Business Environment Analysis Report - HND Business, Term 1

This report provides a detailed analysis of the business environment, focusing on the case study of David and Co. Ltd., a medium-sized enterprise in the food services industry. The report begins by exploring different types of organizations, their purposes, and legal structures, followed by an analysis of various organizational structures and the roles of different organizational functions such as operations, marketing, research and development, and sales. The report then delves into the impact of the macro environment on the firm, utilizing a PESTLE analysis to examine political, economic, socio-cultural, technological, environmental, and legal factors. Furthermore, the report includes an internal and external analysis of David and Co. using a SWOT analysis to identify the firm's strengths, weaknesses, opportunities, and threats. The interrelationship between the business's strengths and weaknesses and external factors is also discussed, providing a comprehensive overview of the business environment's influence on the firm's operations and strategic planning. The report aims to provide a thorough understanding of the factors influencing the success of businesses in dynamic markets, particularly in the context of Brexit and market instability.

Business
environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different type of organisation with their purpose and legal structure. .................................1
P2 Analysing different organisational structure. ........................................................................1
P3 Role of organisational function in achieving the goal and objective of the firm ..................1
TASK 2............................................................................................................................................3
P4 Impact of the Macro environment on the working of the firm. ............................................3
P5 Internal and external analysis of David and co. ....................................................................6
P6 Strength and weakness of business and their interrelationship with external factors............7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
In order to find success in the business world its necessary of organisation to have
better understanding of its business environment. Business environment in simple terms can be
described as all those factor that have its impact on the working of the firm. It includes both
internal factors such as employees, shareholders, suppliers etc., or external factors such as
government and business regulation. Its necessary of the firm to pay attention to this factor as it
have major impact on the performance of the firm. The current report will discuss the
importance of the understanding of business environment especially after Brexit movement and
leading instability in the market. In report A David and co Ltd. Has been taken into account the
firm is medium size enterprise working in food services The firm is known for its full range of
fresh fruit, vegetables, exotic produce etc. The will talk different type of organisation that are the
rivals of the cited firm along with this different macro factors will also be analysed along with
their interrelationship with the strength and weaknesses of the firm.
TASK 1
P1 Different type of organisation with their purpose and legal structure.
Enclosed in ppt
P2 Analysing different organisational structure.
Enclosed in PPT
P3 Role of organisational function in achieving the goal and objective of the firm
David and co Ltd. Has great potential of success in the market. In order to carry out its
various function in efficient manner each and every department of the firm has to work in
harmonious way. The organisational structure of the firm is linked with the various function of
the firm. Some of this function are mentioned below
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Illustration 1: Organisation structure
(Source: Types of organisational structure. 2015)
 Operation department: Operation department is responsible for the production of the
goods in the firm. It makes sure that whole process from the buying of the raw material
till the final product are done in smoother way. Operation management is the one who is
responsible for the quality of product (Drucker, 2017). It plays major role in increasing
the productivity of the firm by reducing the wastage at the time of production. It also
helps firm in gaining the customer satisfaction by providing them with quality services.
This department work closely with marketing department. Research and devlopment
department provide their valuable comments that help operational department in
increasing the quality of product. This help them in achieving the organisational
objective of customer satisfaction and quality product.
 Marketing: It's an important function of the firm. Marketing help firm in attracting the
attention of the customer so that it can achieve it goals and objectives. Marketing
department of the firm is responsible for many things such as advertisement, promotion
etc. Which help in increasing the sales of the firm. It also works closely with research
and sales department and provide them with its valuable input so that improvement can
be bought in the firm. This department work closely with research and development
department they provide the marketing department with necessary data on the latest trnd
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that help them in coming up with best marketing strategy. With the help of this the firm
is able to achieve their goal of profit maximization.
 Research and development: This department is responsible for the development of the
product. This department is responsible to conduct a proper market research that ncan
help firm in understanding the need and demand of the people so that David and Co. can
improve its existence product. This help firm in keeping with the trends and also help
them in keeping the interest of customer. It also plays major role in increasing the sales
of the firm along with customer satisfaction. This department as we have discussed
before work closely with marketing and operational department and provide necessary
data so that they could produce quality product that can satisfy the need of people.
 Sales department: Sales department play important role in cultivating good relationship
with the customers. The main objective of this function is to achieve profit by providing
their customer with best services. Its responsible of contacting potential customer, and
managing customer relationship of the firm (Rong, Shi and Yu, 2013S). Other than this it
also responsible for the distribution process of the firm. This department work closely
with marketing department. Marketing department provide the sales department. with the
data on customer purchasing habit that help them in dealing with difficult customer and
providing them with great customer service. Many organisations have separate
department of customer service and distribution but since the David and Co. is medium
size business it doesn't have much department and sales department is responsible for the
above mention function.
As we have discussed before David and Co is medium size firm and doesn't have many
layers in its structure many of the function are interlinked and carrying out various role. For
instance the operation department is responsible for its own role but also the role of production
department. Same way Sales department is also responsible to carry put various function of the
firm that help the firm in achieving its goals and objectives (Van Wormer and Besthorn, 2017).
In order to succeeds its necessary of each department to work in harmonious way so that they
can contribute in the success of the firm.
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TASK 2
P4 Impact of the Macro environment on the working of the firm.
Macro environment is consisted of all those external factors that have its impact on the
working of the firm. Pestle analysis is one of the best way through which firm can analyse this
factors and come with better strategy so that they can keep working in efficient manner.
Illustration 2: Macro environmental factor
(Source: Macro environmental factor. 2015)
Political factors
Political factor have major impact on the working of the firm. Its necessary of David and
Co. to attention to this so that they can work efficiently. In current time the UK of government is
realizing the importance of the small and medium size enterprise, and paying it more attention
so that this organisation can grow (chaltegger and Wagner, 2017). This will be great opportunity
for the cited firm to grow and expand their business in other part of the firm. The only negative
pint it has that David and Co, need to pay special attention to the instability in political
environment after Brexit movement and should come up with better strategy so that tehir overall
enhancement in the performance can be brought.
Economic factors:
Economic factor is one of the important macro economic factor that has it impacts on the
performance of the firm. The strong economy of the firm will work in the favour of the firm.
With increase in people spending they will be more willing to spend few extra on the food items.
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This will enhance the revenue earned by the firm. Other than this any change in the economy can
also have negative impact on the working of the firm for instance increase in the labour cost will
increase the operational cost of the firm creating pressure on finance department. With the David
&Co plan of expansion they are requires hiring more employees. With this change the company
operation cost will increase which is not good for the firm.
Socio cultural factor:
Socio culture put more focus on the demographic and customer behaviour. This both
factor have major impact on the working of the firm. In current time people are becoming more
health conscious and preferring fresh and healthy foods. This will work in the favour of the firm
as it will be able to provide their services to large number of the people (Xavier, Bandeira-de-
Mello and Marcon, 2014). It can also have adverse effect with their plan of expansion firm also
has to pay attention to the demographic change, people have different culture and preference
according to place it will be better of firm to understand the behaviour and culture of the place so
that it can carry out its work efficiently.
Technological factor:
Implementing new technology in their working will work in the favour of the firm.
Technology will help firm in bringing efficiency in their working. It will also firm in gaining
competitive advantage. Continuous changing technology will help David and Co in improving
the quality of the products and they will be able to provide their product with better services.
(Verbeke, 2013). There are several technologies that firm can implement in their working such
as electronic point of sales, electronic fund transfer machine etc. This type of technologies will
help in bringing efficiency in distribution and production activity of the firm. The only adverse
effect it has that it increase the cost of the business as its quite expensive to buy this technology
and implement them in working.
Environmental Factor
In current time government is focusing more and more on environment and has regulated
many laws that help in keeping environment protected. Its necessary of the firm to abide by that
rule. The firm can focus on more environmental friendly product and can attract more customer
toward the firm (Nimwegen, and et al., 2016). It will also help them in enhancing their image in
the eye of society. David and Co is small business and implementing CSR in the firm will
increase financial burden on the firm.
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Legal factors
Government is continuously making changes in it various law its necessary of the firm to
pay attention to this so that it can stay away from any legal hassle. David and co is working in
the food industry and it is essential of the firm to pay attention to the various code of practices
implemented by food commission. For instance in current time the commission has banned the
organisation from changing the price of the product without any prior notice. If firm doesn't
abide by these rules than it can lead to legal issue which is not good for the image of the firm.
Through the PESTLE its clear that this factor have major impact on the working of the
firm and its necessary of them to pay attention to this so that they can work in smoother manner.
P5 Internal and external analysis of David and co.
With the help of SWOT analysis firm can identify its strength and weaknesses, which
can help firm in strengthening their strong point and eliminating their weaknesses that can help
them in enhancing their performance. Swot analysis also provide them with external analysis and
provide them with various opportunity that can help firm in its development and also with the
threat that can hindrance the growth of entity.
Internal Analysis
Strength
Government support: This firm play important
role in strengthening the economy of the nation
. So the government is paying more attention
on the development of the firm which will be
in the benefit of David and Co.
Good Financial condition: The firm have
good annual turnover which will help firm in
expanding their business (Hamilton and
Webster, 2015).
Customer satisfaction: The firm has good
reputation in the market, which will enhance
the brand image of the firm
Weaknesses
Lack of technology: The firm is small business
and doesn't use much technology in their daily
working.
Lack of experience: The firm has work only at
small area. Lack of experience can be major
risk that will come with the expansion of the
business.
Lack of investment: In order to expand their
business the firm require lot of finance. Which
is not possible with the lacking interest of
investors.
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Good Networking: The firm has great
partnership with various restaurants, caterers,
hospitals, colleges etc., this will work in the
benefit of the firm.
External Analysis
Opportunities
Health awareness: With increasing awareness
among people regarding their health, the cited
firm has more chance of the success.
Global market: The firm has great potential of
expanding their business not only in local
market but also at international level (Elearn.,
2013).
Online operation and digital marketing, with
the help of social media platform it can create
awareness among customers.
Threat
High competition: In recent time the firm is
facing high competition that can affect the
profitability of the firm.
Unstable politics: The instability in the
environment and changing legal laws can also
have its impact on the working of the firm
(Faul., 2014).
Operation cost: Company should focus on
lowering their operational cost looking at the
economic recession nation suffered from.
Effect decision making
The strength and weaknesses play important role in the decision making. For instance the
firm is planning to expand their business in other part of nation which require lot of budget.
Even though firm has good financial condition lack of investor make it difficult for them to carry
out their plane (Chang, 2016). Same way instability in political environment is also not good for
the expansion plan
P6 Strength and weakness of business and their interrelationship with external factors
From the above done SWOT analysis we have to come to know about the various
strength and weaknesses of the firm. The strength and weaknesses of the firm is interlinked with
external factors and have its impact on the working of the firm. Internal and external both have
its impact on the firm.
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The political environment as we studied is quite unstable after the Brexit movement and
many of the company are suffering from this. One of the major reason why firm does not have
many investors even after its wonderful performance is related to this external factor (Gopal.,
2012). The investor is unsure whether the firm will succeed or not in this environment and are
reluctant to invest in them. It necessary of the firm to understand this factor and come up with
better strategy that can help
The socio political factors that studied the behaviour of the people has opened the gate of
many opportunities for A David & Co, as people are becoming more health conscious and
preferring fresh fruits which has become on of the greatest strength of the firm and has also
increased the sales of the firm (Dima, Grabara and Modrak, 2014).
Legal factor also play major role and are interlinked with the strength of the firm. With
low trade barriers and change in the laws and regulation, David and Co have great chance of the
success. It will help in the development of the firm and will also aid the firm in its plan of further
expansion (Belás and et. al., 2015).
With changing labour cost and unwanted recession act, the situation has become more
threatening to the firm. It has lead to increase in the operational cost of the firm which is not
good (Cai and Yang, 2014). Increasing in the operational cost will increase the financial burden
on the firm which is not good even though firm has good financial condition.
From above point it can be said that external factor are interlinked with the strength and
weaknesses of the firm and have great influence on the working of the firm. Its necessary of the
firm to pay attention to this so that they can come up with better strategy that can help them in
finding stability in market.
CONCLUSION
From above report it can be concluded that there are various type of firm that not only
differ in size but also in their values and objectives. Four types of organisation are discussed in
the detail. Other than this the difference in each type of entity is also mentioned above. Other
than this it can also be said that both macro and micro factor have major impact on the working
of the firm. Through Pestle analysis David and Co come to know about various positive and
negative impact of this factor. Swot analyse has also been conducted along with its
interrelationship with external environment are analysed.
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REFERENCES
Books and Journals
Belás, J. and et. al., 2015. The business environment of small and medium-sized enterprises in
selected regions of the Czech Republic and Slovakia. E+ M Ekonomie a Management.
(1). pp.95.
Cai, S. and Yang, Z., 2014. On the relationship between business environment and competitive
priorities: The role of performance frontiers. International Journal of Production
Economics. 151. pp.131-145.
Chang, J. F., 2016. Business process management systems: strategy and implementation. CRC
Press.
Dima, I. C., Grabara, J. and Modrak, V., 2014. Sustainable logistics and business
competitiveness. International Letters of Social and Humanistic Sciences. 15 (2).
pp.148-156.
Drucker, P. F., 2017. The Theory of the Business (Harvard Business Review Classics). Harvard
Business Press.
Elearn., 2013. Business Environment. Routledge
Faul., 2014. Business Environment:Test & Cases 2E. Tata McGraw-Hill Education.
Gopal., 2012. Business Environment 2E. Tata McGraw-Hill Education.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Nimwegen, G. and et al., 2016. A stakeholder perspective on mission statements: an
international empirical study. International Journal of Organizational Analysis. 1(2).
pp.61 – 82
Rong, K., Shi, Y. and Yu, J., 2013. Nurturing business ecosystems to deal with industry
uncertainties. Industrial management & data systems. 113(3). pp.385-402.
Schaltegger, S. and Wagner, M., 2017. Managing the business case for sustainability: The
integration of social, environmental and economic performance. Routledge.
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Van Wormer, K. and Besthorn, F. H., 2017. Human behavior and the social environment, macro
level: Groups, communities, and organizations. Oxford University Press.
Verbeke, A., 2013. International business strategy. Cambridge University Press.
Xavier, W. G., Bandeira-de-Mello, R. and Marcon, R., 2014. Institutional environment and
Business Groups' resilience in Brazil. Journal of Business Research. 67(5). pp.900-907.
Online
Jacob Morgan. 2015. Types of organisational structure [Online]. Available
Through :<https://www.forbes.com/sites/jacobmorgan/2015/07/13/the-5-types-of-
organizational-structures-part-3-flat-organizations/#29fff5106caa>.
Macro environmental factor. 2015. [Online]. Available Through :
<http://www.assignmentpoint.com/business/international-business/macro-
environmental-factor.html>
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