Comprehensive Business Environment Analysis of Arcadia Group Ltd.

This report provides a comprehensive analysis of the business environment, focusing on Arcadia Group Ltd. It begins by defining various types and purposes of business organizations, followed by an examination of their size and scope. The report then delves into the interrelation of organizational functions with business goals and objectives, highlighting the roles of departments like marketing, finance, human resources, production, and research and development. A key component of the report is the analysis of macro environmental factors, including political, economic, social, technological, legal, and environmental aspects, and their positive and negative impacts on the business. Finally, the report conducts an internal and external analysis of the company, exploring the relationship between strengths, weaknesses, and macro factors, and concludes with a summary of findings and recommendations.

BUSINESS AND
BUSINESS
ENVIRONMENT

INTRODUCTION .....................................................................................................................................3
TASK 1....................................................................................................................................................3
P1 Define various types and purpose of business organisation.....................................................3
P2 Size and scope of a range of different organisations................................................................3
TASK 2....................................................................................................................................................3
P3 Organisational functions are interrelated with its goals and objectives.......................................3
TASK 3....................................................................................................................................................6
P4 Positive and negative impact of macro environmental factors.................................................6
TASK 4....................................................................................................................................................8
P5 Conduct internal and external analysis of the company...............................................................8
P6 How strength and weaknesses are interrelate with macro factors ........................................10
CONCLUSION.......................................................................................................................................11
REFERENCES ........................................................................................................................................11

INTRODUCTION
Any business small or large cannot run in a vacuum, it obliges certain resources, i.e.
capital, assets, human beings and further things in order to function appropriately. The term
business environment entails collection of units and individuals that are not in control of an
enterprise. It involves internal and external factors which put a huge impact on business
activities and operations. These aspects also influence growth, survival, performance level as
well as revenues of the firm, so that management is required to analyse these elements in
order to accomplish goals and objectives from target market (Avramenko, 2012). The present
coursework is based upon Arcadia Group Ltd., it is one of the British retailer which which
own has high street clothing retailers, i.e. Burton, Perkins, Miss Selffridge, Topshop and the
out of town chain Outfit, which sells lines from the other group chains. Along with this, the
main motive of the company is to cater qualitative and value added items to target audiences
so as to attain and retain them for long term period. Apart from this, the assignment will
describe various types, purpose, size and scope of business organisations. There will be a
discussion on the role of organisational functions in order to attain business goals and
objectives.
TASK 1
P1 Define various types and purpose of business organisation
Covered in PPT
P2 Size and scope of a range of different organisations
Covered in PPT
TASK 2
P3 Organisational functions are interrelated with its goals and objectives
In this competitive era, business organisations are tend improve their working
activities and operations so as to gain high market share and growth. A corporate association
is an intermixture of numerous functional areas which have diverse roles and responsibilities.
Along with this, organisation structure is a framework which entails how it will function, it
defines the entire cultural and values of a firm (Burns and Winter, 2011). This can also
hamper marketing strategies, working practices, performance level, business decisions,
employee relations, mission and vision as well. In this relation, it is vital for Arcadia Group
Ltd., to develop an effective and efficient structure that is able to compete with external
rivals. Organisational structure encompasses with different departments, like – human

resources, marketing, accounting etc. Below is termed the brief explanation of these
departments, such as: -
Marketing department – In every business unit marketing department supports to
increasing sales and profitability by promote goods and services between target audiences.
Marketers develops marketing plans and policies by analysing market situation; it also helps
firm to know needs and wants of customers so as to provide them higher level of satisfaction.
Arcadia group Ltd., uses several marketing and promotional channels in order to grab
individual’s interest, such as- television, radio, internet, public relations etc. Marketing
campaigns are conduct by an individual or a group of people who are hierarchal system and
are responsible for fetching firm’s goods and services in customers’ eyes (Chow and et. al.,
2011). Since, marketing department is a key of success and revenue generator for private
business associations and requires efficient people who are capable to deal as well as
influence others to purchase products.
Finance department – Finance is the lifeblood of entire corporate entity, without this
any business cannot survival or conducts its activities in an efficient manner. Finance
department covers overall information that helps managers to take important business
decisions. It manage all cash inflows and outflows in an organisation and also describes the
availability of appropriate funds in order to make day to day payments at workplace. Private
companies can generate capital from different sources, like- credits, bank loans, angel
investors, crowd funding etc. so as to accomplish or complete working activities in the best
possible manner. In Arcadia Group Ltd., finance manager formulates an annual budget which
relates with the amount that will be spend on all business practices.
Human resource department – It is one of the crucial department that is liable for
managing workforce within organisations. If employees are having higher job satisfaction
level then they will attain and retain at workplace for long term period. However, human
resource department controls and cope different functions, such as- recruitment, selection,
training, compensation, labour relations, performance appraisals etc. HR manager of the
company focus on improving employees’ skills and knowledge so as they can do all tasks in
the best possible manner. It results enhancement of performance level that will maximise
entire output level of the company. Another role of human resource department is to maintain
healthy and positive working environment in organisational cultural. HR professionals also

look out employees’ conflicts, labour law compliance, data tracking and keeping, and
relational assistance at workplace (Commander, S. and Svejnar, J., 2011).
Production and operations department – In this modern era, large manufacturing
firms have their production division that is responsible about overall production. Higher
output level will contributes to achieve business goals and objectives in short term period.
The production or operational department also emphasis on improving quality of services
which are offered by the firm and formulate plans, i.e. how to reduce wastage from
manufacturing process. Marketing department and production department works together so
as to fulfil needs and demands of target audiences in the best possible manner.
Research and development department – In present scenario, business entities are
required to determine needs and wants of customers by doing market research activities.
Management also takes feedbacks from people in order to recognise that what others think
about their brand or product. In this relation, the research and development department of the
company is responsible to collect information about customers and new market trends so as
to develop strategies accordingly as well as convey production division to produce the same.
Along with this, the R & D manager also ensure about whether the quality of products is able
to satisfy customers’ needs and demands (Cronan and et. al., 2011). Furthermore, it also plays
a vital role at the time of launching of new product or service because any product cannot be
introduced in market before doing any survey or research.
Figure 1 Organisational structure of Arcadia Group

(Source: Organisation charts, 2015)
The above diagram states that Board of directors of the company’ are responsible for
business practices and functional areas; they also takes entire decision that aids to grow and
diversify an organisation in market. BOD of Arcadia Group Ltd., executes business standards
and principles as it can run smoothly. Afterwards, directors of an association provide
guidance to all divisions towards how to perform working activities. Thus, therefore,
organisational structure requires open flow of communication between all departments as
they can discuss all necessary things which helps in growth of a business.
TASK 3
P4 Positive and negative impact of macro environmental factors
Macro environment encompasses with different external factors that have a huge
impact on business actions and its operations. These components having a risk of affecting
market position and goodwill of the firm in future. Thus, it is essential for management to
analyse macro environmental factors so as to grab better future opportunities in future.
Following are the main factors of macro environment which are stated as under: -
Political factors – There are numerous political factors, i.e. taxation policies, import
and export laws, commercial rules and regulation plays a significant role in growth and
survival of every business association. Arcadia Group Ltd., and stores are spread across the
world, thus it is necessary for it to have good interpersonal relations with governments and its
authorised bodies (Dahan and et.al., 2010). This will helps the company to accomplish its
goals and objectives in a certain period. Along with this, well- structured political
environment will provide growth opportunity .
 Positive impact - –Healthy and efficient political environment helps to provide long
term growth and stability of an organisation. It is also beneficial in making
international trade agreements and lower trade restrictions so that any business unit
can easily expand business over other countries.
 Negative impact – For example- if British Government raise tax rates on import and
export of products from one of country to another then it can influence sales and
market position of business units over the globe.

Economic factors - These components encompasses with disposable income level of
people, unemployment, poverty, inflation rates, interest rates, currency rates etc. Economic
factors entails about the economic condition of a nation in which will operate (Fernando,
2011). Arcadia Group Ltd., has a worldwide presence as the firm is able to maintain its
economic stability by providing employment opportunities to people.
 Positive impact – UK’s government has strong political power as well as efficient
condition of economy which is accessible for running a business effectively. It
supports to drive up demand and supply of goods and services. UK’s economy and
labour market are in good shape as the higher disposable income varies individual
confidence.
 Negative impact – Due to economic recession and financial downturn in 2008,
economic condition of UK was high affected. There was increased the situation of
poverty and unemployed as it goes down living standard of people On the other hand,
variations in foreign exchange rates also put a huge impact on customers’ buying
behaviour that reduces demands and needs of people (Gebauer, Paiola and
Edvardsson, 2010).
Social factors – In 21st century, needs and wants of people are getting changed speedily.
Social factors involve values, norms, and beliefs of customers, business entities should
consider these factors while operating at global level. Therefore, social trends have a huge
role in increasing sales and revenues of retail sector.
 Positive impact – The main advantage of considering social factors are – elder people
are in favour to buy trendy and fashionable clothes in a bulk. It is beneficial for
retailing stores in terms raising their revenues or operating income.
 Negative impact – It get evaluated hat UK’s population is going old as per the time
passes, there is a lack of youngsters rather than senior citizens. This phenomenon is
more crucial or intense for Arcadia Group Ltd., because retired people will not buy
new and fashionable things.
Technological factors – Variations in tools and technology driven up output level and
open the doors of success for an organisation (Halbert and Ingulli, 2011). Technology and
globalisation influence user experience and force them to buy new and innovative things.

 Positive impact – Due to technological advancement, it makes easier to reach target
customers in a certain time period. Many multinational companies are used internet
and social media channels in order to improve public relations; by continuously
communicating with customers also help in taking feedbacks and reviews from
customers. For example – the concept of e-commerce results in enrichment number of
buyers.
 Negative impact – Apart from this, it is not possible for all organisations to acquire all
new tools and technologies as they can affect their working procedures. Technological
upliftment also rises the risk of cybercrime risk in terms of data protection and
operational stability.
Legal factors (Positive impact) – If a business association follows all rules and
regulations that are regulated by British government then it will help them to perform in legal
and ethical manner. It also change customers’ mind set towards a specific brand or product.
 Negative impact –Ignorance of business laws and legislations increases unethical
activities that can ruin market image or goodwill of companies among customers
(Hamilton and Webster, 2015).
Environmental factors – In today’s world everyone is aware towards environmental
protection and business organisations are tend to produce eco-friendly and green products in
order to grab individual’s interest. The positive impact of environmental factors is - Green
products and services helps in increasing sales and profitability of the firm whereas if
products get harmed the entire environment then it decrease firm’s goodwill and market
share.
TASK 4
P5 Conduct internal and external analysis of the company
Internal and external assessment of a company can be done through SWOT analysis
which states with – strength, weaknesses, opportunities and threats. After measuring these
aspects any firm can improve its functional areas and operating activities. In addition, SWOT
analysis is conducted so as to acquire better future opportunities that accomplish vision and
mission statement of the firm (Mahmood and Hanafi, 2013).
Below describe SWOT analysis of Arcadia Group Ltd. –

STRENGTH
Arcadia Group Ltd., is a successful
clothing brand by having a strong market
goodwill worldwide. Basically, the firm
deals in clothing, electronic, grocery and
retailing products. As , the company has
strong product portfolio that support it in
driving up sales and revenues as well as the
number of buyers.
Arcadia Group Ltd., has a great experience
of market because it is situated since 1973.
The main reason behind its success is the
organisation focus on producing qualitative
and value added offerings (Siewiorek and
et. al., 2012). After production, it products
are send to quality departments in order to
check quality standards.
The retailing company always willing to
acquire and implement new and innovative
techniques with an aim to arrive large
group of customers. Technological
advancement also improves the quality of
work and support to sustain maximum
cutting edge.
Due to its size and scope, Arcadia Group
buys raw materials in bulk which is
beneficial for it in terms of economics of
scale. This will allows the unit to keep
lower prices that can always attract.
The firm organise e-learning and training
programmes for employees; it will
contribute in improving their skills and
knowledge.
WEAKNESSES
Sales and profitability of Arcadia Group
Ltd., get slower due to higher bad debts
because, the firm provides credit card
facilities to customers. Beside this,
insurance or claims on household items
also affects operating income.
Its products are overpriced in comparison
with competitors (Teece, 2010).
Lack of experience in new marketers as the
company cannot obtain cutting edges.
OPPORTUNITIES
Fluctuations in pricing strategies will draw
many customers and can attracts many
customers and acquisition of effective
promotional channels helps firm to deal
with numerous customers. (Fernando,
2011).
Oversees expansions of markets in which
retailers are facing similarly limited
competition.
E-commerce and online shopping supports
to render a luxurious experience to buyers
who have issues regarding mobility issues;
THREATS
High or intense competition with
competitors.
Economic recession and financial down
turns in an economy can affect sales and
profitability.
Weak political conditions as well as new
entrants in markets can mitigate
customers’ interest from one brand to
another.

Arcadia Group is moved to expand its
business in same field.
Innovation in supply chain management
process and emerging markets helps to get
maximum advantages from rivals.
P6 How strength and weaknesses are interrelate with macro factors
In order to remain successful and get higher cutting edge it is essential for every
business organisation to assess internal and external business environment. It helps in
diminishing the impact of those elements which can affect the entire business association and
its operations. Strength and weaknesses of a company are linked with macro environmental
factor as if a firm has good financial and economic stability then it can easily spread business
other countries (Ullah and Lai, 2011). Micro and macro environmental components have a
great impact on decision making activities of the firm. Arcadia Group of companies has a
wide range of customers in domestic and international market. Thus, the firm has a great
political relation with all governments it helps in increasing market area of business and
getting higher competitive edge rather than its rivals. Along with this, the clothing retailer is
always tend to recognise needs and wants of target and potential customers. It will contribute
as firm will easily compete with social market trends. On the other hand, due to economic
recession financial condition of UK and its firms can goes down; it also decreases the
demand and supply of products because at this time customers are not allowed to purchase
luxurious things.
Political factors – It consists with political situations of the country in which a firm
operates. These elements refer with government laws and regulations, taxes, duties, import
and export policies which have a vast impact on working activities of a business.
 Strength - British government has strong political stability rather than other
developing nations; it is one of the main strength for those firms which are exploring
at there.
 Weaknesses - Government also implement certain laws and regulations which must
be followed by all corporations, in opposition this can affect sales and growth of
business organisations; it is one of major weakness of the company.
Economic factors – Every nation has their own practical conditions and diverse level
of trade streams out nations. Although, economic factors of the company refers with The

distinctive components which are considered under this inflation and deflation rate,
import/trade proportion, universal trades rates and so on.
 Strength - Euro rates are increasing day by day and British government also allowing
foreign direct investment which helps in improving economic condition of the nation.
 Weaknesses – Due to global economic recession in 2008, economic condition of UK
went down thus customers' were not able to spent much amount on consumption of
luxurious goods and services. Thus, economic condition of a nation could also affect
sales and profitability of business organisations.
Social factors – It involves social and cultural perspectives, values, beliefs, dispositions of
local communities. Diff3rent social aspects incorporates socio-economic, way of life patterns
and so on.
 Strength - If a firm spends high amount on research activities thus to recognise needs
and wants of customers at global market; it helps in satisfying customers' desires and
improving brand value of the company.
 Weaknesses – Due to changing nature of people, it is quite difficult for companies to
determine the need of all individuals.
Technological factors
 Strength - Technological advancement helps in raising sales and profitability of a
business in short time of span. If Arcadia group focuses on acquiring new and
innovative techniques so as improve their production and performance level across
the world.
 Weaknesses - But acquisition of new tools and techniques is quite exclusive for
organisation that can impact on their financial capability and if management ignore to
adapt such tools then company will survive successfully in markets.
CONCLUSION
From the above mentioned report it get analysed that business environment plays a
crucial role in growth and success of every business organisation. It involves macro and
micro environmental factors, like- customers, suppliers, employees, political, technological,
social etc. that can affect working activities and decision making process of the company in

direct and indirect manner. Along with this, the report has stated different types of business
organisations, such as- public, private and voluntary sector, in which public sector is
governed by government whereas private companies are run by individuals or a group of
people. On the other hand, in an organisational structure numerous functions get involved, i.e.
marketing, finance, human resource management, production, research and development;
these entire departments assists to accomplish firm’s goals and objectives.
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