services related to justice, economic, gender equality and rights in crisis to the people of the society. P3 Various organisational functions linked to the structure and objective of the organisation. The structure of an organisation represents the wholemodel of a business or firm including it business functions, operations and strategies to achieve the organisational goals effectively. The structure of an organisation can be different from other depending upon the goals and functions, Hennes and Maurtiz has many departments in their organisational structure which performs different functions and tasks in order to manage the business operations. According to the needs and requirement various departments perform their functions and tasks, these functional departments within the organisation are as mentioned below - Human resource department – The Human resource management or department performs mostimportantfunctionwithintheHennesandMaurtiz,thisfunctionsrefersto searching, recruiting and managing the skilled and talented workers or human resources. The Human resources or employees of an organisation are the main elements and factor responsible for the performance of the business. The Human resource department in the Hennes and Maurtiz plays an important role in developing an effective employee team that works and perform impressively to achieve the business goal. Production – Each and every organisation which works in manufacturing sector needs to have a well and effective production department. The production department within an organisation ensure effectiveness and efficiency in the production of goods which needs to be sold in the market for attracting more and more customers. This department is managed and controlled by a production manager under which various skilled employees
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work to manufacture product at a low cost to generate high profit(Wetherly and Otter,2014). Marketing department – The marketing department in Hennes and Maurtiz also plays a vital role in promoting its products or services in the market. This department develops various effective promotional and marketing strategies which helps the organisation to achieve publicity and effective position in the market. Marketing function is very important in order to launch or relaunch a product as well as provide relevant information to the customers in a marketplace. Finance department – The Financial is responsible for managing various types of financial functions and components within an organisation such as Hennes and Maurtiz. There are many elements which are managed and controlled by the financial department such as income, expenses, loss, cost and so on. This department also develop and design different types of budgets and other financial strategies essential for the organisation. All the above department within Hennes and Maurtiz performs different roles and functions for the achievement of objectives and goals effectively. The departments within an organisation are interlinked and shares a strong relationship in order to develop coordination and cooperation for performingthebusinessoperations.Theproductiondepartmentsmanufactureproducts, marketing department assist in promoting those products, the finance department helps in managing the cost of production, expenses, loss and profit of the business. The coordination among all the department is very essential in order to ensure the smooth flow of the business operations and activities. TASK 2 P4 Impacts of macro environment on various business operations. There are many factors or elements in the macro environment which has a great impact on the functions and activities performed by an organisation or business. These factors have both negative and positive impact on the business operations within an organisation such as Hennes and Maurtiz. The various factors affecting business activities of Hennes and Maurtiz are described as follows - 1.Environmental factors – The environmental factors such as climate, trends etc has a great impact on the various business activities or operations. The H&M focus on performing environmental friendly business operations in order to develop a healthy and safe
which negatively or positively affects the business and its functions.In order to sustain and achieve a good position in the market or industry Hennes and Maurtiz needs to ensure that they manage and handle them effectively to reduce the negative effect of all these factors on their business operations. Positive impact of the factors in macro environment The macro environment can beneficial for organisations if the changes are in favour of the business operations or activities. There are many positive impacts of different factors within the macro environment as described above. For example – The government policies and laws can be changed in favour of businesses such as tax reduction, subsidies etc which can have a great positive effect on the organisational functions and overall performance of the firm. The growth in the economy can also be favourable for organisations and businesses operating in various sectors within that particular economy. The other factors such as social elements can also positively effect various business functions and operations within an organisation such as Hennes and Maurtiz. They focus on fulfilling social and environmental responsibilities effectively which also helps the organisation to develop a positive brand image within the community or marketplace. The organisation manages all these factors in order to achieve an effective and leading position within the market or industry and achieve customer support. Negative impact of the factors within macro environment The changes in the macro environment factors can not be always favourable for the organisations and their functions. The government can increase the taxes for production of goods, transportation of raw materials etc which can give rise to cost or expense of the business affective the productivity as well as profit margin. The lack in technological development or understanding the new technologies can also have a negative impact on the business and its functions. The customer's needs and preferences as well as trends changes according to time, it is difficult to manage and satisfy those fluctuating choices. It also has a negative effect on the productivity as well as profitability of the organisations. The legal consequences can also greatly affect an organisation in a negative way, the company can lose its good image in the market and customers may hesitate to use its product or services.
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P5 Internal and External analysis Every last association have quality and shortcoming as per the distinctive components that will influence on the interior and outside condition of the association will influence on the execution if the business(Virglerová,Dobes and Vojtovic,2016). External Analysis Political Factors: As the organization mediation on the affiliation have the genuine effect on the customer. As the new course of action report by the organization for evaluate is inconvenience on H&M. Financial components: As the money related condition of the collected kingdom is presently in not in control which bring the swelling as the cost of rough materiel and other variable cost have been stack on the H&M. As the customer have been not prepared to spend more money on the luxuries stock at this situation is affected on affiliation bargains. Social variables: As the social components of the affiliation can be the customer and other accomplice of the affiliation. These will set the brand and as demonstrated by publicize affiliation moreover affect the overall population with different activities. Technological Factors: revive of headways giving the preventions for the business and business condition. From the use of the distinctive hardware in the generation procedure will improve item advancement. Environmental Factors: As the fundamental contemplations of the affiliation can be affect the regular. That can be the tainting make by the affiliation resources can be hinders for the earth have influence on the H&M execution. It is essential for the association to design better to spare nature. Legal components: These factor will be influenced on the business condition due to various establishment have been made by the affiliation it is basic to streams the H&M. As the present wage law is starting at now stack on the H&M which cause the back as the high compensation need to pay for specialist and distinctive works. The laws are critical to considerer in the detailing of different key choice in the association. Internal Analysis
Quality: The key nature of the affiliation is their picture and the amount of stores of H&M is more in examination of the other contender. Shortcomings:The genuineweaknessof theH&MistheirMarketingandarrangements divisions. Opportunity:H&M have opportunity to pull in customer with different techniques of publicizing and improve the business gathering to extend the arrangements. Danger: As the contender can be the genuine hazard for the affiliations that can pull in H&M customer by giving better organizations. SWOT investigation of Mark and Spencer: M&S is a contender of the H&M which have strength, weakness , opportunity, weakness and Threat, for example, takes after: Strength: ď‚·M&S offer bigger number of item, for example, wine, dress which demonstrates higher brand estimation of the association. ď‚·M&S trust in serving quality items to the client. Weaknesses: ď‚·Absence of development: This can be the significant shortcoming of the association in which the new thoughts and advancement are not contributing in the organization's generation process. ď‚·Taste and inclination: M&S not ready to comprehend the client taste and inclination uncommon in the ladies wearing which can build the organization's altruism. Opportunity: ď‚·Check and Spencer had extended their business in the Asia and furthermore put resources into different countries. Threats: ď‚·High rivalry: M&S piece of the pie have been decrease because of high rivalry from the contender(Chavis,Klapper and Love2,013).
P6 Relationship of strengths and weaknesses with the external macro factors Dangers of new competitors - There are numerous individuals who are getting pulled in to apparel and form industry by observing the measure of benefits. That is the reason it turns into the risk for H&M. This is the shortcoming of refereed to organization. Dangers of substitutes, There are numerous associations who are working in a similar industry. It is normal that if refereed to organization won't satisfy the necessities of clients than they will select. For different organizations. It is soft spot for H&M. Power of service providers or suppliers, This is the qualities of refereed to firm since they take materials from the providers gives them at the ease. Purchasing Power of buyers, This is dealt with as the shortcoming since costs of items are particularly imperative for the clients. Level of rivalry, This is the shortcoming on the grounds that there are numerous associations who are working in a similar industry. This expands the level of rivalry in the market. This expresses there are numerous shortcomings of the refereed to association as per this model. The main quality of the organization is power of effective service provider. Political factors – The Political factors can generally be considered as a weakness for an organisationsuchasHennesandMaurtiz,thepoliticalfactorsareuncertainand uncontrollable which makes it very difficult for the organisations to change or modify the functions of the business or organisation. This is a major weakness for the firms, Political factorscanbestrengthsifthepartiesareinfavouroftheorganisation(Caiand Yang,2014). Economy – The other major factor is the economic conditions of a country in which the organisations operates its functions. The rise or development in the economy can be a strength of organisations in that particular country whereas as it can be a weakness for the organisations operating in a country having a low or poor economic conditions. CONCLUSION The above report concluded that the business environment plays and important role in the performanceofanorganisation.Therearevariousfactorswithinthemacroandmicro environment which have a great impact on an organisation and its functions as described in the report. The report also described various types of organisations such as private, public and charity which are operated for various objectives or goals. The report identified various impacts
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of macro environment factors that are affecting different types of organisations and their functions. Furthermore, the report also includes internal and external analysis of Hennes and Maurtiz along with the comparison with Marks and Spencer. The various functional departments within the Hennes and Maurtiz are also described in the report.
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