Business Environment Analysis Report: River Island Company Overview

This report provides a comprehensive analysis of River Island's business environment. It begins with an introduction to the business environment, highlighting the internal and external factors that influence a company's performance. The report then delves into the organizational structure of River Island, including its legal structure as a private company, and the different types of organizations such as public, private, and voluntary, with their respective aims and legal structures. It explores the size and scope of different organizational types. The report further discusses the connection between various organizational functions like finance, IT, human resources, and marketing, and how these functions relate to the company's objectives and structure. It also examines the positive and negative impacts of the macro environment using PESTLE analysis. Finally, the report assesses the internal and external factors affecting River Island, identifying its strengths and weaknesses and how these interrelate with external factors to understand the overall business performance.

Business & the Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Kinds and aim of private, voluntary and public organisation with legal structures...............3
P2 Determine the size and scope of different types of organisation............................................5
TASK 2 ...........................................................................................................................................6
P3 Discuss the connection between various organisational functions and connect them with
objectives and structure................................................................................................................6
TASK 3............................................................................................................................................7
P4 Determine the positive as well as negative impact the macro environment using examples. 7
TASK 4............................................................................................................................................9
P5 Assess the internal as well as external analysis of the company to understand the weakness
and strength..................................................................................................................................9
P6 Determine the strength and weakness interrelates with external factors..............................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business environment refers to sum of external as well as internal sources such as
customers, government, competitors, management and suppliers which manage and control the
business performance and growth of company (Aithal, 2016). Thus, these affect the overall
performance of an organisation. Business environment helps to recognize the opportunities for
the enterprise success, identify the weakness and threat to solve them in advance, business
requires many resources such as inventory, plant and machinery and finance which improves the
business activities as it increase the organisational productivity. This report includes River Island
which is private company in London, UK. This promote products in fashion, textiles and
clothing. Bernard Lewis along along with his brothers founded this company in year 1948. This
report covers the types of organisation such as voluntary, private and public with legal structure,
size and scope, connection between function of organisation with objectives as well as structure,
negative and positive impact of macro environment, external and internal factors to understand
weakness and strength.
TASK 1
P1 Kinds and aim of private, voluntary and public organisation with legal structures.
Definition of sole trader, partnership, public, private and voluntary:
Sole trader: It refers to those individual person who owns and manage business profit
and liable for his own losses. Example of sole proprietorship are tea stall, barbershop and general
store. It is simple to organize and form business as it is managed by single person.
Partnership: It signifies the relationship of two or more parties to run their business
activities and contribute profit and losses among the partners. It is easy as the cost to start the
business is contributed in the partners which helps them to spend more capital (Akhmetshin and
et.al., 2017). For example, GoPro & Red Bull, BMW & Louis Vuitton and Bonne Belle & Dr.
Pepper.
Public: This is the organisation who is owned by government which runs for public
services. For example, British Council is public company which is founded by British
government in London, United Kingdom. This company offer their product and services such as
international culture and language education. It is the corporation which is governed by Royal
Charter.

Mission: It is to build trust and generate opportunities for the persons of United
Kingdom.
Vision: Vision of British council is that it depends on individual citizens to work and live
cooperatively on the base of trust and respect (Barr and et.al., 2018).
Objectives: To create international educational opportunities for the individual in the UK
which help them to build confidence and trust among the person.
Legal structure: It includes central, state and local government in public sector.
However, British Council follows public corporations which help people cultural as well as
education.
Private: It is defined as those company which is privately owned. These company follow
rules and regulation of government. Such as River Island is a private enterprise in Bernard Lewis
in UK. This organisation sell high street fashion brand such as women's and men's clothing as
well as in footwear in London.
Mission: To offer new look and fashionable clothing to the customers.
Vision: The vision of River Island is to innovate new product with latest design and
technology to consumers.
Objectives: The main aim of River Island is to innovate new fashion products to satisfy
the needs the needs and wants of customers which increase the profitability of company.
Legal structure: It consists of sole trader, partnership, cooperatives and limited company
in private sector which grow their business effectively. River Island is a limited company legal
structure which gives different style of clothing at nominal prices.
Voluntary: This is the organisation which is not-for profit enterprise and have motive to
create social impact not to make profit in business (Čepel and et.al., 2018). Such as charitable
trust, foundation and non profit corporation. Save the children is an International NGO in
England which operates in health care, natural disasters and education.
Mission: To motivate them to treat and protect children to change their lives.
Vision: Save the children helps every child to survive, safe and the development of the
children.
Objectives: NGO company motives is to improve the heath, education and protect the
lives of children.

Legal structure: The structure of voluntary sector such as unincorporated association,
trust and charitable institutions. These are the companies who perform their task for social
welfare. Save the children is non profit association which is registered under limited by
guarantee.
P2 Determine the size and scope of different types of organisation.
Basis Public Private Voluntary
Type of Public companies are
non profit organisation
which fulfil the need
and desire not make
the profit in the
business.
Private companies are
profit making
organisation which
operate their business
for making profit.
Voluntary sectors is
the non-government
organisation with the
aim of social welfare.
Size British Council has
10693 workers and
this is highest from its
competitors.
It is surveyed that in
River Island the
number of employees
who works is 5625
workers (Civelek and
et.al., 2016).
There are 1148
employees working in
Save the children in
UK and approx 9%
staff are working to
support SCI.
Scope The scope of this
company is provide
something creativity to
support business
environment.
This company scope
for launching new
apparels for both men
and women higher
quality at lower prices.
Save the children
organisation scope is
to save the lives of
people health, food
and shelter.
Purpose The aim of British
council is to offer their
education worldwide
which helps to boost
knowledge and skills
(Fabuš, 2017).
River Island purpose is
to bring unique
products in market
quickly which help
them to increase
productivity and
growth of business. On
The motive of this is
to protect the life of
children in war and
other crisis which
gives services to the
needy people by
proving them food and

the other hand, aim is
to take competitive
advantage in the
marketplace.
shelter.
TASK 2
P3 Discuss the connection between various organisational functions and connect them with
objectives and structure.
Organisational structure refers to a system in order to accomplish goals of an
enterprise. This structure is to ascertain the business activities to run the entity in efficient
manner. Company is following various structure which is matrix, functional, hierarchical, flat,
divisional and network structure. In the workplace, divisional structure is adapted where
employees are categorized in divisions based on their skills and ability (Gebauer, Haldimann
and Saul, 2017). On the other hand, matrix which is the combination of two type of structure in
the organisation. River Island follow matrix organisational structure where employees report to
two or more manger in the company which improve the motivation, helps to maximize teamwork
and boost the skills of workers in various groups.
Relationship between various organisational functions along with the connection to structure and
objectives which are mentioned below:
Finance and information technology: Finance function is associated with funds and
resources of River Island. It is the function which gives the statement for business plan and
strategy to attain objectives. Information technology is the method to run the network properly.
This is the method that is used to manage and control data which help them to take appropriate
decisions in the River Island. Finance and information technology is interrelated with each other
as it has lot of data to store which become simple with the help of software. The record of data
help management to check files as well as accounting. With the help of IT, finance department
use the software to anticipate the budgets from the previous year which help them to record the
criteria of this year along with the statistics calculation (Hrechyshkina and Samakhavets, 2019).
Human resource and marketing: Human resources is the tool for the selection and
recruitment as well as training and development of the employees. On the other hand, Marketing
functions refers to develop the product development, sales and advertising to satisfy and retain

the customers need and desire. Both marketing and human resource function is connected with
each other to improve the brand of River Island. However, marketing sector meet the
requirement of consumer whereas HR commune to the workers in the enterprise. Thus, it helps
River Island to promote their product and services in the marketplace.
However, these organisational objective is to make profits and increase market share to
accomplish the business goals which help company to get employees to perform their task in an
appropriate way. This ensure to maximize the sales and revenue of the enterprise. Thus, these
function connect organisational objectives and structure of business (Khan, Çera and Nétek,
2019).
TASK 3
P4 Determine the positive as well as negative impact the macro environment using examples.
Macro environment is defined as the situation which exist in overall economy that
include Gross domestic product, spending, employment, inflation and policies such as fiscal and
monetary which affect the performance of organisation. Mentioned below are positive as well as
negative impact the macro environment of River Island which are as follows:
PESTLE analysis is the framework as it determine the macro level and external
environment of company which helps to analyse the business performance and potential of
business.
Political: This is the factor which include government policy, corruption, political
stability, tax policy, labour law, foreign trade and trade restriction which can impact on River
Island.
Positive: Changes in tax policies in the United Kingdom which impacts positively on
River Island. However, due to changes it lead to increase in profit and business growth.
Negative: Government restriction due to pandemic which impacts negatively on River
Island as it decrease the number of customers which affect the profitability of business.
Economical: This consists such as economic growth, unemployment, inflation, interest
rates, exchange rate and disposable income which impacts business operation in the company.
Positive: Decrease in inflation rate in UK helps River Island to sell their products in the
all area. Thus, it increases the operations and productivity of organisation (Koišová and et.al.,
2017).

Negative: Due to lack of funds and resources by the UK government to help the economy
of company. Thus, it impacts negatively on River Island to invest in the business which affect
profit in the enterprise.
Social: It signifies various factors such as population growth, career attitudes, age
distribution, health consciousness, cultural barriers and lifestyle attitudes that may impacts River
Island as:
Positive: Lifestyle changes helps management of River Island to launch new products
and services in the marketplace to accomplish the business objectives which increase the growth
of business (Krajnakova, Navickas and Kontautienė, 2018).
Negative: Career attitudes impacts negatively on River Island as the management look
for young employees which increase the cost for selection of workers in the retail outlets.
Technological: There are the some factors of technology such as R&D activity, level of
innovation, automation, technology change as well as awareness and technology incentives
which may impact on River Island as:
Positive: Innovation in technology such as online shopping, fast in delivery, rating of
products and services which helps administration of River Island to build business operation in
an effective manner.
Negative: Technological advancement need lots of investment in the company to develop
the software and human resource which affect the sales of the River Island.
Legal: This comprise of those factors such as discrimination, employment laws,
consumer protection, copyright, patent as well as health and safety.
Positive: River Island adapts Consumer Protection Act which retain customers to buy the
products and services which maintains the good relationship with them.
Negative: Hindrances in any laws impacts badly to the company from its competitors
which affect the overall performance of River Island.
Environmental: It consists of weather, climate, environmental policies, change in
climate, regulation and restrictions and attitudes of customers.
Positive: Increase in carbon footprint helps River Island to maximize the profitability of
business.

Negative: Non-compliance of rules and regulations like recycling and using limited
resources impacts the sales of River Island company which impacts the the business
environment.
From the above analysis, River Island has to focus on those factors such as rules and
regulations, safety laws, advancement in technology which helps business to run smoothly.
When organisation is facing any issues then it may minimize the profitability and productivity of
company.
TASK 4
P5 Assess the internal as well as external analysis of the company to understand the weakness
and strength.
Internal analysis is the method to identify the strength, weakness, opportunities and
threat of organisation. This is the analysis of internal business environment which helps the
enterprise to make decisions to identify the areas for success and growth to plan business
strategy. Benefit of this tool to understand the opportunities to expand the business from its
rivals.
SWOT analysis of River Island which are mentioned below:
Strength
 River Island has various differentiation
segments in both female and male such
as kids as well as adults.
 It has unique ideas for product line
which helps company to expand their
business operations.
 Provide high quality products at
nominal prices in the UK market.
Weakness
 River Island have low market share
from it competitors such as Giorando,
New look and Hobbs.
 They do not offer plus size and
maternity wear clothing as from other
companies (Kumar and Pradhan, 2016).
 There is less physical stores of River
Island.
Opportunities
 Increase in online shopping helps
enterprise to maximize sales and
revenue in business.
Threats
 Competition in prices between
companies such as Whistles, Topshop
and Zara.

 Growth in market in international as
well as national level.
 Opportunity of River Island is to
develop purchasing power which helps
then to boost business activities.
 Changes in laws and technology affect
the performance of business.
SWOT analysis of Save the children which are as follows:
Strength
 Internal donation and funds gives good
message to the citizens.
 Relationship between the partners as
well as the government.
 Non profit organisation has not any
competition with other voluntary
sectors (Lim, 2017).
Weakness
 NGO has very low funds to provide
services to the people.
 Save the children company has weak
management level.
 Gap in communication with the team
members.
Opportunities
 This organisation get supports from the
donors which help them to protect the
life of children.
 Support of internal as well as external
laws which provide them from the
restrictions.
Threats
 Other sectors of NGOs compete with
each other.
 Lack of interest at community level.
From the above analysis, it identify the strength and opportunities of business which help
them to implement the weakness in an effective factors.
P6 Determine the strength and weakness interrelates with external factors.
Interrelationship
basis
Strength Weakness
Political In UK, there is stability of politics
and laws. It is the strength of
Changes in the government
policies such as tariff and the

company as there will be no issues to
follow the rules and regulations and
can attain the desired goals.
limitation are the weakness of
River Island which affect overall
performance of business.
Economical Investors will spend in enterprise
which is helps management of River
Island to make more money and
achieve the business objectives. This
is the strength of fashion retail
outlets.
Increase in interest rate is the
weakness as it takes cost for
spending and lower the stock price
of the organisation. Thus, it affects
the business operations.
Social Changes in trends helps
administration of River Island by
innovating new products and services
to satisfy the needs and wants of
customers and meet the requirements
which is the strength (Prajogo, 2016).
Changes in lifestyle is the
weakness as customer can switch
to other competitor company.
However, it River Island fails to
provide substitute products which
is desire of the customers in the
marketplace.
Technological Technology helps River Island to
build strong relationship with
consumers and attract them for
buying decision of their brand
through social and digital media
network. Thus, it is the strength
which increase the profitability of
organisation.
Technology requires high cost to
which is impossible to adapt
quickly as it require investment
that lead to weakness in the
business and reduce the operations
and productivity.
Legal River Island follow rules and
regulation for promoting activities
which help organisation to give high
quality product at reasonable prices.
In addition to this, it follow
Consumer Protection Act to protect
When company is increasing there
product prices, wrong
advertisement, not following
labour law then this result to
weakness in the River Island. This
impacts the success of business

them from problems and build
relationship with them.
(Stott, Stone and Fae, 2016).
Environmental Following environmental factors such
as pollution, food and temperature
which assist the manager of River
Island to make unique from their
competitors. Thus, it is the strength of
the business.
Not adhering the regulations of the
government in UK lead to
weakness and reduce the
performance of entity. However,
this factor reduce the supply of
product on time.
CONCLUSION
From the above report, it is analysed that this help in business planning and strategy in
the organisation. There are various types of organisations such as public, private and voluntary
sectors with the legal structure which run the business in an efficient manner. In enterprise, there
are different size and scope based on their efficiency of business. Interrelation helps to relate the
functions of the organisation such as finance and information technology that states IT is
essential for finance for statistics calculation whereas human resource is important to relate with
marketing for tanning and development along with promoting the brand. PESTLE analysis is
used by the River Island to identify the positive as well as negative impacts in the macro
environment. SWOT analysis is followed to understand the strength and weakness to understand
the internal along with external environment. Thus, it increase the productivity and operations of
the enterprise. Interrelationship between the strength and weakness with external factors.

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