This report examines the business environment of the Royal Air Force (RAF), a public sector organization in the UK. It begins with an introduction to the business environment, differentiating between internal and external factors, and the various organizational structures. The main body of the report focuses on analyzing the RAF using PESTLE (Political, Economic, Social, Technological, Legal, and Environmental) and SWOT (Strengths, Weaknesses, Opportunities, and Threats) analyses to assess its position and performance. The PESTLE analysis considers factors like government support, economic conditions, societal impact, technological advancements, legal frameworks, and environmental considerations. The SWOT analysis identifies the RAF's strengths (e.g., strong military interest) and weaknesses (e.g., lifestyle factors and fear), as well as opportunities (e.g., air operations) and threats (e.g., competitors). Based on these analyses, the report recommends that the RAF adopt a functional structure to achieve objectives effectively and fulfill stakeholder expectations, including shareholders, employees, and the government, while ensuring high levels of security. The conclusion summarizes the importance of the business environment for company success and survival, emphasizing the relevance of the RAF's stakeholders.