BTEC HND Business (Level 5) Individual Written Report

This report, submitted as part of a BTEC HND in Business (Level 5) module M1U1, provides a comprehensive analysis of the business environment. It begins with an introduction to internal and external environments, followed by a description of the Siddhalepa company. The report then explores the positive and negative impacts of the macro environment on business operations. It includes internal and external analyses of the chosen organization, an examination of how strengths and weaknesses relate to macro factors, and an application of the PESTLE model. Furthermore, a SWOT analysis is performed, and the report concludes with a critical evaluation of macro and micro factors influencing business decision-making. The report demonstrates the student's ability to identify macro environment impacts, conduct internal and external analyses, apply PESTLE and SWOT models, and evaluate factors affecting business objectives.

Assignment Cover Sheet
Qualification Unit number and title
BTEC HND in Business (Level 5) M1U1: Business and the Business Environment
Student name Module Tutor
Akash Kanagalingam Dr. Manil De Mel
Learning Outcomes Date issued Deadline Submitted on
LO 3 and LO 4 28 June 2021 24 July 2021 –Before
10.00 am 24th July 2021
Assignment title Individual Written Report- Internal and External Business Environment
In this assessment you will have opportunities to provide evidence against the following criteria. Indicate the page
numbers where the evidence can be found for each criterion.
Criteria
reference To achieve the criteria the evidence must show that the
student is able to: Evidence
(Page no.)
P4 Identify the positive and negative impacts the macro environment has
upon business operations, supported by specific examples.. 04
P5 Conduct internal and external analysis of specific organisations in order
to identify strengths and weaknesses 06
P6 Explain how strengths and weaknesses interrelate with external macro
factors 07
M3 Apply appropriately the PESTLE model to support a detailed analysis of
the macro environment within an organisation. 07
M4 Apply appropriately SWOT/TOWS analysis and justify how they
influence decision-making. 09
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D2 Critically evaluate the impacts that both macro and micro factors have
upon business objectives and decision-making. 10
Student declaration
I certify that the work submitted for this assignment is my own and research sources are fully
acknowledged.
Student signature: Date:24th July 2021
Contents
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Qualification BTEC Higher National Diploma in Business
Level 05
Batch No 10
Module Name Business and the Business Environment
Module Number M1U1
Name of Candidate Akash kanagalingam
Candidate No. 910032106
Submission Date 24 July 2021
Word Count 3552

1.0 INTRODUCTION.....................................................................................................................................3
2.0 INTERNAL AND EXTERNAL ENVIROMENT..............................................................................................3
3.0 DISCRIPTION OF THE COMPANY............................................................................................................3
4.0 POSITIVE AND NEGATIVE IMPACT OF MACRO ENVIROMENT UPON BUSINESS OPERATIONS...............4
5.0 INTERNAL AND EXTERNAL ANALYSIS OF THE CHOSEN ORGANIZATION................................................6
6.0 HOW STRENGTH AND WEAKNESS INTER RELATE TO MACRO FACTORS................................................7
7.0 APPLICATION OF PESTEL MODEL TO SUPPORT AND ANALYSIS ON MACRO ENVIROMENT...................7
8.0 SWOT ANALYSIS OF SIDDHLEPA COMPANY...........................................................................................9
9.0 CRITICAL EVALUATION OF MACRO AND MICRO FACTORS ON BUSINESS DECISION MAKING.............10
10.0 References.........................................................................................................................................10
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1.0 INTRODUCTION
In a nutshell, the phrase environment refers to the surrounds or location of an activity. Several events
occur in an organization, and many people work together to achieve a shared objective. Management
and personal actions are likewise impacted by the surrounding environment that they are in. There are
basically two types of environments that influence an organization that is internal and external (Surbhi,
2020).
Figure 1. Business Environment Classification. Source (Author)
To begin, a general overview of the internal and external environments, as well as a brief description of
the firm will be addressed (Surbhi, 2020). Furthermore, the positive and negative influence of the
external environment on the business environment is discussed, as well as the internal and external
study of a given company and how its strengths and weaknesses relate to macro variables. Moving on to
the following paragraph, where the pestle model is used to support and analyze the macroenvironment,
as well as an explanation of swot. Finally, a critical assessment of macro and micro factors influencing
corporate decision making.
2.0 INTERNAL AND EXTERNAL ENVIROMENT
Internal Environment refers to the aspects of the corporate environment that are concerned with the
many elements existing within the firm. It is made up of situations, factors, members, and events that
can affect the company's decisions and activities (Surbhi, 2020).
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It establishes the processes and techniques by which activities are carried out in the organization, as
well as all of the organization's immediate and information resources, such as technical, financial, and
physical resources. These are the factors:
Figure 2. Internal Environment Classification. Source (Author)
Value System: A value system is a set of rules and rational and consistent values chosen by a company
as a standard guide to control behavior in any sort of scenario.
Vision, Mission, and Objectives: The vision relates to the overall picture of what the firm hopes to
achieve, whereas the mission discusses the organization and its business, as well as the purpose for its
existence (Surbhi, 2020). Finally, objectives are the basic milestones that are established to be
completed within a certain time frame and with the given resources.
Management structure and Internal Power Relationship: The organizational hierarchy, the way duties
are allocated and how they connect, a span of management, the relationship between distinct
functional areas, the membership of the board of directors, shareholding pattern, and so on are all
examples of management structure. Internal power relationships, on the other hand, depict the
relationship and camaraderie between the CEO and the board of directors. Furthermore, the level of
support and input obtained from workers and other members of the organization increases the
company's decision-making authority and its ability to implement its decisions across the board (Surbhi,
2020).
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Human Resources: Human resources are the organization's most valuable asset since they determine
whether the organization succeeds or fails. The company's strengths and weaknesses are based on
abilities, competences, attitude, devotion, morale, and commitment.
Tangible and Intangible Assets: Tangible assets are the firm's physical goods, such as land, buildings,
machinery, and stock. R & d, technological skills, marketing and financial resources, as well as other
intangible assets are all examples of intangible assets.
External Business Environment, effects, events, entities, and situations that exist beyond the company's
borders yet have a major impact on the operation, performance, profitability, and survival of the
commercial enterprise are referred to as the external business environment.
The firm must act, react, or modify in response to these variables in order to maintain ongoing and
uninterrupted business operations. The company has no influence over these variables. The external
environment's components are split into two categories:
Figure 3. External
Environment Classification. Source (Author)
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Micro Environment
These variables, also known as task environment, have a direct impact on a company's operations since
they encompass the immediate environment that surrounds it. In nature, the causes are relatively
controlled. It contains the following items:
Competitors are business rivals who compete in the same industry, provide similar products and
services, and target the same audience.
Suppliers: In order to complete the manufacturing process, raw materials are necessary, which are given
by the suppliers. The supplier's actions have a direct influence on the business operations of a firm.
Customers: Customers are the target audience for a product, as they are the ones who buy and
consume it. Consumers are given the highest priority in any firm since items are produced and promoted
only for customers.
Intermediaries intermediates are persons or companies who assist a business in the advertising, selling,
distribution, and delivery of a product to the end buyer. Agents, distributors, dealers, wholesalers,
retailers, delivery boys, and so on are all included.
Shareholders: Shareholders are the company's true owners since they put their money into it. They also
receive a portion of the earnings in the form of a dividend. They do, in fact, have the right to vote at the
annual general meeting of the corporation.
Employees: Employees are those who are employed to work for the firm in order to assist it achieve its
objective. As a result, it is critical for the company to hire the appropriate people, retain them, and keep
them engaged in order to get the most out of them.
Media: Media plays a vital part in the life of any company since it has the potential to create or break a
firm's product in an instant. This is owing to the fact that media has such a broad reach that any material
that airs on any form of media may have a good or negative impact on the firm, depending on the type
of information it includes.
Macro Environment
The macro environment, often known as the general environment, has an impact on the whole industry
rather than just one company. That is why, in nature, these forces are entirely uncontrolled. To survive
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and develop, the company must adapt to changes in the macro-environment. It contains the following
items:
Economic Conditions: The profitability of a firm is heavily influenced by the economic conditions of the
region and the country as a whole. This is because purchasing power, saving habits, per capita income,
credit facilities, and other factors are heavily influenced by the economic conditions of the country,
which regulates demand for the company's goods.
The political and legal environment is made up of laws, rules, regulations, and policies that the firm must
follow. Changes in these laws and government may have an impact on the firm's actions, provide new
possibilities for the company, or put the company in jeopardy.
Technological Environment: Technology is always evolving, since every day a new and improved version
of something is released that was developed using cutting-edge technology. This might be advantageous
if the firm is the first to market, assuming the product is successful. If, on the other hand, it fails, it will
have been a waste of time, money, and effort. Furthermore, any business must stay current with
evolving technologies.
The socio-cultural environment is made up of variables that have to do with human interactions, such as
conventions, traditions, beliefs, values, morality, tastes, and preferences of the general public. These
aspects must be considered by the firm in a variety of situations, including personnel recruiting, product
and service promotion, and decision-making.
The demographic environment encompasses the size, kind, structure, education level, and distribution
of people in a given geographic region, as the name implies. The firm's understanding of the
environment will aid it in determining the best marketing mix for the target demographic.
Global Environment: As a result of liberalization, domestic businesses may now sell their goods and
services in other nations. In reality, many businesses operate in a variety of countries throughout the
world. As a result, such businesses must abide by local laws as well as international rules and
regulations. Furthermore, the company's responses and practices must be consistent with the global
context.
3.0 DESCRIPTION OF THE COMPANY
M. Hettigoda Gamage Don Carolis de Silva, an ayurvedic physician and astrologer, became prominent in
a tiny town on Sri Lanka's southern coast in the early nineteenth century, and this was founded in 1979.
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Siddhalepa is a brand of herbal balms to relieve bodily aches and pains that is based on an old
subcontinental medical tradition. They sell siddhalepa balm in 25g and 50g sizes, as well as siddhlepa oil
and dietary supplements like pills, as well as gift bundles for elderly parents (Business Today, 2021).
The siddhalepa group of companies is a well-known manufacturer of medicinal oils, balms, and herbal
cosmetics, with authentic goods exported to more than 40 countries. The firm also runs an Ayurveda
hospital, a health resort, and other businesses.
4.0 POSITIVE AND NEGATIVE IMPACT OF MACRO ENVIROMENT UPON
BUSINESS OPERATIONS
The macro environment, instead of a single industry or place, refers to the status of the business as a
whole. The macro environment includes trends in the gross domestic product (GDP), inflation,
employment, spending patterns, and monetary and fiscal policies. Unlike the success of a single
company, the macro environment is inextricably linked to the whole economic cycle. (KHARTIT, 2020)
Taxes, inflation, buying power, and other economic variables might all have a role. When the import rate
falls, prices fall, allowing businesses to purchase resources at a cheaper cost, allowing them to sell items
at lower costs to customers, resulting in more sales. It goes on to say that when inflation falls, people's
buying power rises, allowing them to buy more products and services, resulting in a higher quality of
living and a reduction in poverty (CFI, 2015).
However, economic considerations will have a negative impact on businesses because as tax rates rise,
disposable income decreases and demand decreases, resulting in people having less money to spend,
resulting in a decrease in spending patterns and an increase in saving patterns. When individuals spend
less, company merchants will have fewer sales, which will result in lower earnings year after year. Tax
compliance costs are 67 percent greater for small businesses than for large businesses; when small
businesses make less profit and must pay more taxes, it will be difficult for them to run their businesses,
resulting in their closure.
Wealth, religion, population, taste, and fashion are examples of social variables that influence behaviors
and spending patterns. According to the population, when there are more people in a nation, businesses
will have more sales since people want to buy products and services, thus sales will increase. Traders get
more money as the population grows(CFI, 2015). However, trends and fashion change on a regular basis,
and if company traders continue to use the same patterns and themes, customers will regret purchasing
the items and will seek out alternative options, resulting in reduced sales and earnings.
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The level of invention, research, and advancement are technological aspects. Technical change and
technological awareness are two sides of the same coin. One of the most favorable effects of technology
is convenience, since we can now buy for goods and services without having to drive around. It is also
simple for company suppliers to shift their focus to online commerce, where clients place orders and
items are delivered on time. It will assist to alleviate the existing covid-19 issue. Whether you have one
or a thousand staff, new technologies will boost productivity.
When technology is employed, the output will grow at a reduced cost, allowing the firm to offer items at
a lower price while simultaneously lowering labor costs, resulting in better profits. However, one of the
most prevalent concerns about technology's influence on business is the lack of human connection. It's
more difficult to build a loyal and trustworthy relationship when you may never meet your clients or
business contacts face to face. It goes on to say that adopting technology would result in additional costs
such as machinery maintainers and repairs.
Furthermore, security becomes more difficult to manage when you are unaware that you are being
targeted. Before the internet, businesses would employ a security guard or install security cameras in
their offices to prevent themselves from being stolen. If your company uses e-commerce, you may want
to hire a security expert and invest in more advanced security technology to defend against thieves and
hackers.
Environmental considerations, also known as ecological factors, demonstrate that certain businesses will
utilize natural resources such as forests, agricultural goods, and marine products, among others. The
firm will also use nonrenewable resources. Climate change may be a factor that affects business. For
example, during the summer, vendors may sell cool items such as ice creams, which people may
purchase due to thirst, resulting in increased sales. However, severe weather and global warming may
harm farmers and crops, resulting in increased demand for veggies and skyrocketing prices, raising the
cost of life.
Legal variables are external elements that describe how the law influences how businesses function and
how customers react. Employees are treated fairly, and salaries are provided beyond the minimum
wage, according to employment legislation, to guarantee that employees are satisfied with their
compensation, and that if they are motivated, they would assist the company in achieving its goals(CFI,
2015). However, if the firm sells dangerous or outdated items, the consumer protection agency may sue
the company, resulting in the company's closure and a drop in earnings.
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5.0 INTERNAL AND EXTERNAL ANALYSIS OF THE CHOSEN
ORGANIZATION
An internal analysis refers to or evaluates your company's competency, cost position, and market
competitive viability. Internal analysis usually includes metrics that give useful information about your
company's strengths, weaknesses, opportunities, and threats.External analysis, often known as
environmental analysis, is the process by which businesses objectively analyze changes in their sector
and the wider world that might affect their current operations. This is done by businesses to guarantee
that they can adapt to changes and remain competitive in their fields.
The prominence of sidhalepa's flagship brand name, siddhalepa balm, which has a competitive edge
over similar goods, might represent the company's strength. Siddhalepa balm is one of the most
essential medicines for many individuals, including young people, the elderly, and others, as it helps
them to heal pain while also assisting the company in archiving strength, which is a key element of the
swot analysis.
It also discusses the highly experienced and skilled employees in the R&D and manufacturing segments,
where workers at the Siddhalepa company are much more qualified and experienced, allowing them to
manufacture balms as well as other products at a cheaper price with higher quality, increasing consumer
awareness as a result of the higher quality of products and services. They may also strengthen
themselves by having a strong research and development department, where the board of directors or
searchers would collect data from various sources and websites in order to gather information that will
assist them acquire a competitive edge and grow market share.
Shifting on to the company's weaknesses, the firm will have low profit margins in local markets for only
certain products, because demand exists. This occurs since other brands, such as Vicks, move, and
others, may compete with the siddhalepa company, resulting in lower profit margins or, because they
must capture the market, they may sell at lower prices than other competitors, resulting in a lower
profit margins.
Furthermore, it could be explained by a lack of machinery for the production of goods to meet foreign
demands; because Siddhalepa products are sold all over the world, they must manufacture goods, which
necessitates the use of machines and equipment; if these are lacking, they will be unable to archive
output and may lose target and sales, affecting profit margins and leading to the closure of some
branches and countries.
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6.0 HOW STRENGTH AND WEAKNESS INTER RELATE TO MACRO
FACTORS
The existence of revised technology that makes sure the preservation of the raw materials' natural
heading properties is likely related to technological factors, as when new machines and equipment are
used in the production process, the output of balms and medicines can increase with less wastage,
resulting in a 35 percent increase in sales and profits over the next five years. Based on societal
variables, the Siddalepa firm could make balms and vatha oil according to customer taste and fashion,
where they could develop balms and oil in such a way that consumers will not feel fatigued while
applying them to wounds.
Furthermore, based on economic factors, the siddhlepa firm should pay taxes to the government for the
present technology, and when the inflation rate rises, siddhlepa prices should rise as well, because raw
material costs may rise, resulting in higher pricing.
When the siddhlepa firm joins together into partnership agreement, the growth in technology such as
machines and rapid communication can be uploaded, and the firm can reach the customers through e
commerce such as eBay, Alibaba, and others, where they can sell the balms and oils over the internet.
This will assist them in archiving better sales because they offer items all over the world, resulting in
bigger earnings. Furthermore, the collaborating firm may be able to supply natural resources for oil
production.
The siddhlepa business may manufacture ayuruwedic oil from trees and leaves, which would aid in the
treatment of ailments because it is a collaboration, the other companies may be able to recruit some
educated individuals to work in the siidhlepa company, where the person should be multi-talented. Also,
exchange rates provide dangers and opportunities for many businesses that operate across national
boundaries, and the price of oil has an influence on many sectors. If the exchange rate rises, the price of
oil rises, and the siddhlepa company may be able to charge a greater price for the drug (Pratt, 2020).
However, if there aren't enough online sales, the firm won't be able to collect money, and as a
consequence, the siddhlepa firm won't be capable of paying taxes, leading to the closure of the online
business and the risk of their name being exploited, resulting in a negative brand image.
7.0 APPLICATION OF PESTEL MODEL TO SUPPORT AND ANALYSIS ON
MACRO ENVIROMENT
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