Report: Business Environment Analysis of Arcadia Group Ltd

This report provides a comprehensive analysis of the business environment, focusing on Arcadia Group Ltd. It begins with an introduction outlining the importance of understanding the business environment and its impact on organizational performance. The report then delves into Task 1, exploring various types and purposes of organizations, categorizing them into public, private, and voluntary sectors, and providing examples like the Department of Cultural, Media & Sport and Arcadia Group Ltd. Task 2 examines the interrelation of organizational functions with goals and objectives. The report further analyzes the size and scope of different organizations, and conducts internal and external analyses, identifying strengths, weaknesses, and the influence of macro environmental factors. The conclusion summarizes the key findings and emphasizes the significance of adapting to the business environment. References are included to support the analysis.

Business
environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1Various types and purposes of organisations..........................................................................1
P2 Size and scope of a range of different organisations.............................................................3
TASK 2............................................................................................................................................6
P3 Organisational functions are interrelated with its goals and objectives.................................6
TASK 3............................................................................................................................................8
P4 Positive and negative impact of macro environmental factors..............................................8
TASK 4..........................................................................................................................................10
P5 Conduct internal and external analysis of the company......................................................10
P6 How strength and weaknesses are interrelate with macro factors ......................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................12

INTRODUCTION
Any business cannot exist in vacuum, it requires natural resources, human beings and
further things to operate effectively. As business environment means collection of all individuals
and units that may or may not be in under control of an organisation. Such factors can put a huge
impact on performance, growth profitability as well as survival of the company, thus it is
essential for management to recognise all these so as to take appropriate business decisions. The
present assignment is based upon Arcadia group Ltd., its a British multinational retailer firm
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. The main objective of
the firm is to provide healthy and qualitative services to target and potential customers in order to
gain high cutting edge. Apart from this, the present report will describe various types and
purpose of business organisations. Readers will also come to know about different functions of a
business unit and their interrelation with its goals and objectives. Furthermore, external and
internal analysis will conduct so as to analyse those factors which can affect firm's market
position in future.
TASK 1
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In this over dynamic environment, there are several business units are established by having
different aims and objectives. On the basis of their types and purpose, business organisations are
categorised into three parts, such as- public, private and voluntary. Below describe the brief
description of all these associations: -
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Public sector – It is referred as a commercial undertakings which are controlled and
managed by government of any nation in order increase social welfare and maintain public
interest. Basically, associations which comes under public sector undertakings are managed by
central, local and state government of the country. In some of companies either government
wholly owned the public enterprises or may have partly share or equity with private companies.
Furthermore, capital of public sector units can be raised by their owners through loans and other
sources. Basically, it operates in all all areas with an aim of gaining adequate return on
investment.
For example – The Department of Cultural, media & Sport is government authority
which is responsible for sport and cultural activities in UK. It also handles certain aspects of
media, i.e. broadcasting and internet. DCMS works to enrich lives, driven up growth and
promote UK over the world, by preserving Britain's cultural and its values that assists business to
grow up by investing in innovation. DCMS is a ministerial department which supported by more
than 43 agencies and public bodies. The another responsibility of the firm is to ensure social
responsibility and improve the economic condition of the nation.
Legal structure – DCMS operates with department of sports, innovation and cultural,
media, encompassing sponsorship of various councils and focuses on public industries and
computer games. Public sectors are divided into their sub sectors on the basis of its
characterises:
Central Government: This form of structure comprises government departments and its
ALB's that are non-departmental Public Bodies, executive Agencies, non ministerial departments
and other non-market bodies. These are unit which are controlled and financed by government.
These institutions provide services that consists benefit for parliament. Besides this they even
require to have distance from ministerial control.
Local Government: It is another kind of structure which formulate rules and make
decisions in respect to local services. In England. It includes two tiers of local government which
are borough or city councils, county councils and district. Thus, this aspect comprises different
types of public administration which are specific locality and non-market bodies that are finance
and controlled by them.
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Private sector: This sector comprises of people who seek to generate higher profits and
competitive advantage. Organisations in private sector are usually free from government
ownership and control. In UK, there is established vast amount of private sector organisations
who are liable for providing job opportunities to people; it results enhancement of per capita
income which also improves living standards.
For example – Arcadia group is one of the private sector organisation; it is known one of
the leading fashion industry in UK. In order to ensure continuous business operations and
customer loyalty, the firm emphasis on adopting accurate and reliable data. Furthermore,
Arcadia group cited to grow up in providing online services to people and its stores are reachable
to public.
Legal structure -
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 A sole trader is an individual who deals in trades where is required small amount of
money to set up a business. The business persons bear all losses of a venture, in return
they have a control on all functions and enjoy all profits.
 Another one is partnership, it is an association of people who are ready to do business
activities. Here, each partner is selected on the basis of an agreement who are liable for
all debts. In addition, rights of all members are divided under deed of partnership.
 In today's competitive advantage, franchising business has led to rapid growth so as to
increase the number of stores in UK as well as international market. Franchisees have a
license to trade by using the name of franchisor and logos as well.
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Voluntary sector – These organisations are established in order to create social wealth
among people thus to boost up living standard of people. Voluntary sector involves non-profit
enterprise, not-for-profit charities and various social units. The sector indicates its positioning
between private and public sectors.
For example – The national trust works towards protecting cultural heritage of the
country of a specific geographic region. It emphasis on deviate by region, its objective is to
assure preservation of histrionically momentous parts or items as well as to save the area of
natural beauty.
Legal structure – Voluntary sector follows different kinds of legal framework, there is
given some common ones which are stated as under -
Unincorporated associations – It involves those associations in which group of individuals come
together with a common aim to obtain public benefit and provide them quality of life.
 Incorporated organisations - This is when the organisation comes under a category of
law as a legal form and is considered to be a ‘body’ separate from its directors / trustees.
 A Charitable Company is also known as a limited company that runs and managed by
charities or donations. In UK, these voluntary sector undertakings are owned regulated by
Charity commission as well as companies house.
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P2 Size and scope of a range of different organisations
In UK, business organisations are divided into three categorise on the basis of their size
and scope which is described as under: -
Public sector organisation – UK government has a vast control on decision making
process of public sector organisation. It is one of the important part of government and highly
liable for improving economic growth and development of any nation. Along with this,
government also provided funds for smoothly running of these entities and subject to
accounting, audit contriving and budgetary. But there is a possibilities of misusing government
funds which is considerably reduced.
For example- Department of cultural, media and sport for leisure, tourism and creative
industries, so as to sustain excellence and promoting UK. It also has delivered services in 2012
Olympic and Paralympic games and works towards building of a Digital economy. Other roles of
DCMS is listing historic buildings, export licensing of cultural goods, scheduling of ancient
monuments and administration of government Art.
Mission and vision statement – The mission statement of the DCMS is to give the Britain
an unique advantage on global stage by striving for economic growth and success. There are over
700 staff members who are worked for DCMS. On the other hand, the vision statement of the
department is to maintain as well as improve Britain's elite sports performance.
Stakeholders of public sectors
Shareholders – These are the people who have invested their money in a venture. Whilst
they wants higher returns on their investments in terms of dividend. They vest interest to see the
firm being success.
Unions – These are several labour unions who remit for workers' rights and duties; it
works for safeguarding jobs and raising salaries of people as their roles and responsibilities.
Governance – In public sector organisation, government plays most significant roles as
they bodies are run by public funds. Government bodies has a interest to know how things or
activities are managed. For instance- auditors, health and safety executes and regulators are
categorised as governance stakeholders.
Private sector organisation – The sector has a crucial role in improving economic system
of the nation; if entails those companies which runs by individuals or a group of people. The
prime intention of these firms is to make higher profits and increase sales revenue. In several
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countries, i.e. UK private sectors are not bound with government laws and legislation; they
operates freely but in an ethical or legal manner. Along with this, private sector is known as
those firms which have an unlimited liability subjected with an agreement like how profits will
be spilt between shareholders.
For example – Arcadia group Ltd., has its own and franchise chain of fashion or retail
stores and outlets across the UK. The firm operates its products and services under various
brands so as to gain high market popularity and growth. Arcadia group operates by online and
retail stores; it was founded in 1903. The group The company is majority owned by Taveta
Investments, there are over 23000 employees are currently working it.
Mission and vision statement – The mission statement of Arcaida group Ltd., is to
contribute towards sustainable development of society and that creates a business environment
which attracts people. On the other hand, the vision statement of the company is to satisfy
customers' needs and wants. It pledge to innovate business in order to improve business
experience.
Stakeholders of private sectors -
 Customers – Buyers are the market king, any firm's sales and profitably are totally rely
upon the number of customers. Thereby, it is required for business organisations to fulfil
customers' needs and wants in an effective manner.
 Suppliers – Such people have a huge interest and big impact on the firm and vice versa.
Arcadia group operates over the globe, thus it has several suppliers. Conflicts occur with
suppliers want to put their prices up and owners wants to pay as lower possible.
 Employees – Staff members of the company are liable to do all tasks and working
activities in given time schedule. Private sectors organisation should take care of
employees' rights and duties in order to attain and retain them for long term period within
organisation.
Voluntary sector organisation – basically, it encompasses with those business entities
which are established with an aim to enrich societies and improving their living standards as
well. There is little or no more government involvement and not established to gain high profit
margins. Although, these sectors are totally different from public sector, whereas many voluntary
sectors are combined in order to provide their products and services to society in an effective
manner. According to the studies, it is assumed that the sector is contributing £11.7 billion to
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gross domestic product of UK that is equivalent to 0.8% of the whole of the UK GVA (gross
value added).
For example – National Trust is a developing voluntary sector association by having its
own 350 properties, comprises with social history sites, industrial monuments, historic houses
and gardens. In order run enterprise in effective manner, there is a vast range of employees are
working with it.
Mission and vision statement – The referred organisation, National Trust is a beneficiary
of many large charities or donations and bequests. The main purpose of National trust is to look
after special places forever for everyone. It was regulated in order to promote and look after
places of historic beauty across the world.
Stakeholders of voluntary sectors -
 Volunteers – these persons are board of members of the organisation in order to generous
folk who will support to keep firm running by taking effective decisions and initiatives.
 Donors – It grants with several foundations or federal agencies which render funding to
voluntary sectors. Every charity should have a basket of income from a myriad of
sources.
 Local communities refers with a citizen of a society which also known as important
stakeholder of these sector.
TASK 2
P3 Organisational functions are interrelated with its goals and objectives
A business organisation is an intermixture of different functional areas by having
different roles and responsibilities. The organisational structure of the firm entails how it
functions; it dictates the entire cultural of the company. It influence productivity, marketing
strategies, vision, mission and employee relations as well (Agarwal, Grassl and Pahl, 2012). It
is essential for Arcadia Group to develop an effective and efficient organisational structure so as
to accomplish its goals and objectives in a pervasive manner. An organisational structure is
inbound with several departments, like – human resource, finance, marketing etc. There is
defined the brief explanation of these departments that is stated as follow: -
Marketing - The marketing department of any corporate association is liable for
promoting the products, ideas and mission of the enterprise. It also support in finding new
customers and reminding existing customers. Along with this, marketing manager of Arcadia
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Group is liable to conduct various activities linked with marketing and advertising campaigns. In
this department a single person or a team works in hierarchical manner who aims is to get people
know more and more about the company and its offerings. Marketing department of the
company is key source of generating higher revenues and wide client base which needs effective
and well qualified workforce that enable to deal with target and potential audiences in an
imperative way.
Finance and accounting - The finance department of the company covers a wide range of
information to assisting managers as they can make imperative business decision. In addition,
finance managers cope all cash inflows and outflows occurred within the organisation; it also
ensure that whether or not appropriate funds are available for doing day to day payments
(Aterido, Hallward-Driemeier and Pagés, 2011). Along with this, the area also encompasses with
credit facility of the firm.
Human resource management – The HR department of Arcadia Group handles several
essentials functions, such as- recruitment, training, performance appraisal, induction etc. It is
also liable for labour law compliance, relational assistance, record keeping and look out
employees' grievances in order to manage healthy and positive working environment at
workplace. In multinational business organisations, HR managers are tend towards providing
training and development sessions to employees thus to improve their working abilities and
knowledge level. The person also keep tracks or record personal data of the companies and
focuses on reducing diverse complexities among workforce as well as try to establish healthy
working environment through strategic management of the organizational goals.
Research and development – The main role of research and development department is to gather
knowledge about market trends and customers' tastes and then convey firm to produce in same
manner. Along with this, research and development also works with production department in
order to ensure the quality of products and services (Auzair, 2011). Furthermore, before a new
product is manufactured, the departments analyse that whether it is liked by customers or not. It
involves determination of product specifications, manufacturing costs and actual time.
Organisational structure of Arcadia group Ltd. : -
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(Source: Organisation charts, 2015.)
As per the above, diagram it get analysed that board of directors of the company are
liable to take all imperative business decisions; they also implement business standards and
policies as it can running smoothly. Afterwards, BOD or president provide direction to general
manager and he guides various departments of the company. There should be required proper
communication in order to manage an effective cooperative framework.
TASK 3
P4 Positive and negative impact of macro environmental factors
Macro environmental analysis is one of the significant part of environmental scanning
which is used to determine all external factors that can affect firm's market position and in future.
There is defined several macro environmental which are described as under: -
PESTLE analysis of the company
Political factors – It is necessary for business owners to recognise political condition of
the nation where they will operate their business. The Arcadia Group operates over the globe
thus, its management should recognise all terms and condition of other countries. An
experienced political environment gives effective opportunities to business organisation as they
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Illustration 1: Organisational structure of Arcadia Group

expand themselves. Companies also have to manage good political relations (Avramenko,
2012). For instance – due to higher costs rates people are not able to consume luxurious products
and services.
 Positive impact – Effective political environment creates business sustainability for long
term period. It will also support international trade agreements as well as lower trade
restriction as businesses can easily perform effectively.
 Negative impact – In UK, due to flexible political conditions the British government
make changes in its laws and policies which must be followed by all business units. Thus,
such changes can affect growth and viability of companies in negative manner.
Economic factors – These elements contribute towards economic stability of the firm and
the nation as well. Arcadia group Ltd., has a global presence thus it is able to retain its economic
stability by generating employment opportunities; since the branches of a firm are getting wide
spread over the globe.
 Positive impact – The interaction between political power of government and having
strong economic situation plays a crucial role in smoothly and affluent supply of products
and services (Burns and Winter, 2011). In UK, economic condition and labour market are
rapidly developing and on other side, rapidly increasing disposable income of public also
improve consumers' confidence.
 Negative impact – at the time of recession, economic condition of a country get affected,
which increases unemployment and poverty. Furthermore, changes in foreign exchange
rates also affect buying habits of people which make changes in sales and profitability of
the firms.
Social factors – Social trends or changes put a huge impact on retail sector as well as its
profitability. In this, modern era, there are several changes are being occurred in customer tastes
and preferences; it is essential for business organisations to meet their needs and wants so as to
gain high competitive advantage.
 Positive impact – Elder people prefer to buy things from retailing stores or in bulk; it will
support in increasing the sales and profitability of retailing sector.
 Negative impact – It is analysed that UK population is getting old day by day and as the
time passes the phenomenon is getting more intense (Chow and et. al., 2011). The sun
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total to retired person is increasing and they will not prefer to purchase new and
innovative things.
Technological factors – The technological aspects hinders as well as changed the overall
retail industry in terms of customers' reaching, distribution channels, environment and logistics.
In this competitive, era there is increasing the adoption of new and innovative technology among
business units so as to raise their market presence and market share as well.
 Positive impact – Technological changes will support in driven up the production level of
the firms. Technology effects user experience. The concept of e-retail results in
enhancement of number of customers of Arcadia group.
 Negative impact – On the other hand, technology also affect individuals' needs and
desires. There is seem to rise in cybercrime risk to data protection and operational
stability. E.g. Cyber attacks.
TASK 4
P5 Conduct internal and external analysis of the company
In order to analyse internal and external environment of the company, management can
conduct SWOT analysis. It helps in determine strength, weaknesses, opportunities and threats of
the organisation so as to make imperative business decisions and grab better market
opportunities as well (Cronan and et. al., 2011. In which internal factors involves- strength and
weaknesses of the firm whereas external factors involves – opportunities and threats of the firm.
Below describe the brief description of all these elements -
SWOT analysis of Arcadia group -
STRENGTH
Arcadia Group is one of the leading clothing
brand over the world; it deals in grocery,
electronic, clothing and other products. Thus it
can be said that the firm has wide range of
products which assists it to increase the
number of customers (Dahan and et.al., 2010).
Due to technological advancement, Arcadia
Group Ltd. is emphasised on adopting new and
WEAKNESSES
The profits and sales of Arcadia group get
affected by bad debts as it provides credit cards
facilities and high level of insurance on
household items.
Due to lack of experience in certain markets,
the firm is not able to gain high competitive
advantage.
Products are little bit overpriced as compared
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effective products so as to gain high cutting
edge. This aspects improves the quality of its
products and assists to gain high competitive
edge.
Because of its size and scope. Arcadia group
Plc can buy in bulk benefiting from economics
of scale. It allows the company to keep prices
lower and attract customers.
The firm is also focused on providing training
and development assistance to staff members
as they can produce in well being manner.
with other supermarkets.
OPPORTUNITIES
Changes in pricing strategy can attracts many
customers and various promotional deals aids a
firm to deal with customers effectively
(Fernando, 2011).
Further oversees expansions could occur in
markets where the grocery retailers faced
relatively limited competition.
Online shopping can provide a greater
experience to customers who have mobility
issues; Arcadia Group is trying to expand its
operations in the same field as well.
Emerging markets also support Arcadia Group
to gain high cutting edge.
Innovation in supply chain management
process.
THREATS
Due to economic or financial recession,
customers are migrated to other stores in great
number.
Intense competition from its rivals.
Weak economy hinders sales and proficiency
tremendously.
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P6 How strength and weaknesses are interrelate with macro factors
There is a strong relationship between macro environmental factors as well as strength
and weaknesses of the company. It also affect decision making abilities of the firm in direct and
indirect manner. Arcadia Group is a leading firm which has several customers in domestic and
international markets, thus due to social changes it bis essential for the company to recognise
their needs and wants. It will support in gaining higher customer satisfaction level. On the other
hand, due to political instability in UK business organisations cannot perform effectively, as they
are required to follow all laws and legislations (Gebauer, Paiola and Edvardsson, 2010). For
example – if UK government change its taxes or trading policies then organisations cannot
expand their business activities over the globe.
In this modern era, adoption of technologies and innovative production tools assist to
improve the efficiency of organisations. It result companies will accomplish their all goals and
objectives in an indispensable manner. Apart from this, implementation of new technquies is
quite expensive for organisation that hinder their financial credibility; and if they do adopt such
tools then cannot stay in market competition for long term period. Thus, it can said that strength
and weaknesses of a company is highly affected by external or macro environmental factors.
CONCLUSION
As per the above discussion, it get analysed that business environment plays an
imperative role to running an organisation smoothly. There are various types of organisations,
such as- public, private and voluntary sectors. An effective organisational structure is an
intermixture of various departments- marketing, research and development, finance etc.
smoothly functioning of all these areas helps to accomplish goals and objectives of the firm in
an effective manner. In business environment, there are two types of factors, i.e. internal and
external analysis which can be analysed through SWOT and PESTLE analysis of the company. It
results to improve the decision making process and grab better opportunities in future. Along
with this, the report states that political environment of the nation effect in positive and negative
manner on growth and survival of ALDI.
REFERENCES
Books and Journal
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