BBC Business Environment Analysis: A Comprehensive Report

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Business Environment Analysis
BBC

Table of Contents
ORGANISATIONAL STRUCTURE AND FUNCTIONS WITHIN BBC................................................1
MACRO ENVIRONMENT ANALYSIS...........................................................................................2
MICROENVIRONMENT ANALYSIS.............................................................................................3
REFERENCES............................................................................................................................. 5
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ORGANISATIONAL STRUCTURE AND FUNCTIONS WITHIN BBC
An organisation structure refers to a system that outlines the business activities in order to
achieve the goals of an organisation. It involves responsibilities, roles and rules and
determines the flow of information from one level to another within an organisation
(Diefenbach, 2013). the organisational structure at BBC is a hierarchical structure that is
responsibly regulated by the single BBC Trust. The BBC Board is led by a non-executive
chairman, David Clementi and consist executive directors including director-general and
editor-in-chief, Tony Hall alongside the majority of the non-executive directors. The BBC
Board is responsible for ensuring that the BBC fulfils its mission and purpose set out in its
charter. The executive board involves; news and current affairs Director, finance and
operations director, strategy and digital Director, etc. the board meet once a month to
discuss strategies (BBC, 2019). The executive team involves; BBC Scotland Director, BBC
Northern Ireland Director, BBC CYMRU Wales Director, BBC Digital Director, Marketing and
Audience Director, etc. and the management board involves general Director, radio
Director, television Director, news and current affairs Director, etc.
[Source: Hierarchy structure, 2018]
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The core business functions of the BBC are finance, marketing, human resource, information
technology and broadcast operations. these functions are divided into different classes and
the organisational structure defines the interactions between the business functions
(Hierarchy structure, 2018). The organisational structure at BBC defines how the chain of
command runs through the different functional areas and levels of the organisation. An
organisation structure is set up around the core functional areas of the BBC.
The core business functions of Netflix are marketing, finance, product and content
development, human resource and communications (Netflix, 2019). In Netflix, the
organisational structure clearly follows the functional structure that enables the company to
have a clear line of authority with key decision makers in each functional department
(Sherman, 2019). While in BBC divisional structure is followed where functions are spread
across different branches and each divisional area has its own core functions that make a
complex structure.
MACRO ENVIRONMENT ANALYSIS
A Macro environment is consisting of all the external factors that are not in direct control of
the organisation. The macro environment factors are:
Political: BBC is governed by the royal charter and is an independent and self-regulated
organisation based in Britain. The organisation must remain independent from the political
and commercial influence as it operates with the public interest at its core. The company
has to face the pressure of government. There are chances of conflicts as the licence to
broadcast never been issued for infinity. The globalisation of the infotainment industry has
brought political, technological and regulatory changes in the industry environment and
created international competition for the company from broadcasters like Netflix and
Amazon prime (Burell, 2018). Brexit has also created threats to BBC growth in the UK.
Economic: BBC does not operate on commercial grounds rather, it operates as a non-profit
organisation and a national institution and funded by the license fee. The cost cuts in
government spending the company could confront with the budget reduction (Küng-
Shankleman, 2012). However, its high income is guaranteed due to revenue generated by
the government.
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Social: the UK is a leading country in using digital technology and the UK population strives
to enhance the quality of living by connecting people. The consumer behaviour in terms of
using new media has also been changes and internet has integrated into the everyday lives
of people. BBC is reacting to this change by being actively presented on the social network.
The people are least interested in watching public service programmes and moved towards
streaming media content like Netflix (Burell, 2018). The UK subscribers to Netflix are set to
reach 9.78 million.
Technological: broadcasting and media technology is rapidly changing and it has also
affected consumer behaviour. BBC could gain an advantage of increasing journalism and
media opportunity created by internet technology.
Environmental: the increasing environmental awareness among the general population has
encouraged BBC to adopt sustainable business practice and fulfil its corporate social
responsibility (Küng-Shankleman, 2012).
Legal: higher dependency on the government is the major legal issue for BBC that the
private organisation like Netflix does not confronts. However, BBC is free from certain
commercial regulations and laws that Netflix should comply.
The globalisation and increasing growth of streaming media have created a tough
competition for BBC. So the company needs to an emphasis on developing competitive
content and using streaming technology to remain competitive in the market.
MICROENVIRONMENT ANALYSIS
The microenvironment is consisting of all those factors that are in direct control of the
organisation. The SWOT analysis is applied to analyse microenvironment of BBC;
Strengths: the major strengths of BBC is its unique reputation in the market and its and
customer loyalty and faith. It is the oldest and the largest broadcaster in the world that
focus on continuous development to gain competitiveness in the world (Bhasin, 2018). A
strong brand image and advanced marketing strategies of the company gives tough
competition to its rivals.
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Weaknesses: BBC is linked with several controversies over time and also claimed to provide
biased news that has created negative publicity for the company. the high operating cost
also affects the business profitability as compared to new competitors like Netflix that
perform the majority of its operations through digital technology.
Opportunities: it is a great opportunity for the BBC to expand business in streaming media
to compete with Netflix (Bhasin, 2018). The company should increase its involvement in
global events to overcome international competition.
Threats: the strong competition from the evolving broadcasting media like Netflix creates a
great threat for the company.
The external environment of globalisation and international competition has created a great
threat to the BBC. Whereas, the technological advancements have brought new growth
opportunities of entering into streaming media broadcasting market to confront the
international competition created by Netflix. The current business objective of the BBC to
achieve sustainable growth in the market can only be fulfilled by considering the changes in
the business environment. The company can effectively achieve its objective by developing
its product according to the changing customer behaviour and demand. This will help the
BBC in making effective strategies and decisions to successfully compete with Netflix.
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REFERENCES
1. BBC, 2019. INSIDE THE BBC; structure and Governance.
http://www.bbc.co.uk/corporate2/insidethebbc/managementstructure/bbcstructur
e
2. Bhasin, H., 2018. SWOT analysis of BBC. Online available at
https://www.marketing91.com/swot-analysis-bbc/ Last accessed on 11th March
2019.
3. Burell, I., 2018. The BBC’s dominance is under threat, and Netflix may prove an even
greater rival next year. Online available at
https://inews.co.uk/opinion/comment/bbc-dominance-under-threat-netflix-steps-
up-challenge/ Last accessed on 11th March 2019.
4. Diefenbach, T., 2013. Hierarchy and organisation: Toward a general theory of
hierarchical social systems. Routledge.
5. Hierarchy structure, 2018. BBC Hierarchy. Online available at
https://www.hierarchystructure.com/bbc-hierarchy/# Last accessed on 11th March
2019.
6. Küng-Shankleman, L., 2012. Inside the BBC and CNN: Managing media organisations.
Routledge.
7. Netflix, 2019. Org chart. Online available at https://theorg.com/org/netflix Last
accessed on 11th March 2019.
8. Sherman, F., 2019. What Is the Relationship Between Organizational Functions &
Organizational Structure?. https://smallbusiness.chron.com/relationship-between-
organizational-functions-organizational-structure-18571.html
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