Understanding Business Environment

Understanding business environment

Understanding business environment
Executive summary
In this paper the discussion will be made on the concept of business environment. It has been
seen that business environment plays an important role and it should be analyzed by the
companies so that it can be easy to manage the activities. So, in this paper different types of
organization will be discussed like private, public and involuntary sectors. In the next phase of
the report the discussion will be made on the stakeholder analysis by considering the Nestle
Company as the real example. Then IKEA Company will be considered and the tools will be
considered like Porter five force model and Pestle analysis. These tools will help to evaluate the
overall business environment of the company. In the last phase the key performance indicators
will be discussed in relation to the IKEA Company. So, the paper will be based on the concept
related to understanding the business environment.
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Understanding business environment
Table of Contents
Executive summary.........................................................................................................................1
Task 1...............................................................................................................................................1
Task 2...............................................................................................................................................3
Task 3...............................................................................................................................................5
PESTLE ANALYSIS OF IKEA..................................................................................................6
Importance of Porter five force model.........................................................................................7
Porter five force model of IKEA..................................................................................................7
Task 4...............................................................................................................................................9
Key performance indicator of IKEA............................................................................................9
References......................................................................................................................................12
Appendices....................................................................................................................................14
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Understanding business environment
Task 1
It has been analyzed that business organizations can be classified according to various types of
criteria. There are various types of organizations under classification systems which are
considered.
 Public sector
It has been stated that public sector comprises of the companies that are owned and also the
interference of the government takes place. The government focuses on offering services to the
citizens. In this it has been seen that with the process of outsourcing, the public sector
organizations will engage their enterprises to offer goods and products to its citizens. The public
sector companies are the organizations which are publicly listed companies and also it is the
company whose ownership is concerned with the general public in context to various shares and.
The legal structure of the organization is concerned with the distinct legal entity which is
separate from the overall shareholders and officers. Also, public sector can vary according to the
countries and it depend on the legislation that governs the companies of the state owned and it
also emphasizes on offering services that can benefit the entire society (Bullock, Stritch and
Rainey,2015). The best example is related with offering education to members of the general
public. Also, the example of the public sector of the company consist of the sectors like coal
industry, oil and petroleum industry, steel industry, banking industry and thermal power industry.
 Voluntary organization and charitable sector
The voluntary and charitable sector focuses on the social activities and also it is considered as the
companies named as NGO’s. It has been noted that these companies emphasizes on providing
services to the people who are living in the society. These companies are different from the
private organizations as the main objective of the voluntary companies is to offer services
without the aim of earning the profits. Voluntary companies also focus on social corporate
responsibilities which uplift the society. For example: JB Hi-Fi emphasizes on controlling the
entire CSR operations which assist in achieving the positive outcome. These companies are also
different from the public sector companies as NGO’s do not focus on any government bodies but
they maintain the welfare of the society. These companies also accept the charity from the
different businesses but public sector do not emphasize on getting charity from the businesses
(Raharjo and Eriksson, 2017).
 Private sector
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