BMP3002: Analysis of Company Types, Structures, and External Factors

This report, prepared for the BMP3002 module, provides a comprehensive overview of various company types, including micro, small, and large businesses, as well as different ownership structures such as sole traders, partnerships, limited liability companies, and cooperatives. It explores the characteristics and operations of each type, highlighting their strengths and weaknesses. The report further delves into the influence of external factors on business performance, utilizing PESTLE analysis to identify political, economic, social, technological, legal, and environmental factors affecting businesses. The analysis includes an examination of organizational structures, such as functional, hierarchical, flat, divisional, and matrix structures, and how they impact business productivity. The report concludes with a discussion on how businesses can adapt to external factors and maintain long-term growth and profitability.

BMP3002 individual report
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INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Section 1: Understanding of the different types of companies and how they work...............3
Section 2: Explain different companies from sole traders to cooperatives and Limited Liability
Partnerships............................................................................................................................6
Section 3: Different business structures and how external factors affect businesses.............7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Business environment is inclusive of different type of organisation those who are operating
their activities in different segments that are micro business, small business, large scale and
medium sized business. These businesses are owned and managed by sole traders, partnership,
limited liability, public companies and cooperative organisations. With having different
characters and objectives these organisations perform their functioning with a sole objective
which was to serve needs and demands of customers in an effective manner. Present report has
been conducted on Tesco which is conducting their business services in retail industrial segment.
In this report formative discussion has been conducted on different type of companies and the
manner in which they perform their operations. Along with this report includes discussion upon
different companies and the impact of external factors upon activities and operations of
organisation. For this pestel analysis is being included in this report through which negative and
positive impact of these factors upon business can be identified. This will allow organisation to
undertake advantage of effective strategies and measures which more growth opportunities and
be undertaken.
MAIN BODY
Section 1: Understanding of the different types of companies and how they work
Basis Micro business Large size
business
Small business Medium size
business
Definition Micro enterprise
involves small
businesses that
employ 10-9
workers. In this
organisations
Large business
enterprise
mainly
conducts their
business
operations on
Organisation
those who have 0-
200 employee
wise are
determined as a
small business. In
Medium size
Enterprises
mainly have
employs fewer
than 250
employees. This
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perform their
business
operations in
healthcare sector,
retail sector,
construction
sector and social
assistance (Blank
and Dorf, 2020).
In this
organisation can
simply conducted
their business
operations and
have availability
to grow. They are
the smallest of
small businesses
only with fewer
employees. In this
organisations can
acquire micro
loan from small
business
administrations.
large scale with
having over
1000
employees.
These
organisations
are operating in
several
locations on
domestic and
international
marketplace. In
addition to this
it has been
evaluated that
large
businesses
engage in
operating their
business on
wide scale and
serve large
number of
customers.
this business
organisation
basically
employees a small
number of
employees and do
not have high
volume of sales.
Small enterprises
are mainly of
limited size and
are basically
privately-owned,
sole
proprietorship,
partnership or
corporation.
business size
mainly develops a
bridge between
big corporation
and small
businesses.
Characteristics Smaller team of
employees, not
legally
enforceable,
mostly cash based
They conduct
their business
functioning in
domestic and
international
Main
characteristics of
Include lower
revenue and
profitability,
They perform
their business
operations with
limited resources
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markets and more. platforms. limited area of
fewer locations,
small market area,
and more.
and capital.
Example Trading,
merchandising
and retail, Online
or web-
based businesses
(Blogging and
publishing) Arts
and crafts
(Furniture
making) and
more.
Walmart,
General
Electric,
General
Motors, ASDA,
Tesla and more.
Local bakery,
Toys making and
more.
Leather product
manufacturing,
ceramic glazed
tiles production,
Aluminium door
and window
manufacturing
and more.
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Section 2: Explain different companies from sole traders to cooperatives and Limited Liability
Partnerships
Basis Sole trader
business
Partnership Limited
liability
business
Public
limited
liability
business
Cooperative
Definition Sole trader
business our
own or
manage and
run by a
single
individual
who is
having legal
responsibilit
y for
business as
banks along
with their
profitability
and losses.
In this two
or more
individuals
get into a
partnership
in order to
conduct
business
operations
profit and
losses ratios
are divide
according to
the
partnership
agreement.
Limited
liability
companies
are mainly
known as
hybrid
Organisation
in which
characteristic
s of sole
proprietorshi
p,
partnership
and
cooperation
are included.
Public
limited
companies
have limited
liability and
can offer
their shares
to general
public these
organisations
are owned
by
government
authorities.
In this individuals
involved in the
mutual assistance
to work towards a
common
objectives. In
simple terms it is
association of
individual those
who are
voluntarily united
to fulfil a
common cultural,
economic or
social needs.
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Characteristi
cs
Most
important
characteristi
cs of sole
trader
business is
that in this
individuals
are having
who tried to
undertake
decision-
making and
run their
business in
their own
way without
making any
delay in the
process of
decision
making they
are
responsible
for the
overall
profitability
of business
they are
responsible
Main
characteristi
cs of
partnership
include,
sharing of
profits and
loss,
membership,
agency
relationship
and more.
Members are
not
responsible
for legal
faults and
more.
Minimum 7
members
and
maximum
number of
members are
unlimited, no
restrictions
on transfer
of shares.
Cooperatives
have democratic
form of structure;
have fair and
equitable
distribution of
economic results
and more.
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for the
overall
profitability
of business
Example Local
businesses,
local shops,
home-based
business and
more.
Uber &
Spotify,
Apple &
MasterCard,
Casper &
West Elm,
GoPro &
Red Bull
and more.
Westinghous
e, Anheuser-
Busch,
Blockbuster
and more.
Prudential pl
c, BT
Group plc
and more.
Central England
Co-operative,
Heart of England
Co-operative Soci
ety, Chelmsford
Star Co-operative
Society and more.
Section 3: Different business structures and how external factors affect businesses.
Different organisational structures and explain how organisational structure affects business
productivity.
Organisational structure is defined as a system that basically outlines the manner in
which certain activities are directed in order to accomplish objectives and goals of organisation.
In addition to this it is mainly termed as a hierarchy of employees and employers and determined
each job along with its function. With the help of these structures company can determine the
manner in which information flow among various levels of company. Organisational structure
plays most important role for organisations as it clearly defines relationship and underline greater
pattern of communication among individual through which information can be shared in a well
defined and effective manner (5 different types of organisational structure explained. 2020). In
addition to this with the assistance of organisational structure organisation can determine the
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location of decision centres and can properly manage balance of authority and influence. These
structure encourages growth and profitability of organisation as it facilitate organisation with the
frameworks through which company can perform its objectives in a flexible manner while
creating more growth opportunities and handling business in efficient manner. There are
different types of organisational structure that are functional organisational structure, hierarchical
organisational structure, flat organisational structure, divisional structure and matrix structure.
These structures provides organisation with the benefit of decision making and flexibility
through which large business organisation like Tesco can effectively coordinates different level
of management functions and can define authority and responsibility with more efficiency. These
structure also facilitate company to effectively allot roles and responsibilities to individual
according to their expertise it will facilitate company to ensure its long-term sustainability and
profitability in market
PESTLE analysis explain how different external factors affect the performance of a business
Pestle analysis is a strategic tool through which business organisation can identify
different factors and elements prevailing in external business environment along with its impact
upon business operations of company in negative and positive manner.
Political:
This factor involves the extent at which government policies affect business organisation
or certain industry (Nandonde, 2019). Elements like new tax rate, fiscal policy, trade tariffs that
have impact upon operations of business. It is essential for an organisation to have proper
understanding of all these elements and maintain formative relationship with government
authorities in order to conduct smooth business operations.
Economic:
It includes elements such as purchasing power of customers, economic growth pattern,
interest rate, inflation rate foreign exchange rate and more. Economic factor have negative as
well as positive impact upon business operations. Thus, it is essential for entity to undertake
advantage of strong economic strategies and policies with the help of economic advisers in order
to undertake advantage of economic opportunity for higher business growth and profitability.
Social:
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Social sector includes elements like population analytics, cultural trends, demographics,
belief and perception of customers and more identified. It has been identified that in the
provinces of United Kingdom consumers are tend towards western culture. With the help of this
TESCO can serve them accordingly and can after long-term business sustainability in a
respective industrial segment.
Technological:
This factor includes elements related to innovation in technology. This factor is having
huge impact on sustainability and business operations of an organisation especially for large-
scale organisation like Tesco. Technological factors play most important role as in order to
maintain its leading position and it is required to implement changes in automation and have
proper technological awareness trend that are prevailing in marketplace for more competitive
advancements.
Legal:
This is the most important factor of pestel analysis that include certain laws business
regulations and legislations imposed by legal authorities that are required to be effectively adhere
by organisations. Negligence of this factor may lead business to face many legal penalties and
obligations that can affect their business image in marketplace. Tesco abide labour laws,
consumer laws, safety standards and mores in order to conduct their business operations without
any legal setup on business.
Environmental:
This factor includes impact of business operations upon environment. It is essential for
entities in any industrial sector to have positive contribution in environment and make sure that
their business activities does not affect climate, geographical location and other environmental
aspects in any way, United Kingdom and other countries government imposed heavy penalties
on those organisations who are affecting environment conditions. Tesco with the help of strong
environmental protection strategies and taking advantage of environmental friendly raw
materials can assure long-term sustainability and goodwill in marketplace.
Thus, the help of above mentioned Pestle analysis it has been identified that with the help
of this analysis organisation can identify impact of different factors upon business operations and
sustainability. This will facilitate entity to take advantage of strategies and measures through
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which negative aspects of these factors can be reduced. With the help of this company can assure
long-term growth, development and higher profitability in respective industrial segment. This
analysis help of in decision making through which company can overcome challenges and
negative impact of these factors can be reduced by organisation will allow the company to ensure
long-term sustainability and growth in market place. With the assistance of pestel analysis Tesco
can conduct its operations in a well defined and effective manner in retail industry and can
ensure more competitiveness than other rivals.
CONCLUSION
According to the above mentioned report it has been identified that there are different type
of businesses that are operating their functions in different business industry like micro business,
large size business, small business and medium size. These businesses have different set of
characteristics and objectives. In addition to this it has been identified that an organisation with
the help of pestel analysis can evaluate different type of elements along with its impact upon
activities and objectives of organisation. In addition to this has been identified that there are
diverse range of organisational structure through which company can maintain formative balance
of authority and influence and can conduct business functioning in a flexible manner. With the
help of different organisational structure business organisations can undertake advantage of more
growth opportunities and can effectively handle different business situation in a well define an
effective manner.
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REFERENCES
Books and Journals
Frank, A.G., Dalenogare, L.S. and Ayala, N.F., 2019. Industry 4.0 technologies: Implementation
patterns in manufacturing companies. International Journal of Production
Economics, 210, pp.15-26.
Mikaloniene, L., 2018. Small Partnership Company Form as a Vehicle for Small and Medium-
sized Businesses in Lithuania: Is the Theoretical Model Effective in Practice?. European
Company and Financial Law Review, 15(1), pp.101-122.
Meira, D.A., 2019. The cooperative economic groups and the problem of the quantification of
the social economy entities. REVESCO: Revista de estudios cooperativos, (131), pp.103-
124.
Nandonde, F.A., 2019. A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence, 38(4), pp.54-61.
Van Diermen, P., 2019. Small business in Indonesia. Routledge.
Blank, S. and Dorf, B., 2020. The startup owner's manual: The step-by-step guide for building a
great company. John Wiley & Sons.
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Aula, P. and Mantere, S., 2020. Strategic reputation management: Towards a company of good.
Routledge.
Online
5 different types of organisational structure explained. 2020. [Online]. Available
through<https://www.gazprom-energy.co.uk/blog/5-different-types-of-organisational-
structure-explained/ >
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