Analysis of Business and Business Environment: KFC, TFL, Oxfam

This report provides a comprehensive analysis of business and the business environment, focusing on three distinct organizations: Kentucky Fried Chicken (KFC), Transport for London (TFL), and Oxfam. It begins with an introduction defining business and the business environment, followed by an ove...Read More

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Various types, legal structure and purposes of different organisations.............................1
P2 Size and scope of different kinds of organisations............................................................3
TASK 2............................................................................................................................................5
P3) Relation Between Different Organisational Functions and Link to ir Objectives and
Structure.................................................................................................................................5
TASK 3............................................................................................................................................7
P4 Positive and negative impact of macro environmental factors upon business.................. .8
TASK 4............................................................................................................................................9
P5 Internal and external analysis of specific organisation to acknowledge strength and
weakness.................................................................................................................................9
P6: Interrelation of weakness and strengths with macro environmental factors..................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business is a function which is executed by an individual or a group of individuals for
earning money. Main objective of business is to earn high profitability or growth in
marketplace. Whereas, Business environment refers to sum of internal and external factors
which can influence business operations. For operating the business in effective manner owner
has to consider such kind of factors which can adversely affect on brand image of firm. Chosen
organisations for this assignment Kentucky Fried Chicken (KFC) which is a fast food
multinational chain with headquarters in Texas, U.S. Apart from that, for public Transport for
London and for voluntary Oxfam firm are taken in this report. This Project will discuss about
various kinds of firm along with their mission, vision, objectives along with interrelation
between their different departments. In last, different kinds of external factors which influences
on business operations will also include in this assignment.
TASK 1
P1 Various types, legal structure and purposes of different organisations
There are a large number of firms which operates their business in a single marketplace
with different objectives and they perform their functions for achieving their preset objectives.
organisations with ir different structure and purposes are briefly explained as under:
Public organisation: These kinds of organisation are operated and controlled by
government authorities. Main aim behind formulation of this organisations is to provide services
at lower prices so that sustainability of can be maintained. For instance, Transport for London
(TFL) is a public limited organisation whose headquarters are situated in Broadway, London and
provide transportation services across the London. (Huang, 2013). Main features of these firms
are that they can sold their shares freely to public.
Purpose: Main purpose of this sector is to provide products and services to the
customers at lower rate across world. Transport for London which is a public limited
organisation whose duty is to provide transportation services at reasonable prices across the
London. Their main purpose is to making journeys of individuals easier and for this they also
uses mobile applications so that daily users gets aware regarding the arrival or departure of
vehicles.
Legal responsibilities which are necessary for the public transportation service to follow:
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Transport for London is a statutory body which is formed by Greater London authority
(GLA) under the act of 1999. according to this act, Mayor of London who have responsibility to
monitor this service have duty to formulate or implement policies so as to promoting efficient
transport services across the London. As they are government bodies then they are responsible to
follow traffic signs, control system, road safety etc. TFL can also delegate their responsibilities
to their other subsidiary firms like London Transport Insurance Ltd., TfL trustee company Ltd.
so as to managing transportation services in the situation of heavy load of passengers.
Private organisation: These organisations are owned or regulated by a group or a single
individual with an aim of generating high profitability and revenues. The private firms have to
follow different kinds of legislations which are formulated for guiding them so that they perform
their business operations according to the regulations. KFC is a well-known private organisation
which deals in beverage and food products (Berg,2014). In current scenario, company is
operating at more than 20000 locations in all over the world which defines a huge brand image
of firm.
Purpose: Main purpose of KFC is to earn profitability along with providing good and
hygiene quality of food products to their customers therefore, growth and sustainability of firm
can be managed in effective manner.
Legal responsibilities which are necessary for the Private limited to follow:
These kind of firm have to submit an annual report to the companies house every year. If
any kind of information such as name and address of the firm changes or in structure of share
capital changes at any time. Then the managers of firm have duty to inform about these changes
to the companies House, UK. The owners have to act always in the interest of shareholders of
company. The owner can't act any-kind of activity which can prove harmful for the firm. Owners
have to ensure about all the legislations and laws which are created by the government of nation
and are related with hiring and safety of staff members.
Legal requirements for setup a private limited firm in UK
Private limited firms are those which has separate identity from its directors. Some of the
main requirements for setup a private limited company in UK are,
 Innovative ideas are required for incorporation of firm within UK.
 One director or leader for leading the workers who is over the age of 16.
 At least one shareholder is required for formation of firm.
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 A registered office address is required in UK.
 For incorporating a Private limited company at least one shareholder and one director is
required who can be the same persons.
 At least £50,000 of share capital is required to form a private limited company.
Some other requirements which must be adhere by company for incorporation of Private
limited firm in UK is to provide all details of firm like shareholder, share capital, revenues, in
companies house, UK. At least 25% of shares would be owned by shareholders and if any
modification is occurred in this information then it should be provided in companies house
initially.
Voluntary organisation: Main purpose behind formulation of this organisation is to
achieve a common objective. Objectives of these organisations are generally related with well-
being of people of nation. These firms perform their functions for making wellness of the
individuals of nation without focusing on profit. These organisations have to take permissions
from the government authorities before starting any activity. Oxfam is voluntary firm that has
objective to remove poverty from nation.
Purpose: Main purpose of firm is to provide essential things to poor people of UK so that
they spend their livelihood in well manner.
Voluntary firms like Oxfam have to follow some legal requirements which are given
as under:
Members of Oxfam have responsibility to make their registration under the Charities Act,
2011. These kind of organisations are called as limited by guarantee. In this kind of firms,
members have no authorities to share the profits of firm. If the company is wound up from any
reason then its assets will be used by the similar charitable organisations.
P2 Size and scope of different kinds of organisations
Public organisation: Transport for London (TFL).
Background details: Transport for London was incorporated in 2000 by government of
UK in order to managing transportation activities across the London. It is a statutory organisation
which is monitored by Mayor of London.
Products and Services: It offers several transportation services across the London like
Bus, trams, taxis so as to facilitating travel services across the UK.
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Size and Scope : Around 28000 drivers or staff members are working in this firm and
expected revenue which is decided by the firm to earn is 436 million pound at the end of
financial year of 2020. Therefore, it can be said that scope of TFL is very large in public sector.
Mission and vision: Vision and mission of TFL is to make best transportation services
across the London along with implementation of healthy street approach in their working so that
air quality and environment of London can be improved.
Organisational structure: Firm uses hierarchical organisational structure in their
workplace such as commissioner Mike brown of firm have authority to take decisions.
Stakeholders: Main stakeholders of firm are Investors, customers, chairpersons etc.
Private organisation:- KFC
Background details: Organisation was founded in 1930 by Harland Sandars and
headquarters of firm is located in Texas, U.S. In present time, The company is operating its
business operations in more than 120 nations along with approx. 20000 outlets
(McCormack,2012).
Products: It offers fried chicken, chicken sandwiches, French fries to ir customers
Size: Size of firm is very large because they have employed around 200000 workers at
present firm has earned 58 billion dollar in year of 2018 which defines a large size of
organisation.
Scope: Organisation is operating their business activities in various nations due to
which company is having a good brand image in world. So, it can be said that scope of firm is
very high.
Mission and vision: Mission of this organisation is to become a leading food service
group in world with providing quality products and services to their customers. On other hand,
vision of organisation is to enhance profitability with improving value of shareholders so that
sustainable growth can be achieved in every year.
Organisational structure: firm is using flat organisational structure in ir workplace in
which managers takes supports from their employees for making decisions.
Stakeholders- The main stakeholders of company are owners, customers, shareholders,
investors and community as a whole.
Voluntary organisation:- Oxfam
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Background details: It was started in 1942 with having 20 charitable trusts. Main
objective behind formation of this organisation is to eliminate poverty from world.
Services: firm is providing services for removing poverty from nation,
Size: Organisation is formulated with 20 charitable trust that shows size of organisation
is very large firm is providing its services in UK, America etc.
Scope: Company is providing its non profitable services in across globe which defines
that scope of organisation is very large in nature.
Mission and vision: firm is formulated with a mission of providing necessary things to
needy people of nation through which ir living standard can be enhanced. vision of firm is to
create a nation without poorness.
Objectives: Prior objective of company is to provide essential things to required persons
of nation so that they can live their livelihood easily (Ipate, 2012).
Organisational structure: Organisation has adopted hierarchical structure in ir
working place. In which management have categorised the work in different segments so that
operational activities can be performed by volunteers in effective manner.
Stakeholders- Volunteers, sponsors or directors are main stakeholders of this
organisation.
TASK 2
P3) Relation Between Different Organisational Functions and Link to ir Objectives and
Structure
There are different departments in an organisation which help in efficient working of
company. In private organisation, KFC is used which is following vertical organisational
structure in its working. There are different departments in company such as marketing
department, finance department, operations department, HRM department, and quality control
department. Proper functioning of all these departments assists in achieving goals and objectives
of company.
In public organisation, TFL is taken which is having hierarchical structure in operating
its business as this type of structure is helpful for company in achieving its goals and objectives.
Functional departments of firm are communication and technology department, financial
department, Human Resource Department, and research and development department.
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In voluntary organisation, Oxfam is taken. As organisations is voluntary so it is following
geographical structure in its working because they are working for providing help to the needful
in not only one country but also in many other countries. Voluntary organisations do not have
any departments for working.
Illustration 1: Organisational structure of KFC
§
(Source : Organisational structure of KFC, 2018)
Interrelation Between Different Functional Department:
Marketing and Finance Department: These two departments of KFC are interrelated
with each other as for doing advertisement, finance is needed and this finance is provided to
marketing department by finance department which approves the budget for their
advertisement purpose. For doing proper advertisement, The marketing department also requires
funds in adequate amount which is provided by finance department. Through help of finance
department, marketing department of KFC can advertise its products properly which will help
in increasing sales of company which in result increase revenues and incomes of KFC.
Through coordination among marketing and finance, KFC can achieve its desired goals and
objectives in an effective manner which will positively impact organisational structure of KFC
(Johanson, 2014).
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Research and development and Finance department- Research and development
department of TFL have responsibilities to conduct research programmes so that new trends,
taste and preferences of customers can be identified. For e.g. R&D department of TFL have
made innovations and develop a different system so as to saving the fuel and environment from
pollution but for its implementation they have to take support from finance department so that
suitable amount of funds can be collected for implementing the same. Apart from that, R&D
department of OXFAM generates new ideas and campaigns for raising funds in order to improve
living standard of societal individuals whereas, in this finance department of Oxfam have
responsibility to manage the financials of the company which are raised to fund raising
campaigns.
Advantages and Disadvantages of Interrelation
Advantage: Better interrelation between departments helps the employees at workplace
to understand needs of their colleagues due to which productivity and profitability of firm will
enhance. It also helps in identifying the desired needs of customers so that the firm will easily
make products accordingly. Hence, it can be said that good relation between departments of an
organisation will helps the management in resolving the conflicts and issues from the workplace.
With the help of it, managers will also able in achieving organisational goals.
Disadvantage: If there is a more interrelation between departments then it leads to
confusion and dissatisfaction among the employees due to which the working performance of
employees will be reduced. If managers will take different opinions and views from the different
departments then it also increase the time of decision-making which will not beneficial for the
firm in formulating strategies.
TASK 3
P4 Positive and negative impact of macro environmental factors upon business
For analysing macro-environmental factors in an effective manner, The managers of KFC
have to conduct PESTLE analysis through which they will be able in analysing profitable or
non-profitable of such factors. PESTLE analysis of KFC along with positive and negative impact
are given as under:
 POLITICAL- This factor comprises of tax duties, political stability of government etc.
which can affect the firm in positive or negative manner. In UK, Government policies are
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very strict on fast food operations due to which company can't marketing its fast food
functions because of health concern. Due to this, company have faced heavy loss in UK
market. Apart from that, they have made hygiene quality in their food products and take
certifications from governing authorities so that large number of customers can easily
attracted towards offering of firm.
 ECONOMIC- This factor is related with economy of nation that comprises of inflation
rate, GDP, exchange rate, economic growth etc. These factors have also affected the
operations of firm in positive or negative manner such as due to Brexit in UK, customer's
purchasing power is decreasing due to which they not prefers to go in restaurants like
KFC which has posses negative impact on revenues of firm. In order to overcoming this
impact, they have set lower prices for their food products because of this, company have
gained high market share and revenues in UK.
 SOCIAL- These are those elements which comprises of culture, belief, social trends, or
taste and preferences of customers. In UK, most of the individuals are very conscious
regarding their health and preferred healthy items only. This factor have negatively
impacted on the whole profitability and revenue figures of KFC because company offers
fast food products only to their customers. In order to overcoming impact of these factors,
they have added some health conscious products like chicken Breast, corn on the Cob etc.
so that customers who are health concerned can attracted towards offering of firm and
sales figures of firm can be improved.
 TECHNOLOGICAL- This factor comprises of advanced technology systems which can
provide positive or negative impact on the profitability of business. In KFC, they have
implemented voice activated training systems for improving efficiencies of their
employees. With the help of this system, Employees will train themselves by just asking
questions. This technology will impact positively because when employee will provide
quality services to their customers then it will be beneficial for firm in increasing their
revenue. Whereas, negative impact of this implementation is that interrelation of
employer and employees will be reduced which will be increase the dependency of
employees on technology at workplace.
 ENVIRONMENTAL- This factor is related with environmental factors which comprises
of climate change that can impact adversely or favourably on the profitability and brand
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image of firm. Various legislations for environment protection Like environmental
protection act, 1990, Waste legislations and environmental act are formulated by
government authorities which have to followed by KFC in order to run their business
operations effectively in UK. Positive aspect of these factors is that if KFC follows these
act carefully then it will beneficial for increasing their market share and revenue figures.
Whereas, if KFC will not follows these legislations carefully then it posses negative
impact on customer base which will not beneficial for sustainability of firm in UK
market.
 LEGAL- These factors comprises some important legislations like employment act,
flexibility in working hours etc. which can impact positively or negatively on the brand
image of firm. KFC follows all laws of employment carefully in which they have
provided flexibility in working hours to their employees so that they never get
disappointed from the working of firm. Whereas, if Management of KFC will not provide
flexibility in working hours, or implement strict policies at working place then it will
create conflicts or dissatisfaction among the employees which leads to high turnover for
firm.
TASK 4
P5 Internal and external analysis of specific organisation to acknowledge strength and weakness
For internal and external analysis, Management of TFL and KFC have to conduct SWOT
analysis which will be helpful for managers of both organisation in identifying strengths and
weakness of their firms in appropriate manner. It also provide guidance to m in identifying
future threats and opportunities which can influence business operations in positive or negative
manner (Hansen,2012).
SWOT analysis of Transport for London
Strengths
 Company has a good customer base
which makes its strengthen in
marketplace
 Company fulfils the needs of around 5
million customers daily in terms of
Weaknesses
 Responsibility of protecting
environment is not adhere by firm
properly.
 Cost of operations are regularly
increasing due to which company is
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transportation.
 Company has its own underground
transportation system which is the
oldest underground railway network in
the world.
 Company earns money but they not
uses this money for their growth
whereas, they uses this money for
improving transportation services in
London.
 Firm has dedicated staff members to
provide effective services to the
customers so that the satisfaction level
can be increased.
facing trouble in providing
transportation services at reasonable
prices to societal individuals.
Opportunities
 Improvement in existing services can
provide good growth to firm.
 Making subsidiaries will provide
beneficial outcomes as it will lower the
cost of operations which will beneficial
for firm in maintaining brand image in
market.
Threats
 Modification in legislations like
employment law, insurance of drivers
can become threat for firm.
SWOT of KFC
 Strengths
 Company is 2nd largest restaurant
chain in world which provides major
strength to firm.
 Organisation has their own customer
base who loves with the offerings of
firm.
 Weaknesses
 Management of firm is not able in
managing conflicts of franchisee
which makes weakness of firm.
 Most of the food items of KFC are
related with non-veg category because
of which vegetarian customers not
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 Chefs of firm are using secret recipe for
making different products from their
rivals (Trang,2015).
 Most of the outlets of KFC uses
modern techniques like pay per click,
voice training test etc. which have
made strengthen of firm in UK market.
prefers to purchase food items from
KFC.
 In some of the countries, company is
using outdated technology in their
outlets which can influence their brand
image.
Opportunities
 Company is financially capable due to
which they have opportunities to
expand their business operations in new
markets of UK.
 KFC can attract vegetarian customers
through adding vegetarian food items in
their menu which will be beneficial for
customer base of firm.
Threats
 Changing in preference and tastes can
provide threat to profitability of
organisation.
 Tough competition is providing by their
rivals such as McDonald, that can
decrease sales figures and profitability
of firm.
 Revise of tax rates in UK can become
threat for firm.
P6: Interrelation of weakness and strengths with macro environmental factors
Strength and weaknesses of KFC have an interrelationship with macro-environment
factors which are briefly discussed as under:
 Political factors: These kind of factors are interrelated with the rules and regulations of a
government such as tax policies, stability of government etc. As the government of UK is
stable through which the company has maintained a good customer base which helps
them in maintaining brand image in the world. Whereas, management is not able in
solving conflicts of their franchisees due to which most of their outlets were closed in
UK.
 Economic factors: These factors are related with the fluctuation rates of currency, High
interest rates, import and export duties etc. As KFC offers wide range of products to their
customers because of this company have formed its strong customer base in UK market
which defines a strength of the firm among their rivals. Whereas, If the import and tax
11

duties are increased in a specific nation then it directly affect the cost of product which
will decrease the profitability of organisation.
 Social factors: These factors comprises of taste and preferences of individuals through
which they are encourages for using a specific product of a firm. The Major strength of
KFC is that, they have loyal and experienced staff members who provides effective
services so that brand image of firm can be maintained in market. Whereas, most of the
individuals in UK are health conscious and company offers fast food products to their
customers which can posses negative impact on profitability of firm.
 Technological factors: UK is the most technological advanced nation which attracts a
large number of industries towards this nation. Hence, the residential of nation are
knowledgeable and prefers to use new products along with advanced technology. As
KFC is using pay per click option for customers and for training of employees voice
activated tests which is enough for maintaining brand image of firm in UK market.
Whereas, in some of their outlets KFC is not using outdated technologies which is
reducing the profitability of firm. Thus, it is a major weakness of the organisation.
Therefore, It can be said that internal and external environmental factors are
interconnected with each other and also provides an effective impact on the business operations
of KFC.
CONCLUSION
It has been concluded from above report that there are various organisations in
marketplace which have different kind of objectives and organisational structure. For which
their different departments perform their duties with cooperation so that desired targets can be
achieved in given time period. Internal and external factors of business environment also play an
important role in company as they provides opportunity to managers of firm for achieving
organisational growth. These factors are also helpful for managers in implementation of suitable
policies so that position of organisation in marketplace can be improved.
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Online
Organisational structure of KFC. 2018. [Online]. Available through:
<http://www.kfcsc.com/chart.htm>
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