Unit 1 – Business and the Business Environment

Unit 1 – Business and the
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
P1) Explain the different types, size and scope of organizations................................................1
P2) Size and scope of 3 organisations.........................................................................................2
P3 Different types of organisational structure and interrelationships between organisational
functions. ....................................................................................................................................3
P4 Positive and negative aspects of macro environment............................................................6
P5 Internal and external analysis of Marks & Spencer and BBC...............................................7
P6) Strengths and weaknesses interrelated with macro environmental factors..........................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is a combination of individuals, entities and other factors, these
elements are under or not under control of company. Strategical options and framework allow
entities to underline proper evaluation of different factors prevailing in business environment in
order to ensure more competitive and long term sustainable growth (Dvorský, Petráková and
Fialová, V., 2020). present report has been conducted on Marks & Spencer, entity operate their
business in retail industrial sector with having headquartered in London, United Kingdom. Along
with this, report also include different scope, types and scope of organisations, SWOT and
PESTLE analysis. Along with this, report also include interrelationship between different
departments of entity. Lastly, report also include weaknesses and strength interrelated with
macro environmental factors.
P1) Explain the different types, size and scope of organizations
Public Organisations
These organisations have full or partial control of government on their operations. They
offer products and services by mainly emphasizing upon human development (Singh and
Pawale, 2020). BBC well known entity offer their services in broadcasting sector.
Goals: Main goal of company is to conduct their business services by keeping public interest at
their first priority.
Objectives: BBC is having objective to offer accurate and right informations to customers. Entity
aim to become most respect full entity in broadcasting sector.
Vision: BBC is having mission to develop community and individuals by offering them with
accurate and right informations.
Mission: Company mission is to offer most trusted information to customers by providing them
access to have trusted media news.
Products and services: BBC offer products and services which is mainly associated to news of
high quality.
Stakeholder: Company stakeholders include customers, researchers, political parties, reporters
and more.
Private Organisations
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Entities operating their services in this sector independently conduct their operations by
aiming towards offering their services to maximum number of individuals.
Goals: Main goals of Marks and Spencer is to offer high quality of products and services to
enhance satisfaction level of customers.
Objectives: Marks and Spencer main objective is to satisfy their customers with the services and
products according to their needs and demand.
Vision: Marks and Spencer is having vision to set benchmark against other brand by offer their
customers with the services by taking use of high-technology.
Mission: Company have mission to offer maximum quality of products and services to
customers according to their needs and demands.
Products and services:Company offer different type of products and services in the range of
clothing, home products, food etc. and was established in the year 1884.
Stakeholder: Marks and Spencer stakeholders involves employees, employees, suppliers,
government.
Voluntary Organisations
Entities those who are operating their roles and responsibilities in this sector are mainly conduct
their business operations for social welfare purpose. In addition to this, these entities are mainly
funded by private firms for their goodwill.
Goals: Oxfam conduct their operations with having a goal to eliminate poverty from around the
world.
Objectives: One of the most important objectives of Oxfam is that they conduct their services to
increase individuals living standards by offerings them welfare services.
Vision: Company is having vision to eliminate or remove poverty offer better living conditions
to individuals all around the world.
Mission: Oxfam mission is to develop long lasting solutions as to provide welfare services to
maximum number of individuals.
Products and services: Oxfam offer many welfare services to individuals in order to serve a
social cause.
Stakeholder: Entity stakeholders involves political parties, government and trustees.
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P2) Size and scope of 3 organisations
There are mainly three sector namely public, private and voluntary in which
organisations operations their business activities with different size and scope (Wanke, Antunes
and Hadi-Vencheh, 2020).
Public Organisations
Organisations involved in this sector are fully or partially owned, run, managed by government
institutions.
Size:BBC provide their news in approximately 205 nations.
Scope: Company is having scope to offer their services in more efficient manner to
customers.
Private Organisations
It involves organisations those who conduct their business activities without government
interference.
Size: Company conduct their activities in nearly 57 countries with more than 80,000
employees.
Scope: Scope of Marks and Spencer is to expand business venture in other international
marketplace to ensure maximum probability.
Voluntary Organisations
Organisations in this have motive to serve needs and demands of needy individuals by offering
them welfare services.
Size: Oxfam is combination of 20 confederations those who voluntarily conduct their
business to overcome social cause.
Scope: Scope of Oxfam is that entity aim towards expanding their business operations in
more geographical structure to serve maximum number of individuals.
P3 Different types of organisational structure and interrelationships between organisational
functions.
Organisational Structure:
Organisational structure refers to the system that determines how organisational tasks are
directed towards attainment of goals and objectives and also establishes the organisational roles
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and responsibilities (Kozubíková, Dvorský and Ključnikov, 2020). Different types of
organisational structure are being discussed below:
Functional Structure:
Illustration 1: Functional Organisational Structure
(Source: Types of organisational structure, 2018)
Under functional structure, organisation is divided into different departments which are
based on similar functions and tasks such as Marketing, HR, Finance, IT etcetera. Employees
with similar job responsibilities and skills are put together in different teams. Functional
organisational structure helps in division of labour and specialisation of work. Functional
organisational structure is being implemented effectively in Marks & Spencer.
Divisional Structure:
Illustration 2: Divisional Organisational Structure
(Source: Types of organisational structure, 2018)
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Under divisional structure, organisation is divided into different divisions based on
product or geographical location and every division has separate functional departments such as
Marketing, IT etcetera to support the tasks and production within the division itself. Tesla
Motors is a suitable example with different divisions based on product lines such as SUVs,
Sedan etcetera.
Matrix Structure:
Illustration 3: Matrix Organisational Structure
(Source: Types of organisational structure, 2018)
A combination of two or more types of organisational structure can be termed as a matrix
organisational structure and a grid-shaped structure is formed. For example, division and
functional structure combined together in an organisation where the employees have direct
reporting relationship with product or division manager as well as functional manager. Matrix
organisational structure is being implemented in Starbucks Ltd. to manage and effectively
monitor the wide-scale global operations of the company.
Interrelationships between different organisational functions:
Marketing and Production:
Marketing and Production are two interrelated functional departments working together
to attain the organisational goals and objectives. In the context of Marks & Spencer, marketing
department performs the vital function of conducting effective market research to analyse the
demands and expectations of the customers and current gap which exists between the products
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offered by the company and the level of satisfaction. This provides useful information to the
production department of the company which then aligns the product design and manufacturing
of products is made as per the demands and needs of customers (Martínez-Costa, Mas-Machuca
and Lusa, 2013). Working together in harmony, marketing and production department of the
company are responsible for creation of a product or service based on market research and
resource utilisation that has the potential to satisfy the needs of customers in a market. Thus,
effective coordination exists between marketing and production department of Marks & Spencer
which is instrumental for the success and growth of the business organisation.
Marketing and Finance:
Relationship between marketing and finance is essential for the maximisation of revenue
and profits of a business organisation. Marketing department promotes and advertises the
products and services offered by Marks & Spencer which results into generation of leads and
increasing sales that brings in enough cash to support and realise the financial objectives of the
company. However, a huge expenditure is incurred in the marketing activities of the company
and the funds for incurring these expenditures are allocated by the financial department of the
company after budget approval (McDonald, Smith and Ward, 2014). Both, marketing and
finance department of Marks & Spencer work in harmony and coordination to ensure that sales
are maximised at the lowest possible costs of selling and distribution functions.
P4 Positive and negative aspects of macro environment
Political Factors: This factor include political elements such as employment regularity,
labour law etc. Political stability of United Kingdom offer many political advantages through
which company can effectively conduct their business operations, which is a positive impact.
While fluctuations in tariff and trade laws can have negative impact upon company sales and
probability (Kim and Lee, 2020).
Economical Factors: It include GDP growth rate, interest rate, disposable income of
individuals, exchange rate and more. Significant economic growth of United Kingdom allow
M&S to gain many economical benefits in terms of transportation and infrastructural activities, a
positive impact. While BREXIT negatively affect smooth economic growth that can lead entity
to many economical disadvantages.
Social Factors: It include factors like attitude, customer lifestyles etc. Regular evaluation
of customers trends and presences provide positive impact for M&S probability. While
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evaluation of regular shift in customers trends by rivals have negative impact upon M&S sales
generation capabilities.
Technological Factors: United kingdom is technological advanced place comparatively
to other, it provide Marks and Spencer with an positive impact upon the profit generation ability.
However, technological updates implementation by rivals at first place have negative impact
upon company market share holding ratio (Krishna, 2020).
Legal Factors: Company abide all legal laws and regulations according to government
regular notifications which have positive impact upon company brand image (Martiniatin and
Ghina, 2020). While any negative or misleading advertisement can have negative consequences
upon company goodwill.
Environmental Factors: Marks and Spencer undertake use of all environment friendly
measures to conduct their operations which ensure positive impact upon company customers
base. In this, negligence of any environment conscious laws can negatively affect company long
term sustainability.
P5 Internal and external analysis of Marks & Spencer and BBC
It is essential for an organisation to evaluate impact of factors that are prevailing in
internal and external business environment as to develop strategies against them in order to
overcome their negative impact and gain more competent advancements (Brillinger, Schäfer and
Bender, 2020). In context to this, mentioned below SWOT analysis of Marks and Spencer and
BBC is defined:
STRENGTH WEAKNESSES
 Marks and Spencer is having global
brand image and offer wide range of
products and services to customers
(Banica and Patricio, 2020).
 Company is having many stores and
outlets through which they satisfy
maximum number of customers needs
and demand.
 Company lacks in accomplishing needs
and demand of customers according to
latest trend and technology.
 Marks and Spencer did not spend much
on Research & development
department, it acts as major weakness
for entity.
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THREAT OPPORTUNITIES
 Increase in aggressive competition
among top notch entities create threat
for Marks and Spencer smooth business
operations.
BREXIT creates threatening
environment for Marks and Spencer
profitability.
 By taking advantage of high-
technology Marks and Spencer can
undertake significant opportunities for
better growth and development.
 By expanding their business operations
in other countries entity can maximise
their capability of revenue generation.
SWOT of BBC
Strengths Weaknesses
 BBC is operating their business
operations in all around the world.
 With more than 24000 employees
company offer their services at wider
scale.
 Due to the accused that has been bared
by BBC related to showing biased
views in news, that acts as weakness as
it develop negative perception among
customer mind set among customers.
 Company operating cost is high that are
further impacting upon their overall
profitability.
Opportunities Threats
 Company is having an opportunity to
take advantage of joint partnership as to
maximise their market share holding.
 By undertaking advantage of new
updated and high-tech technology
organisation can significantly offer
high quality services to customers
while assuring more competitive
advancement
 Company is facing threat from
aggressive competition from leading
entities like CNN, BBC, and Times
now.
It has been evaluated that respective industrial
sector is seeing emergence of many domestic
channels that is creating business environment
of tough competition.
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P6) Strengths and weaknesses interrelated with macro environmental factors
Political Factors:
 One of the most important strength that have tendency to offer significant advantages is
political strength that assure entity to ensure their long term and sustainable growth.
 Continuous increase in tariff rates acts as weakness for M&S that can adversely impact
upon their sales and probability.
Economical Factors:
 United Kingdom strong economic conditions offer many economical advancements for
Marks & Spencer which is major strength for entity (Al-Khasawneh, 2020).
 BREXIT poses weakness for Marks and Spencer in terms of their overall profitability
generation rate.
Social Factors:
 Continuous change in organisational strategies to satisfy customers is major strength for
Marks and Spencer.
 Identification of needs and demand of customer after their rivals in weakness for
respective entity that can adversely affect their sales generation ratio.
Technological Factors:
 Strong and continuous technological growth of United Kingdom acts as as strength for
M&S that will aid to generate more income (Sinha, 2020).
 High cost to implement technological transformation is weakness for respective
organisation which is associated with threat of substitution.
CONCLUSION
As per the above mentioned report, it has been concluded that business environment
involves combination of different strategies, individuals and elements with the proper
understanding of which entity can ensure accomplishment of goals and objectives in a well
defined and effective manner. In order to evaluate impact of different factors impact in company
business operations SWOT and PESTLE analysis proves to be an effective measure that allow
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entity to develop strategies and measures to overcome negative impact of these factor while
undertaking advantage of significant opportunities. It ensure more growth and profitability.
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REFERENCES
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Online
Types of organisational structure. 2018. [Online]. Available
thru<https://online.pointpark.edu/business/types-of-organizational-structures/>
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