Business Environment Analysis Report: Shell Company, UK Industry

This report provides a comprehensive analysis of Shell's business environment. It begins with an introduction to the business environment and its importance for organizational decision-making, using Shell as a case study. The report covers different types of organizations (public, private, and voluntary), their purposes, sizes, and scopes, with examples like NHS and Oxfam. It then explores the interrelationships between various organizational functions within Shell, such as HR and marketing. The report also applies PESTLE and SWOT analyses to assess the macro-environmental factors and Shell's internal strengths and weaknesses. Finally, it interrelates strengths and weaknesses with external macro factors. The conclusion summarizes the key findings of the analysis.

Business & the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purpose of various forms of organisation .............................................1
P2 Size and scope of different types of organisation ...............................................................2
TASK 2............................................................................................................................................6
P3 Relationship between different organisational function .......................................................6
TASK 3............................................................................................................................................7
P4 PESTLE analysis ..................................................................................................................7
TASK 4..........................................................................................................................................10
P5 SWOT Analysis ..................................................................................................................10
P6 Interrelate strength and weakness with external macro factors...........................................12
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business environment is a sum total of internal and external factors which directly impact
over organisation decision making as well as its potentiality to attain sustainable growth in
current industry. Along with this, it is important for establishment to understanding the aspects of
business environment as it help them to be aware about the actions and strategies of competitors
in order to obtain profit maximisation in an efficacious and expeditious manner (Aithal, 2017).
Moreover, this aspect is also considered as an powerful determinant for company as it lead them
to identify current or emerging market trends and also assist them to implement strategic
decisions for acquiring best positioning within competing industry. In regard of this project,
Shell company has been considered which is a branded and famous oil and gas company in UK
industry. It is founded in the year of 1907 and headquartered at London. In this study, it involves
various kinds of organisation along with its purpose, size and scope. Moreover, interrelationship
between several business function of firm, application of PESTLE and SWOT analysis as well as
identify strength and weakness of macro external factors for accomplishing business goal in a
given time frame.
TASK 1
P1 Different types and purpose of various forms of organisation
Business environment is a combination of micro and macro factors whcich influence on
organisation productivity and proficiency ratio within current marketplace. Under this, there are
various types of associations like public, private and voluntary. NHS is considered as public
association, SHELL is considered as privately owned business and Oxfam is voluntary. These all
organisation direct its business tasks at universal or global level.
Public organisations- In this determinant, the aspect of public sector organisations is
mainly concern with those form of organisation in which majority of business operation owned
as well as functioned with the support of government in order to give improved way of service to
particular community or society in a better manner (Avramenko, 2012). Along with this, it
encompasses the division like healthcare, education etc. for enhancing living standard of
community in an amended way. In regard of this, NHS has been regarded which is one of the
well-known public organisation as well as affiliated with the health and social care in Northern
Ireland. It is freely national medicinal services framework and furthermore gives the better

human services benefits in everywhere throughout the world. Moreover, it is incorporated in the
year of 1948. Moreover, NHS render best training and development program to its manpower
which lead them to enhance their potentiality or capability to support and delivery the high-
quality patient care as well educating them about maintaining health condition. At universal
level, NHS advance the healthcare advertise and create solid connections with the worldwide
business, government and medicinal services suppliers which enable them to acquire increased
level of proficiency. Some of the Examples are: BBC and Bank of England.
Private organisations- This form of organisation is relate with concept that individual,
organization, affiliations who are not freely body and worked for winning the benefit. In regard
of private firm, SHELL company has been considered which is a global oil and gas firm who
produce or manufacture various oil segments for satisfy the customer. Additionally, it is founded
in 1907 and operate it in across the globe. Examples of Private organisations- British Petroleum,
Petronas, Chevron (Berg and Kilambi, Siebel Systems 2014).
Voluntary organisations- It alludes to any individual, company, affiliations which are
not openly body and worked for procuring the benefit. However, for voluntary, Oxfam firm has
been included which mainly concern with reducing best medical facility in order to reduce the
ratio of poverty enrich their living standard in a better way. Moreover. It was established in year
1942 in Kenya. Furthermore, Oxfam takes corrective course of action to eradicate inequality and
poverty that empower them to serve the society as well as enhance the arket share or size in an
impressive way. Examples of other Voluntary organisations- Save the Children and Wellcome
Trust.
P2 Size and scope of different types of organisation
There are various forms of organisation and each of them are different from each other
but they all are intended towards accomplishing specified objective or goal in an trenchant and
productive manner. Some of the type of organisation are discussed below:
Public organisations- Under this criteria, NHS has been regarded as it is a well
established public organisation within UK marketplace and it is wholly grounded over rendering
hygienic and safe healthcare services to various community of people in an ethical or
satisfactory manner. Along with this, it sever its whole business operation across the globe and
also it has wide social connection with international and regional government, health care

providers and business. Hence, its main intent or purpose is to provide good and healthy
healthcare services and medication to people in an improved way.
Services and Products- NHS deliver its Healthcare services to people like Medical Social
Services, Nursing Care and many more in a better mode.
Size- In NHS, there are around 1.4 million manpower who are highly dedicated and
passionate to give best improved care for patient across the world.
Scope- The scope of NHS is wide as its offer several services to different community of
manpower around the worldwide. Moreover, it handle various kinds of business function like
instance dental care, optical care and basic medical facilities (Chi, 2015).
Vision and mission- The foremost vision of NHS to give better and improved healthcare
and medication and generate value among society. Furthermore, NHS mission is to render best
care services to various group of individuals in worldwide in order to keep them safe and
healthy.
Objectives- The primal objective of NHS is to enhance and enrich the standard of living
of society. However, for accomplishing the same objective, NHS provide sustainable , fair and
optimal utilisation of available resources.
The main purpose of NHS is to give amended healthcare services and generating best
environment so that they each individual can be able to resist against all harmful disease in a
healthy manner.
Legal structure- Some of the legal structure of public organisations are given below:
Central Government: They are those whose functional unit are managed and controlled
by the help of central government.
State Government: In this, organisations are directed and functioned by state government.
Local Authorities: Under this, establishment are monitored and governed by local
government (Craig and Campbell, 2012).
Stakeholders- They are regarded as those group of individuals who take participation in
business managerial or operational function for maximising profit in an effective mode. Some of
the stakeholders of NHS are NHS Confederation, Clinical Commissions, Local Government
Associations, Association of Directors of Adult Social Services.

(SOURCE: Full details: New NHS England and Improvement structure)
Voluntary organisations- For understanding this type of organisation, Oxfam has been regraded
which is a highly reputed non profit company within UK and incorporated in the year of 1942. It
offer tis services and function all around the world as they mainly dedicated to remove the
poverty from community.
Services and Products- The services and products which Oxfam give is the they work
towards to enrich living standard of society by offering fair trade, livelihoods, gender equality,
justice, natural disasters etc.
Size- Oxfam has a group of the 14 forms who are connected or interconnected with 3000
parters in around 100 countries for finding the solutions to remove poverty and injustice from
society ( Hillary, 2017).
Scope- In regard of Oxfam, its serve its managerial function across the globe which
shows that its scope is large and wide. Hence, they mainly work towards minimising the poverty
Illustration 1: Organisational Structure of NHS

and inequality from people and tale corrective action ton save manpower who are suffering from
natural disaster in order to enrich living condition of community in an improved way.
Vision and mission- The main Vision of Oxfam is to eradicate poverty and injustice
from people. Along with this, its mission is to overcome poverty causes as well as develop long
lasting solutions.
Objectives- The objective of Oxfam is to evaluate the personnel personally directly when
the local capacity is inappropriate and enrich the lifestyle of society (Ifinedo, Pyke and Anwar,
2018).
The purpose of Oxfam
Stakeholders- Some of the stakeholders of Oxfam are Trade Union, Trustees and donors,
Volunteers.
The key purpose of Oxfam is to eradicate the poverty and improve people living standard of
people.
(Source: Organisational Structure of Oxfam, 2019)
Private organisations- In order to acquire deeper understanding about private organisation,
SHELL has been regraded as it is well established company in oil and gas industry in UK.
Illustration 2: Organisational Structure of Oxfam

Moreover, it is founded in the year of 1907 and serve its product or service across the world by
maintaining best quality of services in order to place the brand in a competitive position.
Services and Products- SHELL render various types of services like Petroleum, natural
gas, LNG, lubricants, petrochemicals with a n intent of maximising the profit in an existing
marketplace.
Size- SHELL contains 82,000 personnel who put their full effort for achieving the
defined objective in a stipulated time duration in a innovative and creative way ( Hillary, 2017).
Scope- Due to intense level of competition, SHELL has large scope as it conation
enormous opportunities for enlarging its business operations and market share in competing
marketplace. Moreover, it has various subsidiaries like SHELL Australia, South Africa, Canada,
and so on.
Vision and mission- The main Vision of SHELL is to create the difference with people,
a team of devoted professionals, who value customers as well as deliver best quality of services
or products and contribute to sustainable development. Along with this, its mission is to safely
market, distribute energy and petrochemical products while offering innovative value added
services.
Objectives- The objectives of the Shell Group is to engage efficiently, responsibly and
profitably in oil, gas, chemicals as well as in other selected businesses by participating, searching
and developing other sources of energy for meeting out the evolving customer needs and
world's growing demand for energy.
The purpose of Oxfam
Stakeholders- Shell stakeholders are employees, suppliers, customers, local
communities, governments, business community, other related oil companies, the media and
some NGOs.
Moreover, the primal aim of SHELL is to acquire the best position within competing industry by
providing effective product or services.

TASK 2
P3 Relationship between different organisational function
In SHELL, it has different kinds of functional unit and work towards to accomplish the
desired goal or objective in a stipulated time duration. Along with this, each functional unit are
interrelated with each other which lead them to attain sustainable growth and development in
existing industry. Some of the interrelationship among SHELL departments are as follows:
HR department and Marketing department- These two function are considered as
important unit of an organisation as it help them to improve its overall performance in an
amended manner. However, the main objective of HR department is to hire and recruit highly
skilled or potential candidate who can put their best contribution for enlarging company's market
share or size in productive style (Janita and Miranda, 2013). Hence, for inviting large pool of
candidate towards SHELL vacant position, it requires the support if marketing departments who
help them in advertising the job position in current market. Therefore, SHELL marketing
function adopts various promotional tool like advertising in social media platform, newspaper,
magazine, online marketing and many more. With the help of this, company's HR unit can
acquire large number of personnel towards the brand and it lead them to place their brand in an
aggressive and competitive position in an innovative and creative style.
Finance department and Marketing department- These two units plays a significant
role in an establishment s it help them to enhance its sales performance in a productive style.
However, the main aim of marketing function is to promote the products or service in order to
gain competitive advantage among competitors. Hence, for obtaining the same, SHELL
marketing division needs enough amount of money which they can acquire from finance
department so that they can easily advertise the product within existing industry. Thus, SHELL
marketing function analyse the current market condition and calculate a estimate idea regarding
the experience and inform the same to finance division. By doing this, SHELL finance unit
render enough amount of funds and money to marketing unit that lead them to advertise their
product in various online platforms. Moreover, it also assist them to utilise other promotional
strategies such as public relation, sales promotion and so on. Henceforth, SHELL can reach large

number of customer in a effective way and also can attain sustainable profitability ratio in
competing industry.
Organisational structure- The aspect of organisation is relate with those concept in which it
encompasses various activities such as supervision, allocation and coordination ans well as direct
each business function towards attaining organisational aim. In addition to this, it influence over
organisational action and provide basic foundation through which firm can operate its managerial
function in an impressive way. In context of SHELL, it follows flat organisational structure as it
signifies that there has limited manageable level among front- line staff and administrative level.
Furthermore, its main intent is to follow this structure so that they can provide proper motivation
and encouragement for inviting personnel to implement best decision making. Moreover, it help
them to decrease bureaucrat as well as enable manpower to enhance their skill or ability by
making use of available resources in an impressive and creative manner (Palepu and Healy,
2013).
However, these various business functions of SHELL are marketing, human resource,
operations, finance etc. are interconnected with each other that empower them to enlarge its
market share or size in an amended mode. Additionally, each of them are working for attain
common outcomes and follow organisational structure effectively.

TASK 3
P4 PESTLE analysis
In today's scenario of marketplace, there is an extreme level of competitions or challenges
among companies which influence firms capability to cope up with all sort of threat in a
improved manner. However, for handling and managing external factors (such as competitors,
government, customers ) in an efficacious way, PESTLE analysis play a vital role in company
for attaining the same dilemma. Hence, PESTLE analysis is a strategic business tool which
enable organisation to determine its external macro component and also lead them to take
corrective course of action in order to gain competitive advantage among competitors within
prescribed time limit. However, Shell, a leading private company makes an effort to imply
PESTLE in its business operation which is discussed below:
Political: This factor comprises government regulation, policies, procedures, rules,
political stability of country and many more which effect organisation proficiency ratio. In
relation to SHELL, recently the governing bodies of international and regional countries made a
decision regarding imposing penalties for carbon emissions as well as there was a huge pressure
from government over SHELL in terms of avoiding the usage of crude fuel and adopts bio fuel
for protecting the environment from pollution. Therefore, such kind of pressure influence

negatively over SHELL to maintain its brand value among existing industry. Hence, SHELL
make an effort to tackle this negative impact by making a decision of engaging in alliances and
partnership with government in which they provide several incentive for economical
enhancement and in return company acquire support from government for processing their
business operation in a better way. Moreover, SHELL involved in Climate Action Partnership
which help them to gain positive response from public and also to provide enormous
employment opportunity within community which enrich organisation brand value (Palo and
Tähtinen, 2013).
Economic: In this, it involves economic growth, interest rate, inflation or deflation, GD
or GNP ratio and etc. that effect establishment to maintain its overall performance among
competitors. In context of SHELL, UK government has been raised the amount of taxation which
effect SHELL by increasing its cost of production that directly influence consumer buying
behaviour and attitude towards company. Moreover, another issue which SHELL is being going
through is that to satisfy the increasing demand of customer. This is because, from the recent
study, it has been analysed that there are only few natural reserves of crude oil which challenged
SHELL to place its brand in a competitive position in existing market. However, for overcoming
such challenges, SHELL take an initiative in investing in new project which is concern with
exploration and extraction of oil and gas from natural reserves that lead them to acquire best
position among competitors in an impressive manner.
Social: In this, it covers demographic factors like age, gender, population income,
customer taste and preference and so on which influence business decision making process.
Thus, in relation to SHELL, there was a huge demand among population regarding implication
of responsible consumption by companies in its managerial or operation function. Due to such
rising demand, it negatively impact SHELL in terms of improving its sales performance and also
to enhance their profit margin. Therefore, SHELL took this negative effect as an opportunity and
took an initiative to make use of their product waste for cultivating flowers in order to prevent
the planet from tingeing destroyed. Hence, with the help of such action, SHELL was able to
enrich its volume of sales and also empower them to create a impressive brand value among
wide range of consumers in an improved way.
Technological: This factor encompasses innovation and advancement in technologies for
enlarging the market share of firm in current competitive industry. However, in regard of SHELL

, it faced a extreme demand from consumers in terms of adopting innovative tools or equipments
into their functional unit that challenged company's productivity ratio. Therefore, SHELL make
an attempt to acquire advanced and modern technologies or equipments for drilling and
extracting oil and gas. Due to which, SHELL has enhanced its proficiency and productivity ratio
in an innovative or productive style among competitors (Shell PESTLE Analysis , 2019).
Legal: Under this, it encompasses government legislation, laws, regulation and etc.
which impact firm to enlarge its overall profit margin rate. IN context of SHELL, government
are highly imposing pressure on companies in regard of reducing carbon emission for preventing
planet from global warming. Due to which, SHELL is facing huge difficulty in complying with
the same for generating positive response from consumers and competitors. So, if company
adhere to that, it assist them to enhance its brand image among competitors in a amended manner
(Shenkar, Luo and Chi, 2014).
Environmental: It is encompasses with measures related to environmental protection,
eco friendly product or services that influence organisation to attain sustainable growth in
competing marketplace. However, in case of SHELL, they took an initiative to invest on various
projects in order to prevent the Earth from harmful gases and also to render good environment to
consumer that help them to improve their sustainable growth and development.
NHS
Political: Under this component, it encompasses the aspect of government measures,
interventions, influences, policies and etc. that impact company's productivity ratio. However,
with the introduction of Brexit within UK, it negatively influence NHS in terms of modifying or
altering its existing policies or regulation. Hence, NHS make an effort to cope up with their
negative impact by adopting an implementing new policies, regulation or rules within its
business function that enable them to improve its overall performance and profit margin in a
aggressive and competitive way. Moreover, NHS were benefited by political stability of UK that
help them to imply all changes in a efficacious manner.
Economic: This factor involves product price and demand, exchange rates, economic
growth, inflation rate and so on which effect organisation to enrich its brand value in a better
mode. However, NHS undergoes with a severe recession period in UK as it effect them in regard
of delivering services to community. However, NHS overcome this negative influence by

acquiring affordable price for rendering its service that lead them to enrich living standard of
community and also to run their process in an impressive style.
Social: Under this, it involves age, gender, health consciousness, emphasis on safety ad
career attributes and many more which influence establishment decision making process. In
regard of NHS, they are able to provide improve degree of satisfaction to community or society
as they work towards to give better health facility and hygiene environment to people so that
they can stay healthy and fit as well as can easily resist against all sort of spreading diseases in a
better manner (Schaltegger, Lüdeke-Freund and Hansen, 2012).
Technological: In this, it comprises advanced technology, automation, innovative
technology, novel ideas and so on that impact establishment productivity ratio. In relation to
NHS, it adopts innovative or modern techniques and technologies into its functional unit that
help firm to gain competitive advantage in an innovative and creative style among competitors.
Legal: Under this, it comprises government legislation, laws, regulation, rules which
effect company to obtain its profit maximisation. In relation to NHS, it makes an effort to follow
all regulation, laws imposed by government which enable them to place their brand in a
aggressive and competitive position in a better manner.
Environmental: In this, NHS take an effort to cerate various awareness program related
to protecting environment as well as uses eco friendly products which enable them to capture the
attention of large numbers of population and also lead them to enhance their overall productivity.
Henceforth, PESTEL analysis assist SHELL and NHS to examine external factors and also to
implement corrective course of actions that aid them to improve its overall productivity and
profitability in an trenchant and expeditious way.
TASK 4
P5 SWOT Analysis
SWOT analysis is regarded as one of the powerful determinant within an organisation as
it help them to determine their internal capabilities or potentiality as well as empower them to
implement best strategic decision in order to enhance the market share or size in an effective
way. Therefore, the SWOT analysis of SHELL is explained below:
Strength

 It has its presence in all aspects of oil and gas as it offer wide range of products like
gasoline, upstream and downstream segments. Due to which, they are called as a key
players within Oil and Gas industry among competitors. The another strength which make SHELL to acquire best position within competing
marketplace is that it maintain their core values i.e. honesty, integrity, respect while
providing its products or service to consumers that empower them to build long lasting
relationship with them in a impressive way (SWOT analysis of Royal Dutch Shell, 2018).
Weakness The foremost weakness which SHELL undergoes is that it find difficulty in attaining
sustainability in competing marketplace. This is because government increased taxation
amount and also the technology related to manufacturing oil and gas are extremely costly.
Due to which, it face issue to place its brand in a aggressive position (Tynan, C.,
McKechnie and Hartley, 2014).
Opportunity In relation to SHELL, it make an initiative to invest a good portion of amount in future
sustainable transportation system, smart cities and green fuels. With the help of such
action, it assist them to improve its brand image among competitors in an innovative
manner.
Threat
 The industry where SHELL operates its business function is highly competitive and
challenging which impose huge threat over company's potentiality in gaining competitive
advantage. Some of its competitors are British Petroleum, Petronas, Chevron and etc.
NHS
Strength The primal strength which NHS contains is that it deliver its service in a very better and
hygienic manner as it contains high quality staff who provide good care and treatments to
each patient. With the help of this, NHS is able to attain sustainable profitability within
existing industry.
Weakness

 The weakness of NHS is that there is a lack of accountability and consistency throughout
NHS and affiliates which directly impact over brand value among competitors for
obtaining profit maximisation in a better manner.
Opportunity There is an opportunity for NHS to develop a consistent guidelines for NHS and
Affiliates that help them to attain sustainable growth and development in an improved
mode.
Threat
 The primal threat which NHS undergoes is that a lack of community support which
challenge them to maintain a good reputation among competitors.
P6 Interrelate strength and weakness with external macro factors
IN relation to SHELL, interrelationship of of strength and weakness with external macro
factors are as follows:
Political factor
Strength
This factor is related to government rules and regulation for accomplishing the desired objective
in a better way. Hence, in relation to SHELL, they make an effort to develop a partnership with
government alliances i.e. Climate Action Partnership which lead them to create positive impact
among consumers and competitors.
Weakness
If SHELL denies to adhere with government regulation, it deceases its brand value and
productivity among other rivalries (Vitale, 2012).
Economic Factor
Strength
Under this component, SHELL make an attempt to invest in new projects that is related to
exploration and extraction of oil and gas from natural reserves which improves its overall profit
margin ratio.
Weakness
If SHELL fails to implement corrective course of action into its functional areas, it reduces its
sales performance and also create negative impact among targeted population.
Social Factor

Strength
In relation to SHELL, it take an initiative to cultivate flowers with the utilisation of waste which
enable them to enrich their volume of sales and profit margin within competitory industry.
Weakness
At the same time, if SHELL avoids to satisfy the needs and demand of consumers it impact
negatively over them by reducing their brand value among competitors.
Technological Factor
Strength
In such factor, SHELL impose innovative technologies and advance machinery for their
manufacturing process that lead them to gain comparative advantage and also to enhance its
market share or size.
Weakness
On the contrary, if SHELL fails to adopts innovation and automation within their functional unit,
that impact over their proficiency ratio in negative manner (Wheelen and et. al., 2017).
Environmental Factor
Strength
In this, SHELL make an effort to produce eco friendly products within its production procedure
which assist them to expand their productivity and profit margin ratio in an impressive mode.
Weakness
On the other hand, if they fails to implement a best strategic decision related to environment
protection then it negative impact on its brand value and goodwill in current industry.
CONCLUSION
It has been recapitulated from above discussed report that business environment is a
combination of internal and external factors which impact on organisational performance and
growth rate. The three different organisations such as public, private and voluntary has been
discussed here. There has been detailed explanation about the different companies with their
background, vision, mission, stakeholders etc. PESTLE analysis has been conducted to
determine the external factors which impact on the organisational productivity and decision-
making. There has been studied about the SWOT analysis because it helps in analyse internal
factors affecting decision-making and business operations.

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Online
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analysis-project-report/>
SWOT analysis of Royal Dutch Shell, 2018.[Online].Available Through;
<https://www.marketing91.com/swot-analysis-of-royal-dutch-shell/>