Business and Business Environment Report - Apr 2017 Intake

This report provides a comprehensive analysis of the business environment, focusing on ABC Limited, a consultancy firm. It begins by exploring different organizational types, their objectives, scope, and the relationship between various organizational functions and their structures. The report then delves into a PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors impacting ABC Limited. Following this, a SWOT analysis is conducted to identify the company's strengths, weaknesses, opportunities, and threats. Finally, the report explains the interrelation between the identified strengths and weaknesses with the external macro factors. The analysis aims to provide insights into the company's operations and strategies within its dynamic business environment, considering both internal and external influences.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different organisation types and their objectives..............................................................1
P2 Scope and size of different organisation...........................................................................2
P3 Relationship between different organisational functions and organisation structured.....4
TASK 2............................................................................................................................................6
P4 Pestle analysis of ABC limited..........................................................................................6
P5 SWOT analysis of ABC limited........................................................................................8
P6 Explain how strengths and weaknesses interrelate with external macro factors..............9
CONCLUSION..............................................................................................................................10

INTRODUCTION
Business environment consist of all those factors that has direct or indirect impact on the
function of the organisation. It can be classified into internal or external sections and each has
more or less impact on the profitability. All the enterprise operates in the situations which keeps
on fluctuating and therefore management has to bring change in themselves as all the factors are
not under the control of business (Efendic, Pugh and Adnett, 2011). Micro elements are those
which are present within the boundaries of organisation and can be modified as per the
requirement of the business but there are other factors like that of macro environment which are
present outside the premises and are not under the control of any individual. ABC limited is a
consultancy firm which is known for its effective services and quality of their work. Following
report is prepared in order to understand the variety of organisation and how they operate as each
differs from one another to a great extent. Minutes of each are given which shows the basis of
their difference.
TASK 1
P1 Different organisation types and their objectives
Covered in PPT
P2 Scope and size of different organisation
Covered in PPT
P3 Relationship between different organisational functions and organisation structured
In order to provide customers with final services management of cited company needs to
perform various functions. As every output is a result of efforts taken by different departments
which are sales, finance, marketing production etc. In order to achieve the objectives and goals
of organisation it has to be ensured that each managerial head perform their duty with maximum
care as any carelessness shown by them may result into loss to company. Although different task
is performed by each section there is great interdependency in them. No department can continue
its task effectively without the assistance of other. For instance if marketing section has to carry
out its activities it will need to coordinate with finance department too as budgeting needs to be
done so that accordingly plans can be made (Evetts, 2011). Given below is the organisation chart
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of cited company which shows how the whole enterprise is divided into different units in order to
carry out its operations.
Illustration 1: organisation chart of ABC limited
Marketing – It is a very important section for the cited company as through knowledge of
products and services offered by ABC limited is given to its potential customers. This
department ensures that effective medium is utilised so that desired results can be achieved.
Through this process demand of market is also analysed which further helps in providing what
actually is required by customers.
Sales and support – In order to generate profit this department works towards maintaining the
supply of required quantity so that continuity is maintained in operations. It has direct connection
with the production department as demand is made by the sales section to the unit which is
producing the commodity and accordingly this chain keeps on moving. If any modification is
required in the designing or other feature than same is communicated to the production unit so
that they can make changes accordingly (Gessen, 2011).
Product improvement – It is that section which perform the duty of producing quality outputs
so that customer satisfaction can be ensured. Also as clients like changes and innovative
offerings efforts are taken by the concern unit to provide best services to clients.
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Operations – It is concern with all those sections which are engage in different activities like
finance, human resource, information technology etc. As no work can be carried out without
employees recruitment and selection of work force needs to be done for which department of
human resource is responsible. Budgeting is done by the finance section for various divisions
according tp their nature of work and accordingly estimating the finance requirements of each.
Also as data is recorded and analysed using distinct software IT division assist different users
about how those programmes can be utilised in companies prospectus.
Above text shows how different operations are performed by distinct department and also
their inter relation is discussed. It has its own advantages and disadvantages. Through having
good coordination it becomes easy to achieve the objectives of company and also the use of
resources can be made done with maximum effectiveness which increases the productivity. Same
concept has a negative effect also as when whole work is sub divided into various sections than
the process of decision making becomes slow and high interdependency reduces the ability of an
individual to take various decisions (Pomeranz, 2010).
TASK 2
P4 Pestle analysis of ABC limited
It is important for every company to understand the outside factors which effect a
company and its operational strategies. This analytic thinking of these facts is called PESTLE
analysis. It includes descriptive enquiry of political, economical, social, technological, legal and
environmental effects on an organisation. It leaves a negative as well as positive impact on any
entity and its working process (Suttle, 2011). An organisation can identify its problem areas and
after that take reasonable steps to remove these issues. Sometimes it becomes hard for a
company to pay attention towards its operations because of the detailed analysis of these factors.
This procedure is time consuming and consists of costs.
Political – It includes policies made by government, funds and grants provide by authorities etc.
rules and plans of actions are made from time to time and it is responsibility of any organisation
to follow all these policies (Thornhill and Dyer, 2012). These factors effect business
environment. These are laws and legislations which a company needs to comply with. It also
includes protection of intellectual properties such as trademarks, copyrights, patents etc. If any
rules are made regarding consultancy services then ABC consultants has to comply with all those
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legislations. ABC consultants provides recruitment services. Government make new regulations
in context of these services.
Economical – These factors consists of changes in tax rates, wages rates, inflation rates and FDI
policies. GDP and economic growth rates always changes after some period of time that leaves
impacts on economy of an entity. If interest rates are lower at that time a company can plan
expansion because it is easy to raise loan and funds from market at low cost. It includes trade
restrictions such as tariff and quotas (Volkov, 2010). There are always changes in stock market
trends and market prices. They effect an entity's economical surroundings.
Social – It includes societal issues such as population growth and life expectancy with age
distribution. It effects need of customers that what they want from an organisation. Ethical and
regional factors are some matters which also give impacts on a business. Generally people do not
give priorities to consultancy services as trending now everyone is already have sufficient
knowledge regarding their business and other issues.
Technological – It changes from time to time. In this era the whole world has become
completely technical (Moutinho, 2011). Most of services are being automatic now a days. Every
work is being done online. ABC consultants should also make some alterations in their
techniques such as providing services online over the internet. By doing this customers can
access market easily from anywhere and can get information regarding their subject matter at any
time.
Legal – It relates to acts already passed in parliament such as consumer act. According to this act
consumer should be satisfied and company should not follow any unfair trade practices. Those
can be harmful for users of services or commodities. These are the legal effects that controls the
operations of any business in any country. Every territory has its own laws and legislation and
people residing there have to follow all these rules. If they are not able to comply with legal acts
then they are liable for fines and penalties. Hence it is one of the most important factors that
gives a great impact on any business organisation (Palo and Tähtinen, 2011).
Environmental – A company should follow its corporate social responsibilities. Operations of
company should not be of this type that they adversely effect surroundings. Every organisation
should maintain its atmosphere. environmental factors are not only limited to geographical
situation and climate etc. this is more than that. ABC consultants also should not have such
operations that effects nearby surroundings and it should maintain a healthy work environment.
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P5 SWOT analysis of ABC limited
SWOT analysis simply means to know your strength and weaknesses and then discover
the opportunities and eliminate threats. By doing this any organisation can know that where it
can perform well and what are areas where it faces issues and problems for conducting its
operations (Pikka, Iskanius and Page, 201). When a company comes to know its strengths it finds
opportunities to explore its uniqueness in comparison to other companies. After having
knowledge about its weaknesses, it finds threats and take steps to eliminate them. To compete
successfully in market it is necessary to compare your organisation with another organisation and
try to do better.
Strength and weaknesses are internal factors while threats and opportunities are external.
This technique is best for make planning, detect problems, resolve them and make decisions
regarding business. It helps to know growth potential of any business and making strategies
(Pingali and Roger, 2012).
Strengths – This analysis is done to know that why a company is better than the other. What are
the factors which differentiate an organisation. It recognises the characteristics of business and
than better ways to utilise them to get best results. In a consultancy service provider company,
knowledge of professional consultants, their qualification, understanding, organisational skills
and capabilities can be particular areas to find out the strengths of a firm. Main elements are
those which makes entity better than other entities in market. There is less competition in
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Illustration 2: Factors of pestle analysis

consultancy services so it can be a strength of a firm. It is necessary for business to identify that
what resources can it use more cost efficiently than other enterprises. There are high barriers in
entry for new consultancy firms. Consultants also need high potential and qualification to assist
their customers. Company can sell its services online also so this is a better way to establish a
very big market for survival of company (Reed and et. Al ., 2013).
Weaknesses – These are areas where a company can improve itself. There are many factors
which reduces sales of services. Competitors can immediately offer same services to the
customers and it is a main weakness of consultancy firms. Lack in knowledge of implementing
new technologies in business can be a great hurdle. There may be any problem to communicate
exact matter by customer to the consultants because of that they will not be able to provide right
solutions. Many financial issues like access to capital can be a great weakness for new entrants in
market.
Opportunities – Demographic, political, environment and socio economical are some areas
where a company can develop itself. If organisation have good qualified consultants and a very
large professional network then enterprise can tap market and increase its client base.
Availability of funds for capital, evaluate profits in relation to rising market and new
technologies can help to explore opportunities for consultancy services. By paying attention to
changes in government policies related to consultancy services, it can be realised that how it can
be beneficial for organisation. After looking at strengths of an entity, new opportunities can be
explored. Client's needs should be satisfied so that they can trust organisation and it will be
helpful to achieve long term goals (Trkman, 2010).
Threats – All those areas who have offered opportunities can also offer threats. For example if
changes in government policies and rules are not in favour of organisation then it will be a very
big problem for an entity. All weaknesses invite threats so it is important to find weaknesses and
then overcome them. All threats should be eliminates as soon as possible so that company can
operate its functions very well and establish its reputation in market. SWOT analysis helps in
analysing all strength and weaknesses and then explore the opportunities and remove threats.
P6 Explain how strengths and weaknesses interrelate with external macro factors
There is a direct relation between the internal and external macro factors as any change in
the outside surroundings has their direct impact on the operations of the given enterprise.
Therefore, it is important that surrounding are examined so that according enterprise can take
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benefit of the opportunity that may help in expansion. It can be understood more by analysing
the effect of change in political economic technology or legal factors on the internal business
section. If there is any change in the existing technology takes place than it will have a direct
impact on the companies strength (Wheelen and Hunger, 2011). If cited company is good at
marketing its products to the consumer and than with the change in the method management will
also need to bring change in its existing practices. If the alteration is not adopted on time than
this will hamper the profitability of cited business entity. It will add total cost also which will
further be added to the cost of production. After this if it is found that there is a change in the
existing social culture like people stop using the series of consultancy and switch to some other
option than this may hamper the business even if the cited company take much efforts towards
improving their quality as they will remain unused.
Apart from these change in the existing government authorities also has major impact on
the working as modifications need to be done than in order to carry out operations freely in the
market. All the members which are responsible for formulation of policies or strategies will have
to take care of the current conditions so that they do not cross any legal obligations and perform
their duties within the limits that it remains free from any legal action from the government
(Zott, Amit and Massa, 2011). There are many other factors also which needs to be considered
like the code of conduct of ABC limited should be in such a frame that it does not do any harm
to the surroundings like damage to agriculture, marine animals or any other natural resources.
Micro factors like the various stakeholders, companies sellers and customers has major impact
on the internal environment of business as their change in attitude or preferences can effect the
total business output to a great extent. Therefore this shows how even if the company is doing
good to maintain its internal surroundings healthier and effective it can not be kept ineffective
from the changes that take place outside the business boundaries.
CONCLUSION
From above report it can be concluded that different organisation has their own
objectives and goals. There is variety in sectors in which investment is done by each as their
expectations are different. Public sector companies operates with a prime motive of bringing
development in the society so that those section which needs to be raised can be brought equal to
others and can enjoy same benefits. Different from this is the private sector companies. They
only operate to generate profit and develop their own standards. Selection of product and
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services is done after analysing profitability of each. Importance of conducting the pestle and
swot analysis can also be understand as it shows how the information gathered through this
system helps management in taking the right decisions. Given study shows how through this
process of conducting marking study ABC consultants take various actions according to
situation. It is also discussed that how different activities are performed by various department of
cited company which is presented through the organisation chart. Each department has their own
duties and responsibility and head of each function are accountable to the top management for
their work done.
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REFERENCES
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