Unit 1: Business & the Business Environment

Business & the
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
Illustrate various types and purposes of public, private and voluntary sector and legal
structure.......................................................................................................................................3
Explain the size and scope of distinguish types of firms............................................................6
Discuss the relationship between various organizational functions and how they connected
with firm's objectives and structure.............................................................................................7
PART 2............................................................................................................................................8
Conduct Pestle analysis ..............................................................................................................8
Conduct internal and external analysis of specific firm's to identify strengths and weaknesses 9
Elaborate strengths and weaknesses interrelated with external macro factors.\.......................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Business environment is stated as accumulation of both internal and internal factors like,
management clients, employees, activities by government, social trends, innovation in
technology, supply and demand, customers preferences and so on (Ayios, 2018). It is important
to study business environment effectively as it helps to better understand the rivalry's strategies
and action. This report is based on North London Chamber of Commerce and Enterprise
(NLCCE). It is a independent membership organization who is supporting and representing
business, charities and education across North London. This is located in Enfield EN3 5JH,
United Kingdom. This assignment covers public, private and voluntary sectors purpose and legal
structure. Relationship among various organizational functions is studied in order to full-fill set
goals and objectives. The positive and negative side of macro environment is deeply evaluated so
as to make strong tactics for better results. The strengths and weaknesses are connected with
external macro factors are examined in order to make improvements in the loop holes.
PART 1
Illustrate various types and purposes of public, private and voluntary sector and legal structure.
The numerous types and purpose of organization with their legal structure are elaborated
below:
Public sector (Network Rail): In this case, businesses are owned and operated by governing
bodies of the nation and they work for the welfare of the society or community.
Purpose: The main purpose is to uplift the living standards of the society (Edgington,
2018).
Legal structure of public sector:
 Central government: With the help of income tax huge finance is accumulated.
 Local government: Through council tax cash amount is gathered from society or
community.
 State government: Those firms are under their control where there is no central
government interference.
Private sector (Hennes and Mauritz): Those organization which are owned and operated by
individual person. They bear all the risk and profit all alone.

Purpose: They focus more on innovation in order to full-fill the emerging needs of the
customers.
Legal structure of private sector:
Sole proprietorship: Grocery shop, taxi drivers etc. are examples of sole proprietorship
as they are operated by individual people.
Partnership: Here, the ratio of profit and loss is mentioned in an agreement where both
party mutually agree.
Private limited company: It limit the liabilities of the firm in relation to their
contribution. Along, with this it is a legal structure (Fabus, 2018).
Voluntary sector (Cancer Research UK): Here, person take participation willingly. They
contribute their valuable time and money in solving issues associated with people of the nation.
Purpose: They are non-profit and non-government firm. Their main purpose is to serve
better services to the general public.
Legal structure of voluntary sector:
Trust: This type of firm are not legal entities but render services to the society based on
the faith and trust of all the members.
Unincorporated association: It is formed by group of person who come together to full-
fill specific purpose such as, societies, clubs and so on.
The differences between micro, small, medium-sized enterprise are described as under:
Micro enterprises are operated by the owner and very few people are working in it.
Whereas, in case of small enterprise less or 50 staff members are working day and night to meet
the emerging needs and wants of the customers. Their main motive is to earn profit and grow
business in other region or varied geographical area. While, medium size enterprise is a
independent firm where around 250 workers and are serving quality services to the end users.
They mainly focus on quality of products instead of maximizing huge revenue. The differences
are illustrated below:
Basis Micro enterprises Small enterprises Medium sized
enterprises
Scope The scope is to bind
client emotionally with
their goods and
To grow business in
other region or
geographical area
To build loyal
customers over the

services. (Foss and Saebi,
2018).
years.
Supply of goods and
services
The supply of goods
and services for small
enterprises remains the
same .
The demand and
supply of products and
services changes as
per the customers
preferences.
Supply of goods are
done on consumers
needs.
Example Vendor selling
vegetables in the
locality, dairy products
, Small repair shop of
bike, cycles and so on.
Guest house, Small
scale manufacturing
businesses, carpenters,
electricians etc.
Gift and toy shop in
malls, stores selling
products of branded
cloths, firm
manufacturing
bootless, napkins,
chocolates and so on.
The differences between franchising, joint venture and licensing are elaborated as beneath:
Particulars Franchising Joint venture Licensing
Definition It is a business
agreement where one
party signs contract
with other company in
order to sell goods and
services with the help
of companies name
and image.
Here, agreement is
done between two
parties in order to
work unitedly to
maximize profit by
commercializing new
product in the market.
In licensing one
company permits other
organization to
manufacture it's goods
for a specified
payment (Geissdoerfer
and Evans, 2018).
Examples McDonalds, Burger
King and Pizza Hut
BMW, Toyota etc. Clothing
manufacturer such as
Life is good is
licensing it's brand in
some of the nation

with local firm.
Advantages More brand
recognition can be
done easily as well as
collective buying
power is raised at a
large scale. But in
franchising the initial
capital investments
can be high.
This is very flexible in
nature and incur huge
profit at low rate. It is
focusing more on
share costs, risk ,
benefits and expenses.
It is a easy and quick
process to enter into
the foreign market .
Licensing need less
finance.
Disadvantage It is costly in
investment as well as
access to a limited
territory. Additionally
there are limited exit
strategy (Geissdoerfer,
and Evans, 2018).
This is less flexible in
nature. There are
more clashes of
culture. Moreover, it is
difficult to enter
partnership as it
involves contract.
There is poor quality
management results in
damaging brand and
products reputation or
image.
Explain the size and scope of distinguish types of firms.
The size and structure of the examples of large, medium and small size organisations that
are present in UK are as follows :
Basis Large organisation
(TESCO)
Medium size
organization (LMA
recruitment)
Small size
organization (The
Berkeley
Partnership)
Size In this case thousands
of employees are
working in order to
create tough bench
mark for others in the
This type of firm are
non-subsidiary and
independent
companies. 50 to 250
staff members are
Those companies
where 50 employees
or less are working.

open market place. working to meet the
emerging needs of the
customers.
Goal To come up with
creative idea or to add
value to the existing
products by upgrading
features, discount etc.
To render quality
services.
To earn profit (Hillary,
2017)
Market share Large or multinational
organization are
capturing most of the
market share as they
are focusing on
innovation and quality
in the goods and
services.
They are capturing
less market share as
this business are
operating in locality.
Small business is
holding nominal
market share within
their geographical
region.
Growth and
sustainability
In this type of business
the growth and
sustainability is more
as they are using
modern tools and
techniques in order to
compete with the
competitors in the cut
throat competitive
world (Kasemsap,
2018).
The growth and
sustainability of
medium size business
is bit more as compare
to small enterprise.
They are working hard
in order to compete
with their competitors
The growth and
sustainability is less as
they are operating in
locality. As well as
they can be easily
acquired by large
firms.

Industrial structure: It is stated as structure outlined in order to meet particular function
in industry. However, more then twenty five percent of cost the of construction is assigned to
industrial structures.
Competitive analysis: This refers to as examining rivalry's tactics so as to measure their
strengths and weaknesses relative to own goods and services.
Market forces and economic operations like, supply and demand, scarcity and choice and
income elasticity all this affect the business profit ratio to a large scale. The fluctuation in the
market forces creates downfall of firm's share in the market. It creates huge financial loss to the
business.
Discuss the relationship between various organizational functions and how they connected with
firm's objectives and structure.
The relationship among organizationals function such as, human resources, finance,
marketing, consumer support system, production and so on. The functions varies according to
the type of business operating in the market. In an organization strong and clear relation among
the distinguish department helps them gain competitive advantages in intense competitive world.
As well as set standards are attained easily. Below is the brief description of various
organizational functions which are as follows:
Marketing and Human Resource department: In order to grow the business in the
intense competitive world it is very essential to build healthy relation with marketing and human
resource department (Komljenovic and Kumral, 2017). In order to recruit skill and capable
employee for the vacant post effective marketing is needed. Through this eligible candidate can
be placed in the firm and productive outcomes can be gained. By this set gaols and objectives
can be meet automatically. However, the firm's structure functions effectively and efficiently.
Finance and Marketing department: To market the creative goods and services in the
international market there must be strong and clear relation among finance and marketing
departments. To advertise the product in the market funds is required and according marketing is
done. It leads in attainment of set standards and structure which is a positive mark for the
business.
In the cut throat competitive world organization's function are related to overall firm's
mission and objectives because when this function will be functioning effectively then only
companies set mission and objectives can be accomplished in the set time span. It is very

essential to build strong and healthy relations among several divisions like, human resource,
finance, marketing etc. to survive in the competitive world for longer time duration.
Organisational structures of public and private organisations
Hierarchical organisational structure : In this structure people are organised in
hierarchy of departments and the authority travels from top to bottom. Network rail follows this
structure where the information and instructions pass through hierarchy structure.
Matrix organisational structure : In this structure there are more than one bosses due to
diversified operations. Syngenta follows this structure and it is also called as project team
structure. The company uses expert advise to link all the functional operations of the company.
PART 2
Conduct Pestle analysis
Pestle analysis is conducted by Hennes & Mauritz in order to better understand the
external factors that are directly or indirectly affecting the business growth and expansion at a
tremendous scale in the intense competitive world. Pestle The complete explantation of this
factor are done as under:
Political factor: Tax policy, trade policy etc. are some of the examples of political factor.
In order to grow the business of Hennes & Mauritzs it is mandatory to study them. By
neglecting this factor business can not be flourished in the international market smoothly. It
reduces the overall productivity (Korcsmáros and Šimova, 2018).
Economical factor: Some of the factors such as, tax rates, policies, laws, interest rates
etc. are involved in economical factor. All this affect the business and reduces the value of the in
the coming years.
Social factor: In order to survive and sustain in the market for longer time duration it is
essential to work for the welfare of the society. Violation of social factors reduces customer base
which ultimately results in downfall of profitability.
Technological factor: To compete with rivalry it is essential to adopt modern tools and
techniques. By this emerging needs and wants of the consumers can be full-filled easily. But by
using old plant and machinery set objectives can not be attained in the set time span.
Environmental factor: To run the business successfully in the open market place it is
important to work on environment factors. By not following environmental factor business

licence can be cancelled for ever. Buy this business will not be able to operate in the global
market.
Legal factor: Commercial, immigration, consumer protection and so on are included
under legal factor. In order to retain skilled and capable employees for longer time span it is
essential to adopts mandatory legal factors in the working premises. Organization faces
numerous issues by not following legal factors. It leads in downfall of market value as well as
employees turn out ratio raises tremendously.
Conduct internal and external analysis of specific firm's to identify strengths and weaknesses
SWOT analysis is conducted by Cancer Research UK and Hennes and Mauritz in order
to identify the opportunities prevailing in the open market place and to mould them for their
business growth and expansion. Along with management is able to improve their weak areas by
designing strong tactics for upliftment (Lee and Shin, Y 2018). Additionally, threats can be
ascertained which will be influencing the business in the coming years. The Swot analysis of
both the firm are done below:
SWOT analysis of Cancer Research UK :
Strengths Weaknesses
 It is a world wide recognised research.
 Cancer Research UK is conducting
various sessions and seminars
regarding reducing cancer in the early
stage.
 The main strength of this firm is it's
informative and interactive websites.
 Research conducted on cancer is a long
procedure so the finance gathered from
various sources are insufficient.
 Employee turn out ratio is more in
Cancer Research UK due to which
productivity decreases at a tremendous
scale.
Opportunity Threats
 The chances of getting drugs which can
prevent cancer is more as firm is
continuously researching on it (Trad
and Kalpić, D 2019)
 As funds are accumulated from the
general public are business is
dependent on them so it is the biggest
threat.
SWOT analysis of Hennes and Mauritz:

Strengths Weaknesses
 Firm has strong brand image in the
market.
 With the goods and services offered to
the consumers are of their expectation
level due to loyal customers are build.
 Firm's design and styles can be easily
copied by rivalry.
 Many time lacks behind in providing
quality products (Schwertner, 2017).
Opportunity Threats
 Business expansion through online
platform is the greatest opportunity and
can raise customer base .
 Continuous changes in foreign
exchange is the uncontrollable threat
can be faced by Hennes and Mauritz.
Elaborate strengths and weaknesses interrelated with external macro factors.\
Hennes and Mauritz.
Political factor: The strength of this organization is strongly related with political factor
as they need to change their policies and norms according to it. By this only business can explore
smoothly without government interference.
Economical factor: Business can meet the emerging needs of the customers by working
on their weaknesses. They are closely related with each other so that productive results can be
gained easily.
Social factor: Strengths of the company are interrelated with social factor as they are
working hard to upgrade the living standards of the people.
Technological factor: Firm need to work on the weak points of using technology in
appropriate manner as they lack behind in this . To achieve the set goals and objective it is
important to adopt modern tools and techniques (Tallma and Buckley, 2018).
Cancer Research UK
Political factor: It is a part of macro environment and they are related with strength of
the firm because the staff members of the are trained to adopt to the dynamic environment. By
this huge market ratio can be captured.
Economical factor: It is closely related with the loop holes of Cancer Research because
violation of this factor gradually decreases the market value at tremendously scale.

Social factor: Strengths of Cancer Research is interrelated with each other as it assist
them to Create more awareness regarding cancer symptoms and prevention. By this better life
can be served to people.
Technological factor: In order to conduct research activities smoothly huge finds is
required so the negative aspect is linked with this because with the help of advance tools and
techniques best results can be attained (Teece, 2018).
CONCLUSION
From the above report the conclusion drawn is that it is all the three type of business
public, private and voluntary sector are contributing largely in the upliftment of the GDP. All
this three sector are working day and night to raise the society living standards. Deep study is
done on large, small and medium size firm in order to better understand their differences. The
interrelation among numerous organization functions like, human resource, finance, marketing
etc. and how they are connected with objectives and structure are examined ion order to make
necessary improvements for productive results. Along, with this advantages and disadvantage of
macro environment is showcased in properly so that management of the firm can easily frame
strong tactics in order to compete with rivalry. SWOT analysis is conducted to understand the
threats prevailing in the market and to design policies to overcome them. Additionally, to
discover ways to improve weak area. Pestle analysis is conducted by the form to understand the
influence of them on business day to day working.

REFERENCES
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