Business Environment Report: Sector Analysis and Structure

This report provides a comprehensive analysis of the business environment, examining different types of organizations including public, private, and voluntary sectors, as well as their legal structures. It explores the link between organizational structure, size, scope, and business objectives, while also delving into the complexities of various business structures. The report analyzes the relationship between organizational functions, objectives, and structure, and discusses the advantages and disadvantages of their interrelationships. Furthermore, it assesses the positive and negative impacts of the macro environment using the PESTLE model, and examines the internal and external factors affecting Primark through SWOT/TOWS analysis. The report concludes by highlighting the interconnectedness of strengths, weaknesses, and external macro factors.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Different types and purposes of organisations; public, private and voluntary sectors and
legal structures............................................................................................................................3
M 1 The structure, size and scope of different organisations link to the business objectives
and product and services............................................................................................................5
D 1 Critical analysis of the complexities of different types of business structures.................5
P 2 Size and scope of a range of different types of organisations............................................5
TASK 2............................................................................................................................................7
P 3 The relationship between different organisational functions and objectives and
structure.......................................................................................................................................7
M2 Advantages and disadvantages of interrelationships between organisational functions. 8
TASK 3............................................................................................................................................8
P 4 Positive and negative impacts the macro environment has upon business operations......8
M 3 PESTLE model to support a detailed analysis of the macro environment......................9
D 2 Macro and micro factors impact on business objectives and decision-making...............10
TASK 4..........................................................................................................................................10
P 5 Internal and external analysis of Primark.........................................................................10
M 4 SWOT/TOWS analysis influence decision-making........................................................11
P 6 Strengths and weaknesses interrelate with external macro factors..................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business environment play a vital in the market place all over the world. There are many
types of of business which operate their business in different ways .In the following report many
different business organisation like public, private and voluntary sectors and legal structures
companies. All these organisation have their own function to run the business. Purposes of these
different companies are different from each other (Björklund,2011). Size of the companies and
the scope are also differentiated. In the following report the public and private companies will be
explained in details in term of their organisational structure and features. Function of the
company affects the objective and goals of the business organisation.
The macro environment of the company which includes the political, social, legal and
competitor situation which leads to the positive and negative impact on the business operations.
Sainsbury's supermarket limited is a leading public sector company of united kingdom. It is an
important organisation in the chain of supermarket. It captures almost 17 percent of market
share. In the following report internal and external analysis will be discussed of the private sector
company so that its strength and weakness can be identified. There is a interrelated connection
between strength and weakness of the company with external environment factor.
TASK 1
P1 Different types and purposes of organisations; public, private and voluntary sectors and legal
structures
Three are many different types of business organisations. Which are different from each
other in term of functions, purposes and structure of the company. These are public, privates,
voluntary and the legal as following.
1. Public sector business organisation-This type of organisation is owned by government of
the country of a particular state (Botha,Kourie and Snyman,2014). In united kingdom,
there is a huge public sector business organisation which is Sainsbury's. These public
companies are run by the fund raised by tax of people which is used for the public in the
end. The purpose of the public sector company is to provide essential public services.
The sources are utilised for the benefit of the community in the public unit. For example,
the public sector company Sainsbury's makes effort to provide product and goods at

reasonable price so that normal people can spend less money on the daily need things.
These business are used for betterment of the society and its people.
2. Privates sector business organisation-Private sector organisation are companies which are
owned and run by private individual. There can be few types of privates sector
organisation like sole traders,partisanships and franchises. Private organisation have the
purpose to generate profit,increase the market share in the particular industry,growth of
the business at maximum and maximum sales of their product (Chavis,Klapper and
Love,2011). They do not focus on the welfare of the society. These type of organisation
get the finance through personal savings,bank loans,government grants,trade credit and
sell shares. For example , Primark is one of the leading brand in the retail industry of
united kingdom. This private company operated its business with the purpose of profit
maximisation by maximum sales. It has the objective top capture a lion share in retail
sector of market place.
3. Voluntary sectors-This type of business organisation is not owned by a particular
individual or government. There is one or more than one persons who are responsible to
ensure the set targets and for budget to set the business in the long term. These type of
business organisation have their own purposes like to helps particular person or group.
These type of companies try to use break even method for spending. They spend the
money which is equal to their funds so that no difficulty in survival in the future.
4. Legal structure-Theses are the organisations which are made to manage the code of
conduct in the corporate environment. These can be government bodies or other type of
organisations (Chow Erving and Ying, 2012). For example, at international level there
are few big organisation which controls the business operation of various companies so
that smooth functioning can be kept in the business market. Thus there are many
different business organisation which have their own specific purposes, structure and
resource to run the business in the long term.
M 1 The structure, size and scope of different organisations link to the business objectives
and product and services
 Public business organisation- These type of business organisation have a huge structure
in which government has maximum shares (Commander and Svejnar,2011). There are no

control in hand of one person instead , government has the control. Size of the company
dependent upon its objectives and the products are made according to the purposes.
 Private business organisation-In the private business organisation size can be small or
large as it relates to the goals of the business. If the objective of the company is to
Dominate the market then it would make a unique and exclusive product for the
customer.
 Voluntary business organisation-These companies are small in size as it has the purpose
of small time period. Structure of these company is not fixed.
D 1 Critical analysis of the complexities of different types of business structures
The business structure of the organisation differ from each other. There are some
complexity ion the structure which leads to the problem in the future. In the public sector
business organisation like Sainsbury's , there is no controlled structure and role and
responsibilities to the people of the company (Craig and Campbell,2012) .Because there are
individual as well as government owners who can have conflict on some decisions. The function
of private and public sector organisation are interrelated .For example primark being as private
sector company has a controlled by individual person who has the whole control .It leads to the
organised business in the long term. If the public sector companies would also focus on the
profit maximisation then there will be no balance in the community as there will be no welfare
of society only economic rise in the market which is not healthy.
P 2 Size and scope of a range of different types of organisations
Size ans cope of a range of public, private, voluntary and legal organisation can be
explained as following.
 Public sector organisation-These companies dominate the market as they are large in
the size. The scope of these companies to provide better infrastructure to the
community so that they can get better standard of life. They try to keep a healthy
business environment for the people of the society.
 Private sector organisation-These business organisation run their business by the
individual support not by government (Fernando,2011). These have the scope to
increase the economy of the local as well as national level. For example Primark

being a private sector company, is a large scale company. It is a private sector
company. It has the huge variety of the daily needed product like grocery .This
organisation has a large share of the retail market in the united kingdom.
 Voluntary sectors- These organisation are can be small or large in size. They have
scope of any particular purpose like profit, or social welfare. For example many NGO
are the organisation which have voluntary employees.
 Legal structure-These structures can be large in size as they are controlled by
government authorities. These have then scope to keep equity in business
organisation. They try to resolve any conflict in market.
Size of the business organisation plays a vital role in the company .There are many
different size of the public as well as private sector companies (Granger and Schroeder,2013).
Size of the company depends upon the scope of the company. For example of public sector
organisation,there are mostly large size organisation. In the different organisation , there can be
three types of size like small, medium and large. In small size public sector organisation, scope
of the business is small according to the size. There are less than 50 employees who run the the
business activities. Another medium size public sector has the employees less than 500.
It has the purpose to make efforts for the welfare of public. Third type of the company in
public sector is large size organisation like Sainsbury's. This type of organisation has a huge
scope of funding as well as welfare of the society. It has the employee more than 1lack.It is a
multinational organisation which has huge range of product in the super market. Thus there are
many size of the different organisation and the scope of them are important for society as well as
the business environment.
TASK 2
P 3 The relationship between different organisational functions and objectives and structure
Sainsbury is a large public sector business organisation which has many important
function. These functions estimate the achievements of the objective and goals of the company.
Along with these function the structure and the functions are interrelated. Another business
organisation can be Primark which also has some crucial functions which help in achieving
objectives of the business (Halbert and Ingulli,2011). These functions are related to the structure

also. These relationship can be understood by following functions of these mentioned
organisation.
1. Sales-This is the most important function of any business organisation as it finally
contributes in achieving the business objective like public welfare or profit. In this
function, company has to use an effective marketing strategy to increase the sales of the
product. Sainsbury has its own sales strategy which helps in increasing maximum
purchase of its product and goods.
2. Production-This function is operated by every business organisation. Sainsbury puts
maximum effort to provide good quality in the product. On the other hand Primark uses
the best technology so that it can gain maximum profit from the customers by customer
satisfaction.
3. Research and development -This function of the business organisation contribute in the
betterment of the goods and services. Primark, being a private sector company, conducts
time to time research and development so that a customised product can be provided to
the customer (Hamilton and Webster,2015). On the other hand Sainsbury uses then
research and development to provide more welfare facility for the community. This
function helps in attaining the objective of the company in the long term.
4. Human resources management-As employee are the soul of every business organisation,
as this function helps in operating business in a smooth way. Private sector company
Primark conducts the training and development for the human resources management to
maximise its product quality.
5. Finance-It is the most important function fro business organisation. Primark has the
resources to gain maximum finance. The company uses this finance in the improvement
of product and service for customers (Hazlina,Ramayah and Kummerow,2010). On the
other hand , Sainsbury gains the finance from the government fund to spend it on social
welfare. Thus these functions are game changer for the companies to accomplish their
goals and objectives.

M2 Advantages and disadvantages of interrelationships between organisational functions
The functions of the business organisation like Sainsbury and Primark affect their
objectives and structure. The functions like human resource management, finance, marketing and
production have their positive result as well as negative results on the structure of these two
mentioned companies. These functions are interrelated with each other. These interrelation and
impact can be explained as followings.
 Production- Best techniques in the production can lead to the more profit for business
organisation. Sainsbury monitors its production functioning so that there can be no weak
feature in the product and goods in retail business. Disadvantages of the production is
that if there is no monitoring then it can lead to cheap quality of product.
 Finance -This function can benefit the company Primark to increase revenue .On the
other hand, excess or short finance can lead to the difficulty in business in the future.
 Human resource management- This function can benefit the company in well
organisation of activities (Ishengoma and Kappel,2011) .But if this is nt effective then it
can weaken the position of the organisation .
TASK 3
P 4 Positive and negative impacts the macro environment has upon business operations
A macro environment includes various crucial factor which can hinder or foster the
business of any organisation. This environment exists outside of the business organisation which
has huge impact on the survival of any company. These include the political stability , legal rules
and regulations, environment resources, society customs and economic situation of the industry.
Different organisation are affected in different areas by these macro environment factors. In
Sainsbury,the political factor play vital role as it is controlled by government. If there is any
change in the policies and procedures of government authorities then there will be alteration in
the business policy of Sainsbury.
This alteration can benefit as well as harm the business in the long term. The positive
impact of economic macro factor is that if there is boom in the business market then the
company can achieve maximum profit from this situation (Iskanius,Pageand
Anbuudayasankar,2010). Negative impact includes the recession market situation in retail

industry. For Primark, there is positive impact of legal factor that the code of conduct makes it
easy operation of every activity to create a healthy environment in the company.
On the hand the negative impact of the legal factor is that it makes stubborn rules for the
business which will lead to lack of liberty for the company. The positive impact of social factor
is that it can help in making trading product according to the choice of customers. Negative
impact of the social factor is that if the customer have different attitude towards the product of
organisation then there will be difficulty to maintain the sales of the goods in supermarket
industry. Positive impact of the competitor factor is that it helps the business organisation to
improve its product to make more profit than competitor firm. Negative impact of competition is
that it can ignore the welfare of the customers to make more profit in cut throat competition.
Macro environment has more positive then negative impact on organisation. Being
private sector business organisation, Primark is affected by environmental factor as it has
limited natural resources to utilise ion the business. So the negative impact is that is has to
control or minimise the natural resource of environment. A positive impact of the environmental
factor is that the company can use these resource in an effective way to improve its services to
customer in the market. Thus there are many factors which are included in macro environment
which are more powerful than the micro environmental factor within the organisation.
M 3 PESTLE model to support a detailed analysis of the macro environment
PESTEL analysis is a type of macro environment in which outside factors are included.
This analysis contain political , economical, social, legal,technological and environmental factors
which affect the business of every organisation (Klapper,Lewin and Delgado,2011). This
analysis helps in estimating futtre opportunities and risks for the business. By using this model,
Primark can make effective strategy to deal with the future risks and maximise the benefit from
future opportunities in different sectors of market. Being a private sector leading business
organisation, Primark has to be aware of these factors. In the technological factor, the company
has to make sure that it is up-to-date in term of technology (Klapper and Love,2010). On the
other hand, if the company is not using trending technology in its product then the position of its
brand can be down in sight of customers. Political factor in this analysis can benefit the company

if its policies are reverent to the organisation. But if the governmental policies are not relevant of
the business of company then it can hinder the progress of Primark.
D 2 Macro and micro factors impact on business objectives and decision-making
Primark is a huge brand in the retain sector of united kingdom. Being a big company , it
has it own strengths and weaknesses related to its business. Macro factors include government
policies and society attitudes which affect the decision making for the business. For example if
the legal policies are focused on the reasonability of price of product then the company has to
make changes in its pricing policy decision. As the company has to compete in the market
environment , it has to consider all external factors to deal with any conflict in the future. Along
with the macro factors, micro factor also affect the business of the Primark (Klapper and
Parker,2011). In micro environment strength , weakness, opportunities and threats are included.
If the organisation is strong in some features then it can benefit by focusing on its
strength related to decision-making. If the company is weak in something to compete then it has
to make an effective decision in its policy to deal with this situation. Thus there are many factor
which are included in macro as well as micro environment which affect the decision-making and
objectives of Primark.
TASK 4
P 5 Internal and external analysis of Primark
Primark has a considerable share of the retail market. The company has its own weakness
and strength which affect its business in the market. Internal as well as external analysis can be
done to show clear picture of the company position. Internal analysis can be considered as
SWOT analysis. On the other hand, external analysis of the mentioned business organisation can
be called as PESTEL analysis. These analysis can be explained as followings.
The internal analysis of Primark Includes its performance and positions within the
company business. Strength of the business organisation is analysed and the company makes
maximum use of its strength to gain its objectives and goals in time (Popescu,2013). This
company has a strength that it has the strong presence across Europe. Its sales increase year to
year. Another strength is that it has no advertising cost as it relies on word of mouth marketing of
its product. The company is conducting a research for exploration in middle east .After that it

would launch its product in that place also. For leading position the company has strong product
like sports wear which is fast growing sector in today market.
Weakness of the company is that it has overall less profit due to slow economic growth
in the European union. Another weakness is that it has inconsistency in its product due to
outsourcing of manufacturing of apparels. In current time the company has no presence in
emerging market which leads to less profit making for organisation. Competitor can also be a big
threat for the mentioned company which are Zara, Marks & Spencers. Thus external and internal
analysis help in identifying the strength and weakness of the business organisation for future as it
can provides a transparent view of positive and negative side of company.
M 4 SWOT/TOWS analysis influence decision-making
In SWOT analysis , real situation of the company can be evaluated and the higher
official of the organisation can use this analysis to gain advantage from both sides of the
business. In this analysis first element is strength and it can motivate the company employee to
improve its strength to capture the market share at maximum (Siewiorek,Saarinen and
Lehtinen,2012). Another factor of the SWOT analysis is weakness of the company. The
weakness of Primark is that it has not started to invest in emerging market in the world. So it has
limit its business in Europe which is low in current time due to economic unsuitability.
Opportunity for Primark is that it would open further store to increase the sales of the product.
As India and china are the emerging market , so the company should operate its business in these
counties to increase its market share all over the world. So the company can alter its strategy to
run its business in these markets places.
Threats of Primark include that since all sales of the product is dependent on the
economic condition of European Union, so if there is any more slowdown in market, it will
affect the business of the company in negative way. So the company has to change its decision-
making to deal with these competitor in the same industry. By changing the decisions, company
can overcome the weakness and threats in the long term.
P 6 Strengths and weaknesses interrelate with external macro factors
Primark is affected by macro as well as its strength and weakness related to its profit ,
revenue in the future (Welford,2013). The External or macro factors include competitors,
suppliers,distributors,customers, government,law and market situation. The internal factors like

strength and weakness of the company are related to the external factors in various ways as they
both affect the operation of business in Primark.
Strength of the company is that it is one of the most growing brand in apparels which
leads to the increased number of distributors. Because more sales motivate more stores and more
distributors. Weakness of the mentioned business organisation is that it has inconsistency in
product quality. This can lead to decrease in customer satisfaction which is the soul of external
factors of Primark. Legal factor of external environment can affect the internal situation of the
company .For example if there is any law implied by authorities on retail sector then Primark
also must change its business policy according to that law. Technological factor of external
environment is also related to the strength and weakness of the company. For example if there is
any technical change in production in apparels then the company also has to update the
method ,otherwise it can loose its value in the market.
Environmental factor also affect positively and negatively on the strength and weakness
of the company. If there are sufficient resources available then the company can increase and
improve its production process (Xue,Shen and Ren,2010). On the other hand if there is any short
of resources then it can hinder the operations of the company in the long term. If the political
condition is according to the business of company then it will benefit in term of profit and
maximum sales. On the other hand , if the policy of current government authorities are against
the production process of the Primark then the company has to face difficulty or alter its process
which will lead to huge cost of the product. Another factor of external environment is economic
situation industry as it plays a crucial role in the strength and weakness of the company.
For example if the apparel industry faces any slowdown due to recession or the
competition is high in this industry then the company has to bear harm in profit and revenue to
some extent. On the other hand, if there is boom or hike in price of the apparel in the whole
industry then it will boost up the strength of the company in the long term (Yu and
Ramanathan,2012). Thus there are many external factors which have a major impact on the
strength as well as weakness of Primark.
CONCLUSION
From the following report it can be concluded that business environment affect all types
of organisation whether it is public sector unit or private sector. The structure , size and scope of

the different business organisation differs from each other as they have their own specific
purpose for the business. There are some complexities of these different organisation. From the
above report it can be stated that there are some advantages as well as disadvantages of
interrelationships between organisational functions and some impact on organisational structures.
PESTEL analysis includes political, economical,social,technological,environmental and legal
factor are analysed. By evaluated strength , weakens, opportunities and threats, interrelation can
be identified. Public sector has different environment for business operation from private sector
company. So it can be stated that evaluation of external environment is important for better
understanding of the structure and functions of these companies.
REFERENCES
Books and Journals
Björklund, M., 2011. Influence from the business environment on environmental purchasing—
Drivers and hinders of purchasing green transportation services. Journal of Purchasing
and Supply Management. 17(1). pp.11-22.

Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business
environment: Knowledge management and knowledge management technology.
Elsevier.
Chavis, L.W., Klapper, L.F. and Love, I., 2011. The impact of the business environment on
young firm financing. The world bank economic review. 25(3). pp.486-507.
Chow, A.T., Erving, R.H. and Ying, W., At&T Intellectual Property Ii, LP, 2012. Computer
readable medium with embedded instructions for providing communication services
between a broadband network and an enterprise wireless communication platform
within a residential or business environment. U.S. Patent 8,155,155.
Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance. The Review of Economics and Statistics. 93(1). pp.309-337.
Craig, T. and Campbell, D., 2012. Organisations and the business environment. Routledge.
Fernando, A.C., 2011. Business environment. Pearson Education India.
Granger, M.J. and Schroeder, D.L., 2013. Integrating the Internet into the business environment.
Internet Research.
Halbert, T. and Ingulli, E., 2011. Law and ethics in the business environment. Cengage
Learning.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Hazlina Ahmad, N., Ramayah, T. and Kummerow, L., 2010. Is entrepreneurial competency and
business success relationship contingent upon business environment? A study of
Malaysian SMEs. International Journal of Entrepreneurial Behavior & Research.
16(3). pp.182-203.
Ishengoma, E.K. and Kappel, R., 2011. Business environment and growth potential of micro and
small manufacturing enterprises in Uganda. African Development Review. 23(3).
pp.352-365.
Iskanius, P., Page, T. and Anbuudayasankar, S.P., 2010. The traditional industry sector in the
changing business environment–a case study of the Finnish steel product industry.
International Journal of Electronic Customer Relationship Management. 4(4). pp.395-
414.
Klapper, L., Lewin, A. and Delgado, J.M.Q., 2011. The impact of the business environment on
the business creation process. In Entrepreneurship and Economic Development (pp.
108-123). Palgrave Macmillan UK.
Klapper, L.F. and Love, I., 2010. The impact of business environment reforms on new firm
registration.
Klapper, L.F. and Parker, S.C., 2011. Gender and the business environment for new firm
creation. World Bank Research Observer. 26(2).
Popescu, G.H., 2013. Macroeconomics, Effective Leadership, and the Global Business
Environment. Contemporary Readings in Law and Social Justice. (2). pp.170-176.

Siewiorek, A., Saarinen, E. and Lehtinen, E., 2012. Learning leadership skills in a simulated
business environment. Computers & Education. 58(1). pp.121-135.
Welford, R., 2013. Hijacking environmentalism: Corporate responses to sustainable
development. Routledge.
Xue, X., Shen, Q. and Ren, Z., 2010. Critical review of collaborative working in construction
projects: business environment and human behaviors. Journal of Management in
Engineering. 26(4).pp.196-208.
Yu, W. and Ramanathan, R., 2012. Effects of business environment on international retail
operations: case study evidence from China. International Journal of Retail &
Distribution Management. 40(3). pp.218-234.
Online
Swot analysis,2017.[Online].Available through:
<http://www.businessballs.com/swotanalysisfreetemplate.htm>.[Accessed on 16th may
2017].
Kiesha Frue,2017.WHAT IS MACRO ENVIRONMENT ANALYSIS?[Online].Available
through:<http://pestleanalysis.com/what-is-macro-environment-analysis/>.[Accessed on
16th may 2017].