Business and Business Environment Report

This report analyzes the business environment of Burberry, a global luxury brand, using PESTEL and SWOT frameworks. It examines different types of organizations, their purpose and legal structure, and the relationship between organizational functions. The report also explores the impact of external macro factors on Burberry's strengths and weaknesses. The report concludes that a strong understanding of the business environment is crucial for organizations to identify opportunities and overcome challenges.

Business and Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1 ..........................................................................................................................................1
P1 Different types of organisation along with their purpose and legal structure........................1
P2 Size and scope of different types of organisation .................................................................3
TASK 2 ......................................................................................................................................6
P3 Relationship between different organisational functions and how they link to
organisational objectives and structure ......................................................................................6
TASK 3 ..........................................................................................................................................8
P4 PESTEL Analysis and its impact...........................................................................................8
P5 SWOT Analysis of Burberry...............................................................................................10
P6 Strengths and weaknesses interrelate with external macro factors......................................11
CONCLUSION .............................................................................................................................12
REFERNCES ...............................................................................................................................14
.......................................................................................................................................................15

INTRODUCTION
Every business operates in a particular environment and each unit has its own
environment. A change or modification in environment it cause opportunity to some and threat to
others. However, business environment is the combination of internal and external factors which
effect company's operating situation including employees, customers, management, supply and
demand and business regulation (Zanoni, 2011). It is a force, factors with which the company or
businessman has to deal for achieving its objectives. Business environment is a dynamic concept,
as it consist emerging trends in business ethics, corporate social responsibility, corporate
governance, consumer citizenship etc. For managing the same, every firm develops or creates
conceptual and policy framework to support development and use of business and environmental
information in decision making. Every organisation is categorized in various types i.e. sole
proprietorship, private, public, voluntary sectors etc. and each of them are differ from each other
in terms legal structure, scope, purpose etc. In context to Burberry, one of the famous global
luxury brand which deal into clothing, accessories, perfumes, cosmetics etc. and it is commenced
in the year of 1856. It is situated in London, UK. This report covers different types and purposes
of organisation, size and scope of different types of organisation, relationship between different
organisational functions and their link to organisational objective and structure. Finally, usage of
PESTLE and SWOT to analyse business environment and strength and weakness interrelate with
external macro factors.
TASK 1
P1 Different types of organisation along with their purpose and legal structure
Business environment is a sum total of all external and internal factors which influence or
impact a business operations. It is dynamic in nature which means it keeps on changing and it is
very difficult to predict the exact nature of future happenings and the changes in economic and
social environment. Thus, business environment is differ from place to place, region to region
and country to country (Stonier, 2012). Each business is classified into several groups such as
private, public, voluntary sector and each of them has their own scope, purpose, aim, legal
structure etc. which leads them to accomplish organisational goal effectively and efficiently.
Hence, on the basis of ownership business is classified into various types which is described
below:

Private Company
Private company are legally distinct entities with their own assets, profits and liabilities,
personal finances of any shareholders are prevented by limited liability (P., Gowthorp and De
Bosscher, 2014). They issue stock and have shareholders, but their shares do not trade on public
exchanges or stock market exchange. In relation to Burberry, one of the international luxury
fashion brand which is founded in the year of 1856. It's headquartered in London, UK and offers
varies ranges of product such as clothing, accessories, cosmetics etc. Due to an effective purpose
and legal structure which ensures them to accomplish high profitability and productivity. The
purpose and legal structure of Burberry are as follows:
Purpose
The primal purpose of Burberry is to keep its wholeness and energy of their brand at the
same time proceed to develop or enrich the business operations by acquiring innovative or latest
technology in order to improve overall performance of company.
Legal Structure
The legal structure of Burberry are as follows:
 Sole Proprietorship: It is one of the most popular business types as it only requires a
single person to create. An important thing to note is that there is not a legal or financial
differentiation between business and its owner, which means business owner is fully
responsible for all profits, liabilities and legal issues which company encounter (Sawalha,
2017).
 Partnership: A business which is owned and headed by two or more people who share
their responsibilities, profits, loss and risk equally. On of the main benefits is that it
reduces the complexities and create a easier path to both the parties in order to achieve
pre determine goal.
Public Company
A company whose securities or shares are traded on a stock exchange and can be bought
and sold by anyone thus, it is also known as publicly held company (Sarsby, 2016). In context to
National Health Service, one of the publicly funded national healthcare system which is founded
in the year of 1948. Its headquartered in London, UK that offers varies services like health
service, dental care, optical care etc. With the help of productive purpose and legal structure it

enable them to attain organisational goal. The purpose and legal structure of National Health
Service are as follows:
Purpose
The key purpose of National Health Service is to serve community, public and patients
by providing them best healthcare services in order to keep them fit and healthy.
Legal Structure
The legal structure of National Health Service are as follows:
 Health and Medicine Act, 1988: National Health Service implies this act as it provide
them proper guidance or direction to provide effective healthcare and medication service
in order to protect them from harmful diseases.
 Health and Safety Act, 1981: NHS applies this act as it enable them to provide best
quality of equipments and facilities to patients in order to improve their morale.
Voluntary Sector
Voluntary sector are non-profit organisations whose main motive is to create social
impact on community rather than profit (Samantra and et.al., 2016). In relation to Oxfam, a
famous and successful non-profit organisation which is established in the year of 1942. Its
headquartered in London, UK and it contains efficient purpose and structure which help them to
achieve pre determined goal. The purpose and legal structure of Oxfam is described below:
Purpose
Oxfam is mainly dedicated with a vision to eradicate the poverty and provide equality to
men and women in order to build healthy relations among society.
Legal Structure
The legal structure of Oxfam are as follows:
 Oxfam Trustee: They are mainly responsible for managing the law for charity, assets,
activity and it contain three parties i.e. donors, trustee, beneficiaries who set up with an
aim to handle property, money and clearly define goal for helping people or community.
P2 Size and scope of different types of organisation
Business environment consist of several types, sectors, structure i.e. public, private,
voluntary who contribute their best effort towards the accomplishment of high productivity and
profitability (Psychogios and Garev, 2012). Each company has their own size, scope, objective,

structure which directs tehm to attain maximisation of profit with the optimum utilisation of
resources. The size and scope of various types of organisation are as follows:
Burberry
 Background detail: Burberry is a global luxury brand in clothing, accessories, cosmetics
which is started in the year of 1856. Its headquartered in London, UK.
 Vision and Mission: The key vision of Burberry is to capture the best position among
competitors by providing quality of products and services to customer in order to
improve high morale and satisfaction.
 Business Objective: The business objective of Burberry is to sharpening the positioning
in most rewarding and enduring segment of market, drive sustainable growth and higher
margin over time and continue in providing attractive returns (Pahl and Beitz, 2013).
 Size and Scope: Burberry has a team of 10,000 employees across the globe who are
highly dedicated, determined and expertise who put their full effort towards attainment
of high productivity. It operates in 51 countries with 40 stores. They have of huge scope
in expanding as they deal into varies ranges of products like accessories, clothing,
sunglasses, cosmetics, fragrance etc.
 Products and Service: Burberry products line is intensive as it provide several types of
products are fashion accessories, clothing, cosmetics, perfumes etc.
 Organisational Structure : Burberry follows hierarchy organisational structure i.e. an
organisation using different levels of authority and a vertical link or chain of command
between superior and subordinate.
 Stakeholders: Burberry stakeholders are customers, employees, partners, communities.
National Health Service
 Background detail: National Health Service is one of the famous health service company
which is started in the year of 1948 and its headquartered in London, UK.
 Vision and Mission: The key vision of National Health Service is to keep community or
society healthy and fit by providing best health and medication service (Niu, Song and
Xiao,2017).The prime business objective of NHS is to improving the environment for
patients and staff as well as provide them several benefits for enhancing their welfare of
community.

 Size and Scope: Burberry has a size of 2,165,043 manpower worldwide who are talented,
passionate towards the achievement of profit maximisation. It has massive scope as they
are concerned into dental care, staffing, mental health etc.
 Products and Service: National Health Service offer a various types of services like
primary care, in-patient care, long term healthcare , ophthalmology, dentistry etc.
 Organisational Structure: It implies flat organisational structure which is also known as
horizontal organisation i.e. it contains few or no levels of middle management between
staff and executive.
 Stakeholders: The major stakeholders of National Health Service are patients, physicians,
employers, insurance companies, pharmaceutical firms and government.
Oxfam
 Background detail: Oxfam is a global organisation who work for eliminating the poverty
and rebuild the lives of community or society (Jhamb and Kiran, 2011).
 Vision and Mission: The key main vision of Oxfam is to develop a world without poverty
and injustice and everyone should be treated equally irrespective of religion, caste, creed
etc.
 Business Objectives: Oxfam business objective is that they runs life-saving emergency
responses, life-changing development projects in order to overcome the issue of poverty.
Irrespective of all these their main focus is that men and women are values an treated
equally so that they can meet out their needs and wants.
 Size and Scope: Oxfam operates in 90 countries with 19 international organisations.
Their scope is huge as their main aim is to eliminate poverty and one person in three in
world lives in poverty.
 Products and Service: It provide several services like providing basic amenities, personal
hygiene in order to keep them healthy and safe (Hussein and Khalifa, 2012).
 Organisational Structure: It follows flatter organisation structure i.e. employees directly
reports to owner which reduces bureaucracy and enable them to take quicker decisions.
 Stakeholders: Oxfam stakeholders are staff, partners, volunteers, donors and supporters,
government, private sector etc.

TASK 2
P3 Relationship between different organisational functions and how they link to organisational
objectives and structure
An organisation is a combination of two or more individuals who come together with an
aim to achieve common goal in an effective and efficient manner (Helms and et.al., 2011). It
involves several functions and departments which have unique responsibilities, purpose and roles
who contribute towards the accomplishment of pre determined goal. Along with this, each of
them business functions are interrelated with each other and it has great influence on
organisation structure and objectives. The relationship of Burberry's different organisational
function which is described below:
 Finance and Marketing Department: These both business functions are the pillars of
company in order to accomplish high growth an profit. As marketing function is mainly
concerned with promoting products through various ways like advertising, direct selling,
sales promotion etc. On the other hand finance is concerned with providing money or
fund in order to attain sales growth, profits etc. Hence, marketing should require a
strong base of finance through which company can develop goals for marketing like
sales target, sales price, cost of product etc.
 Marketing and Human Resource Department: Both of these functions has an integral
role to play for the expansion of company. Every company require talented or skilled
manpower who enhance or enrich the branding of company (Hamilton and Webster,
2018). Marketing department communicates the brand of company to consumer and
they adopt various technology in order to hire effective personnel. Hence, working
together HR and marketing finds the best people to promote and build the company's
brand image.
From the above mentioned statement it has been noted that each business functions are
connected with each other and they work towards the accomplishment of high productivity and
profitability. The organisational structure of Burberry are as follows:

Each departments are linked with each other as work together in order to achieve
organisational goal effectively and efficiently. From the above shown diagram, in this whole
business operations is managed or controlled by Board and it followed by different committee
i.e. nomination, remuneration, audit and chief executive officer (Grochla and Szyperski, 2018).
Furthermore, they has effective culture, proper assigning of responsibilities among each business
functions which enable Burberry to improve overall performance and attain high proficiency.
Hence, each departments are highly influenced by organisation objective as it provide proper
guidance or direction for obtaining high volume of sales and gain competitive advantage.
Some of the positive and negative effect of interrelationship of different organisational functions
of Burberry are as follows:
Positive
 It enable the company to eliminate or reduce the duplication of work within an
organisation.
 It minimise the stress or workload of employees which leads to high productivity and
proficiency (Gao and Peng, 2011).
 It enhance and develops skills or potentiality of subordinates which helps company to
gain profit maximisation.
Negative
Illustration 1: Organisational structure of Burberry

 It creates ambiguity and confusions among employees regarding work which leads to
conflict or disputes within workplace.
 If marketing department fails to complete their given task on time then it effect finance
functions to proceed their work towards the achievement of pre determined goal.
TASK 3
P4 PESTEL Analysis and its impact
PESTEL is a tool which Burberry is using to analyse the impact of external factors on the
performance of organisation. This analysis also help company in taking decisions regarding their
management and production.
POLITICAL: It is the factor which help in determining how does the government's decisions
and stability/instability impact the long term profitability in the market (Fowler, 2013). There
are number of risks which can impact the organisation and some of them are corruption, risk of
military invasion, legal framework, trade regulations and many more. For example Burberry is
working in many continents &countries and instability of any one government affect its entire
operation. Like when terrorist attack happened in Europe it impacted Burberry's market and their
sales got reduced because of the decrease in tourist visit. Other than this, once Chinese market
purchasing power got down because of the fight against corruption had also impacted the
company's sales. These incidents has negative impact on organisation because it declined the
sales of the company well as productivity and profitability also affected. On the other hand
happening of BREXIT positively impacted the organisation because it increased the impression
of Britishness as well as the brand image of the organisation. As a result, there was a rise in
company's sales as well as its profitability.
ECONOMICAL: These factors are related to the economy of the country which include
inflation rate, interest rate, foreign exchange rate etc. and how does they impact the performance
of Burberry. This factor help the company in forecasting its growth in the market but these
factors also impact organisation either in positive or negative way (Fernando,2011). For example
at the time of BREXIT, presence of British companies increased which impacted the company
positively as it increases the sales of Burberry products in UK by 30% because of the rise in
tourists. Other than this at the time of recession in UK, it lowers the purchasing power of people
They start spending less on luxury products and start saving more. Burberry is an luxury fashion

products brand so this incident negatively impacted the performance of organisation as it
reduced its sales and profitability. Increasing liberalisation in UK's trade policy is another help
for Burberry which will positively impact the organisation by helping them to invest in more
regions.
SOCIAL: This factor is related to the culture, values, beliefs, society, attitude of population etc.
it help in understanding the impact of these element on the performance if Burberry. Customer's
preference and attitude play a very important role on company's market because it is completely
dependent on the fashion and taste/preference of buyers (Dockalikova and Klozikova, 2014). For
determining the impact of social factors on company, they need to analyse the education standard
in company, culture, attitudes, leisure interest, class structure etc. fashion brands need to analyse
their customer's culture because it affect lot to the company as culture difference create various
taste and trends. For example as per the people choice and demand, Burberry launched option of
customization in scarf to colour it as per individual choice. It has positively impacted the
organisation because its sales and profitability both get increased.
TECHNOLOGICAL: Technology is growing very fast in every industry that even it is not giving
chance to organisations to cope up with it. It is very important for Burberry to analyse
technological changes in the market and how does it will impact of their product offering , cost
structure, value chain structure etc. For example, use of internet is increasing for sales of luxury
products so Burberry has launches its online apps for the people to shop from hone and it is
impacting positively to the organisation by improving the brand image of the company (Cuervo‐
Cazurra, 2011). It is strengthening its market with the help of social media and helping them to
stay ahead from their competitors. But on the other hand, there are some negative impact of these
growing technology on the company is that, their competitors are also taking advantages of these
innovation and reaching to that level of success which is not good for the image of company.
ENVIRONMENTAL: This factor is related to the impact of environmental elements on the
performance of the Burberry. These include weather, climate change, recycling, pollution, waste
management, endangered species etc. organisation need to analyse environment because every
country have different environment standard and sometimes even states of one country has
different laws. For example there in increasing awareness about eco friendly products in the
market or among the people, even government has put regulation on carbon emission. This has
positive impact on the organisation when it started following it, because Burberry became top

company to perform for sustainability in consumer apparel sector this has enhanced its brand
image. On the other hand there is a negative impact on Burberry from this regulation made by
the government that its production cost increased and as a result it had to rise the price of its
products. Weather conditions in different countries is also impacting company's cost of operation
as well as affecting its investment.
LEGAL: This factor is related to the country's legal framework which affect the performance of
the Burberry. It is important for company to analyse legal factor of a country before entering into
it. Some of the factors that organisation need to consider is anti trust law in personal &
household goods, discrimination law, copyright, patents, consumer protection, employment law,
health and safety law, data protection etc. for example Burberry is making their employees to
work more than eight hours but as per UK's employment law, employees are not allowed to force
for working more than 8 hours (Cordes-Berszinn, 2013). So this is against the employment law
because it is negatively impacting the organisation and declining its brand image. In some
countries Burberry is not following the legal protection of intellectual property which is
compulsory the the UK government to follow it no matter in which country it is working. So it is
again against the law and putting bad impact of the organisation's image.
P5 SWOT Analysis of Burberry
SWOT stands for strength, weakness,opportunity and threat it is a tool that Burberry uses
for knowing its internal strength and weakness on which it have some control and external
opportunity and threat which is out of their control. It also facilitate, fact ,data etc. which help
company is focusing to its major area.
STRENGTH: Burberry is one of the famous brand of UK which is working from 156 years so
its iconic British fashion is its major strength. Company is always known for its quality product.
This has make them top competition and also help company in improving its productivity and
profitability (Ciocoiu and et.al., 2013). Some of the other strengths of organisation is its global
presence, company is working in more than 50 countries with more than 500 stores and it has
increased its customer base to a large extent. It is working as both retailer and wholesaler and
has licence to work globally.
WEAKNESS: Burberry is a very big brand but still it is facing some weaknesses which It need
to overcome soon for enhancing its productivity. The major weakness of organisation is its high
range or price, which is not very much helping them to increase their clients. Although company

is providing quality products but the prices of their items are not very much pocket friendly
because of which young aged people who are not earning can not be able to afford it. Another
weakness of Burberry is its limited product line, only only deal in beauty products, accessories
and apparels which is not enough to compete with its competitors.
OPPORTUNITY: There are always opportunities available for the company to develop itself.
The major opportunity for Burberry is changing lifestyle , tastes ,preferences and education
among the people (Cavusgil, Ghauri and Akcal, 2012). It is giving chance to the organisation to
satisfy the needs of buyers which will help them in increasing their customer base. Other than
this expanding product line will also act as the opportunity for the company if they focus on
increasing its product line. It will differentiate organisation from its competitors. Burberry is
dealing in premium products so increasing demand of luxurious goods will set a new opportunity
for the company.
THREAT: Burberry is a leading brand in UK but there are some other brands also which is a
tough competitor of this organisation. So increasing competition is one of the major threat for the
company as other players is working world wide in more countries as compare to Burberry so it
is decreasing their customer base as well as their profitability. Changing lifestyle among people
is also increasing rapidly which also act as the threat for the company because this continuous
changes making it difficult for the company to cope up. They have fear of short life cycle of their
products and its rapid depletion (Carlsen and Andersson, 2011). Imitation of product or fake
products are also threat for the company because it reduces the customer base of the company by
selling almost same product at lower prices.
P6 Strengths and weaknesses interrelate with external macro factors
Political- It is related to the influence of government condition in an organisation. UK
government is stable but company is working in many other countries where government is not
always stable so it affect the company's performance. It is related to the strength of the company
because of its global presence as well as the stability of UK government. On the other hand it is
interlinked with the weakness because not every countries government is stable which affect the
overall operations of Burberry and also reduces its profitability (Ashworth and Goodall, 2012).
Economical- Influence of country's economy on organisation's performance are related to
economic factor. From the above analysis economical issues that organisation is facing is
condition of recession in UK market. This is related with the weakness of the company because

higher inflation rate reduces the purchasing power of people as brand already has high prices of
their luxury product. In return to this sales of the company goes down and On the other hand it
is interrelated with the strength because it give chance to the organisation to increase the prices
of their product and to earn more profit.
Social- These factors are related to the social issues which is impacting the performance of the
company. Company is facing changing lifestyle of people and it is interlinked with organisation's
strength because Burberry is iconic British fashion which keeps on innovating their designs for
fulfilling the need of their customers and to lead in the market among all the competitors. On the
other hand this is interlinked with the weakness of the company is that it is not providing much
options to the people which is not satisfactory for the customers and as a result it is reducing
company's sales.
Technological- Technology is also impacting the performance of the company. Burberry has
opened their online app for the customers to shop from home. This is interlinked with the
strength of the organisation as its global presence is a possible by the use of internet. Company is
able to sale its products all over the world without its physical presence (Asad, 2012). On the
other hand it is interlinked with the weakness of the company as it is increasing the competition
for the organisation which is impacting the brand image of the company.
Environmental- Burberry's environmental factor is production of eco friendly products. It is
related with the strength of the company because it is providing quality product to their
customers which is satisfactory for them. On the other hand it is related to he weakness of the
company because high prices of their products as they are involved into the production of eco
friendly items which automatically increase its cost prices which affect the product price.
Legal- Company is facing the breach of law related to the protection of intellectual property.
This is interlinked with the weakness of the company as it is damaging the brand image of the
company. Which in return decreasing the sales of the organisation.
CONCLUSION
From the above mentioned report it has been concluded that business environment plays
a vital role in an organisation as it enable the company to identify opportunities in order to
overcome their challenges or threat. Each organisation consist of varies types and each of them
has their own purpose, objective and legal structure which directs them to attain high
productivity. Along with this, PESTLE and SWOT analysis helps company to evaluate their

performance for gaining competitive advantages among competitors. Moreover, an organisation
has different departments which is interlinked with each other and enable company to achieve
profit maximisation with the optimum utilisation of resources. Therefore, an effective business
environment helps firm to expand their business operations across the globe or at global
environment.

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