HND Business - Unit 1: Business Environment and Strategies Report

This report examines the business environment and strategies, focusing on the case of Virgin Money. It begins by defining different types of organizations and their purposes, followed by an analysis of organizational size and scope. The report delves into organizational functions, their links to objectives, and structures. A significant portion is dedicated to identifying the positive and negative impacts of the micro and macro environments on the business. The report includes a detailed PESTEL analysis to understand the macro environment and a SWOT analysis to assess Virgin Money's strengths and weaknesses. It concludes by exploring the relationship between these strengths, weaknesses, and external macro factors, providing a comprehensive overview of the business environment's influence on organizational strategy and performance. This report provides insights into business analysis and strategic planning.

BUSINESS ENVIRONMENT AND STRATEGIES

Table of contents
Introduction......................................................................................................................................3
P1 Different types of organisation and their purpose......................................................................3
P2 Size and scope of the organization.............................................................................................4
P3 Different Organizational function and their link with the Organizational objectives and
structures..........................................................................................................................................5
P4 Identification of positive and negative impact on the micro and macro environment on
business environment.....................................................................................................................6
P5 Analysis of the organization to recognize the strength and weakness.....................................7
P6 Relation of strength and weakness with the external macro factors..........................................8
Conclusion.......................................................................................................................................9
Reference list.................................................................................................................................10
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Introduction
An organisation is comprised of different departments that are responsible for a particular
function. In order to achieve organizational goals, different departments are required to function
in an effective manner for fostering growth of any business firm. It is very important to choose
an effective business environment in order to choose the efficient professional career in today’s
world. The purpose of this study will help to understand the business environment and the factors
that will affect the growth of the business organization. The learner has chosen virgin money to
discuss the business environment and will also analyse that how PESTLE factors will affect the
organization. This study will help to know various significant factors of the business
organization and the challenges that the organization face in the business environment. It will
discuss all the objectives of the venture of the business organization.
P1 Different types of organisation and their purpose
Various types of business organization are categorized in terms of private, public voluntary and
so on. The main types of private sectors are sole trader, companies, partnership and many more.
Allison et al. (2015, p.53) has stated that the aim of the Virgin money and other private sectors is
to earn profit whereas, public sectors is governed by the government and all the rules of this
sector are formulated by the government. The main focus of every business is to fulfill the
objectives in order to survive in the business world. It has been found that public sectors pay
taxes to the income tax department so that they do not have face any risk in the business. On the
other hand, in case of private sectors, they are not concerned about the laws and rules. Voluntary
sectors are formed with the people those who have an interest to serve people with a good cause.
However, they do not get any payment for this and therefore, they are known as the volunteers.
The aim of the voluntary sectors is to focus on the factors that help in the betterment of the
society and publics. It has been found that the people working in the public sectors earn more
money in compared to the private sectors (Belas et al. 2015, p.68).
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Figure 1: comparison of revenue between public and private sector
(Source: Bah and Fang 2015, p.159)
P2 Size and scope of the organization
Managerial capabilities
Every organisation whether it is a private or public, should have the capacity to manage the
organisation in order to create organizational function and structures. Kolk (2016, p.30) has
suggested that one of the easy way to adopt capability model is to focus on the organizational
function and behind the function should uncover the capability. It has been found that the
management in the organisation in UK has been growing in all the sectors from a low base.
Average payment level of the private and public sectors vary from each other due to different
job roles and types of people in each sector. Few years back it was analysed that the average pay
level of the public sectors was in the range between 2.5% and 3%. Public sectors are formed of
large organization with an average of 500 staffs and private sectors are divided into large and
small companies.
Business nature
Virgin money and other private banking organization are the business that earns a huge profit but
is not managed by the government. These are managed by individual business owners who runs
the entire business and the jobs involve finance services, hospitality and other non government
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organisation. On the other hand the public sector recruits the staffs through local and state
government. These are mainly the civil service jobs that include teaching, army officers, and
healthcare offices and so on.
Scope of different organization
Local companies: there are huge business scope in the local companies of UK that includes
health care industry, retail and energy industry. Jobs are available at every location in the entire
UK.
National companies: the national companies of finance sectors offer huge opportunities to the
graduate students. They can work with the big public sectors like, national health care services,
Accenture and other organization.
International: it has been found that virgin money has international business of finance services.
The government of UK has international trading business with the trade partners of US and
China that involve huge revenue and profit (Kim et al. 2013, p.5598).
The scope and size of the business has help to know different criteria of jobs where the learner
may think of approaching the career. Virgin money are popular business who have a good image
in the entire world. The investment team of virgin money focuses on the consumer sectors such
as travel, telecom, music, financial services and many more. The HR manager of virgin money
organizes interviews to hire the effective employee for their organization. They do their business
with the help of advance technologies that has enhanced them to do their business rapidly.
It has been found that the organization has various advantages and disadvantages of their
functions and structures. The functional organization helps to give a high-level specialization.
The employees who are strong in functional activities can perform tasks at a high rate of speed
that will increase the productivity of the company. However, as the functional organizations have
a high degree of efficiency therefore, everyone is engaged in individually effort that will lead to
the lack of teamwork (Budak and Rajh, 2014, p.140).
P3 Different Organizational function and their link with the Organizational objectives and
structures
The HR manager in the virgin bank is responsible to hiring the suitable candidate having finance
background on their record. They monitor and control the work process in order to maintain
discipline in the venture of the organization. The knowledge of finance and marketing should be
known because it provides finance and banking information. It has been found that Finance
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department of virgin bank is responsible for producing the financial reports and activities to the
account department. In addition, this particular department is responsible for mobilization of the
bank reports of financial resource. They keep the financial records of the marketers. This
department is categorized into accounting and treasury division.
The HR department face different kinds of complexities in performing their roles because they
had to manage huge number of employees and giving them proper training about their jobs. It
has been analyzed that the division are geographically organized in an organization and in each
division; a particular group of employees are assigned. However, it must be noted that there is a
disadvantage of this division because a lots of competition and efforts arises between these
divisions. It has been found that virgin money has a matrix structure that has helped the
employees to work in team (Boons and Ludeke, 2013, p.9).
P4 Identification of positive and negative impact on the micro and macro environment on
business environment
Cohen, and Kietzmann (2014, p. 279) has stated that the micro and macro environment that is
nearer to the organization affects the positive and negative relation with the customers. Various
factors that enhance the microenvironment in the business of virgin money are supplier,
customers, and competitors and so on. It has been observed that supplier of the business affects
the marketing value in the organization. Shortage of supply or delay may leads to the destruction
of the customer’s needs. The goal of the bank is to serve the customers and develop an effective
relationship with them. The micro environment is comprised of natural and technological
environment of the bank
PESTEL analysis of virgin money will help the learner to understand the macro environment of
the venture and it has a major impact in the money holdings of virgin.
PESTEL ANALYSIS
POLITICAL They have a legal structure for the
enforcement of the contract
Virgin banks have safety regulation in the
department of finance
ECONOMICAL Virgin money uses the inflation and growth
rate of the country to estimate the trajectory of
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the growth of the organization.
They interchange the stability and rates of the
currency of the country.
SOCIAL They focus on the demographics and
capability level of the population.
They focus on the power level of the society.
TECHNOLOGICAL Cost structure is impacted by the technology
in virgin money.
Financial sector is impacted by the value
chain framework.
ENVIRONMENTAL Factors like weather and climatic change
affect the virgin money.
They display an attitude towards ecological
appliances.
LEGAL They have implemented health and safety law
in the organization
Law of Antitrust is also implemented by the
virgin money bank.
Table 1: PESTEL analysis
(Source: virginmoney.com.2017 )
P5 Analysis of the organization to recognize the strength and weakness
SWOT analysis will help to understand the strength and weakness of the organization. This will
analyse the market by giving the complete information of marketing and parameters of the brand.
SWOT ANALYSIS
STRENGTH This company is highly capable and effective
in grabbing the right customers towards them.
Other banking sectors can be explored such as
priority banking and so on
Services like banking, loan, and mortgages are
offered.
A wide range of financial assets is offered that
attract many new customers throughout the
year.
WEAKNESS Other countries are not benefited from virgin
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money except UK
It is difficult to upgrade the capital as it is
termed as a not marked company.
OPPORTUNITIES There is a chance to enlarge in other countries
such as Europe and Asia.
IPO can be launched and the capital can be
raised in order to achieve the business
objectives.
THREAT Giants as if HSBC is present that may lead to
the destruction of revenue.
International function in Australia can turn to
get failure.
Table 2: SWOT analysis
(Source: virginmoney.com. 2017)
P6 Relation of strength and weakness with the external macro factors
The business of virgin money is affected by variety of factors and macro environment in one of
them. This environment helps to determine the strength and weakness of the organization. The
external analysis helps to investigate the opportunities and threats of the organization. Cant et al.
(2014, p.565) has mentioned that these are the factors that enhances the decision making ability
of the organization. It has been found that the market goes on changing and therefore this
requires an implementation of new technologies and other essential factors for getting a known
position in the business world. Political and economic factors of virgin money help to get a clear
description of the venture that helps to understand the macro environment of the business. It is
very important to take a strategic decision in order to achieve the goals of the organization
(Riasi, 2015, p.15).
Virgin money is doing a successful business all over the world by targeting the appropriate
customers in the business. They have developed a wonderful team that has helped to build a
strong business. They offer valuable products and services to the players. They have many
branches in the entire UK with 3 billion customers approximately. They have implemented a
new plan to support the existing business of financial service. This plan includes the recruitment
of the top employees in their business.
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The impact of micro and macro environment is strongly indulged in the decision making process
of the organization. These are the two factors that are enhanced while developing the marketing
strategies of the business. Suppliers are the factors that hold the power of the business as this
factor help in the success of the business. Economic factors like inflation and growth rate impact
in the production of the revenue for the organization. Strategic marketing decision is done by
enhancing the legal and political forces that is strongly related to the market.
Conclusion
From the following study, it has been clearly understood the business environment of the virgin
money and other organization that will give a clearly idea about the business world. Political,
social and the other factors have a strong impact on the business concept of every public and
private organization. It will enable the learner to recognize the areas of growth of the
organization. It has been found that by doing the analysis the owner of the business will be able
to improve the performance of the organization. Therefore, it can conclude that to grow a
business every organization should must analyze the strategies and venture of the business.
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Reference list
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Belás, J., Demjan, V., Habánik, J., Hudáková, M. and Sipko, J., (2015). The business
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the-art and steps towards a research agenda. Journal of Cleaner Production, 45, pp.9-19.
Budak, J. and Rajh, E., 2014. Corruption as an obstacle for doing business in the Western
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Cant, M.C., Erdis, C. and Sephapo, C.M., 2014. Business survival: The constraints experienced
by South African SMEs in the financial sector. International Journal of Academic Research in
Business and Social Sciences, 4(10), p.565.
Cohen, B. and Kietzmann, J., 2014. Ride on! Mobility business models for the sharing
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Kolk, A., (2016). The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business, 51(1), pp.23-34.
Riasi, A., 2015. Competitive advantages of shadow banking industry: An analysis using Porter
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