Business and the Business Environment: A Report on Bourne Leisure

This report provides a comprehensive analysis of the business environment, focusing on Bourne Leisure, a company in the leisure and holiday sector. The report begins with an introduction to business and its environment, followed by an examination of Bourne Leisure's organizational functions, including finance, research and development, sales and marketing, human resources, and administration. It then delves into the macro environment, discussing political, economic, social, technological, environmental, and legal factors and their impact on the business. Internal and external analyses are conducted using SWOT and Porter's Five Forces models, identifying the company's strengths, weaknesses, opportunities, and threats, as well as analyzing the bargaining power of suppliers and customers, threats from new entrants and substitutes, and the intensity of competitive rivalry. The report concludes with a summary of key findings and insights into the business environment.

Business and the
Business Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
a)(P1, P2 and M1) Enclosed in ppt .............................................................................................3
b)P3)............................................................................................................................................3
M2................................................................................................................................................4
PART 2............................................................................................................................................6
a)P4).............................................................................................................................................6
P5)................................................................................................................................................7
P6)................................................................................................................................................9
M3, M4).......................................................................................................................................9
b) D2).........................................................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
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INTRODUCTION
Derivation of services and products with help of group of individuals and selling these to
the respective customers can be defined as business. This complete cycle of manufacturing,
production and selling can be constituted as elements of business environment. There are certain
methods that need to be followed for running a smooth business. These methods are based and
adapted by strategic management and planning of all the functions in the organisation. For
efficient planning analysis of the external and internal factors must be conducted. Business
environment consists of these two types of factors. Organisations are then classified according to
their ownership as public and private sector organisations. NHS (National Health Service) is the
health service provider for UK while Bourne Leisure is a private sector undertaking providing its
services in leisure and holiday sectors.
PART 1
a)(P1, P2 and M1) Enclosed in ppt
b)P3)
Various organisational functions of Bourne Leisure are :
Finance function – Financial function refers to recording of daily transaction. It involves
quantitative data entry. Bourne Leisure is a large public company which involves large number
of transaction daily and recording of all data is a complex task. Finance function helps in
decision making to the managers for example in deciding price of services on the basis of total
number of expenditure (Strategic Planning Tools . 2016). Finance department in company is also
responsible administering salary to the employees of Bourne Leisure. It helps company in
achieving its objective such as reducing cost through proper management of expenses of
company. Finance is known as lifeblood to any organization.
Research and Development function – Research and development departments performs the
activity such as market research and product and service development. research and development
function performs a study on customers demands which includes change in taste and preferences,
change in fashion, change in needs of customer or cultural change (Types of organisational
structure. 2016). It helps Bourne Leisure in achieving target such as growth in market share, it
performs an activity includes study competitors strategy and develop its strategy such that it can
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attract competitors customers to himself and provide additional services so that customers get
satisfy. A good research and development team refers to fast technological advancement in
company. It also helps in boosting profit through cost reduction strategies (Blackwell and Eppler,
2014).
Sales and marketing function – marketing function refers to developing product or services in
mind of customers. it helps management in attracting customers and boosting sales in market it
helps in achieving objective such as Bourne leisure is operating in hospitality as well trading
company whose main motive is profit as well as customer satisfaction and marketing and sales
function helps in increasing profit through increase in sales (Swayne, Duncan and Ginter, 2012).
For example Bourne Leisure is targeting to increase it sale by 15% in next month so marketing
activity will help in attracting customers and increasing sales which is the target of the company.
Human Resource Function – Human resource function refers to staffing of employees for
company and also includes training and development of employees. employees in any company
plays a very important role as they play a role of mediator between company and customers (E.
Dobbs, 2014). They reflect the reflection of company to employees. Bourne Leisure is product
and service providing company and therefore human resource function play a vital role in
achieving objective example Bourne leisure motive is to provide better quality services and best
experience to their customers and to achieve that it is very essential that employees are known
with companies policies and strategies
Administration Function – administrative function includes administrative task such as mail
handling, dealing with queries of customers and taking feedback from customers, maintaining
premises, rooms etc. administrative department play a vital role in achieving objective to Bourne
leisure as without administrative department customers complaints would not be solved. For
example,company aims to provide best experience to their customers and now a days customer
are not only get satisfied through the demanded product they requires extra complimentary
services (Bull and et. al., 2016).
M2
An organisation comprises of various sections or operating departments. Basic
organisational functions are front desk operators, finance, human resource, sales, marketing,
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manufacturing, etc. These functions vary according to the size, type and structure of a company.
Bourne Leisure being a leisure and holiday sector undertaking provides its services through its
subsidiaries. Organisation has to maintain a rhythm in the different organisational functions so
that structure and function do not influence each other (Bøllingtoft, 2012).
The organisational structure obtained by Bourne Leisure is a major deciding factor
regarding the functioning of the company. The interconnections between different functioning
groups is decided by the adapted organisation structure (Botha, Kourie and Snyman, 2014).
Bourne Leisure uses a customer based organisational structure. Here separate departments
functions according to the services required by customers. Visualising such a structure is quite
complex but the hospitality and health care industry uses this structure for efficient management
of the customers as they are highly based on the reviews and suggestions of customers.
Customer based organisational structure has a head of the organisation that handles the
supervisors of various other departments. The functions are divided into house keeping, food and
beverage department, front office desk, managers and the internal departments include the
human resource, finance, sales and marketing. These are customer centric as a holiday industry
works on the principles and demands of the customers (Bulpitt, 2012). Holiday sector itself
refers to the customer spending by planning their extra income. If a customer spends money over
his luxury and leisure activities but is not satisfied with them, there are less chances of the
customer to refer the company or even pay a second visit. This will reduce the company's market
share (Types of organisational structure. 2016).
To avoid above mentioned consequences Bourne Leisure designed its organisational
structure according to the customer. This structure will create a link between the organisation
and the customer which will initiate the process of meeting organisation objectives and goals
(Carroll and Buchholtz, 2014). Increased competencies have shifted the focus of the company
from profit making to customer satisfaction. Interconnections web here supports the organisation
structure and helps in achieving its goals and objectives.
Functioning of each department doesn't get interrupted by any disorder of the other
department. Following are the advantages and disadvantages of the customer organisational
structure.
Advantages:
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1. Customer satisfaction is attained with classified approach.
2. No chaos is created in the management of the different departments.
3. Customer needs are specialised and focus is build according to different types of
customer groups.
Disadvantages:
1. Organisation can suffer a monotonous functioning because of no or less shuffling of
employees within different departments.
2. Interaction is reduced between employees of different functioning departments. This will
create a communication gap if not handled effectively.
PART 2
a)P4)
Macro environment consists of political, economical, social, technical, environmental
and legal factors affecting the business operations. This environment can have both positive and
negative impact on the functioning of the organisation. Business operations can be related to any
department like finance, sales, marketing, or any other (Chang, 2016). The factors before stated
are the elements of business environment. Individual businesses, groups or events are also part of
the macro environment. The positive and negative impact of the macro environment are
described below:
Positive impact:
1. Any changes regarding the governmental policies that favour the business organisation is
a plus point. For example, if government releases taxation on consumer spending income
levels will increase and consumers may concentrate more on acquiring leisure benefits
for their incomes.
2. Digitalisation has helped companies gain audience and customers from the virtual world
and earned profits in the real world. By digitalisation, focus is made on online shopping,
booking and surfing portals that provide customers to purchase a service from any sector
be it hospitality, medical, clothing, etc. and in comfort of their home (Cummings and
Worley, 2014).
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3. Legalisation of unfair means and more strictness from the government will give the
companies security from unfair competitors as well as new entrants rights will not be
violated.
4. Low interest rates will create opportunities for the companies to bring up new
employment options and this decreases the inflation rates. Overall economic growth
graph of the company increases steadily.
5. Relaxation on trade restrictions may also help the company to expand its boundaries from
one region to another and it can also be to other countries.
6. Business development will contribute to country's GDP and even developing nations can
become the part of international globalisation process (Cosh and Hughes, 2012).
Negative impact:
1. Increase in revenue generation by the government will lead to decline in the purchasing
power of the consumers and the company has to suffer lower purchase rates leading to
less profits.
2. Consumer bargaining power if increased will lead to decline in the selling price as a
result the manufacturing cost is not recovered leading to declining financial status.
3. Improper communication or less means of advertising decreases the awareness levels of
consumers. Products and services of the company are not marketed as a result. This
happens due to lack of technological advancement of either the company or the country
(Channon and Jalland, 2016)
P5)
Internal and external analysis of an organisation is conducted to identify its core strengths
and weakness with details regarding the drawbacks and pros of the business strategy on which
the company has been working currently (Fleischmann and et. al., 2014). Internal analysis can be
based on SWOT tool and external analysis is conducted using Porter's five forces model or PEST
or PESTLE.
Internal analysis(SWOT technique)
1. Strengths: Bourne Leisure is a recognised multinational holiday and leisure sector
company with great brand recognition. It provides best in class facilities for the
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customers according to their spending levels. Customer based organisational structure is
their key to success (Goetsch and Davis, 2014).
2. Weaknesses: Major weakness of the company is it relies on high investment in research
and development which revives more taxes on their services.
3. Opportunities: Growing economy with new acquisitions and introduction to new markets.
These markets can be in different country as well as continents.
4. Threats: Changes in tax policies and more strictness in government regulations can pose
a threat for Bourne Leisure.
External analysis(Porter's 5 force model)
Porter's five force model is a critical technique that covers up the complete business
environmental analysis backing any organisation (Stark, 2015). These five factors are mentioned
and described as follows :
1. Bargaining power of suppliers: The advantage to the company gained by acquiring
minimum resource cost from the supplier which includes any cost from raw material to
labour or employees. Company will experience a profiting advantage over other
competitors if it gets resources in lesser costs.
2. Bargaining power of customers: Bourne Leisure company is a holiday sector company.
Hence, it has to aim on achieving maximum profits from the customers but without
increasing or charging them unethical prices. Bargaining power of the consumers will
decrease company's extraction power (Zikmund and et. al., 2013).
3. Threats from new entrants: New competition is a refreshment to fight with but at the
same time they can pose as a threat to the company. Organisations must make it a point to
be aware about the products and services of the new entrants with complete background
knowledge about them. This helps in balancing the consumer acquisition from their end.
4. Threats of substitution: Every organisation faces a threat of substitution of its products
and services from those of its competitors (Bøllingtoft, 2012). Strategies must be
designed in accordance with these threats and complete check on the quality and
standards of services given by Bourne Leisure.
5. Competition from rivals: The more the number of competitors, the more is the increase in
the level of products and services provided by the company. Good competition always
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results in the economic development of the country. Equal competition is necessary to
keep the business spirit going.
Core strengths and weaknesses of Bourne Leisure derived from these two assessments are as
follows:
Strengths: Great brand recognition with enormous competition. The company has
maintained good reputation and divided its business operations according to subsidiaries. It has
also developed a good organisational structure which has helped to evolve the possibilities in
every direction (Hansson and Ekenberg, 2016).
Weaknesses: Company must focus more on developing their technicalities and maintain
their public relations. Focus must also be given on better finance strategies.
P6)
External macro factors in a business environment are demographics, influence from
political decisions, economic changes, social and cultural considerations piling up with the
natural forces (Strategic Planning Tools . 2016). For smooth functioning of Bourne Leisure, it
has to focus on improving and maintaining its relations with the external factors. Be it
competition from new entries, local groups or individuals the company has to focus on adapting
measures that can curb the negative impact of this competition (Xu and et. al., 2016). The
strengths and weaknesses do have an important link with the external factors.
 Strengths always prove out to be a shield for a big brand like Bourne Leisure. They help
in compelling with different reforms that can affect a company's strategies.
 Weaknesses are not major limiters for the company but with reference to the external
factors company can control the impact of its weakness in business strategies.
M3, M4)
PESTLE and SWOT are two types of analysis tools that are used to determine the correct
functioning of a business and also to detect faults in the business decision making process.
PESTLE
Factors Description and effect on decision making
Political(P) The government policies and regulations that
affect the functioning of the business fall in
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political factors. Decisions contexting these
political factors are changed and affected with
any changes in the political policies (Bull and
et. al., 2016).
Economical(E) Economical reforms like taxation, trade
restrictions, control over export and import,
immigration formalities affect Bourne
Leisures decisions regarding the production
and quantity of services.
Social(S) Social barriers emerge due to conflicting issues
or reforms that change the taste and demands
of the consumer. Decisions based on the
quality of products and services are changes
and affected accordingly (Rothaermel, 2015).
Technical(T) Technical developments have always affected
marketing and sales decision making process.
Greater advantage of technology enhances the
marketing strategies and people are more
inclined to buy a product or service that is
effortless.
Legal(L) Legal restrictions or claims of consumers can
affect brand reputation. Following legal
procedures won't have a negative impact.
Environmental(E) Environmental changes like natural calamities
or any sort of hindrance caused in the
deliverance of the services becomes and
important factor affecting decision making
process of the company (E. Dobbs, 2014.).
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SWOT
Strengths(S)
 Bourne Leisure is one of the largest
holiday sector multinational in UK.
 High standard luxury and leisure
providing business.
 Has subsidiaries and branches in
different countries which contributes to
global presence. Reward programmes have escalated
sales (About Us. 2016.).
Weakness(W)
 Brand name is often viewed to be
expensive which implies decreasing
customers.
 Spending power can take a toll on the
current economic status.
Opportunities(O)
 Clients can be increased by involving
better offers and package.
 More ventures can be launched at novel
destinations. Globalisation will help increase
economic returns.
Threats(T)
 Increasing operations cost is affecting
hotel rates.
 Decline in tourists due to natural
disasters (Persson, 2013).
 Increasing start ups are becoming
threats to the competition control.
The SWOT analysis conducted above depicts the facts that necessarily considered before
planning any decision. Effectiveness of a decision will improve if these facts are considered.
Without any analytical approach decisions can be made but probability of successful decisions
decreases. SWOT gives a complete business profile of any company (Goetsch and Davis, 2014).
Henceforth, it is an important assessment tool in decision making process.
b) D2)
The complete scenario of a business environment can be visualised by knowing about the
organisation type, its background, structure and functioning as well as the factors that affect
these functions. The learning experience enlightened my perspective regarding the functioning of
public and private sector organisations. I chose National Health Services as public sector
organisation and Bourne Leisure as a private sector firm. Detailed description of the functioning
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and organisational structure of Bourne Leisure was enriching. I gained knowledge about the
assessment techniques like Porter's 5 forces model, SWOT, PEST or PESTLE.
My objective was to engage in acquiring knowledge about the types of business and the
environment affecting the functioning of these businesses. I had incorporated skills to analyse a
company based on the information obtained in the report. Using Bourne Leisure as my private
sector organisation, I developed knowledge regarding process in which a web of
interrelationships is created in the company. This web gets influenced in its functioning by the
type of organisation structure a company adapts. Bourne Leisure adapted a customer based
structure which revolves around the needs, qualities and quantities of the consumer.
My findings also include awareness about what constitutes a business environment and
the different types of business environment. There are two types of business environment that is
micro and macro. Both have certain impacts on the decision making and strategy build up
process of the company. I improved my analytical skills through this project. The tools that are
used for analysing business strategies can be used in day to day life for solving real time
problems. Micro factors affect the internal structure of the company while macro factors affect
the overall company decisions.
I realised that for making any business function it is very important to develop a
structure. This helps in choosing the number of employees and layers that will be functioning in
the respective departments of the business. It is very important that all these departments are in
rhythm and collectively function. After deciding the structure the functions are automatically
categorised. While planning strategies my assessment says that we must use these analytical
tools that give an edge and support to complex industrial decisions and also for fighting
competition in the real world. Micro environmental factors help in maintaining peace and
discipline in the company. Its analysis gave me details about the work culture, employee
satisfaction and suggestions and feedbacks gained from employees helps in understanding the
internal environment. I would like to suggest more increase in the competency levels of the
organisation. These levels can be achieved by training and development of employees.
Feedbacks and suggestions must not be ignored by the company. Focus must be given in those
areas were communication gap prevails. Company can also experiment by introducing matrix
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organisational structure may be at a small level. It enhances the chances of evolution and all the
employees can know each and every person working in different departments of the company.
Macro environmental factors are uncontrollable events that have large scale impact on the
functioning of the organisation. I also acknowledge the great use of PESTLE analysis which
deeply analyses the major macro environmental factors affecting the business operations of an
organisation. A major effect of these factors is felt only due to the activities and reforms
produced by the present government. Their one crucial step changes the dynamics of the private
sector organisations.
Although according to my experience and knowledge gained during the project, Bourne
Leisure is a brand. People assume a brand to be right always. But this also means that the
company must be providing services affordable only by the higher income groups. This creates a
decline in the quantity of consumers from the middle and lower income group. My conclusion
based on the analysis of the company's core strengths and weakness will be that Bourne Leisure
must focus on creating and developing services and products that can be affordable by the lower
and middle income groups. This will create an opportunity for the company to maximise its
market share by accessing this majority population of UK.
CONCLUSION
The report consists of detailed information regarding the business and its functioning
based on the type of organisation, business belongs to. The organisation structure of Bourne
leisure is discussed with its impact on the interconnections web in the organisation. The impacts
of macro environmental factors on business can change its decision making process. This can be
understood by PESTLE analysis which is also mentioned in the report. SWOT and PESTLE are
such tools that help in internal and external analysis as well as help the strategists to gain
knowledge about the current situations of the organisation. Business environment study is
incomplete without the knowledge of these assessment tools.
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