Business Environment Analysis: John Lewis, TLG, and Arcadia Group

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The Business Environment
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Table of Contents
Introduction......................................................................................................................................3
Task 1 (P1, P2, M1, D1)..................................................................................................................4
P1 Describe the type of business, purpose and ownership of two contrasting businesses..............4
P2 Describe the different stakeholders who influence the purpose of two contrasting businesses. 6
M1 Explain the points of view of different stakeholders seeking to influence the aims and..........8
Objectives of two contrasting organizations....................................................................................8
D1 Evaluate the influence different stakeholders exert in one organization.................................11
Task 2 (P3, P4)..............................................................................................................................12
P3 Describe how two businesses are organized............................................................................12
P4 Explain how their style of organization helps them to fulfil their purposes............................13
Task 3 (P5, M2,)............................................................................................................................14
P5 Describe the influence of two contrasting economic environments on business activities
within a selected organization.......................................................................................................14
M2 Compare the challenges to selected business activities within a selected organization, in two
different economic environments..................................................................................................16
Task-4 (P6, M3, D2)......................................................................................................................17
P6, M3 Describe how political, legal and social factors are impacting upon the business activities
of the selected organizations and their stakeholders......................................................................17
D2 Evaluate how future changes in economic political, legal and social factors, may impact on
the strategy of a specified organization.........................................................................................20
Conclusion.....................................................................................................................................21
References......................................................................................................................................22
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Introduction
Business environment is the combination of various factors both internal and external such as the
employees, customers, suppliers, government activities, legal structure, advancements in
technology, economic changes and demand and supply. Business operations are directly or
indirectly affected by these factors. The influence of different stakeholders is very important for
any business organization. In this study, the types, structure, business environment of a range of
organizations have been discussed. This study evaluates how various external environmental
factors such as political, legal and social factor influences the function of the chosen
organizations in their functioning as well as on their stakeholders.
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Task 1 (P1, P2, M1, D1)
For completion of this task two different organizations have been chosen. One organization is
John Lewis PLC, which is an UK based company that operates as retailer of clothing, cosmetics,
accessories, furniture, giftware, home appliances, food materials and financial services. John
Lewis PLC is a private or profit making organization. The chosen organization is a non-profit
organization of UK, named TLG - Transforming lives for good. TLG is a charity organization
that supports struggling families and children (Tlg.org.uk., 2019).
P1 Describe the type of business, purpose and ownership of two contrasting businesses
Type of business:
Sole trader: Sole trader is a self employed person who owns a business and run it by himself or
herself. Some traders are responsible for all the debts of the business.
Partnership: A Partnership business is formed when more than one individual share the
responsibilities of a particular business. All partners have rights on the profits that are made as
well as on the debts of the organizations (Anyadike-Danes, Hart and Du, 2015.).
Private limited organization: Private limited company is a small business which is held
privately. In Private limited organizations, the liability of the owners toward their shares is
limited also the number of shareholders is limited. There is a restriction on the shareholders to
trade the shares publicly.
John Lewis PLC is an employee owned company that means it is a partnership organization. All
the employees of this organization get a share of the annual profit apart from their salary. The
employees of the organization have formed a trust, named as Partners and the company is owned
by this trust (John Lewis & Partners., 2019).
TLG is a private limited company and it is a small business with about 70 staffs. Thus number of
shareholders of the company is also limited and the owners possess limited liability to the shares.
Purpose of the business:
Profit making businesses: These types of businesses are generally run by individuals, partners,
agencies or corporations. Such kind of businesses has the purpose to make profit only.
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Non profit making businesses: These types of businesses generally do not depend on the
government and the sole purpose of the business is dealing with social welfare, human and
animal rights, education, health care and environmental issues (Maier, Meyer, and
Steinbereithner, 2016).
John Lewis PLC is a supermarket chain and its sole purpose is to generate profit for the partners
of the organization. The purpose of the organization is to serve quality products and services to
their customers. The organization makes profit for all its employees who are considered as
owners of the company.
However, TLG is a Christian charity and the purpose of this business is to help children and
families by solving their problems, donating in churches which are similar with the features of
the voluntary non-profit making businesses. In UK, the number of suffering children is
increasing day by day; they are unable to cope up with the changing situations for a range of
uncomfortable reasons. So the organization, TLG has taken initiatives to help such vulnerable
children through churches so that a light of hope can be given to the struggling children.
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P2 Describe the different stakeholders who influence the purpose of two contrasting
businesses
Stakeholders: Stakeholders of a particular organization can be defined by the people, agencies,
groups or organizations that are affected by the outcome of the organization, as they possess
direct or indirect interest on the success of the organization (Palmer and Hartley, 2012).
Stakeholders of any organization can be present inside that organization or outside the
organization. The different stakeholders of any organization are its owners, employees,
customers, suppliers, distributors, trade unions, Communities both local and national and
governments. A brief description of the various stakeholders of the two chosen company is given
in the table below:
Stakeholders John Lewis PLC TLG
Care receivers They are those people or customers
who want various products and
services that are provided by the
company and ranges from young
age group to elderly people.
The helpless and voluntary
children of UK such as those with
disabilities and poor economic
background.
Employees The numbers of employees in this
company is 83,000 and all are
supposed to be the partners of the
organization.
The number of employees is 70.
Both men and women employees
are given equal opportunity.
Owners The organization is owned by the
trust named Partners which is made
by all the employees.
The organization is owned by a
group of people who have equal
rights and responsibilities toward
it.
Suppliers They are individuals, organizations,
farmers, distributors, manufacturers
who supply the raw materials to the
They are individuals,
organizations, farmers, churches,
trusts who donate necessary
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organization. things for usage of the children
and families.
Local and national
communities
Local and national community of
UK is also directly affected by the
operations of this organization
because of its wastage, emissions as
well as the CSR practices.
Local and national communities
are directly benefited by the
operations of charity by getting
help as well as getting advices for
supporting helpless people.
Governments Government of UK receives tax
including sales taxes, property taxes,
federal taxes and income taxes
TLG is exempted from paying
federal taxes, sales taxes,
property taxes and income taxes.
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M1 Explain the points of view of different stakeholders seeking to influence the aims and
Objectives of two contrasting organizations
The viewpoints of various stakeholders on the functioning of the two chosen businesses are
discussed in the below table:
Stakeholders John Lewis PLC TLG
Care receivers Customers wants good quality products,
attention, occasional discounts, trendy
products, products made from sustainable
raw material, good customer support and
improved technology at the stores.
Benefitted people of the
organization wants mental,
physical, economic and
social support and seek the
organization to be involved
with awareness campaigns
that educates people about
the needs of the helpless
people and the necessity of
helping the poor in a
developed country.
Employees The aim of the employees here is the growth
and development of the organization and to
effectively use of their potential. They want
job satisfaction, good compensation,
promotion, increments, healthy working
environment, safety and security.
Employees of the
organization want that their
innovative and creative
ideas for helping the people
who are struggling are
given value by the charity.
They also want support
including payment,
security, health benefits,
holidays and sick leaves.
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Owners Owners or the partners want the
organization to become more profitable by
expansion of their business to new emerging
markets as well as seek implementation of
policies to outnumber competitors (Dahles
and Susilowati, 2015).
Owners want the
organization to become
more helpful and
responsible to the
community so that the
objectives of the company
is achieved..
Suppliers Suppliers of the company want best prices
for the materials they supply and seek long
term interest of the company by fully
depending on them for particular products.
Suppliers want the
company to make a strong
bonding with them and
fulfilment of their
requirements on time.
Local and
national
communities
Local communities want the organization to
run its business quietly and taking account
of the security and safety as well as the
benefits of the local people (Camillus,
2016). National community wants the
business to perform in an environment
friendly manner so that the public can be
benefitted.
Local and national
community want the
organization to look into
issues other than the
expertise of the company
such as helping in
reduction of waste material
and taking care of the street
dogs and other helpless
animals.
Governments Government ensures all the taxes are paid
by the company on time and the laws and
regulations of the country are also followed
by them (Aithal, Shailashree and Kumar,
2015.). The organization is given the
responsibility to help reduce the
unemployment of the country.
Government wants the
company to make
commitment to all its duties
and complete them in due
time. The organization is
also asked to expand their
charitable hand to the other
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portion of the country.
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D1 Evaluate the influence different stakeholders exert in one organization
The chosen organization John Lewis PLC is impacted by the different needs and expectations of
its stakeholders. As the customers want products that are of high quality and follows the social
trend, the organization has invested a huge amount on the R&D so that it can fulfil the needs of
its customers (John Lewis & Partners., 2019). To ensure that all the employees are motivated at
work the organization is influenced to take up certain policies so that the managers are more
active in communicating with the employees and solving out their problems. As its employees or
owners want the organization to grow, it have taken initiatives to train its employee through
training and development program for making them efficient in order to increase the productivity
of the business that helps it to grow. To fulfil the demands of the suppliers, the organization is
also influenced to make a strong bonding with them via communication, programs and timely
payment. The influence of the local and national communities forces the organization to invest in
CSR approaches such as making donation, educating poor children, reducing emissions and
wastage, performing in recycling procedures (Abdullahi and Zainol, 2016). The major influence
of the government is the pressure to reduce the unemployment which results in recruitment of
more people in different stores of the company.
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Task 2 (P3, P4)
P3 Describe how two businesses are organized
Organization of John Lewis PLC
Organizational structure: A demographic organizational structure is followed by John Lewis
PLC. The organization is departmentalized based on the ranges of products and functions of the
employees.
Human resource management: The HRM performs by recruiting and selecting people for the
company, offering proper training and development program to new and old employees,
managing diversity, managing compensation, reward, safety, motivational level of all the
employees (Floyd, 2004).
Finance department: Employees of finance department functions by managing the overall
budget of the organization and track record of the debts and investments made in different fields.
Marketing department: The marketing department of John Lewis PLC functions by promoting
its products through advertisement, emails, websites and campaigns.
R&D: The R&D is responsible to produce new trendy designs for clothes, cosmetics home
appliances and for making improvements in the quality of all the products.
Customer service: Customer service executives are responsible for solving the queries and issues
of all the customers quickly.
Organization of TLG
Organizational structure: TLG also follows a demographic organizational structure and the
staffs are divided into groups. The leader communicates with the team members regularly for
motivating them toward work (Tlg.org.uk., 2019).
Human resource development: The HRM of TLG performs by recruiting active people who are
committed to work for the community.
Finance department: Finance department helps in maintaining the budget by calculation of
money spent on various fields.
Marketing: This is done by some employees of TLG for collecting donation and fund and other
supportive materials like clothes, foods and books for the helpless children.
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