Business and the Business Environment Report - Detailed Analysis

This report provides a comprehensive analysis of the business environment, exploring various organizational structures, including functional and organizational structures, and their application across micro, small, medium, and large organizations. It differentiates between public, private, and voluntary sectors, highlighting their characteristics, objectives, and importance. The report also examines the size and scope of different organizations, providing examples like One Stop Barber, Clarasys, Maybelline, and Apple. Furthermore, it delves into the complexities of transactional, international, and global organizational structures. Finally, the report incorporates a PESTEL analysis, evaluating the impact of political, economic, social, technological, environmental, and legal factors on business operations. This analysis considers how factors like tax and trade policies, labor costs, consumer protection, and social contributions influence business decision-making and overall performance, particularly in a retail context.

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
PART 2............................................................................................................................................6
CONCLUSIONS..............................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Business is an occupation in which transaction of selling and purchasing of goods and
services take place in order to make profits at a large scale. Business is also termed as that
platform where, products are sold to other people so that profits can be earned which can be
used for further growth and expansion. It important for the country as business weather small or
big provides huge job opportunities as well as provides innovative products or services to the
customers. The main purpose of it is create more and more customer for business so, that they
can sustain for longer time duration. Mark Spencer is a British multinational retailer in UK
Market. It is located in Westminster, London and was founded by Leeds in the year 1884. This
report includes meaning, types and purpose of various organization like, public, voluntary and
private sectors. It also focuses on size and scope of various types of organizations. Moreover,
relationship between different firms functions are explained as well as how they are linked with
objectives of the company (Bell and Harley, 2018). Study the positive and negative impact of
macro environment on business operations.
PART 1
Business environment is a combination of both internal and external factors which are
influencing organization's operational activities at a large scale. It is a external and
uncontrollable factors which is influencing an business associates decision making process at a
large scale. It helps firm to take realistic plans as well as ensure that this plan will be executed
effectively. Business environment indirectly helps in searching out threats and opportunities in
the cut throat competitive market. The different types of organizations are public, private and
voluntary and the distinguished between them are explained as follows:
Basis Public organization Private organization Voluntary
organization
Meaning Public sector
organization are
owned and operated
by government within
a country.
Public sector
organization is owned
by individuals not by
government.
Voluntary sector
organization work for
the betterment of the
society. This business
associates are flexible,
secular, non-profit
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people's organization
which work day and
night to uplift society.
Examples Examples of public
sector firm are, health
care bodies, police and
prison services,
educational bodies etc.
John Lewis
partnership is public
sector firm.
Examples of private
sector organization
are, retail sector, local
businesses, credit
unions etc. Tesco is a
public sector
organization.
Examples of voluntary
sector organization
are, Greenpeace and
World Wildlife fund,
Oxfam, international
Union for conservation
of Nature etc.
Importance Public sector is
important for the
economy as it
contribute in the
success and growth of
the economy.
Private sector
organization is
important for the
economy as it is
focuses more on their
own development and
growth which
indirectly increases
economy level in the
market.
Voluntary sector
organization is
important for the
economy as it work
only for the betterment
of the society which
indirectly raise
economy growth.
Objective Profit maximization is
the main objective of
the public sector
organization.
To prevent
concentration of
economic growth of
private monopolies is
the main objective of
the firm.
It's main objective is
not to generate profits
at a large scale but to
create social impact in
the cut throat
competitive world.
Adaptability Public sector firm is
less adoptable to the
changing environment
Public sector is active
adoptable to the
Voluntary firm are less
adaptability to the
changing needs as
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as compared to the
public sector
organization.
dynamic environment. compared to the public
and private sector
firm.
Goods and services It serves goods and
services related to
electrical and lighting
installations, lingerie
fitting, home design
etc.
The goods and
services served by
TESCO are, furniture,
software, telecoms,
internet services, toys,
clothing etc.
The services served by
Oxfam are, firm saves
lives of people and
helps to rebuild
livelihood when crisis
strikes etc.
The difference between micro, small, medium and large size organization are discussed as
follows:
Basis Micro
Organization
Small
Organization
Medium
organization
Large
Organization
Meaning Micro
organization is
owned and
operated by
individual person.
Example: Barber,
tea stall etc.
It is owned and
operated by
independent
people. In which
there are nine or
few more people
are working in the
firm. Example:
Local bakery,
local general store
etc.
In medium size
organization the
plant and
machinery is of 1
corer to 10 corer.
Example: Studer
group, Talent
Plus etc.
Large
organization are
those which are
running
successfully
across globe and
has employee of
least 500 staff.
Example: Apple,
Google, Amazon
etc.
Market share One stop Barber
is a micro
business in UK
market (Quinlan
and Griffin,
Clarasys is a
management
consultancy . It is
small size
business carried
Maybelline is a
beauty based
company. Its
market share is
11% in the
The market share
of Apple
company is
24.3%.
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2019). It's market
share is the local
people staying
within 5km.
out in UK market.
It's market share
is people within
the region or₹
state.
market.
Profit share Its profit share is
$30,000 as per
2013.
The profit share
of Clarasys is
₹500 million.
Maybelline has
$95M as their
profits in the
competitive
world.
Apple is
generating
26,559.5 USD as
their revenue.
Growth and
Sustainability
The growth of
barber is very low
and their
sustainability is
strong.
Clarasys growth
is gradual in the
market as well as
their
sustainability is
strong.
Maybelline
growth in the
market is rapid
and is coming up
with innovative
product whereas,
sustainability
depends upon the
market scenario.
Apple growth in
the competitive
market is very
fast as well as
their suitability is
positive in the
market.
The different types of organizational structure are functional structure and
Organizational structure. Functional structure is one of the common organizational structure
in which staff members are grouped according to their capabilities and abilities of the roles and
tasks (Chang, 2016). It is carried out in an business associates so that smooth functioning of the
business can be carried out easily. By doing so, effective and efficient outcomes can be achieved
in the competitive market place. In this all departments like, marketing, finance, accounting,
production etc. are reporting to the top level management so that problems can be resolved at the
earliest. Whereas, Organizational structure states as the reporting relationships in a
organization. There are many reasons for selecting organization structure in an business
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associates. Here are some of the factors examined before choosing organizational structure like,
geographic location, variance in product segments and size.
One Stop Barber: This organization is a micro which is using functional structure so
that profit can be maximized at a large scale. This structure helps the company running smooth
functions as well helps to build loyal customers.
Clarasys: This organization is small in size and and uses organization structure in their
operations. By this they can capture potential customers for their product and services as well
profit is generated.
Maybelline: Maybelline is medium size organization and they are using divisional
structure in their business. It helps the cosmetic firm to function properly as well as proper
utilization of resources can be done.
Apple: Apple is a large organization and they are using organizational structure. It helps
the firm to meet it's objectives in time duration (Easterby-Smith and Jackson, 2015). By doing
so, Apple is able to flourish in the market and is a tough competitors for other. The employees of
the firm are working effectively and this structure is ensuring a positive impact on their decision
making.
Above it can be seen that different small, micro, medium and large organizations are
using various organizational structure in order to gain profitability. All the different structures
helps the company to operate smoothly in the global market. Every business associates weather
small or big are using structures depending according to their functioning and size of the
business.
The complexities of transatioanl, international and global organization structure are faced
by organization in the market. International companies are focusing more on import and
export. In this case international firm do not invest outside their home country. By doing so they
are flourishing within the nation only and there economy is also raising at a rapid scale.
Multinational companies are investing in other countries so that more transaction can take
place (Nicholas and Steyn, 2017). But here they are not coordinated with product offering in
each country. They are more focusing on adopting their goods and services to individual local
market. By investing in other countries foreign exchange rate. Due to which flu-cation in rates
are taking place at a rapid scale.
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Global companies are investing in many countries are physically present in many countries. In
this case the complexities has raised because they market their product by using the same
coordinated brand in the cut throat competitive world (Hammer, 2015). Here, they give emphasis
on cost management and efficiency which creates complexity in the market as well as in the
organization (Maylor and Huemann, 2016). Transactional companies Re very much complex in
nature . The are focused on investing more on foreign investments so that growth and expansion
can be done at large scale. They provides central corporate facility but giver decision making to
each individual foreign market.
PART 2
PESTEL analysis:
Political Factor: Political factor includes tax policy, trade policy, consumer protection
act, funding grants etc. all this are affecting directly to the macro environment and their decision
making process. Frequent changes in political situation are creating negative impact on the
organization decision making process. It indirectly is affecting the set goals of the business
associates.
Economical factor: TESCO is dealing in retail sector and comes with innovative product
for potential customers in order to increase sales. In order to raise more customer base for the
product researcher need to examine all the economical factors like, Labour costs, government
policy, taxes etc. This is done so that growth and expansion scenario can be examined in the
global market. All this factor affect the decision making process in positive and negative aspect.
Due to which set objectives are also affecting at a large scale.
Social factor: TESCO should contribute more in the social upliftment so that good will
can be raised in the eyes of the customer (Hatten, 2015). It also helps to raise organization
market value indirectly by sharing some amount of profits for the betterment of the community.
By creating goodwill in the eyes of the customers targets can be achieved automatically as it
raise sales ratio.
Technological factor: By using modern tools in the organization TESCO which is
dealing in retail sector the sales volume can b e raised tremendously as well as there preferences
can be fulfilled accordingly. It also helps to increase productivity level in the business due t
which profit ratio can be increased at a huge scale. By this effective decisions can be taken for
the betterment of the organization. If effective decisions are taken then set targets can be
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achieved accordingly whereas, if ineffective decisions are taken then objectives set can not be
achieved on time.
Environmental factor: In this case TESCO should study the culture of the people in the
UK market regarding every segment as it deals in supermarket and hypermarket product. By
doing so consumers base can be raised as well as potential customers can be attracted towards
there innovative product at a rapid scale (Herrmann and Herrmann-Nehdi, 2015). These factors
directly affect the decision making process in the cut throat competitive world. Positive
outcomes results to achieve set objectives within no time.
Legal factor: TESCO is dealing in retail sector in the UK market. firm need to study
deeply all the legal norms and policies like, profit margins, viability and product transportation.
All this factor will help the business associates to carry out there business operations effectively
and efficiently in order to meet the set objectives. Decision-making process of TESCO is widely
affected by the legal factor as it's positives and negative aspects are directly related with
organization goals.
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Bargaining power of suppliers: If TESCO has strong bargaining power then suppliers are
allowed to sell product at higher level. Suppliers has high degree of bargaining when there are
few suppliers, few substitutes of raw material exits, suppliers hold scare resources etc.
Bargaining power of buyers: TESCO is coming with Forever young product in the
market. Here, buyer has high degree of bargaining and can demand to lower the prices of the
product. Buyers are strong when only few buyer exist, switching to other supplier is low, there
are many substitutes etc.
Threat to substitutes: TESCO is dealing in retail sector. And many other competitors
are entering the market which is a threat to the organization in the market. The threat increase
when customers has more switching options for the same product. If there are many options for
the same product then degree of threat is high.
Rivalry among existing competitors: TESCO has tough competitors like, Sainsbury's,
Morrisons, Asda stores , etc. which has already captured huge market ratio in the market. The
rivalry competitors are more when exit barriers are high, industry of growth is slow, low
customers loyalty.
Threat to new entrant: When there is more competitors in the market there is more
threat to new entrant like TESCO If the product is unique and has more funds to invest then only
company can sustain in the market (Laudon and Laudon, 2015). The threat of new entrance is
high when low capital is there to enter into the market, no government regulations, low
customers loyalty, products are nearly identical etc.
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WOT analysis of Tesco
Strengths
 Customer base of firm is very good that
makes strength of company in
marketplace.
 Tesco's product portfolio is very large
which makes strong sustainability of
firm in marketplace.
 Digital technology such as robotics is
implemented by Tesco in some of their
outlets so as to providing unforgettable
experience to customers
 Staff members are dedicated and
devoted for work because of which
customer base of firm is very high in
marketplace.
Weaknesses
 Company is facing controversies of
patent due to which sales figures of
Tesco is regularly decreasing in market.
 Cost of products and services are
regularly increasing due to which
profitability of firm is decreasing in
market.
 Some of their outlets are still using
outdated technologies because of which
brand image of firm is reducing in
marketplace.
 Tax rates can be revised any time which
can increase the cost of operations of
firm.
 Prices of products are regularly changes
due to which company is not getting
profits as per their expectations.
Opportunities
Joint ventures can provide opportunities
because through making this with small
ventures of market Management of Tesco
will be able in enhancing their business
operations.
Through improving quality of existing
products company can achieve good
growth in marketplace
Threats
 Some of the giant players like M&S,
ALDI are providing tough competition
in marketplace which can become threat
for operations and sales figures of
Tesco.
Interrelation of weakness and strengths with macro environmental factors
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 Political factors: This factor comprises of tax duties, political stability etc. which can
affect the profitability of firm in positive or negative manner. Some of the strength and
weaknesses of these factor are given as below:
Strength – Government of UK is stable due to which company's brand image is high as
compared to their rivals.
Weaknesses – Tax duties can be modified any time which will increase the cost of
products that is not beneficial for customer base of firm.
 Economic factors: These factors includes fluctuations in currency rates, high interest
rates, etc. which can favourably and adversely influences the operations of Tesco. Some
of strength and weaknesses are given as below:
 Strength – Good portfolio of firm have made strengthen in marketplace because of which
high customer base is always attracted towards offering of firm.
 Weaknesses – whereas, changes in tax duties in a specific country can posses negative
impact on the profitability of organisation.
 Social factors: This element includes taste, needs and preferences of customers which
encourages the individuals towards specific offerings of firm.
 Strength – Company have recruited loyal and dedicated employees in their workplace
whose efforts leads the Tesco in competing their rivals in market.
 Weakness – Changes in pricing policy is providing negatively impact on the
profitability and customer base
Technological factors: UK nation is considered most technical advanced due to which
most of multinational corporations are established within the environment of UK. Because of
this, large number of individual prefers to purchasing products from high-tech stores.
Strength – Mostly stores of Tesco are upgraded and using robotics technology in their
workplace so that unforgettable experience of shopping can be provided to customers.
Weakness – whereas, in some of the nations company have not upgraded their stores due to
which their sales figures and profitability is decreasing in these countries.
CONCLUSIONS
From the above it can be concluded that organization uses various types of structures in
the operations so that smooth functioning can be carried out effectively. The various purposes of
public, private and voluntary are studied deeply which will help to clear concepts about them.
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Whereas, various types of business associates are related with size and scope of the business
which will help in growth and success. Organization uses porters five force model to better
understand the degree of powers in each stage in order to sustain in the marketplace . Which will
help smooth functioning of the business in the cut throat competitive world. Organization is
carrying out PESTEL analysis so that political, legal, technological, etc. factors can be examined
deeply so that business can be operated easily in the market. While SWOT is conducted in order
to figure out opportunities, threat, strengths and weakness so that all these can be used in positive
way to capture huge market ratio.
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REFERENCES
Books and Journals
Bell, E., Bryman, A. and Harley, B., 2018. Business research methods. Oxford university press.
Chang, J. F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
Easterby-Smith, M., Thorpe, R. and Jackson, P. R., 2015. Management and business research.
Sage.
Hammer, M., 2015. What is business process management?. In Handbook on business process
management 1 (pp. 3-16). Springer, Berlin, Heidelberg.
Hatten, T. S., 2015. Small business management: Entrepreneurship and beyond. Nelson
Education.
Herrmann, N. and Herrmann-Nehdi, A., 2015. The Whole Brain business book: Unlocking the
power of whole brain thinking in organizations, teams, and individuals. McGraw-Hill
Education.
Laudon, K. C. and Laudon, J.P., 2015. Management Information Systems: Managing the Digital
Firm Plus MyMISLab with Pearson eText--Access Card Package. Prentice Hall Press.
Maylor, H., Blackmon, K. and Huemann, M., 2016. Researching business and management.
Macmillan International Higher Education.
Nicholas, J. M. and Steyn, H., 2017. Project management for engineering, business and
technology. Routledge.
Quinlan, C., Babin, B., Carr, J. and Griffin, M., 2019. Business research methods. South Western
Cengage.
Ross, D. F., 2016. Introduction to e-supply chain management: engaging technology to build
market-winning business partnerships. CRC Press.
Sadgrove, K., 2016. The complete guide to business risk management. Routledge.
Scarborough, N. M., 2016. Essentials of entrepreneurship and small business management.
Pearson.
Scholes, M. S., 2015. Taxes and business strategy. Prentice Hall.
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