Business and Business Environment: A Comprehensive Report

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BUSINESS AND BUSINESS ENVIRONMENT
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Contents
LIST OF FIGURES.............................................................................................................................3
INTRODUCTION............................................................................................................................. 4
LO1.................................................................................................................................................5
P1............................................................................................................................................... 5
P2 AND M1................................................................................................................................ 6
LO2............................................................................................................................................... 11
P3............................................................................................................................................. 11
M2............................................................................................................................................13
LO3............................................................................................................................................... 15
P4............................................................................................................................................. 15
M3............................................................................................................................................17
LO4............................................................................................................................................... 20
P5 AND M4.............................................................................................................................. 20
P6............................................................................................................................................. 23
CONCLUSION............................................................................................................................... 24
REFERENCES.................................................................................................................................25
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LIST OF FIGURES
Figure 1: TFL Legal Structure..........................................................................................................7
Figure 2: Marks and Spencer Legal Structure................................................................................8
Figure 3: Boots UK Legal Structure.............................................................................................. 10
Figure 4: PESTLE Analysis.............................................................................................................18
Figure 5: SWOT Analysis.............................................................................................................. 21
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INTRODUCTION
The business environment is the external environment of a business in which the organization
operates. It is significant for a business organization to understand the key elements of a
business environment so it can structure and operate its business accordingly (Erasmus et al.,
2016). The internal as well as the external environment has various factors that hold a strong
impact over the business organization and thus are required to be studied.
In this report, an overview of business organizations and the environment they work in is given.
Through this report, a highlight over different forms of business organizations has been given
and the impact of various elements of the environment over the objective of the business has
been determined. The report would also cover the interrelationship of various functions of a
business organization and study its impact on the objective of the firm. The report would also
cover the study of the external business environment and use different measures through
which its benefit can be utilized by organizations.
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LO1
P1.
On the basis of purpose of formation, the business organizations can be classified into various
types, which have been discussed in the following:
 Public Organization
A public organization is a firm which has been established by the government or statute
of a country and is controlled by the same. The main purpose of a public sector
organization is to provide essential services to the public at a lower cost and develop the
society (Baden-Fuller and Mangematin, 2013). For example, Transport for London is a
governmental organization which has been established by the government to provide
easy transportation services to the people of London.
 Private Organization
A private organization is a privately owned business whose main purpose is to earn
profits through business activities. Private organizations are managed and controlled by
their owners and do not accept any interference from the outside environment (Porter
and Tanner, 2012). For example, Marks and Spencer is a consumer retail organization
which is a type of private company. Marks and Spencer have its business diversified at
global platforms and established its business overseas to gain higher profits.
 Voluntary Organization
Voluntary organizations are those organizations which are being formed by an individual
or a group of individuals who are willing to work not for the purpose of profits but for
development of the society (Anheier and Seibel, 2013). These organizations have a
common motive of benefitting people in society through their activities. For example,
Boots UK is a subsidiary of Alliance UniChem and is a voluntary organization willing in
providing pharmaceutical services to the people in the society.
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P2 AND M1
Different types of business organizations are formed with different sizes and scopes through
which their objective of formation can be fulfilled. Following is the representation of the range
and scope of different forms of organizations:
Transport for London
Type: Public Organization
Background: Transfer for London is an organization formed by the government to facilitate
transportation services in London. The organization was formed in the year 2000, after passing
of the Greater London Authority Act 1999. The headquarters of Transport for London is situated
at 55 Broadway, London (Transport for London, 2019). The organization facilitates its services
to about 31 million customers every day through an extensive transportation network
established by it.
Objectives: The objective of Transport for London to implement the strategies that have been
framed by the Mayor of UK so that the services can be managed throughout London (Transport
for London, 2019).
Products/Services: The services provided by Transport for London include London Buses, TFL
Rail, London Underground and Overground, Victoria Coach Station, Emirates Airlines, Docklands
Light Railways, London River Services, etc. (Transport for London, 2019)
Size and Scope: The size and scope in which the Transport for London operates are very huge as
they manage transportation services throughout London and generated revenue of about 2.7
Billion pounds in the year 2016-17 (Transport for London, 2019).
Stakeholders: The key stakeholders of this organization are the government, associations,
elected officials (for example Mayor of UK), and citizens of London.
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Legal Structure:
Figure 1: TFL Legal Structure
[Source: Transport for London, 2018]
Marks and Spencer
Type: Private Organization
Background: Marks and Spencer is a multinational retailer which has established its business
overseas in 57 countries. The organization is known for providing high-quality products and
providing higher satisfaction to the customers. Formed 135 years ago in the year 1884, Marks
and Spencer is currently headquartered in London (Marks and Spencer, 2019). It is a market
leader in the retail sector of the UK and has been providing a variety of products to the
customer globally.
Objectives: The objective of Marks and Spencer is meet the changes that are occurring in the
customer's world and focus on the wellbeing, community, and planet through the activities
performed by the organization so that they can assist the development of communities around
and beyond their stores situation worldwide (Marks and Spencer, 2018).
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Products/Services: Marks and Spencer provide a range of products in clothing, food products,
and home products. The clothing line of Marks and Spencer is very popular across the globe
with a wide range of clothing for men, women, and children.
Size and Scope: Being a multinational organization, scope held by Marks and Spencer is very
huge which is performed by employing more than 80 thousand employees worldwide and
generating revenue of £10.4bn group revenue (Marks and Spencer, 2019).
Stakeholders: Stakeholder impacting the decisions of Marks and Spencer include its customers,
employees, suppliers, investors, government, media and wider society (Marks and Spencer,
2019).
Legal Structure:
Figure 2: Marks and Spencer Legal Structure
[Source: Marks and Spencer, 2019]
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Boots UK
Type: Voluntary Organization
Background: Boots UK was formed 170 years ago in the year 1849 which was formerly named
as Boots the Chemists Ltd. The organization is known for providing pharmaceutical products.
The organization is a subsidiary of Alliance Boots and is headquartered in Nottingham, United
Kingdom (Boots UK, 2019). It is considered as one of the largest retailers dealing providing care
products to the customers.
Objectives: The objective of Boots UK is to be the first choice of customers for pharmacy,
beauty and healthcare products (Boots UK, 2019). The organization also aims at providing
products to the community so that it can lead to happier and healthier lives.
Products/Services: The products of Boots UK include a wide range of beauty products, health
products, and pharmaceutical products. Of the various products, the bestselling products of the
organization are tube mascaras, No7 Serums, thermal treatment wrap, etc.
Size and Scope: Providing its products in 5 countries, Boots UK holds the big scope in the
pharmaceutical industry. With the rise in the awareness of health among the people, Boots UK
also holds a huge scope in the health and beauty industry (Boots UK, 2019). The size of the
organization is also very big which has been formed by about 56 thousand employees working
for the organization in different locations of the firm.
Stakeholders: the stakeholders of Boots UK largely include the customers, the society and its
employees.
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Legal Structure:
Figure 3: Boots UK Legal Structure
[Source: Boots UK, 2019]
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LO2
P3
It is required for an organization to maintain a strong relationship among the different functions
performed by them so that they can be synchronized with the objective of the organization.
Marks and Spencer is a global retailer of consumer goods and thus, is required to maintain
harmony between all the different functions performed in the organization (Drucker, 2012). To
understand the relation between the different functions performed by Marks and Spencer, it is
essential to outline the different activities performed, which are as follows:
 Marketing Function
The marketing function is performed by Marks and Spencer so that it can attract more
customers and gain a higher base of the customer in the global market. Through the
various marketing activities performed, it is required by Marks and Spencer to align
them along with the other function that is performed so that they can promote what
can be delivered to the consumers (Chernev, 2018). Through considering all the
different functions, Marks and Spencer develop a marketing strategy which could be
effective and its result can be delivered to the customers. Through this function, Marks
and Spencer is able to reach out to new customers and increase its profitability, thus
leading to the objective of the organization.
 Finance Function
The finance function of Marks and Spencer deals with the inflo9w and outflow of the
fund in the organization. It is essential for the finance function to interrelate with the
other functions of the organization so that it can monitor the expenses that are being
incurred by the different activities and determine the level of income generated by
them after investing the certain amount (Golway, 2019). Thus, the finance function has
to work keeping in sync with the other functions of Marks and Spencer. Through
controlling the expenses and examining the key areas of income, the finance function
contributes to the fulfillment of the objective of the organization.
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 Human Resource Management Function
The human resource management function is of the most significant functions that are
to be considered by Marks and Spencer and has to be interrelated with the other
departments of the organization so that it can understand the skills and abilities that are
required to be inherited by the individual before appointing him to a particular job
(Leroy et al., 2018). Through this, higher efficiency from the employees is achieved as
they are being appointed to the right job based upon their capabilities. Thus, the human
resource management function has to work in accordance to the requirements of the
other functions performed in the organization so that they can gain efficiency in their
function and fulfill the aim of the organization (Ansoff et al., 2018).
 Research and Development Function
Research and development function is performed by Marks and Spencer so that it can
understand the potential changes that would be incurred in the future so that it can
plan accordingly in the present to gain higher benefits from them (Coghlan, 2019).
Unlike other forms of organization, this function has to interrelate with other functions
so that it can determine the possible areas of changes and examine the strategies that
can be adopted by Marks and Spencer so that it can increase its profitability in the
future (Drucker, 2012). Through estimating the changes and developing products based
upon the needs of the customers, the R&D function of Marks and Spencer assist in
attaining the organizational objective.
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