Business and Business Environment Analysis: IKEA, BBC, Red Cross (HNC)

This report provides a comprehensive analysis of the business and its environment, focusing on organizational types (public, private, and voluntary), their legal structures, sizes, and scopes, using IKEA, BBC, and the British Red Cross as examples. It examines the relationship between organizational functions, the impact of organizational structure, and analyzes the complexity of different business structures. The report utilizes SWOT and PESTLE models to assess internal strengths and weaknesses, as well as the positive and negative impacts of the macro environment on business operations, and how these factors influence decision-making processes. The report also explores the link between organizational objectives and functions, and the influence of both micro and macro factors on decision-making within these organizations. The study concludes by synthesizing the findings and providing insights into the challenges and opportunities within the business environment.

Business and Business
environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P1 types and purposes of organization which are public, private and voluntary and its legal
structure........................................................................................................................................3
P2 size ans scope of different types of organization....................................................................4
M1 structure, size and scope of organization link to business objectives...................................5
P3 Relationship between different organizational functions and their link to organizational
objectives.....................................................................................................................................5
M2 impact of organizational structure.........................................................................................6
D1 analysis of complexity in different types of business structure.............................................6
P4 positive and negative impacts macro environment have upon business operations...............6
M3 pestle model to support macro environment of organization................................................8
P5 internal and external analysis of organizations to identify strengths and weaknesses...........9
P6: How strengths and weaknesses interrelate with external macro factors in IKEA...............10
M4 SWOT/TOWS analysis and justify how they influence decision-making..........................10
D2 impact of micro and macro factors on decision-making......................................................11
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
Business environment is the surrounding in which employees of company works. If
environment of business is positive then it can lead to growth and success for business. IKEA is
the global company which manufacture designer furnitures. BBC is public company which
broadcast the latest news. British red cross society is the voluntary company which provide free
service to people at the time of crisis. This study will discuss types, size, nature and purpose of
organizations. Further will explain relationship between organizational functions. Swot and
pestle models will be used to identify strengths and weakness.
MAIN BODY
P1 types and purposes of organization which are public, private and voluntary and its legal
structure.
Public sector:
Public sector is the organization which work for welfare of the society. It also includes
not for profit organization. It gives services to public. Its purpose is providing goads and services
to the public which involve infrastructure, military, police etc. BBC is the public company which
provide broadcasting services (Čepel, 2019). It is largest and oldest broadcaster in the world. The
legal structure of company is providing news related services to society which helps in
maintaining sustainability.
Private sector:
Private sector is owned by private individual or by the group. Its main objective is
earning profit by maximizing sales. Its purpose is to carry business in such manner so that
revenue can be increased. It is helpful in contributing in the economy of the country. IKEA is the
multinational company which sells ready to assemble furniture, home accessories, home services
etc. legal structure of company is the furniture retailer worldwide. It is known for its designer
furniture and eco friendly product.
Voluntary sector:
Voluntary sector is the organization which works for society. The main purpose of this
organization is serving society without thinking about profits. British red cross society is the
charity company which provide help to the people at the time of crisis. Legal structure of
company is doing social service and helping people which discrimination on the basis of colour,
sex, gender, religion etc.

Partnerships:
partnerships means which business is owned or run by more than two people. In this
capital is contributed by both partners and profits are also shared amongst them on agreed ratio
(Cepel and et.al., 2019).
Sole trader:
It means when business is owned by an individual. He or she is responsible for business
operations and take all profits and also bear loss by himself or herself.
P2 size ans scope of different types of organization
IKEA BBC British red cross
society
scope IKEA is the
multinational store for
home furnishing,
kitchen products,
home décor products
etc. it has more than
300 stores and also
have franchised units.
It has high sales
volume.
BBC provide news
and information to the
people so that people
and understand and
gets updated. The
company is known for
providing innovative
and good quality of
services (Holotiuk and
Beimborn, 2017).
It provides social
service to the people at
the time of crisis in
UK as well as
globally.
nature The corporate
structure of company
is intricate. Its store
and manufacture units
is managed by trust.
Company even
outsourced their
manufacturing to other
countries.
Its nature is it serve
communities and also
contribute in the
economy of the
country. It shows
culture of UK at global
level.
Organization is equal
for all because it does
not discriminate while
providing their
services.
Goals and objectives The objective of The main goal is to The main objective is

company is earning
profits by increasing
sales.
provide authentic
information to its
viewers.
providing help to the
people in crisis. They
serve the communities
and work for people
well-being.
M1 structure, size and scope of organization link to business objectives
Organizations which are IKEA, BBC and British red cross society all have different size
and structure with having varied objectives. Objectives of IKEA focus on maximizing profits
which facilitate economic growth (Akhmetshin and et.al., 2017). British red cross society which
is voluntary company having objective of serving society and make the world better place to live.
They help people at crisis times. BBC is the public company. Their objective is broadcasting
news and creating awareness related to current issues. It is the big size organization which have
many employees who contribute in spreading awareness.
P3 Relationship between different organizational functions and their link to organizational
objectives.
Human resource and marketing department:
Human resource hire candidates for marketing department which can carry marketing
related activities. Marketing department doing marketing of the company so that sales can be
increased. HR provides such candidates which possess marketing knowledge and skills.
Marketing team and finance team:
Finance department pass budget to the marketing team to carry their marketing activities.
Budget is provided to them so that marketing team does not go out of budget (Perera, 2017).
Both the departments work together so that organizational goals can be achieved.
Human resource and finance department:
Human resource department provide employees to finance team so that finance work can
be done effectively. When there is vacancy in finance department HR comes in role and provide
candidate which best suits the vacant position. Finance team gives budget to HR team so that HR
can do recruitment and selection work.
Marketing department and research and development department:

Marketing department face customers directly, so they know that what are the demand
and preferences of customer is. Marketing team gives information related to market to research
and development team. R&D uses the information at the time of making innovative products of
company.
Sales and marketing department:
Sales department is responsible for increasing sales of the company. Marketing
department given advertisement which is helpful for sales team in doing sales because with the
help of advertisement awareness is created (Santos, 2019). Both departments work hand in hand
and their coordination is necessary so that company can achieve their goals.
M2 impact of organizational structure.
Organizational structure of company is different from other companies. Under the
trademark of IKEA many companies operate. It has franchises which comes in IKEA group.
Franchises are controlled by INGKA group. Company follow strategic direction to carry
business operations. They manufacture and supply furniture related products.
D1 analysis of complexity in different types of business structure
Sole proprietorship:
It means business is owned and controlled by single person. It has complex structure as
compare to other business because in this complete loss is handles by single individual. It is
highly risky because only single person is involved in it.
Limited liability company:
It includes big company. Its business operations are complex because it operates with the
help of large employees and managing performance of every employee is not the easy task.
P4 positive and negative impacts macro environment have upon business operations
macro environment:
Macro environment present on large scale or in whole economy. Pestle model is used to
understand it clearly.
Pestle:
External environment is evaluated with the help of pestle framework. It has six factors which are:
pestle of IKEA
political factors:

this factor shows that how government can have impact on the particular company. It includes
tax, trade policies, tariffs etc.
Positive impact:
IKEA provide jobs to people and contribute in improvising economic growth (Al-Zghool, 2016).
Negative impact:
if the government is not friendly with company then it can create problem in importing and
exporting of products.
Economic factors:
it includes all economic factors which involve foreign exchange rate, inflation rate, interest rates
etc.
Positive impact:
despite of downfall in economy IKEA has survived because of its low pricing and good design
furnitures.
Negative impact:
rise in inflation rate increase [rice of products and lowers purchasing power of customer.
Social factors:
social factors include society related change like population, cultural trends etc.
Positive impact:
company make products which is demanded by society and offer social values.
Negative impact:
company has to face loss in some countries because of different ideology of society.
Technological factors:
change in technology can also affect business like automation, advanced operation practices etc.
Positive impact:
IKEA have website through which they are getting good online sale.\
Negative impact:
adopting advanced technology is expensive and affect company's profit.
Legal factors:
it includes laws and policies which can affect business like safety and security law, consumer
law, employment law etc.
Positive impact:

IKEA follow laws laid by government, it has stores which is run by employees so company take
care of labour laws (Singh and et.al., 2021).
Negative impact:
it can hurt company's reputation if goods manufactured by them is not safe.
Environmental factors:
it includes all environment related factors like weather change, climate, season etc.
Positive impact:
it manufactures eco friendly product which is safe for environment.
Negative impact:
using renewable energy require huge investment.
Pestle of BBC
political factors:
positive point of this factor is, company enjoy political stability in many countries. Quick
changes in old political regimes can give negative impact to business.
Economic factors:
Economic development of country improvise performance of organization which is positive.
Strict labour laws of countries can affect business which can be negative.
Social factors:
BBC competitive advantage in many countries because of different demographic characters.
Before entering in new market company have to study its market trends which is difficult and
wrong assessment can affect negatively.
Technological factors:
through social media BBC is getting more brand recognition worldwide which is positive.
Adopting innovative and advanced system is not easy can affect negative to business revenue.
Legal factors:
positive point is BBC providing employment to many people which is building strong image of
company in front of government. Negative point is if company is most able to protect intellectual
property right then company can lose its market share.
Environment factors:
company have habit of waste management which is positive impact. Weather and climate change
can negatively affect BBC.

M3 pestle model to support macro environment of organization
factors
political It is related with factors which include tax, tariffs etc.
economic Change in economy can influence the company.
social With the behaviour of society company can be impacted.
technology Change in technology affect business operations.
Legal Laws and policies can hinder or foster performance of company.
environment Environmental factors include climate, weather, geography etc.
P5 internal and external analysis of organizations to identify strengths and weaknesses
Swot model will be used to analyse internal and external factors.
Swot analysis of IKEA:
strength:
The biggest strength is company do extensive market research through which they came to know
about preference of customers. They offer unique designs in affordable price. There eco friendly
products is also major reason of attracting customers. It has goo brand recognition globally
which helps to beat the competition and also brings customer loyalty.
Weaknesses:
Weakness of IKEA affected their market share. Company compromise on quality as consumers
face issues related to breakdown of furniture (SWOT Analysis of IKEA: What’s the Brand’s
True Strength?., 2021). Furniture is used in daily life so people started ignoring because of poor
quality. Assembling furniture is another major problem which consumers has reported.
Opportunities:
Online shopping is the opportunity of company. Business can expand via online selling platforms
and increase their online sales.
Threats:
Competition is increasing in furniture market which is threat for company in sustainability.
Swot analysis of BBC:

strength:
Strength of BBC is it is the largest broadcasting company and have skilled workforce. BBC is
the oldest company which have good reputation in the market. To beat the competition they opt
for latest marketing strategies which helps them to reach towards goals. They use advances
technology which helps in delivery good quality services.
Weaknesses:
Major weaknesses are people believe that they telecast biased news which spread negativity.
This news channel shows sensitive issues and because of that company have to face
controversies. Their operating cost is high as compare to competitors.
Opportunities:
the biggest opportunity is the name of company which is known and trusted by many people.
They cover global events which is helpful in growth.
Threats:
More competition in new line like CNN. Along with global competition company is also
receiving competition from domestic news channel.
P6: How strengths and weaknesses interrelate with external macro factors in IKEA
Internal and external environment affect company and both factors have relations with
each other. Internal factors include strength weakness, opportunities, threats. External factors
include political, economic, social, technology. Environment and legal.
Strengths and social factors:
According to social factors society want products which looks designer and affordable. In
case of IKEA company does market research through which they come to know about customer
choice and then manufacture products accordingly and in reasonable price. It is helpful in
retaining existing customer and bringing new customers. So it possesses societal satisfaction.
Weakness and political factors:
IKEA works in many countries. Political factors of each country affect business
operations. When government of country is not business friendly then it can increase
complications of the company. Unfriendly government has created problem for IKEA in
importing and exporting of products. Some government attitudes are very bad for foreign
companies which can create issues to operate in such countries.
Opportunities and technological:

IKEA opt for latest technology which help company in getting opportunity over
competition. Technology factor is highly related with opportunity (Landmann, Stolz-
Römmermann and Günther, 2020). It also facilitates better decision-making in the future.
M4 SWOT/TOWS analysis and justify how they influence decision-making.
Swot of IKEA:
strength:
main strength of company is there innovative designs which is the result of company's decisions
after studying customer demands.
Weaknesses:
company compromise on quality which is weakness. Company should take decision to improve
quality.
Opportunities:
company gets opportunity in online selling of products which is help to IKEA in increasing sales
and revenue. Operating costs of company has also reduced because of use of advanced
technology.
Threats:
IKEA is facing cut-throat competition because its competitors are providing good quality of
products on almost same price. Company should take decisions and make strategies to beat their
competitors.
D2 impact of micro and macro factors on decision-making.
Social factors can affect business performance. Cultural change, change in preferences
and taste of society can influence decision-making of customers (Zhou and et.al., 2019).
Adoption of advanced technology becomes burden for company because advanced technology
incur high costs which cuts profit margin of company. Company should take effective decisions
to reach sustainability.
CONCLUSION
Through this report it can be concluded that private, public and voluntary sectors have
different scope, nature and objectives. Every department of organization are interrelated with
each other. Report has analysed that how each department is linked with other department.
Negative and positive impact of macro environment on business operations are identified. With

the help of swot internal and external analysis are done so that strengths and weaknesses can be
identified.

REFERENCES
Books and journals
Akhmetshin, E. and et.al., 2017. Analysis of innovation activity of enterprises in modern
business environment. J. Advanced Res. L. & Econ.. 8. p.2311.
Al-Zghool, M., 2016. An evaluation of IKEA’s global position and marketing standing.
Cepel, M. and et.al., 2019. Selected economic factors of the quality of business
environment. Journal of International Studies.
Čepel, M., 2019. Social and Cultural Factors and their Impact on the Quality of Business
Environment in the SME Segment. International Journal of Entrepreneurial
Knowledge. 7(1). pp.65-73.
Holotiuk, F. and Beimborn, D., 2017. Critical success factors of digital business strategy.
Landmann, E., Stolz-Römmermann, J. and Günther, T., 2020. Customer Integration Through
Virtual Reality Implementation: A SWOT Analysis in the Area of Production Systems.
In Augmented Reality and Virtual Reality (pp. 253-266). Springer, Cham.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Santos, J.P.D.S., 2019. How merchandising and layout of Ikea influence the consumer
behavior? (Doctoral dissertation).
Singh, P. and et.al., 2021. Key Determinants of International Retail Success: A Case of IKEA
Retail. International journal of Tourism and hospitality in Asia Pasific (IJTHAP). 4(1).
pp.18-33.
Zhou, J. and et.al., 2019. A selection model based on SWOT analysis for determining a suitable
strategy of prefabrication implementation in rural areas. Sustainable Cities and Society. 50.
p.101715.
Online
SWOT Analysis of IKEA: What’s the Brand’s True Strength?., 2021. [Online]. Available
through: <https://pestleanalysis.com/swot-analysis-of-ikea/>
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