Comprehensive Report: Business and Business Environment - Unit 1

This report provides a comprehensive analysis of the business environment, focusing on different types and sizes of organizations, including private, public, and voluntary sectors, and their growth in the international market. It explores the interrelationship between organizational functions and objectives, using case studies of Solesmith, Tesco, Network Rail, and the British Red Cross. The report delves into macro-environmental factors through PESTEL analysis and assesses the strengths and weaknesses of Solesmith. Furthermore, it incorporates SWOT analysis to evaluate internal and external factors influencing business objectives and decision-making, concluding with key findings and recommendations. This report provides a detailed examination of business environments, organizational structures, and strategic tools to enhance business understanding.

Unit-1 Business and Business Environment
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Table of Contents
Introduction......................................................................................................................................3
Section -1.........................................................................................................................................4
Different types, sizes, and purposes of organizations and their growth......................................4
Background, Size and scope of different types of organizations.................................................6
The relation exists among the functions of the organisation and with the objectives and
structure of the business.............................................................................................................13
Section- 2.......................................................................................................................................17
PESTEL analysis as macro-environmental factors and their impacts.......................................17
The interrelationship of strength and weakness of Solesmith with PESTLE factors................21
SWOT analysis of the Furniture Practice..................................................................................22
Internal and external analysis impacting business objectives and decision making..................24
Conclusion.....................................................................................................................................26
References......................................................................................................................................27
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Introduction
The operations and functions of business are shaped and run by the environment and the
situation of the surroundings since the evaluation of business (Banzhaf, 2012). As business
organizations have to run their operations in the local, national, and international community at
large to accomplish the vision and objectives, the environmental situation affects the business in
a great manner. Thus, to kiss the organizational vision and goals, organizations have to consider
the environment in decision making and in operating business. Both the internal as well as
external environment exert great impact which can be in both positive and negative manner
(Knill and Liefferink, 2014). This study is divided into two sections. The first section will
discuss the purposes of different types of organizations including private, public, and voluntary,
and their growth in the international market; size, vision, mission, and objectives of
organizations including private, public and voluntary; the interrelationship of different functions
of Solesmith in comparison with other business organizations. The section two will discuss the
macro environment and PESTLE analysis to highlight positive and negative impacts on
Solesmith, to understand the strength and weakness of Solesmith SWOT analysis will be
executed and the analysis of the key findings.
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Section -1
Different types, sizes, and purposes of organizations and their growth
Each organization is formed to perform different purposes and to serve different functions
according to the purposes. The size and types of organizations set the purposes (Blackstone,
2010). In terms of ownership, organizations can be divided into three types such as public,
private, and voluntary organizations.
Figure 1: Different types of organizations
Source: (Blackstone, 2010)
Private sector
Private sector organizations are the for-profit organizations that are privately owned by the
individual of the country (Bohlman and Dundas, 2015). These organizations are basically formed
to make some profit by doing business. Private sector organizations can be any of the following
types-
Sole trader refers to the private sector organisation where the owner of the organisation plays
the all in all role in initiating, operating, and managing the business (Dietz and Stern, 2012). The
main purpose of a sole trader is to earn profit and economic progress for thyself and for society.
A private limited company refers to the business where two or more individuals, not exciding
50 incorporate the business whose liability is limited to earn some profit. The main purpose of
the organisation is to earn profit and distribute it among the shareholders. Unlike a private
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limited company Public limited company is a business formed by two or more shareholders and
there is no limit to the number of the shareholders. The main purpose of the business is to earn
profit and expand the business to aid in the growth of the business.
For example, Solesmith is a private limited company which deals with customized socks in the
UK. On the other hand, Tesco is a public limited retailer business that serves its product in the
UK and around the world.
Public sector
Public organizations refer to the organization which established and operated by the government
of the country to serve the general people within the country (Fernando, 2011). Unlike the
private sector public sector is established to ensure the well-being of the general people of the
country.
The stated-owned organisation is the legal business entity established by the government of the
country to take part in commercial activities on the side of the government of the country (Knill
and Liefferink, 2014). State-owned organizations formed for the purpose of maintaining and
accelerating the economic growth of the country, ensuring the well-being of the general public,
and participate in commercial activities on behalf of the government. Government organization
is governed and regulated by the government of the country which is formed to ensure different
development activities to increase the well-being and living standard of the general people of the
country.
For example, Network Rail is a public sector or government organization in the UK which
ensures the transport service to the general people of the UK.
Voluntary Organization
Voluntary organizations refer to the organizations which are formed by the members of a
community to improve the well-being of the members of the community (Maitland, 2014).
Voluntary organizations are formed for the following purposes-
 To ensure the social welfare and well-being of the general people.
 To satisfy the needs, demands, and desires of the members of the community.
 To ensure basic human rights for the general people of the society.
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For example, The British Red Cross is the humanitarian charity that serves support at the time
of crisis in the UK and around the world.
Growth of the international business
There are several factors which work behind to lead the growth of an international business such
as-
Development and expansion of technology: As the technology had evolved and has been
developing and expanding across the border, these technological advancements pushed the
businesses to expand the international activities (Bohlman and Dundas, 2015).
Liberalization of cross border activities: As the cross-border business has become liberal, this
liberation leads the organizations to expand the business internationally.
Supporting services: To initiate and run businesses internationally, organizations need different
supports (Pride, Hughes, and Kapoor, 2010). In this globalized world, different supporting
services have evolved which also lead to the expansion of the international business.
There are also several reasons behind the growth of an international business-like-
Availability of low-cost labor: In developing countries, the labor cost is low which induces
giant organizations to expand international business.
Increased demands: Global demands of some products have increased which is also another
reason behind the growth of the international business (Dietz and Stern, 2012).
Diversification: To gain economies of scale, organizations now entering into a new market to
diversify their product offerings.
Background, Size and scope of different types of organizations
The four different types of organizations of private, public, state-owned, and voluntary
organizations are- Solesmith, Tesco, Network Rail, and British Red Cross respectively. The
background, size, scope, vision, mission, objectives and legal structure of four different types of
business are-
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Background of the organizations
Private Ltd. Co.
Solesmith
Public Ltd. Co.
Tesco
Stated Owned
Organisation
Network Railway
Voluntary
Organisation
British Red Cross
Solesmith is a
private limited
company which
deals with
customized socks in
the UK established
in 2014 by Lauren
Dorling to offer
different
personalized socks,
tops, and jocks
(Tolba and Rummel-
Bulska, 2018).
Tesco is a
multinational public
limited organization
serving its retail
products worldwide.
The company was
established in 1919
by Cohen and use
the name as Tesco in
1924. The first-ever
Tesco shop was
opened in 1931. The
company has
become the world’s
9th largest business
by revenue (Pride,
Hughes, and
Kapoor, 2010).
Network Rail is a
state-owned
government
organization in the
UK that ensures the
transport service to
the general people of
the UK. The
company has been
running as the public
sector body since
2014 which was
established in 2002.
Basically, the train
operating companies
are the customers of
the organisation
(Bohlman and
Dundas, 2015).
The British Red
Cross is the
humanitarian charity
that serves support at
the time of crisis in
the UK and around
the world. The
society was formed
in 1870 as a British
national society for
aid to sick and
wounded in a war
that was chaired by
Robert Loyd-
Lindsay as a
humanitarian
network. The
organization
currently has 32500
volunteers and 3500
staff (Maitland,
2014).
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Products and services of the organizations
Private Ltd. Co.
Solesmith
Public Ltd. Co.
Tesco
Stated Owned
Organisation
Network Railway
Voluntary
Organisation
British Red Cross
The organization
basically offers
personalized socks
to their customers
(Banzhaf, 2012).
Besides socks, the
company also offers
underwear, jumpers,
t-shirt, accessories,
homeware, blankets,
etc.
The organisation
deals with the
retailing business of
different groceries
and general
merchandise
(Bohlman and
Dundas, 2015). The
business also offers
clothing, banking
services, mobile
magazine, etc.
The organization
provides services
and support to Train
Operating
Companies (TOCs)
for ensuring quality
passenger transport,
Freight Operating
Companies (FOCs).
The organization
provides
humanitarian
support at the time
of the humanitarian
crisis over the world
and the emergency
response as well
(Shaikh, 2015).
Size and scope of the organizations
Private Ltd. Co.
Solesmith
Public Ltd. Co.
Tesco
Stated Owned
Organisation
Network Railway
Voluntary
Organisation
British Red Cross
Solesmith is a
private limited
company that
offers its
personalized socks
and other products
in the UK
(Blackstone,
2010). The
This company offers
its products and
services worldwide.
The business fall
under the retail
industry in the UK
having the operation
in more than 8
countries. The
The organization
provides services
regarding public
transport. The
organisation is in the
industry of Rail
infrastructure and
asset management
industry. It has
British Red Cross
aids in humanitarian
crises to the general
people in the UK
and around the
world. The
organisation has
nearly 32800
volunteers and 4000
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organization falls
under the gift
industry and offers
different gift
boxes. Currently,
the business has 1
shop to provide
services and
around 10
employees
working in the
organisation.
organization has
6800 outlets in
different countries in
which it operates its
business by more
than 450,000
employees working
in different outlets.
The business has a
27% market share in
the market place. The
company is the third-
largest retailer by
revenue. In 2019 the
company experienced
about almost $64
billion along with
$1.32 billion (Dew,
2008).
around 40,268
employees working
to ensure the quality
of public transport in
the UK. The
organization has
gained 6.6 billion in
revenue in 2019
(Knill and Liefferink,
2014).
employees around
the world.
Mission and vision and business objectives
Points Private Ltd.
Co.
Solesmith
Public Ltd. Co.
Tesco
Stated Owned
Organisation
Network Railway
Voluntary
Organisation
British Red
Cross
Mission The mission of
the organisation
is to provide
the desired
fashionable
The mission of
Tesco is to create
the brand value to
gain the
customer’s
The mission of the
Network Railway
is to ensure a
quality transport
system throughout
The mission of
the organisation
is to ensure well-
being and safety
for the general
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socks and gifts
to the
customers (Knill
and Liefferink,
2014).
loyalty. the UK. people of the UK
and around the
world (Tolba and
Rummel-Bulska,
2018).
Vision The vision of
Solesmith is to
become the
leading gift
organization in
the UK.
The vision of
Tesco is to
expand the
business and
achieve
sustainable long-
term goals along
with increased
market share
(Dietz and Stern,
2012).
The organization
has the vision of a
technologically
advanced railway
transport system
in the UK without
any interruption.
The vision of the
British Red Cross
is to have a world
with human
equality and no
humanitarian
crisis.
Objectives The main
objective of the
organisation is
to accelerate
the profit
margin, achieve
a better market
share along
with increased
customer
loyalty
(Banzhaf,
2012).
The organization
has the goal to
increase the
market share over
the world from
27% to 35% in
the upcoming
year (Blackburn
and Klayman,
2010). The
organisation also
has the objective
to increase its
sales revenue and
net profit by 5%.
The objective of
the organisation is
to ensure a
satisfactory
railway transport
system with safety
(Schneider,
Kollmann and
Reichl, 2010).
This organisation
has the objective
to ensure the
well-being of the
general people
and peace among
the general
people of the UK
and the world
(Pride, Hughes,
and Kapoor,
2010).
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Legal structures of different types of business organizations
Private Ltd. Co.
Solesmith
Public Ltd. Co.
Tesco
Stated Owned
Organisation
Network Railway
Voluntary
Organisation
British Red Cross
The organisation is
a privately owned
organisation and
the orders and
directions are
passed from the
top organizational
chart too low
levels (Maitland,
2014).
Tesco is a public
limited company
owned by the
general shareholders
of the organization.
There are 14
members in the
board of directors of
Tesco among which
one is chairman, one
is chief executive,
one chief financial
officer, ten directors,
and one company
secretary. The
liability of the
shareholders is
limited by their
investment amount.
The main sources of
the capital for the
organisation is the
share capital and
bank loan
Network Railway is
the government’s
state-owned
organization. There
are ten members in the
board of directors of
Network Railway
among which one is
chairman, one is chief
executive, one chief
financial officer, and
seven directors. The
revenue of the
organisation is used as
the sources of capital
and the government of
the UK provides
capital for the
organisation.
The British Red
Cross is a non-profit
voluntary
organization. It has a
12 members trustee
board among which
one is chairman, two
are vice-chairman,
one as treasurer, and
eight members in the
trustee board. The
sources of capital of
the organisation are
from a different
charity shop,
donations from
different
organizations and
reach people, etc.
(Bohlman and
Dundas, 2015).
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(Blackburn and
Klayman, 2010).
Information about the stakeholders of the organizations
Private Ltd. Co.
Solesmith
Public Ltd. Co.
Tesco
Stated Owned
Organisation
Network Railway
Voluntary
Organisation
British Red Cross
The main
stakeholders of the
organisation are
suppliers,
customers,
employees, and
shareholders. The
organization gets
the necessary raw
materials to form
the suppliers to
produce finish
products.
Employees process
these raw materials
and produce socks
and personalized
gifts for the
customers.
Customers
consume the
products and
As Tesco operates a
multinational
business it has
several stakeholders
like suppliers,
employees,
customers,
government, general
people, facilitators,
shareholders, etc.
The organization
gets the necessary
groceries to form the
suppliers to offer for
the customers.
Employees take care
of the groceries and
merchandise to offer
for the customers.
Customers consume
the products and
services from the
The main stakeholders
of the organisation are
general people,
government,
employees, the
environment different
transport
organizations, and
supporting
organizations. This
organization provides
services for general
people. The
government provides
capital and set
regulations for the
organisation on how to
operate the business.
Transport
organizations are
operated by the roles
and regulations of the
British Red Cross
also has several
stakeholders like
other organizations
such as general
people, employees,
volunteers,
government, society,
and community. The
organisation aids in
humanitarian and
inhuman crisis.
Employees of the
organisation help to
provides aids to the
general people. The
volunteers are
working for ensuring
humanitarian for the
general people. The
government of
different countries
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