The Business Environment

This report discusses the various external factors and environmental impact on business organizations. It also covers the functions of marketing and the importance of ethics and culture in business. The impact of lack of care for the environment on business profitability and reputation is also explored.

The business environment

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Task 1: External factors and environmental impact........................................................................3
External factors impacting business organisations......................................................................3
Significance of conducting a PESTLE analysis..........................................................................4
Three-step crisis management procedure....................................................................................4
Factors contributing towards environmental damage and minimising them...............................5
Impact of lack of care for the environment on business profitability and reputation..................6
Task 2: Marketing Booklet..............................................................................................................6
Functions of marketing and how it is different from selling.......................................................6
Purpose of a marketing plan and objectives................................................................................6
Differences between internal and external data and information................................................7
Differences between primary and secondary information...........................................................7
Elements of the marketing mix....................................................................................................8
Task 3: Ethics and culture................................................................................................................9
Benefits of ethical behaviour for organisations...........................................................................9
Effects of organizational culture on business organizations......................................................11
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

Introduction
Business environment can be defined as the sum of all the internal and external elements
like employees, customers, political and legal climate, suppliers, technological and
environmental factors, economic stability and other social factors etc. In this report, the local
business environment and produce materials for the local chamber of commerce will be
evaluated. The external factors and environmental impact will be analysed and will be covered in
the presentation, and a marketing booklet will be produced explaining the functions and
objectives of marketing as well as a marketing plan. Apart from these, a sample handbook for
managers in the start up business will be described covering organisational ethics and culture.
Task 1: External factors and environmental impact
External factors impacting business organisations
The various external factors that affect the local business environment-based functions
can be explained via PESTLE analysis, which constitutes of political and legal climate of the
locality and country, the environmental factors, the social and economic factors.
 Political factors: The current political climate of UK, the direction in which government
is taking decisions regarding the local businesses, the issues of Brexit and other tax-based
implications, policies, tariff and duties, the supply chain and import-export related
decisions can have a direct impact on the local business operations.
 Economic factors: The stability and performance of the economy of UK, the business
cycle stage, the performance of the stock market, consumer confidence and purchasing
capacity, the income level of the people in the community and the labour cost influences
market and business decisions in terms of employment, costing and profitability.
 Social factors: The purchase behaviour of the people such as trends, customer
preferences and taste, cultural and demographical aspects as well as social issues liked
population, lifestyles, buying habits, beliefs, education etc (Kozubikova, Homolka and
Kristalas, 2017).
 Technological factors: The state and advancement in the technology could mean
enhanced automation, use of AI and internet services, which could impact on how a
business functions and the way customer services and marketing is changed.
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 Legal factors: The laws of a particular state or country impacts businesses such as
consumer rights, employee laws, anti-trust laws, health and safety laws, intellectual
property laws etc.
 Environmental factors: The rise in the environment consciousness in people and the
government has made it important for businesses to adhere to environment regulation
laws and standards such as waste management, reducing carbon footprint and even going
green for improving the goodwill.
Significance of conducting a PESTLE analysis
Pestle analysis is a framework for the assessment of the various external factors that
directly and indirectly impact businesses. It helps the business in conducting a feasibility test and
gain deeper insights into what affects and influences the major business decisions which also
tend to have an affect on the profitability, cost effectiveness, manufacture or production,
customer services, marketing, operations and other business functions. It helps business in
looking for opportunities and minimise the estimated and existing threats in the business. It
encourages strategic thinking where the business owners can evaluate all possibilities and make
decisions that help in the achievement of the business and functional goals (Elavarasan and et.al.,
2020).
Three-step crisis management procedure
Crisis management can be referred to the various systematic policies that are initiated for
responding to the crisis situations in any business and development of response strategies.
 Pre crisis: This stage can be described as the warning stage where the problem of the
crisis is discovered by the manager or superior. Mass communications is bypassed and
the higher tiers of the hierarchy is are informed. The situation is analysed and potential
harm is determined, as well the necessary steps that have to be taken beforehand.
Functions like risk assessment and emergency notifications system are implemented.
 Acute crisis: The following stage occurs when the problem becomes visible to the people
outside the organisation and a crisis management team is activated. The team makes use
of the crisis communication s system for notification of the masses regarding the issue.
Effectiveness in communication becomes imperative and necessary guidelines and
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instructions are followed up and the crisis has to pushed towards resolution, by
conferencing the leadership and responder teams.
 Post crisis: After the containment or resolution of the issue, the business recoups the
losses to show community, shareholders, investors, government, customers etc. the
reassurance messages. The performance is evaluated, changes are made in crisis
management system and documentation occurs (Wang, 2017).
Factors contributing towards environmental damage and minimising them
The major factors that lead to damaging the environment by the corporations and
businesses are Business based impact such as the business implications of production waste,
emission of greenhouse gasses, pollution, improper waste disposal, water wastage, improper and
overutilisation of resources. Other factors are inefficient business practices, frequent utilisation
of fossil fuels for functions like transportation and sourcing, high carbon footprint etc.
The impact can be minimised through:
 Efficient use of electricity- By using more natural resources such as solar power and
producing power through biodegradable sources and energy efficient building systems.
Installing renewables and clean energy systems.
 Conserving water: reduce the water wastage through reusing water after treatment,
reducing usage, and processing waste water efficiently.
 Considering near sourcing where all the business functions can use nearby vendors and
suppliers for most business-related needs and reducing the environmental impact and
saving costs at the same time.
 Travelling less, initiation of innovation techniques that reduce overutilisation of resources
and increasing internet-based communication (Ali, Khan and Ilahi, 2019).
Impact of lack of care for the environment on business profitability and reputation
Lack of care and irresponsible corporate social responsibility, especially towards
environment can have major problem for businesses as the customers, employees, community,
government, media and other stakeholders are directly impacted by the steps taken by businesses
in their environmental management. The rising environmental consciousness and awareness of
ethical responsibility has led to a drastic change in the way stakeholders think and behave. The
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reputation and goodwill of the company is majorly affected by the customer behaviour which
constantly prefer green companies which take csr initiatives. Also, there are various environment
laws and regulations such as waste disposal, efficient use of resources, reduction of carbon
footprint which have major influence on the costs of businesses. Also, if business don’t take care
of the environment, the market value of the business can decline, stakeholder resistance can
increase, costs might increase which impact profitability and issues in the long term (Swaffield,
Evans and Welch, 2018).
Task 2: Marketing Booklet
Functions of marketing and how it is different from selling
Marketing can be defined as the management process that is conducted for the
identification, anticipation and satisfaction of customer requirements through effective market
rese and product or service development and promotion and advertisements by using various
marketing tactics and strategies. Marketing is a broad term which consists of various functions
such as promotions, market-based research, product development, marketing information
management, pricing and packaging, financing, distribution and post sales performance
evaluation. On the other hand, selling is a narrower term which is a part of marketing but is more
focussed on the operational function of transforming the goods into value rather than marketing
which is more focused on serving and customer satisfaction (Paesbrugghe and et.al., 2018.).
Purpose of a marketing plan and objectives
Marketing plan is used for the identification of certain characteristics of the potential
customers, specify the various strategies, conducting a market or situational analysis, conducting
marketing segmentation, targeting and positioning, and devising tactics for meeting the goals of
the marketing, developing certain monitoring and evaluation standards and setting tools to meet
the marketing objectives (Chernev, 2020). The primary purpose of market plan is to conduct a
detailed analysis and estimate all requirements comprehensively, focussing on the efforts to
avoid wasting all resources.
Marketing objectives are the goals that are defined and outlined for stating the specific
and measurables intentions and aims of the business; efforts towards the marketing functions and
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activities and play a significant role in the development of marketing strategy and are made for a
particular timeline of completion. They give a clear direction for the marketing plan and specify
the targets that have to be achieved which helps in specificity of the entire market plan and helps
the marketing teams to focus on the marketing activities which are designed around the
procedures aimed at achievement of the marketing objectives. For example, if the marketing
objective is to expand the growth of the company, the marketing strategies usually involve
differentiation of products and market development (Chernev, 2020).
Differences between internal and external data and information
In the major marketing function of market research information is collected and analysed
and most often the organisation’s internal data, business systems data and unstructured data are
used. Internal data can be described as the information which is development from businesses
and extends to the areas of maintenance, operations, employees and finance. The information is
obtained internally through accounts receivable, sales records and consumer history, financial
statements etc. On the other hand, external data is collected through the various customers and
competitors regarding whom the statistics are used, outsourced or are available through surveys,
questionnaires, market and business research, and customer feedback as well as competitor
business model and consumer credit ratings. This external data is considered more valuable than
the internal data (McLaren and et.al., 2018).
Differences between primary and secondary information
In context to business research, there are two types or sources of collection of
information. Primary and secondary. Primary information is collected through primary sources
of data collection and the sources provide a first-hand account of the event, activity, or
information. These are government documents, market and business reports that all are
conducted through various methods like interviews, surveys, ethnographic, focus groups,
statistical data from the source or subject of research, questionnaire, customer feedback etc. on
the other hand, secondary data is collected from the secondary methods of collection of data
which provides a second-hand account of the information such as already or previously
published articles, journals, researches, dissertations and thesis, businesses reports and online
articles, blogs and editorials etc. the major difference is the primary research will be conducted
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by the company first hand with new or raw information being discovered whereas secondary
information will be either purchased or used from existing sources (Raty, 2019).
Elements of the marketing mix
For the organisation Tesco, which is a grocery retailer operating in multiple countries and
is based in UK, the marketing mix is as follows:
 Product: Products are the items that satisfy the needs and requirements of the customers
and consists of various tangible and intangible goods and services. Tesco delivers a wide
range of general merchandise such as electronics, clothing, home products and grocery
items and food items. The various regional produce and international cuisines are offered
and Tesco specialises in a wide variety of food choices. Other products involve home
appliances, car products, hardware, gaming products, personal hygiene and pet care,
baked items, jewellery and fashion accessories, sports and leisure products, books and
entertainment etc.
 Price: price refers to the amount or monetary value which of set for the products and
services of a company or organisation. In case of Tesco, a penetration pricing policy is
adopted by the company which aims at setting lower process and majority of discounted
items in its stores to increase its market value and reach a high number of customers
while maintaining the quality. The prices are ow and stable in general except for certain
premium items or product line (Wu and Li, 2018).
 Place: The place element of marketing mix is where customer access ins provided by the
company for consumer convenience through distribution of its products. Tesco follows an
extensive distribution network with over 7000 stores located in various urban and sub
urban areas across UK and other countries. The store categories are divided into Tesco
metro, express, Tesco extra, Tesco superstores.
 Promotion: Promotion in the marketing mix is referred to the marketing communications
that comprise of promotional strategies for the brand through advertisements, PR, direct
marketing and sales promotions. Tesco advertises through low prices-based discounts and
periodical offers on its various products. Traditional marketing is used such as print
media, hoarding sand billboards, tv commercials etc. Also, digital marketing is used
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through social media promotional techniques, Tesco Clubcard and referral-based
marketing, influencer as well as direct marketing.
 Physical evidence: It refers to the environment in which the service occurs or the space
where the customers interact with the service employees. Tesco utilises a simple and
convenient outlet and ambience and design for its stores so that consumers can easily spot
all the items in various product categories and navigate the stores effectively.
 Process: The process refers to the mechanism and procedures which govern the flow of
activities through which the product is sold or the service is delivered. Tesco utilises a
convenient process through technology like RFID embedded across its stores for easy and
faster checking out and bill payment for all customers and also omnichannel presence for
better online shopping and payments.
 People: The employees and the staff that interacts with the customers comprises of the
people element in the marketing mix. The people across the stores of Tesco wear similar
uniforms and are divided into various job roles such as accounting, customer service,
sales assistants, managers etc. They manage the entire business activities of Tesco and
the company indulges in hiring skilled employees and trains them periodically to deliver
the best (Blut, Teller and Floh, 2018).
Task 3: Ethics and culture
Benefits of ethical behaviour for organisations
Ethical behaviour has become highly significant in the business in the present times and
is also highly beneficial for businesses who indulge in ethical behaviour. Ethical behaviour in
terms of business can be referred to the understanding of the difference between right and wrong
decisions and activities to consistently set up a and practice a good conduct. The major
advantages for companies are:
 Building customer loyalty: If the consumers of any business feel that they are being
consistently treated unfairly or are being overcharged etc, the customer retention of the
business will eventually decline. Therefore, for high customer loyalty in the long term a
rapport or customer services, quality, trust and ethical practices are needed in business.
Having a loyal customer base is the key for any business to throve in the competitive
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businesses environment and it also saves the customer acquisition costs as it does not
involve high marketing costs.
 Improving the goodwill of the organisation: Ethical practices such as no discrimination-
based policies, reduction of carbon footprint, community welfare and other corporate
social responsibility-based activities enhances the brand reputation and equity in the
marketplace and the minds of the customers and other stakeholders which eventually
increases the sales and profitability, share value, market size, investments and supplier
confidence, government incentives and support. In the current age of social networking,
any mishap or unethical practices can severely damage the reputation of the company
through transparency in online reviews or media attention (Turyakira, 2018).
 Retaining good employees: Talented individuals are important for any business
organisation at all levels and want to be treated fairly and equally. Employees want
advancement and growth in their career and many are also sensitive regarding the nature
of business practices and steer away from organisational politics, toxic or unethical
culture and favouritism. They want to be a part of the company that supports theory
dedication and hard work and want to be involved in major management decisions like
possible layoffs, reorganisation and change implementation. Therefore, companies need
to practice ethical behaviour in all management activities for retaining high performing
and best talent in the organisations and avoid high employee turnover.
 Positive workplace: All the employees pertain to a responsibility of practicing ethical and
positive behaviour to create a healthy and ethical workplace that fosters growth,
equitability and development of all employees as well as the stakeholders and the
company. Ethical employees are perceived as team players and inculcating ethical
behaviour in employees can benefit businesses by improving the creativity and growth of
the workplace, better communication and higher overall productivity.
 Avoiding legal problems: Any unethical business practice in terms of financing and
auditing frauds, misrepresentation of accounts, inappropriate marketing tactics or
advertisements, unfair employee treatment etc. can cost the company huge legal expenses
and severe damage of reputation as well. Therefore, the business organisations need to
adhere to all laws and regulations and don’t incorporate unethical and unhealthy
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corporate activities. The company should follow a proper code of conducts and corporate
governance (Bull and Ridley-Duff, 2019).
Effects of organizational culture on business organizations
Successful organizational cultures itemize employees and their relationship to the
company and its goals which creates an optimistic employer experiences. The culture of the
organization elaborates the expectations for how people behave and work together towards the
achievement of goals and objectives of the organization. In such manner, the culture helps in
breakdown the boundaries between different teams and improve overall workflow (Felipe,
2017). The organizational culture effects the business organization in various ways which
includes:
 Organizational culture is about living company's central beliefs: The culture is the
reflection of the company's core values. The ways in which the workflow has been
conducted by the company, interaction with the employees and customers treatment
shows maximum about the culture of the organization. In short, we can say that the
culture of the company is the sum of structure beliefs in action. A powerful
organizational culture keeps the companies core values in front of the society. The value
of doing such activities are incalculable. Like in Pure Planet the company conducts time
to time activities to enhance the values and cultural coordination among employees which
helps both the employees and the managers to understand each other on a broader level.
 A strong organizational culture helps in keeping best peoples: It is a well-known
concept that employees who feel like they are a part of the community and decision-
making of tasks regarding the company, rather than just an employee are more likely to
stay at the institution. The workplace culture helps in delivering a specific employee
experiences and makes the peoples feel more related to each other. For instance in Source
Breaker the company arranges everyday morning huddle meetings to resolve the
difficulties of the teammates and discussion about what they are going to perform whole
day will help in engaging each and every person of the team to describe their
performances, problems and suggestions which creates an environment of satisfaction
among employees because due to such kind of activities they feel their importance inside
the company.
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 Culture impacts employees well-being and their performances: According to various
previous studies it has been concluded that the organizational culture directly effects the
performances of the employees and as we all know that the employee performance will
directly affects the organization performances while achieving its goals and objectives
(Lubis, 2020). Supportive administration behaviour, flexible operative options and an
wide-open culture which allow employees to share their views and opinions in front of
their managers or team leaders will more or less effects the overall performance of the
employees as well as the whole organization because the objectives of an individual are
interconnected with organizational goals and objectives. Like in Clarion, the company
offered flexible working hours to its employees which creates an environment of
satisfaction among employees as they are allowed to do 9 hours shift according to their
preferences.
 Culture transforms the company into team: The culture of the organization transforms
the different employees of the company to behave like a team and work together which
effects the productivity of the organization in an efficient manner. For instance in Oscar,
the managers conduct monthly day out for its employees to maintain and build a strong
connection apart from their professional life which will more or less effects the employee
performances as well as the overall system performance.
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Conclusion
From the above report it can be concluded that a business environment can be impacted
by various external factors such as political and legal climate of the locality and country, the
environmental factors, the social and economic factors. A pestle analysis is significant because it
helps business in looking for opportunities and minimise the estimated and existing threats in the
business and encourages strategic thinking where the business owners can evaluate all
possibilities. The three-step crisis management procedure consists of three stages, pre-crisis,
acute crisis and post crisis. The various factors affecting environment were evaluated to be
inefficient business practices, frequent utilisation of fossil fuels for functions like transportation
and sourcing, high carbon footprint etc. The minimisation strategies are Efficient use of
electricity, Conserving water, innovation, Considering near sourcing etc. Lack of care can lead to
declining market value, high stakeholder resistance, costs might increase which impact
profitability and issues in the long term. The marketing booklet was devised consisting of
Functions of marketing, Purpose of a marketing plan and objectives, internal and external data
and information and primary and secondary information. Also, the marketing mix of Tesco was
described comprising of product, price, place, promotion, people, process and physical evidence.
Benefits of ethical behaviour for organisations was evaluated to be high customer loyalty, less
legal cost and goodwill. Also effect of organisational culture on business organisations was
explained.
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References
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