INTRODUCTION Business environment is a sum total and collection of all the internal and external factors whichincludesemployees,customers,supplyanddemand,management,activitiesof government, innovation in technology etc. These factors affect the functions of company and also influences their direct and indirect working(Virglerová, Dobeš and Vojtovič, 2016). It includethosefactorswhicharecontrolledandmanagedfromtheexternalsideofan organisation. All the business enterprises such as public, private and voluntary which are considered as for profit, not for profit and non-government organisations. As these organisations need to be aware aboutthe frequent changes which happen in the business environment and should know how to deal with it. This report is going to cover the different types of organisation and also describe the difference between for profit, not for profit and non-government organisation and also discuss the comparison between the micro, small and medium-sized organisation. Moreover, it also describe the interrelationship between the organisational functions and their structure and identifies the positive and negative impact and strengths and weaknesses of an organisation and their relations with macro environment. This report is in the context of Marks & Spencer, which is a British multinational company and offer high quality clothing, home and food products. It is situated in Westminster, London and has around 950 stores in UK. TASK 1 P1. Organisation is a place where group of people are gathered in order to achieve the organisational as well as individual goals(Schaltegger, Hansen and Lüdeke-Freund, 2016). Various types of organisation are as follows: Private:These organisations are operated by an individual as a sole trade or in partnership in order to earn profit. This sector contribute its large share in order to develop the nation. Moreover, the business operations need to follow some laws and regulations of government and also make their own norms to operate their organisation(Prajogo, 2016). For instance, Marks & Spencer is a British multinational company founded in 1884, headquartered in Westminster, London. They also follow the various regulations of consumer contracts regulations 2013 in
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
which they spread awareness about the legal terms & conditions which they apply on their products and services. Purpose:Their purpose is to increase the profits, develop clarity in order to select a correct organisational structure to run their business. Legal Structures:Sole proprietorship:It is a form of business which is commence and operated by an individual and here, it only has one owner who is responsible for all the profits and losses in an organisation. This type of organisation can be seen in small and micro businesses where the huge investment is not required(Pearson, 2017). Moreover, it is the easiest form of business as it is established without any complex paper work. It is famous among sole owners, self contractors and consultants.Partnership:It is an association of individuals in which two or more than two individuals are required to form and carry out a firm. This association is set up by partnership deed which is a legal business document made by the consent of partners and this deed include variouslegaltermsamongpartnerssuchasprofitsharingratio,authoritiesand responsibilities and many more.Corporation:It is a form of business which is create by individuals in order to make their own independent business firm. These are owned by stakeholders which are elected by the BOD in order to run their firm. To form a corporation various legal formalities are required which need to be fulfilled and it carry their own name and trademark. Public:These are the organisations which are owned and operated by government body in order to offer their services to people and they are owned by the local, state and central government. Here, some service providers shift from public to private sector which is known as Privatization (Laudon and Traver, 2016). For instance, British Broadcasting Corporation is a British public service broadcaster and it is the largest broadcaster in the world in terms of employees. Purpose:There purpose is to transform the nation, development of infrastructure, spread awareness among people and provide valuable products and services. Legal Structures:Local Government:This structure of government is used in order to collect funds in the form of charges which are known as Council Tax. Moreover, they plays a vital role in
preventionandidentificationofneeds.Moreover,theyalsofindthefundingand relationship factors in order to deal with various sectors.State Government:This part of government also share the power and authorities with national government as there are various services which are controlled and managed by state government.Central Government:They control and manage different business activities which are managed by them in order to have control on the business(Kozubíková, Homolka and Kristalas, 2017). Moreover, this government has the power to make laws for the country and companies who are runs by central government need to take permission in order to take major decisions. Voluntary:These organisations are the set up in order to do social welfare and here membership is not necessary as they have paid or unpaid staff. People join these organisations in order do social welfare(Kolk, 2016). These organisations are useful for those areas who have sufficient amount of resources in order to perform their functions in systematic way. For instance, National Council for Voluntary Organisation (NCVO) which is a Charitable organisation and follows the various norms of charity and social investment act which depicts the various issues of official offerings. Purpose:There purpose is to provide welfare services to the poor and needy people and to connect more and more people in the organisation and they work for the welfare of the society. Legal Structures:Trust:This type of structure is owned by the group of people who are known as trustees. It is constituted by the trust deed which is made among trustees and it is more flexible because there is no statutory framework(Ji-fan Ren and et. al., 2017)(. To set up a trust, the group members should make an agreement in written form which is termed as trust deed. Unincorporated Association:It is established by the constitution which is not mentioned and it also include some features such as limit on the distribution of funds to its members as they set the rules and norms under which they can run their organisation easily. These associations are not incorporated and hence they cannot make any contact.
P2. BasisFor ProfitNot For ProfitNon-government PurposeTheirpurposeisto makeprofitand expand their business across the world. Theseorganisations existinorderto transformthesociety andprovide convenient services to public. Theseorganisations aremainlyexistin order to provide help toneedypeopleand forthewelfare services. Type of OrganisationTheseorganisations form undercompany, soleproprietorship, partnership firm. Theseorganisations setupunderlocal, stateandcentral government(Hillary, 2017). Theyformas charitabletrust, unincorporated association,charitable incorporated organisationand companylimitedby guarantee. People that ManageIt is managed by many peoplesuchassole traders,ownersand partners. Theseorganisations are managed by public or government bodies. Itismanagedby trustees and committee members. Difference between micro, small and medium sized organisations BasisMicroSmallMedium-sized Business PurposeTheseorganisations are not only helps in improving the standard of business owners but theyalsoaddingthe valuetothelocal Theseorganisations areownedbyless workforceandalso have less machinery as they serve to the local community in order to Theirpurposeof businessisto maximise the profit in order to expand their currentbusiness activities and increase
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
economy(Hamilton and Webster, 2018). earnminimum profitability. themarketshare. Moreover,alsotake over their competitors to acquire the market. ObjectivesTheirobjectiveisto createlargescale employmentin economyandexpand theirbusinessinthe backwardareasin ordertodevelop employment. Theirobjectiveisto increasethe productivity of people andresources, excellentcustomer serviceandretention oftheirtalented employees. Theirobjectiveisto foster,promoteand coordinatewiththe international market in order to sustain growth of market at national, regionaland international levels. Supply of goods and services Theseorganisations delivergoodsand services in their local community and area. Theseorganisations supplygoodsand services at state level. Theydelivertheir goods and services at national level in order to expand themselves. TASK 2 P3. In an organisation, there are several function which are crucial for effective running of the company. These division and functions are important to the company because with the help of them, the management of the company manage and administrate its business and they are also make their contribution to accomplish the business objectives and aims(Evans and et. al., 2017). Marks & Spencer is a British transnational retail store which is operate its business globally with the help of its different departments and functions. The intercorrelation between its functions are defined below: Marketing with human resource- In M&S, marketing and human resource department both are interrelate with each other in different manners. When marketing function employees for the vacant positions then the Human resource department conduct recruitment and selection process so that they can hire and select skilled and well qualified applicants for the vacant posts
and they contribute in accomplishing the business objectives of the company by using their competencies and cognition(Erasmus, Strydom and Rudansky-Kloppers, 2016)(. Apart from it, when Human resource function organise hiring process then it use different promotional channels and tools of marketing, like social media, Facebook, web advertisement, email and others, to provide the information and notification about recruitment. Finance with production- These both are another functions of M&S which are also have an effective interconnection among them because they both are support to each other so that they can functioning effectively. Finance department of the respective company provide fund to production department to purchase raw material, machinery, wages, operating expenses and others. So that they can buy the required material which are need to manufacture goods and services of the company to adequately operating the business of the firm. Production department also connected with finance because the production manger provide the clear information about the fund and cost which is invested by the this function on the production of the goods. With this, it can appropriately manage the finance and maintain the balance sheet and cash flow statement of the company. Effective relationship between organisational functions are essential for the success of the company. It create positive impact upon the company because if all the functions of the company are interrelated with each other then the firm can accomplish its set business objectives on time and also able to fulfil the consumers needs on time by manufacturing goods and services as per their requirement. TASK 3 P4. Macro environment refers to the external environment in which there are different factor which create impact upon the business of the firm in different terms like positively and negatively (Deasy and et. al., 2016). To monitor this impact, the administration of M&S can use PESTEL analysis and it is defined as beneath: Political: This factor consist trade policy, taxation policy, trade restrictions, political stability or instability, bureaucracy and others(Charter, 2017). M&S operate its business globally so there are several these kind of components affect the business of the firm in different manners.
Positive:Free trade policies have been a monolithic political welfare for M&S and its almost 1500 overseas retail store. The respective company favoured by EC's free trade concord so have led to reduced beginning expenditure(Marks and Spencer PESTLE Analysis, 2019). Negative:As Brexit put negative impact on the operations of company in order to import and export its products especially in terms of trade regulations. Economical:This factor overlook the performance of economy which include the economic growth, exchange rates, inflation, interest and many more. Currently, the economic condition of company is uncertain and affect its sales(Chang, 2016). Positive:The premium pricing strategy of the company helps in improving its growth and success in the competitive market which defines its quality which is offered by company. Negative:Prices have always become the biggest factor in the retail industry but the competitors of M&S start providing discounts on their products which influences the sales of the M&S (Marks and Spencer PESTLE Analysis, 2019). Social:It is the environment which represents the demographic norms, values, trends and customs in which the organisation operates(Virglerová, Dobeš and Vojtovič, 2016). Marks & Spencer appeal to different markets in terms of social class which majorly influences the company and its current issues. Positive:M&S provide various services to their respective customers and after this, they are now ready to serve themselves in the food sector in which they provide hygienic and healthy food products in order to attract large amount of customers. Negative:The reputation become less trendy for their younger consumers because of the designs and trends which is followed by company. Their motive is to provide quality instead of being trendy. Technological:These factors affect the technological terms which include operations, level of innovation, automation, R&D and many more. This factor plays an important role in terms of retail market as it helps in managing their brands and also useful for promoting and advertising the creation of brand awareness among people. Positive:Self-checkout service which is provided by the company to their food stores as it is in trend which is designed to save money which people spent on cashiers and helpful for customers in order to provide faster experience (Marks and Spencer PESTLE Analysis, 2019).
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
Negative:The online services which are provided by company put negative impact in terms of food as they does not deliver the food products just like other food stores. Environmental:This factor become important in terms of increasing the scarcity of raw materials, carbon footprints, environmental offsets and many more. Positive:The green policy which is adopted by the company in order to protect the market and its conditions and they named it “Plan A” which is useful for the carbon emission and become a zero waste to landfill. Negative:In the context to M&S, they does not conduct market research before entering into new market which can become risky for them in order to launch their products. Legal:This factor describes the various laws and legislations which needs to follow by company in order to achieve sustainability. Retailers should follow various resources in order to meet various legislation which can abide them during their regulation(Schaltegger, Hansen and Lüdeke-Freund, 2016). It becomes tricky when company expand its business and start online trading. Positive:Company adopt fair packaging and labelling act which helps their respective customers in order to provide general information of the product such as what the package contains, who made it and how much it contains (Marks and Spencer PESTLE Analysis, 2019). Negative:It is found that Company exploit their workers and induces them to work 7 days which is violation of Labour act and because of this company breaches its legal policies. TASK 4 P5. SWOT Analysis of Marks & Spencer StrengthsWeaknesses Expansion of business at global level strengthen the UK market. Company is achieving success in order to implement new projects which helps in earningvaluablereturns(Prajogo, 2016). Companyisnotcapableenoughto acceptitschallengesbecauseits competitors occupy its marketplace. The price factor is its weakness as they chargehighpriceswhichcannotbe afford by the middle class customers. OpportunitiesThreats
Company has an opportunity in order to merge with more supplierswhichis helpfulintermsofsavingits manufacturingcostandhelpsin acquiring new market segment. Moreover,thebrandreputationof companyhelpsinitsexpansionand premiumpricingpolicy(Pearson, 2017). Companyfaceslawsuitsinmany countriesinwhichtheyexploitthe politicalclimatebychangingits policies frequently. M&S has threat from its competitors such as Amazon, TESCO and many more. Porter's Five Forces ModelThreat of New Entrants:This factor describes the threat of new entry which is moderate in terms of low level changes and high variable capital cost in order to establish a new business. Therefore, in terms of M&S they have strong brand reputation which helps in making their products success in the market.Threat of Substitute:It describes the alternate factors which can become threat for the company and its products(Laudon and Traver, 2016). In this context, substitute products can become threat for the company which can affect the brand and its production. This force is high as in the diversified business environment the customers can easily switch from one product to another.Bargaining power of Suppliers:In the context of M&S, the negotiation power of suppliers is low because in clothing and food industry there are lot of suppliers present in the market. Hence, company can easily switch from one to another.Bargaining power of Buyers:In terms of M&S, the bargaining power of customers is high because customers can easily switch from one brand to another one(Kolk, 2016). Therefore, in order to retain them M&S offer various Discounts, offers and vouchers in order to retain their customers. Competitive Rivalry:In this industry the intensity of competitors in retail sector is high because the services which they provide are also provided by their competitors including, TESCO, Asda, local market and many more. As each sector is spending on advertising in order tom open new franchise which helps in developing their customer base.
P6.Political:Expansion of retail market is difficult and trendy as government allows them to free flow of trading in European countries whereas in other nation they need to pay taxes. Moreover, the political stability of UK helps the retail industry in order to increase its brand image in global market.Economical:At the time of recession, the sales for the consumer goods also increases as it helps in becoming the largest retailer in the world. Moreover, the funds in the form of licence fee of retail industry has been eliminated by government in order to operate their business effectively at low prices.Social:Retail industry launch its goods and services while keeping the perspective of customers and taste but the consumers of their local areas shift to local market because of rapid changes in fashion and also customers did not get the product as per their taste and need(Kozubíková, Homolka and Kristalas, 2017).Technological:Company promotes its offerings by social media and introducing its new products to customers. But through this strategy their total production and manufacturing cost maximises so they need to change or modify their strategy.Environmental:Retail industry use large amount of qualitative raw materials in order to produce good quality products and services but it is quite critical for them to manage the use of materials. Legal:Company offer prime products to its respective customers which is importantto meet their requirement but they exploits their labour(Ji-fan Ren and et. al., 2017). Therefore, this eliminates the interest of employees. Moreover, they are fully depend on board of governance for funds which can become threat on their brand image. CONCLUSION From the above conclusion, it is concluded that business environment is sum total of both the internal and external factors which impacts the performance of business. Furthermore, the purpose and legal structure is important for the company and also depicts their functions and interrelationships. Moreover, SWOT, Porter's five force and PESTLE analysis is conducted in order to analyse the internal and external market which is helpful in order to enter into new business environment and also describe how they impact the business conditions and also evaluate the internal and external strengths and weaknesses of an organisation.
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.