Business Environment Analysis Report: HND Business, Semester 2, 2017

This report provides a comprehensive analysis of the business environment, focusing on the case of Thomas Cook. It begins with an introduction to the business environment and its impact on organizations, followed by an examination of the interrelationship between organizational functional units and their link to organizational goals. The report then delves into a detailed discussion of macro-environmental factors, including political, economic, social, technological, legal, and ecological factors, and their positive and negative impacts on the business. A SWOT analysis is conducted to identify the strengths, weaknesses, opportunities, and threats facing Thomas Cook, followed by an exploration of the relationship between these internal factors and the external macro-environmental factors. The report concludes with a summary of findings and a list of references.

Business
Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1& P2 Covered in presentation.................................................................................................1
TASK 2............................................................................................................................................1
P3 Relationship between the different organisational functional units and their link with the
organisational goals.....................................................................................................................1
TASK 3............................................................................................................................................2
P4 Identification and discussion of various macro environmental factors along with their
positive and negative impact.......................................................................................................2
TASK 4............................................................................................................................................4
P5 Internal and external analysis to identify the strengths and weaknesses...............................4
P6 Relation between the strengths and weaknesses with external macro factors.......................6
CONCLUSIONS..............................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
All the external and internal factors that impact upon an organisation and its functions are
known as business environment. The objectives and goals of an entity are highly dependent of
these factors and hence, it is necessary to have a deep knowledge and evaluation of them while
applying business strategies (Robinson and et.al., 2016). This assignment is helpful in
evaluating the environment of different type of organisations depending upon their scope and
size. Also, the legal structures of all these entities is also explained in this report. This study
further demonstrates the interrelationship of the antithetic structural functions and their nexus to
the objectives and structure. Moreover, the impacts of the macro environment either positive or
negative on the business are also evaluated in this learning. Furthermore, impact of these factors
on the strengths and weaknesses of the particular organisations are determined. In order to
evaluate the strengths and the weaknesses, internal and external analysis for specific
organisations are conducted.
Different organisations are selected depending upon their type, scope and size for the
overall evaluation of the business environment.
TASK 1
P1& P2 Covered in presentation.
TASK 2
P3 Relationship between the different organisational functional units and their link with the
organisational goals.
Role and relations of the different operational and functional units of an organisations
plays a vital role in attaining the organisational objectives. In context to the Thomas Cook, a
large size private sector entity with 20,000 employees in total and 19 million customer figures
each year, it is essential for them to maintain the effective and proper relations with each other.
Further, it is foremost responsibility of human resource management department to assure the
good relations with the help of proper and impelling communication between and within the
departments. The link of different departments in order to attain the objective of the organisation
are as follows:
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 R&D department- This unit is the backbone of the many operations and functions that are
being performed in an enterprise. This department ensures the research and development
for the appropriate production of the services.
 HR department- Human resource department plays the most crucial role in the effective
operative of the Thomas Cook. This unit ensures the good communication between the
different functioning unit so that impelling results can be obtained (Islam and ett.al.,
2016). Further, it also helps in developing the motivation among the employees so that
they can boost up their performance. Moreover, conduction of various training and
technical programs are also done by this cell in order to enhance the employees' services.
 Sales Department- The role of this unit is to fill the gap between the customers' needs and
the products/services that the organisation is offering its consumers.
 Marketing Department- This segment of the business entities plays the role of enhancing
the sales of the products. Various strategies and tactics are played by them in order to do
so.
 Production Department- This department needs to ensure the production of the recent
services depending upon the market trends and development (Islam and Mamun, A.,
2017). In order to perform this, a deep market research is mandatory so that effective
results can be obtained.
 Social media unit- The work performed by them to attain the organisational objectives is
to promote the services and products on the social networking sites. This section also
impacts upon the business value of the organisation by increasing the sales. Further, it is
also necessary to consistently notify the public about the recent offers provided by the
organisation.
TASK 3
P4 Identification and discussion of various macro environmental factors along with their positive
and negative impact.
In order to accomplish this task, the organisation chosen is Thomas Cook, the oldest and
renowned name in the leisure travel. This large sized entity belongs to the private sector. For an
industry who serves around 19 million customers each year, it is essential to acquire the entire
knowledge of all the factors of the micro environment that impact upon the organisation either
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positively or negatively. These factors are evaluated from the end of the business analyst of the
entity. Further, these factors can be determined with the help of PESTLE analysis.
 Political: In this segment the political factors that impact upon the business value of an
organisations are present. This feature states about the extent of the government influence
over the business (Potts and et.al., 2016). The factors under this section have both the
positive and negative impact. The biggest challenge to businesses associated with this
factor is of the instability. Political conditions are the most unpredictable thing, also the
frequent changes the running political party highly impacts the proper functioning of the
entities. The imposition of new laws and regulation at each change also impacts the
strategy making procedure of entities.
 Economic: These factors are dependant of the financial conditions of the company. This
segment highly impacts upon the business done by the establishment and also on their
profitability. The segments included in this are the economic growth, interest rates,
exchange rates, inflation, etc. The major area that is concerned with this factor is the
demand management of the Thomas Cook.
 Social: This factors are also known as the socio-culture factors and are dependant of the
varied range of choices of the customers depending upon the class, society, family,
culture, traditions, etc. (Robinson and et.al., 2016) These factors influence the product
development segment of Thomas Cook. Further, with the complete knowledge of the
society and culture of the existing place, Thomas Cook can design and prepare the
products accordingly.
 Technological: The present era is of technologies, thus it is foremost responsibility of the
Thomas Cook to develop and design the products and services accordingly that can
withstand in this era. Consistent innovations are required that can impact the operation of
the industry (Cortelazzo and et.al., 2017.). These factors refers to the automation,
research and development of the awareness about the technologies.
 Legal: Both, the internal and the external parameters of the entity are highly influenced
by this factor. These are the rules and regulations implemented by the government and
the organisation is supposed to follow them for their effective functioning. Laws for
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quality standards impact the business value edge whereas laws made for the employees
rights have impacts on the internal environment of the premises.
 Ecological- The influence of these factors bas been raised due to the scarcity of raw
materials, pollution, etc. According to the law for the ecological development it is
necessary for Thomas Cook to posses sustainable development in its operations. Industry
will have to follow this law and thus, have to bear the impact of this factor on their
business value.
Thus, these are some factors of macro-environment along with their positive and negative
impact on the business organisation.
TASK 4
P5 Identification of strengths and weaknesses using SWOT.
In order to deal wit the challenged come to the organisation, it is essential for Thomas
Cook to analyse all the internal and external dimensions. This analysis of these factors can be
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Illustration 1: PESTLE analysis
(Sources: Roigé and et.al., 2017. Cluster validity and
uncertainty assessment for self‐organizing map pest profile
analysis.Methods in Ecology and Evolution. 8(3). pp.349-357.

accomplished with the help of an effective tool, namely SWOT analysis. This technique deals
with the complete analysis if the internal and external parameters of an entity. The abbreviations
stands for the strengths, weaknesses, opportunities and threats. The parameters to measure the
internal environment are the strengths and the weaknesses whereas the external environment can
be measured using the opportunities and the threats (Redpath and et.al., 2016). In context to the
the Thomas Cook the SWOT analysis observed for the industry are:
Strengths
This segment describes what an organisation excels at. In case of the Thomas Cook, the
strengths are listed below:
1. One of the oldest and largest tourism industry of UK.
2. It provides easy to access and affordable services to the people.
3. The global edge of the entity is really very strong (Daries-Ramon and Cristobal-Fransi, 2017).
4. Print media and other promotions tools have provide them a strong brand presence.
5. There are about 20,000 employees working with the group.
6. The advancement in the technologies and the services offered to the customer.
7. They have provided sponsorship to many sports and events that have enhance their brand
presence.
Weaknesses
1. They have declared refusal to pay legal EU compensation to customers.
2. There is high level of competition in the hospitality sector which is impacting their brand
presence.
Possibilities
1. To become the sizeable hospitality company in the home country.
2. To enhance their business value by growing their business globally.
3. Digitalisation of the functions and operations performed.
Threats
1. Uncertainty in the hospitality sector.
2. High competition is resulting in reduced market share.
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Thus, this analysis can help Thomas Cook in achieving the upcoming opportunities and
evacuates the coming threats. To gain the opportunities, the strengths of the entity plays an
important role and similarly, by working on the weaknesses of the entity, the coming threats can
me handled out by implementing effective tactics.
P6 Relation between the strengths and weaknesses with external macro factors.
The internal factors that is strengths and weaknesses of an entity has a strong relationship
with the external macro factors. These parameters highly impact upon the external environment.
In context to the Thomas Cook, the dependency of macro-environmental factors on the strengths
and weaknesses of the organisation are as follows:
 Political factors- In context to the Thomas Cook possessing the strength of its presence in
the global level market but it is somehow its drawback in context to the political factors.
As the existence at different countries having different political parties and more
importantly different politics. This instability in the political factors highly influences the
effectiveness of the entity.
 Economical factors- The high market share of the selected entity is no doubt a boon for it
in context to the economical segment. The brand presence of the establishment highly
impacts upon its economical edge (O’Brien and et.al., 2017). Moreover, its sponsorship
in the various event provides the organisation with the effective marketing that enhance
the sell value of the product.
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Illustration 2: SWOT analysis
(Sources: Deese and et.al., 2017 Influence of

 Social factors- The existence of the entity on the different corner s of the world requires a
vast knowledge of the various socio-cultures present in that area. Further, the high
competition level present in the hospitality sector also have great impact. In contrary to
this, the large employees figure present at different geographical location can cope up
with the varied range of society culture and traditions.
 Technological factors- Nowadays, it is become the most important factor that needs the
high attention of the industries. Advancement and the innovations in the services and
products offered by the Thomas Cook are up to the mark. All the recent trends and
developments according to the needs and demands of the customers are implemented by
them (Robinson and et.al., 2016). Thus, this segment has positive impact on the selected
organisation as presence of them help the entity in attracting large customers numbers.
 Legal factors- This factors have negative impact in context to the Thomas Cook. Their
refusal to the EU compensation policy for the customers affected them to a greater extent.
They faced a large fall in the buyers after this denial.
 Economic Factors- The global level level presence of the entity results in the working of
the business operations in the different geographical locations possessing different
environmental condition. Also, there are different laws in every country depending upon
the scarcity of the materials they are facing, thus it is bit challenging for Thomas Cook to
design strategies according to them.
Thus, above are the impact of the strengths and weaknesses on the external factors of the
Thomas Cook.
CONCLUSIONS
This report emphasise on the various aspects of the causes that impacts the business. This
study is comprised of various type of business organisations depending upon the shape, size and
purpose. In addition to this, the legal structure for each type of the organisation is also described
in this learning. Further, a detailed research for the large sized private entity is done in this
assignment. This learning explains all the external and internal factors that impacts upon the
organisation. Also, role of different functional and operational department of an organisation in
achieving the organisational objectives are also explained in this study. In order to evaluate the
internal and external analysis of the chosen establishment, SWOT analysis is also performed and
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the impact of external macro environment on these factors are also determined in this report.
Also, these external factors are resolute using the PESTLE analysis.
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