This assignment requires students to analyze the business environment using tools such as PESTLE and SWOT analysis. The document provides references to relevant literature and resources, making it a valuable resource for students studying business management and entrepreneurship.
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Businessand The Business Environment
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INTRODUCTION The sum of internal and external factors which affect the business is defined as Business environment.This internal includes employee, customers needs , expectation,client supplier, and the external factors includes owner and innovation in technology, social change,marketing change etc. This internal and external factors affect business environment.Business environment improves the overall performance and identify the opportunities, growth, and profitability of the organisation. This report is carried out in context of TESCO, a British multinational groceries and general merchandise retailer founded in 1919 by jack Cohen. its headquarter is in England UK(Andersson, Forsgren and Holm, 2015). This study involvesvarious kindsof purpose and legal structures of organisationthe scope of different organisation provides a link between objectives and product offered by companies. This report focuses on identifying the impact of macro environment on business operation with the help of PESTLE. The strengths and weakness will be examined by swot analysis below: TASK1 P1.Different types and purpose of organisation and legal structures. Thevarious type of organisation such public, private, voluntary to operate the business successfully. In the present report, Tesco company is taken as the private organization , British broadcasting company is taken as the public organisationandOXFAM is consideredas the voluntary company. Types , purpose , mission , vision , product & services and legal structure of these organisation is explained below: Public sector:This public sector is defined as the organisation which isclosely-heldand directby the government. British broadcasting corporation is a British public sector broadcaster. This organisation was founded in 18 October 1922 by John Reith.BBC is a worlds oldest mass media industry and national broadcasting organisation. Services and product:BBC provides several servicesto its customer's and It also operates various televisions in UK. They currently operates HDservices to all its nationwide channels with the exception of BBC parliament. TheBBC has its own 10 radio stations in UK and further 6 radio station in national region. This organisation operatenews gathering operations, news website and also operates BBC audio books. 2
Size and scope :According to the number of employees BBC considered as the largest broadcaster in the world. Its has 20,950 employees and 16,672 are working for the public sector broadcasting. BBC has 35,402 fixed and flexible staff employee including part time employee. (Belás and at. el. 2015). Vision: To see its self as the most creative organisation of the world. Mission : the mission is to inform and educate the people through programmes and services. Legal structure : This is defined as an structure where the organizationhas the liability for all those work which they perform at different platforms. Organisation can be of different types such as Private, Public and voluntaryto operate the business successfully. In the present report, Tesco company is taken as the private organization , British broadcasting company is taken as the public organisationandOXFAM is consideredas the voluntarycompany. Types , purpose , mission , vision , product & services andlegal structure of these organisation is explained below: Public sector: the public sector is defines as the organization which is directed and controlled by the government.BritishbroadcastingcorporationisaBritishpublicsectorbroadcaster.This organisation was foundedon18 October 1922 by John Reith.BBC is the worlds oldest national mass media broadcasting organisation. Services and product:BBC provides the several services to its customer's. BBC operates the various television in the UK.They currently operates HDservices to all its nationwide channels with the exception of BBC parliament. TheBBC has its own 10 radio stations in UK and further 6 radio station in national region. This organisation operatenews gathering operations, news website and also operates BBC audio books(Chang, 2016). Vision of BBC: To expand the area of mass media over the world Mission of BBC : The mission is to make the people aware about its services. 3
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Legal structure of public sector: This is defined as an structure where the organizationworks at local level , state level and national level. Local government:it is defined as the administration where local government operates in districts, towns, cities and countries.This local government have control over the local area not the wider area. Decision of local government not affected at larger level. State government:This defined as the factors which is focus on making the laws for a state.Thisstate government Framethe rules and regulations for the businesses for an specific state. Central government:The government holds the power over the unitary state is definedascentralgovernment.Theunitedstateisafederalsystemsof government in the power are sharing between the central and state government. In public organisation, it requiredat least two shareholderand organisation should be registered with company house. Private sector: Theadministrationwhich is operated by thepeopleor the partners but not by the government is defined as private sector. Thekey purposeand objective ofthese organizationsis to earn huge profit. Tesco is a general merchandises British multinational retailer company, headquarter in Welwyn garden city UK,.This organisation was founded byjack Cohen as a group of market stallin 1919(Charter, 2017). Servicesandproduct:Tescoprovidesvarioustypeofservicessuchas household product , clothing , insurance , groceries etc. PurposeThey want to earn loyalty and create goodwill for consumers. Mission of tesco: the mission is to earn loyalty and trust of customers. Vision of tesco: To expand the market by delivering its customers durable and new sustainable products. 4
Legal structure for private sector: Soletrader:Sole trader are the people own and run their own business.The owneroftheorganizationsnotsolelyworkstoachievethetargetsother employees also helps them in growth opportunities.As sole proprietor owner can use its social security to reports on taxes. Partnership:It is defined as the structure where two or more persons agrees legally to run a business organization together and share the profit into equal distribution. Voluntary sector : it is defined as the organisation whichenriches and provides benefits to the society. The purpose of these organizationis to provide benefit to the society not on the profit. OXFAM is a charitable organisation which focusing on decreasing global poverty(Deasy and at. el. 2016). This organisationwas developed by OXFAM international inn 1942. voluntary sector is non- profitable sector which operates collection of tasks. Services provides by OXFAM :This organisation provide the services such as health and education which is effective in reducing the inequality . legal structure : Unincorporatedassociation:Itisexplainedastheassociationwhichis commenced by the number people were they don't have the motive to earn profit. Trust :It is the business organisation which is required to present themselves as a trustee in which there are number of people who works for the organisation. P2.Explain the size and scope of different type of organisation. TESCOis one of the most popular company in retail sector. They have around 2300 supermarket store were more than 300000 people works. The main setup of TESCO is in united Kingdom. Size and scope of Tesco: Thecompany have near around five lakh employees across the world who have to operate there seven thousand stores across the globe.Tescocurrently operates in 13 countries. Planning ro expand to US BECOUSE ITS ALREADY the largest retailer in UK. Business objectives: 5
the main objective is to survive a short term objective at thr time of new firms enter the market. try to make more possible profit. Stakeholders: Tesco company has many stakeholders some of them are shareholders, customers, government, local community, financiers etc. OXFAM This organisation is defined as the global movement of people and working together to end the injustice of poverty. as a network of people this organisation save, protect , tackle the inequality that keeps the people poor. It is effective uin buil better lives for themselves and for the others. OXFAM solve the issues like land right, climate change and the discrimination against women(Erasmus Strydom, and Rudansky-Kloppers, 2016). Size and scope OXFAM: This company has the collaboration with 20 Oxfam organisation with more than 10,000 staff and nearly 50,000 interns and volunteerworking around the world. Together with all the local partners this company works in more than 90 countries as the part of OXFAM. This organisation spends 25% of its funds on the wages and running cost. This organisation has wide scope more people wants to connect with this because its help people for their betterment. Objective: Organisation have made the motto in which they loves to save the children by delivering them better education facility, health services and many more. Stakeholders: The main stakeholders at Oxfam are: financial supporter, their contributionhas great impact in this organisation butstill not enough involved in the campaigns. This would include its founder, director , board , staff , volunteers, donors, and the other benefits from their work. British Broadcasting corporations: this company is worlds oldest national broadcasting organisation and the largest broadcaster in the world by number of employees. Size and scope : Size and scope : BBC considered as the largest broadcaster in the world according the number of working employees. Its employee over 20,950 and in this 16,672 are in the public sector 6
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broadcasting. The total number employeestaff in theBBC is 35,402 after including part-time, flexible and fixed contract staff included(Evans, and at. el. 2017). Objective: BBCissimple,toenrichpeoplesliveswithprogrammesandservicesthatisprovide information, education , entertainment by being the most creative organisation in the world. This organisation has 6 values which people across the BBC share. Stakeholder: key stakeholder are creditors , directors, employees, government, owners, suppliers, unions and the community. TASK 2 P3.Relationship between various organizational functions andtheir link to organizational objectives and structure. Tesco Plc. It is a multinational groceries and general merchandise retail company based in UK. Tsco was founded by Jack Cohen in 1991 it is the third-largest retailer organization in the world. The company is diversified into different areas such as clothing, retailing of books, furniture, electronics,petrol,financialservices,telecomsservicesetc.therelationshipofdifferent organizations of Tesco are as follows : marketing with human resource:Marketing is an important tool for every organization to promote itself in the competitive market(Hair and at. el. 2015). To carry on the functions of marketing, employees are required so human resource departments provides employees to complete activities and task.In the same way when an organization requires human resource, the company need to announce in the market to full fill the requirements, through marketing tools such as newspapers, hoardings, advertisements, pamphlets etc. so these two functions of an organization are interrelated to each other. Advantages:Marketing helps in promotion of business organizations and human resource plays a supporting role in execution of marketing. Disadvantages:Socialmediamarketingisanegativetoolincaseoffraudulent. Ineffective human resource can lead to the failure of marketing activities. 7
Sales with research and development:To carry on the production and manufacturing activities first a company need to forecast demand and supply with the help of research and development. . When a company achieves estimated sale then the R&D department help in developing sales procedure which is changed with the purpose to divert the focus to different department. TASK 3 P4. Identification of theeffect of external environment on business operations. Largesurroundingsbasicallyreferstotheoutsideenvironment,thatincludesthe environmental factors which affects organizations.Some of the impact of external factors have been determined through PESTLE: PESTLE analysis PESTLE model is defined as the analytical tool through which it can be easily found that what are those factor through which organisation is affected. Detail information has been discussed in context of TESCO. Political factor-These elementconsider the plan of actionofauthoritiessuch as labour laws, fiscal policy, trade restrictions and political stability of an economy that are required to be followed by TESCO(Hamilton and Webster, 2018) . Positive impact-Tesco is an UK based retail company and the government of UK is stable this positively helps the constant decision making process of the company by not introducing new laws and regulations at short period this in turn helps the organization to achieve more growth opportunities. Negative impact-Fiscalpolicy of government has a negative impact on Tesco by the rise in taxation policy and less revenue for business, which affected the profit margins of company. Economic factor-It includes economic growth, inflation rates, interest rates, exchange rates and unemployment rates that have a direct or indirect impact upon a company. Positive impact-Government is offering employment to unemployed peoples which in turnhas a positive impact onTesco's growthwith increase inproduction and expansion of business with more labour opportunities. Negative impact-Increasein inflation rate leads to decrease in the profit of company when the weighted price of goods raised by the government, the buying capacity of consumer reduces.That shows anegative impact on the profitability index of Tesco company. 8
Social factor-Here, discussion is aboutpopulation, growth rate, age, career attitudes, health consciousness and cultural barriers of the environment. Positiveimpact-TheeconomywithlargePopulationhavingdifferenttasteand preferences has positive impact on tesco in terms of market expansion and growth of the company. Negative impact-Consciousnessfor health is increasing immensely which has a negative impact on sells of ready cooked foods which is being avoided by the consumers and increased the preference for fresh food. Technological factor-hisfactor defines innovations in technology which effects to the operation of the organizations, It includes research and development and awareness of technological factors. Tesco can promote its products and services through tv and internet which can lead to increase in awareness for its product and services(Kljucnikov and at. el. 2016). Positive impact-Research and development helps tesco in segmenting the market according to the demand created by people. By with the help of R&D the company can analyse the competitive market and growth opportunities by customers demand. Negative impact-Ifthe company lacks technological factors such as promotions through social media, research of consumers taste and preferences then it has a negative impact for the organization in creating goodwill for its organization. Environmental factor-This factor includes weather, climate, environmental policies and climatological changes of the economy which affects Tesco's in positive and negative aspects. Positive impact-Tesco is encouraging the people to shop through its online website, Which saves the fuel and time of people. Negative impact-The packaging of tesco's products is done with plastic begs which are non recyclable and affects the environment, it reflects a negative picture of organization. Legal factor-It includes various laws such as discrimination laws, employment lawsand many more.Tesco follows all the rules and regulations which comes under legal factors. Positive impact-Tescoprovides equal remuneration and incentives to the workers who performs task under the company, and also render them insurance services by which employees can enjoy benefits of the company. 9
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Negative impact-In the year 2016 some workers of Tesco were extremely frustrated with the age and gender discrimination for low pay rates for night. TASK.4 P5. Conduct internal and external analysis of organisation to identify strengths and weakness. SWOT analysis of TESCO company: StrengthWeakness Theyaregoodindeliveringthe services to customer because of that they have won number of awards. TESCO is also known as the giant of theirsectorandthereasonis profitability. This company has strong financial background because the company has significant cash reserve and has wide propertyinitsportfoliowhichis underdeveloped. The company has its long history in UK which in turns will continue for long period. Theyhavebettertechnological serviceswhichishelpingthemto sustain in the market. They are unable to declare accurate financialstatementduetowhich different fines have been imposed. The share price as of 25thApril is below the peak They have less disposable income and even they do have high stock selection. OpportunityThreat They do have the opportunity to expand theirbusinessatgreaterplatformas demand of their product is high. This company face the threat of the economicrecessionandthecredit crunches to threaten profitably in area 10
TESCO have the option to work as a joint venture at international platform through which they can easily enhance there business. Inthiscompanythereisthemore opportunitiesaswell.Thereis significant opportunities to grow online shopping for tescoas well as provide theofferhomedeliverytothe customer's or more area. In this company there is the more opportunity in the private label market also. This company canalso provide better access to the western goods theses area demanded. around the world, reducing the number andsizeofpurchasemadeby customer's. Competitorthreat is in front of tesco because other global retail may be able to offer lower price great variety as well food prices are very high which also reduce the the number of consumers who buy the product. In this company there is the threat of in term of increasing wages and benefits aroundtheworldaddtotescocost basis. Pressure of grater stakeholder related to theenvironmentandsocial responsibilityalsoadverselyimpact tesco cost basis. P6. strength and weaknesses interrelation with the external macro environment Analysing of macro environmental factors will help an organisation in improving its image and performance at workplace by monitoring several opportunities threat which is present external environment.In order to achieve high benefits tesco must determine the strength and weakness of particular macro environment factors for formulating strategy accordingly. Political:This political factors work as the strength of the organisation because this is effective in increasing the demand for its product and diversified its workforce. Due to decline in disposal income and house hold income. Economic:theeconomicfactorworkasthreatforthetescobecauseeconomic recessions and credit will continue threaten market share and profitability in around the world. It will affect number and size of purchases which is made by customer's. 11
Social: the economy with large population is a strength for the organization to achieve more growth opportunities in market andIt expands themarket effectively in term ofhigh profitability. Technological: it works as a opportunity for tesco. The company promotes online shopping for their growth in international market. They can offer services like home delivery to more an more area. Environmental:this factor work as threatfor company. It will increase the pressure on company to address environmental issue and adopt way which are beneficial for the company. Legal: thisaffects the company bybanningcurrent practices withoutnoticingthe company. 12
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CONCLUSION It is concluded from the above report that there are number of association and it is necessary that it should be formed legally. It can be said that size, structure and scope of organisation are never similar with any of the organisation. Stakeholder are always connected with company who helps to enhance the business at better platform. SWOT is one of the essential tool which helps to identify the internal and external strength of the organisation. PESTLE is also helpful as it indicates all those factor due to which organisation can be affected or benefited. 13
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