Business Environment Analysis: Performance and Growth Evaluation

This report provides a comprehensive analysis of the business environment, focusing on key concepts such as market structure, stakeholder analysis, and Porter's Five Forces model. It begins with an introduction to organizations like HSBC, NHS, and Tesla, outlining their legal structures, operations, and objectives. The report identifies the market structure under which these organizations operate, discussing its impact on their behavior and competitive advantage. It defines stakeholders, shareholders, and stakeholder analysis, demonstrating the application of stakeholder analysis to a real company. Furthermore, it discusses the importance of analyzing the business environment, using Porter's Five Forces model to examine critical influences. Finally, the report evaluates business development with reference to key performance indicators, assessing the balance of financial and non-financial measures and providing recommendations for improvement. Desklib offers this document and many other study resources to aid students in their academic pursuits.

Understanding
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Provide an introduction an organization with which you are familiar, identify the legal
structure along with an outline of the operations/purpose of your organization and its main
objectives.....................................................................................................................................3
Identify and explain the market structure under which the organization operates, including a
discussion of how the market structure affects the behaviour of the organization in looking to
achieve competitive advantage...................................................................................................4
TASK 2 ...........................................................................................................................................5
Define the following terms: 'stakeholder'; 'shareholder' and stakeholder analysis'. Using a
named real company of your choice, demonstrate how you would apply the stakeholders
analysis process to identify the company's stakeholder groups and evaluate their needs and
influence......................................................................................................................................5
TASK 3............................................................................................................................................6
Discuss three reasons why it is imperative for your selected organization to analyse the
business environment it faces......................................................................................................6
Explain the importance of Porter's Five (5)-Forces model. Using the Five-Forces model,
examine the current behaviour of the selected organization and explain what you believe to be
the five most critical influences arising from the competitive market environments.................8
TASK 4............................................................................................................................................9
Referring to the key performance indicators in the annual report of the organization, evaluate
the development of the business with reference to short term and long term performance........9
In your own assessment, do you believe current growth reporting practice is balanced in terms
of financial and non-financial measures of performance? Justify your answer and provide
recommendations for improvement..........................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Businesses or business organization is refer to the set of actions which is handled by top
level management of company in aspect of sustaining their objectives, mission and vision for
long time. Due to the effective use of various functions in business firm easily sustained the
positive image in minds of consumers for long time (Chowdhury, Audretsch and Belitski, 2019).
Here the chosen organizations are HSBC, NHS and others for understanding the nature and
concept of business organization and headquarter of these companies are located in England. The
report will be covered provide an introduction an organization with which you are familiar,
identifying the legal structure along with an outline of the operations/purpose chosen company
and its main objectives. It further covers the description of market structure under which
organization operates, including a discussion of how the market structure impacts the behaviour
of the organization in looking to achieve competitive advantage.
TASK 1
Provide an introduction an organization with which you are familiar, identify the legal structure
along with an outline of the operations/purpose of your organization and its main
objectives
Here the company which is selected for analysing the concept of business organizations
are NHS, HSBC, TESLA and others. The headquarter of all these organizations are situated in
United Kingdom and also have their presence globally. In context to HSBC, this firm is comes
under the category of they are comes under the category of public limited company. This
company is dealing with wide range of financial services and products Their products includes
credit cards, equities trading, insurance, investment banking, mutual funds etc. In context to
NHS this firm is comes under the category of Voluntary sector. The main motive of this type of
firm is to conduct welfare programmes and activities for public. Because here this type
organization is not directly connected with government. Due to this organization is able to
maintain direct relationship with all customer segments for long time. In context to TESLA, it is
basically a multinational organization and they are mainly dealing with range of vehicle
products. The main motive of private based organization is to increase their profit at maximum
level.

From the analysis of above information HSBC is followed the most effective legal
structure which is known as public limited company in aspect of run the business activities
smoothly. The main objective of this type of company is to develop a meaningful business
through profitable, consistent growth and also to ensure that employees of organization must act
responsibly in meeting our accountability to shareholders and wider stakeholders.
Identify and explain the market structure under which the organization operates, including a
discussion of how the market structure affects the behaviour of the organization in looking
to achieve competitive advantage
Market structure is refer to in which manner industries are classified and differentiated
according to their degree and nature of competition regarding products and services of firm. In
context to HSBC management are following the Oligopoly structure and due to following this
structure firm always facilitates quality based financial products and services to all customer
segments at wide range. With help of providing best quality service to consumers, portfolio and
goodwill of organization are highly enhanced in market within short duration (Das and Acharjya,
2021). In respect of HSBC, management is acting in the form of global banking and marketing
business which is important for taking essential steps in aspect of gaining best possible output for
their customer's during the time of initiating orders on their behalf.
How Oligopoly market structure support for enhancing the success rate of company -
 Facilitating reliable goods and services – Due to the effective use of Oligopoly
structure HSBC always facilitates reliable and accurate data to their clients regarding
their services and goods in both online and offline mode. Therefore, it is necessary for
management that they must advertising and social media platform for sharing their
products details to customer's quickly. With help of facilitating reliable informations to
users goodwill and profit margin of the organization are highly sustained in long term.
 Increasing profit – In respect of HSBC, according to the Oligopoly structure concept,
the services and products that are managed through Oligopolies are basically highly
wanted and needed from large majority of the population. Due to delivering services and
products to customers at wide range their overall presence in various locations and in
minds of consumers are effectively sustained.

TASK 2
Define the following terms: 'stakeholder'; 'shareholder' and stakeholder analysis'. Using a named
real company of your choice, demonstrate how you would apply the stakeholders analysis
process to identify the company's stakeholder groups and evaluate their needs and
influence
Stakeholder is basically refer to any particular entity or person who is highly motivated,
capable and ready for doing any type of task. Stakeholder also played the important role in
aspect of developing significant impact on various types of decision regarding operational and
financial functions of organization. But shareholder is defined as a subset which is comes under
the category of stakeholder, it means shareholders invest their money in business. In this way
they are automatically known as stakeholders
Stakeholder Analysis -
Stakeholder analysis is refer to a tool which is applied by company for increasing their
economic growth and also for maintaining their objectives, vision and mission for long time
(Ellis, 2021). Due to the effective use of this tool by each group and every individual various
types of business activities are run in smooth manner and also increased the profit margin of
HSBC at higher rate. With help of this analysis it is also understandable that every group or
individual before the implementation is gathered them in accordance to various stages and
authority within company.
 High power, high interest – It is related with those stakeholders whose powers are very
high and also have deep interest in aspect of decision in the business functions. Because
due to always taking correct decision the overall performance and growth of organization
is easily sustained for long time. In context to HSBC, top level management such as
Chief Executive Officer and board of directors are comes in this category. That means
these types of employees are highly responsible for increasing the overall performance
and success rate of firm at maximum level.
 High power low interest – Here those type of stakeholders are considered whose power
and interest both are very less regarding the functions of organization. Because in this
stage the main focus of this type of stake holder is to achieve positive output from
employees in any way. In relation to HSBC, the stakeholders who is belong to this
category are investors. Because here only investor have high power in aspect of taking

final decision. That means due to taking right decisions from investors the activities of
firm always moved in right direction.
 Low power, low interest – It is considered with those people within organization whose
interest are high but powers are low regarding the functions of business and also in the
process of decision making. In relation to HSBC, the peoples comes in this category are
consumers. Because here customers did not have the right for making any type of
interference in business functions. But they have the option for availing various types of
services and products according to their own choice and desires.
 Low power, low interest – It is related with those kind of stakeholders whose interest
and power both are low or comes at zero level (Gerber, Le Roux and Van der Merwe,
2020). In relation to HSBC, low level employee's are belongs in this category. That
means due to having Zero level powers workers did not have any type of option for
applying their own creativity, concept and ideas in various task and assessment. Due to
this chances are highly increased in aspect of reducing goodwill and productivity of
company at maximum level.
After the evaluation of above model it is understandable that stakeholder analysis play a major
role for enhancing the revenue of organization at maximum level. Due to the effective use of this
model bad impression of the organization is easily decreased at higher rate regarding their goods
and services for long time.
TASK 3
Discuss three reasons why it is imperative for your selected organization to analyse the business
environment it faces
PESTEL Analysis -
It is basically defined as a tool or technique which is used by HSBC for analysing the
macro external factors which leads to create both positive and negative impact in their business
functions. The factors which generate direct impact on the goodwill and productivity of
organization are explained below -
 Political – This type of factor is interlinked with different types of regulations and rules,
exchange and return policy, laws etc. Due to the effective analysis of these factors
company is able to sustain their political stability effectively. In relation to HSBC, higher

authority must execute and utilize their policies effectively. They also ensure that their
policies must be beneficial for all categories of customers regarding their products and
services. With help of various types of effective policies firm is able to sustain the
political and positive relations with upper and middle class segments for long time.
 Economical – It is considered with those types of factors which is responsible for
producing impact on the overall functions of business. It includes income, fluctuations,
interest rates, wages etc. In respect of HSBC, authority are faced different types of
difficulties due to the impact of fluctuations and changing rates in currency. Due to
changes in currency rates on regular basis firm need to keep fair or average price in their
services and products. In this way the value for firm is easily reduced in the minds of
users at higher rate.
 Social – It is defined as those factors which effects the functions of firm in social way
which includes income level and so on (Hasan, 2021). In relation to HSBC, it is only the
one company who provides quality products and service to consumers at high range. Due
to this reason the chances are highly increased for developing negative image or
impression in the minds of existing and new customers regarding their services and
products. It leads to decrease the economic growth of organization at maximum level.
 Technological – It is considered with those key factors which impact the all over
productivity and reputation of firm in digital manner. In context to HSBC, authority must
use advanced and artificial intelligence in aspect of running their operational functions
smoothly. Due to the heavy utilization of different types of software, apps and other
systems customer convenience are highly enhanced for availing the company services
and goods quickly from any location. The digital facility which is provided to users from
company are online shopping, self check in and check out system etc.
 Environmental – It is connected with those type of factors which effects the productivity
of firm naturally and it includes food, pollution, population density etc. In context HSBC,
it is necessary for higher authority that they must reduce the use of carbon footprint
within organization. Because it leads to decrease the work efficiency of employees at
higher rate. Due to this organization are not able to deliver the best quality service and
products to customers in time.

 Legal – It is linked with those type of factors which effects the whole functions of
company in legal manner. It includes various rules, regulations and laws which is made
by the government. In context to HSBC, they must run their whole business functions in
transparent and fair way. Due to this they are able to run their whole business at
maximum level without any type of legal risk for long time and also sustained positive
relations between company and customer effectively.
Explain the importance of Porter's Five (5)-Forces model. Using the Five-Forces model, examine
the current behaviour of the selected organization and explain what you believe to be the
five most critical influences arising from the competitive market environments
It refer to the framework or method which facilitates strong platform to company for
evaluating their competitive advantage. With help of this model organization is able to
understand their own strength and weakness effectively.
 Threats of new entrants – It means enhancing threat for previous organization due to
providing new goods and services to users by other competitor brand. Here other brands
also providing same features in their services and goods which creates for this
organization. In relation to HSBC, the threat of new entrants is very less regarding their
services and goods because their goodwill and loyalty are strongly sustained in the mind
of all customer segments.
 Bargaining power of buyers – In context to HSBC, bargaining powers of consumers
regarding their services and products are very less (Kemper, Hall and Ballantine, 2019).
Because here management always tried to facilitate quality and reliable service to their
customers. Due to this the loyalty and trust of the organization are highly developed in
the minds of users in long term. In this way the revenue of company is easily increased
at higher rate.
 Bargaining power of suppliers – In relation to HSBC, it is also very less because they
did not dominate the company for enhancing price in their product unless negotiated
with them. Due to this organization has various other suppliers to give them with their
services and products. A suppliers refer to a single person which facilitates raw materials
to the business for manufacturing best quality goods.
 Threat of substitute – In respect of HSBC, it is high for their services and goods
because here chances are easily enhanced in aspect of switching people to other brands.

The main reason for occurring this problem is that here sometimes other brands provide
similar or duplicate goods to users at low price. It easily leads to reduce the goodwill of
firm at maximum level.
 Competitive rivalry – In context to HSBC, management activities in a highly
competitive market segment they need to maintain affordable price range in their
product. Due to this the sale of their product is easily increased at maximum level during
the time of competition. t also help to enhance the goodwill of company at large scale
between customers.
TASK 4
Referring to the key performance indicators in the annual report of the organization, evaluate the
development of the business with reference to short term and long term performance
Key performance indicator is defined as a technique which is applied by firm for
measuring their current and previous record effectively (Kushwah, Dhir and Sagar, 2019). With
help of this tool firm is able to enhance their success and performance at maximum level. Due to
this HSBC are utilized various types of methods in this procedure which includes balance
scorecard, benchmarking and others.
Development of business in aspect of both short term and long term goals -
In aspect of short term goals it refer to procedure or functions which is used by company
for enhancing their progress level with in short time. The various steps which is applied by
organization in short term aspects development are motivating employees for their work,
effective communication, preparation of budget, managing cash flows effectively and saving of
capitals. Due to the effective use of these steps HSBC are able to maintain the popularity in their
services and products at maximum level for short duration.
In aspect of long term goals it is defined as a long planning and comprehensive
framework which is essential for the comprises of various goals within three to four years period.
With help of utilizing this plan organization is able to gain their vision, mission and objectives
for long time. Here the steps which is involved in aspect of long term planning are increasing
sales, enhancing brand awareness with help of product and high utilization of digital and social
media platforms. Due to the effective use of these stages organization is able to sustain their
goodwill in market for long time.

In your own assessment, do you believe current growth reporting practice is balanced in terms of
financial and non-financial measures of performance? Justify your answer and provide
recommendations for improvement
Financial measures of performance is refer to subjective in nature that means in which manner
company use their resources in aspect of increasing their revenue at high rate. Due to this they
used their resources from primary mode of business.
The elements which is used by HSBC for measuring their financial performance are -
 Net profit margin – It is a one type of profitability ratio which is utilized by company in
aspect of measuring the percentage of profit which is left after decreasing all expenditure
for business, including costs of goods sold, operating expenses etc.
 Working capital - This method measures the businesses available operating liquidity
which can be used to fund day to day operations (Lafuente González and Szerb, 2021).
Non financial measures of performance is refer to expressing performance in the form of
measurement other than money. It includes percent of bags lost, airline use on-time performance
and number of consumer complaints. All these comes under the category of non financial
measures.
 On-time delivery – With help of providing quality product to users according to
prescribed time goodwill of company are highly increased.
 Consumer satisfaction – In relation to HSBC, higher authority must facilitate quality
service and products to their consumers. It leads to enhance the satisfaction level of
customers at higher rate.
Recommendation for the improvement of company -
After the analysis of above data it concludes that financial measures is effective and
suitable for HSBC in aspect of enhancing their overall performance. Due to the effective use of
this strategy organization is able to use their resources in optimized manner. Due to using
resources properly company is easily manufacture best quality product according to the
requirement of customers. In this way positive relationship are sustained between employee and
customer for long time.

CONCLUSION
According to above information it is necessary for company that they must facilitate their
products at minimum price to all customer segments. Because effective pricing strategy also
helped to attract the customers in large number and it also leads to increase the revenue of the
organization. Company need to apply the several business strategies in order to know the trend
and evaluate the competition. The report will be covered provide an introduction an organization
with which you are familiar, identifying the legal structure along with an outline of the
operations/purpose chosen company and its main objectives.

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