Business and the Business Environment: Virgin Money Report Analysis

This report provides a comprehensive analysis of the business environment, focusing on various organizational types, their purposes, and legal structures. It examines the interrelationships between organizational functions, such as marketing, finance, human resources, and operations, and their alignment with business objectives and structures. The report uses Virgin Money as a case study, assessing the positive and negative impacts of macro factors on its operations. Furthermore, it conducts an internal and external analysis of Virgin Money, highlighting the interconnections between its strengths, weaknesses, and external macro factors. The report concludes by synthesizing the findings and offering insights into the complex interplay of factors that shape a business's performance within its environment.

BUSINESS AND THE BUSINESS
ENVIRONMENT

CONTENTS
INTRODUCTION.........................................................................................................1
LO – 1..........................................................................................................................1
Varied types of organizations and their purpose.....................................................1
Explaining the size, scope and legal structures of different types of organizations 2
LO – 2..........................................................................................................................4
Relationship amid different organizational functions and their link to the objectives
and structures of the firm.........................................................................................4
LO – 3..........................................................................................................................6
Determining the positive and negative influence of macro factors on the business
operation of Virgin money........................................................................................6
LO – 4..........................................................................................................................7
Carrying out internal and external analysis of Virgin money...................................7
Explaining inter-relationship of strengths and weaknesses with the external macro
factors.......................................................................................................................8
CONCLUSION.............................................................................................................9
REFERENCES..........................................................................................................11

TABLE OF FIGURES
Figure 1: Functional organizational structure of Virgin money .....................................
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INTRODUCTION
Business organization is defined as an entity with a main aim to perform
commercial enterprise through offering products and services for meeting out the
demands of the customers. Environment in which the business operates is very
complex and it is related with both internal and external factors that impacts the
functioning and operation of the business. These factors typically include employees,
customers, supply, stakeholders, demand, laws, government and many other that
influence the decisions of the business. Thus, it is quite necessary to analyse all
these factors for successful running of the corporation (Hamilton and Webster, 2015).
The current research report also aims to comprehend the functions of different types
of organizations with wider business environment. Focus will be made on varied
organizations, there sizes and scope being linked to the products and services and
business objectives of the organizations. Further, analysis of the inter-relationship of
different organizational functions linking to their business structure will be carried out.
The final part of the study will throw light on both positive and negative impact of
macro environment on the business operations and will determine the internal
strengths and weaknesses and their relationship with the external macro factors.
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LO – 1
Varied types of organizations and their purpose
Speaking in volume about the business, it is being alluded as a procedure that
aides in changing over the aptitudes and materials as indicated by the requests of
the clients and give them the ideal merchandise which thusly fulfils their needs
fundamentally (Caprotti, 2012). There are various kinds of associations whose
business and reason for existing are different from one another and are being
clarified underneath:
• Public organization – These are not-for-profit government owned firms which
offers services mainly for some or the other social purpose. The main purpose
of public sector enterprise is to look into the delivery of public merchandise
and legislative, administrations services including military, police, public
frameworks, travels and many others for the advancement of the general
public. Example, Virgin group.
• Private organization – Private enterprises incorporate for-profit associations
that can be owned either by non-governmental organizational or by other
small number of people and groups. They are considered as fundamental
piece of the nation's monetary framework which is possessed by private
people as well as groups consequently carrying out activities for creating more
turnover (Besley, 2015). Other than this, they are likewise regarded as a
significant basis of development and advancement and creator of per capita
income for the nation and in this way, enlarging the gross domestic product of
the country. Example, TESCO.
• Voluntary organization – Focusing on the voluntary organizations, they
incorporate those bodies that preforms social actions attempted particularly by
some predetermined not for revenue driven associations which are
additionally non-governmental in nature. As voluntary organizations involves
different associations, there sole reason lie in giving advantages and
improving the general public with no motive to earn profit. They further make
social wealth and helps in the improving the general public. Example, Cancer
Research UK (Cancer Research UK Centre, 2018).
• Profit organization – These associations incorporate organization, sole
dealers and constrained organizations and the principle point of these
organizations is to build their income. Profits is being viewed as a significant
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hotspot for their survival. Benefits earned by these associations are invested
into those undertakings which can give them further rewards and welfare of
the society is the minimal need for these organizations.
• Non-profit organization – Serving the humankind and society is the principle
intention of foundation of non-benefit associations. They utilize their income
being earned for the welfare of the society and common habitat where they
play out their business exercises. For non-benefit associations, gifts and
awards assumes an essential job for their survival.
• Non-governmental organization – These firms are shaped by the overall
public and there primary point is to serve the general public and humankind.
They are not related with government and offer fundamental need to the
penniless individuals.
Relation of different types of organizations with the chosen firms
Considering the example of Virgin group, it is British multinational venture
capital conglomerate of United Kingdom with a main focus positioned on the
approach that pursue to provide a good value to the clients and thus, helping in
delivering an optimistic contribution to the whole general public or community. In
addition to this, Tesco is also a perfect example of private sector enterprise, which is
also a leading a British multinational retail company. The main emphasis of the firm
is to generate huge amount of profit as well as income and thus, obtaining a
competitive edge over the competitors in the market (Bendell, 2017). Finally, Cancer
Research UK is the example of voluntary organization which shed light on the social
services through carrying out research as well as campaigns for preventing cancer
from the humanity. As they work voluntary, their main aim is to spread awareness
between all for the purpose of eliminating this deadly disease from all the levels.
Explaining the size, scope and legal structures of different types of organizations
There are three types of firms based on the size and scope such as micro,
small and medium & large enterprise.
 Micro enterprise – Throwing light in relation with the micro enterprise, they
involve small business sectors wherein the level of employment is quite low
and investment capital is also very small.
 Small enterprise – Further, small enterprise are owned by the independent
bodies which significantly encompasses small amount of employees that aims
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to improve the business in longer period of time and thus, helps in increasing
the volume of sales (Langdana, 2009).
 Medium and large enterprise – Finally, medium & large enterprises comprises
both workers carrying out activities as voluntary members and generally
include multinational bodies which possess the likelihood of increasing the
growth of these firms at a reckless speed.
Legal structures
 Sole-proprietorship – In this type of business, the hierarchical structure is
basic and business person utilizes his very own capital into the business. He
is entire and sole of the business for example coordinator, controller,
administrator, leader and so forth. Further, he is just the obligated individual
for disappointment and achievement of the business (Storey, 2016). .
 Partnership – According to this business, every single partner meets up with
common understanding so as to frame a partnership firm. According to the
understanding, they bring capital into the business. Accomplices go about as
an administration and both commonly chooses in respects with the different
vital choices related with the tasks of the business.
 Limited – These are characterized as the organizations, which are being
controlled and built up by a gathering of individuals for example investor
(Chiron and Aubier, 2001). They have a distinct legitimate substance,
unmistakable from its proprietors. Furthermore, the proprietors are likewise
not answerable for any obligation. It tends to be two sorts, public limited and
private limited. Private limited organization is claimed by little gathering of
individuals and they can't exchange their offers straightforwardly on stock.
Then again, public limited organization is permitted to exchange on stock and
raise capital (Charles, Schmidheiny and Watts, 2017).
 Cooperatives – This is likewise another sort of a business, which happens at
local or regional level. At the point when the business is being established, it
is being viewed as the lawful element, which is separate from its investors.
Further, the possession is additionally transferrable (Rostamkalaei and Freel,
2016).
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LO – 2
Relationship amid different organizational functions and their link to the objectives
and structures of the firm
According to Alanet, the structures of the organization is mainly based on the
business function of the firm as the organizational ways along with structure and
objectives are being dependent on the role being served to the customers
(DemirgucKunt, Love and Maksimovic, 2011). With increasing level of competition
along with risks, different roles of the department have risen up within the corporation
Virgin money in order to offer supporting hand in maintaining an appropriate position
of their own. Some of the vital functions of the firm are as follows:
• Marketing – This function of Virgin money is being regarded as the most vital
pieces of the business activities which help them to build up a strong
relationship along with association with the clients and different organizations.
The marketing function is further dependable to convey a resilient brand
picture of the given association consequently doing a functioning support
identifying with different publicity active and client connection utilizing
successful instruments and strategies. They are responsible for carrying out
marketing research as well as to determine the market segments and target
market for the firm.
• Finance – Talking in relation with the finance function, it is another significant
department that controls the different consumptions of the organization
pursued by other legitimate commitments and accordingly dealing with the
whole venture procedure of the organization in order to keep up their revenue
(Schiffer and Weder, 2010). The main function of this department is making
and receiving payments, preparing budgets and many more.
• Human Resource – The human resource function of Virgin money performs
viable and key administration of the internal work procedure and thus make
use of all the business assets proficiently. In addition to this, this function also
spotlight on doing a viable enlistment process. In this way, it helps in
procuring the best workers to add on to the organization's profit and help in
expanding their profitability.
• Operations – This is again considered as one of the most vital function of the
company as they try to direct the whole manufacturing process and in this
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way, helps in drawing out a smooth and effective service to fulfil the desires
and needs of the clients properly.
Every single function being characterized above necessities to cooperate as
each firm have indistinguishable goals. They have to work as a team with
correspondence in the midst of them as a key movement. Every single firm get their
base from its structure. An appropriate structure being received by the firm will
bolster the firm in having better execution level. For the most part, there are 3 sorts
of association structure, for example, divisional, functional and matrix structure (Craig
and Campbell, 2012). Discussing the functional authoritative structure, it helps in
separating the firm dependent on the various capacities being performed by them, for
example, marketing, deals, production, human asset, accounts and so forth. On the
opposite side, divisional structure isolates the organizations dependent on the jobs
and duties of the workers as indicated by their ventures, division and plans. Last yet
not the least, matrix or hierarchical structure isolates the firm according to both the
capacity and items or division (Organisation Structure, 2018). It is considered as one
of the most multifaceted structure in which the specialists that control the movement
is very differed. Therefore, it tends to be said that it is especially basic for the
organizations to choose appropriate association structure according to their industry
and their bit of work.
Virgin money adopts functional organizational structure, as it has numerous
functions and people are divided based on their roles and specialisation.
Figure 1: Functional organizational structure of Virgin money
(Formal Organization – Functional Organization. 2019).
With this type of structure in place, Virgin money can maintain consistency by
actual control and monitoring of the business activities. Better functionality is
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achieved through this, as each of the function and related people are connected with
any department or project that possesses thorough understanding of his or her role.
Thus, effectiveness in the setting of objective as well as structure of the firm can
support the firm to accomplish functions.
LO – 3 Determining the positive and negative influence of macro
factors on the business operation of Virgin money
According to Childand Möllering, many new risks and challenges do appears
in the macro environment and it is really very hard to find out for any firm. In regards
with the retail sector, it is not imaginable for any firm to reject the change as they
increase in number rather they have to adapt all these alternations effectively
(Weatherley and Otter, 2014). The macro environment typically includes economic,
political, social, technology, environment and legal influences. While making
decisions, Virgin money is needed to evaluate all these different aspects as well as
factors at the time of making decisions as they might have effective influences and
consequences. In the subsequent paragraph, PESTEL Analysis of the Virgin money
is being carried out which can be utilized in the decision making process effectively
and can impact the operations of the business.
PESTEL
Factors
Analysis
Political
Holding a presence as universally acclaimed bank, the firm is
carrying out its operations in United Kingdom, Australia, South
Africa and many others, under different laws, guidelines and
approaches. The present estimates in regards with tax of the
United Kingdom government has influenced Virgin money to a
great deal. Shopper spending has been impacted in view of the
expansion in VAT in the year 2011. This will reduce the sales of
the retail firms and will in turn affect the bank as well.
Economic
Virgin Money has encountered an enormous development in
relation with steadiness of the monetary components pursued
by different remote trade rates and financial exchanges on a
worldwide scale. Their director has accordingly commended
making vital monetary changes inside their organization to
broaden their advancement and activities. This has additionally
helped them to survive with the 2008 monetary emergency.
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Social
So as to get effective in business, Virgin money have made
different endeavours to fulfil their client’s needs. This has
empowered them to centre on the altering social patterns with
varying needs of the clients (Gupta, 2013).
Technological
In regards with the technology, the firm has made different
innovative developments, in this way ensuring themselves from
digital assaults. Additionally, they have found a way to secure
the client information along these lines suggesting different
specialized supervisory crews to improve their usefulness.
Environmental
Virgin Money have defined objectives to lessen carbon outflow
and thus, creating strategies to improve their innovation and
add against a supportable commitment and production network
coordinated effort (Glasson, Therivel and Chadwick, 2013).
Legal
Being represented by different guidelines and rules, the
organization has laid accentuation on accepting payment
assurance protections. In this manner, they safeguard their
future awful exposure from developing up. They have
additionally embraced the FCA demonstration to deal with their
PPI
guarantees and accordingly building up their activities auxiliary
to this (Jones, 2013).
LO – 4
Carrying out internal and external analysis of Virgin money
Internal factors Analysis
Strengths
• Virgin money have the mastery in creating brand value
• Wide range of choices are being offered to the customers
Weaknesses
• With the passage of time, the firm have stepped up into
monopolistic firm, because of which the expansion of the
firm is very critical
• The management layers of the company is very minimal
and there is no strong board (Virgin money UK, 2019)
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Opportunities
• Virgin money offers old services by making use of novel
modes that helps them in becoming more innovative. It
also aid in enhancing the opportunities for their future
growth.
• The firm was also in a position to decrease their costs of
operation by adopting different effective strategies
Threats
• The major threat being faced by the firm is from the
presence of competition all across the world
• There has been increase in the financial crime these days
which poses great threat to the effective working of Virgin
money (Helpman, 2016)
Explaining inter-relationship of strengths and weaknesses with the external macro
factors
Within each and every business corporation, analysis in regards with different
factors is required to be done for the purpose of making effective decision that might
influence the whole effectiveness of the firm. This can be performed by evaluating
the internal as well as external analysis that clearly explains the strengths and
weaknesses of the firm effectively and support in making useful decision that further
leads to the generation of higher amount of profits. According to the above SWOT
analysis of Virgin money being conducted, it can be attributed that there exist some
relation between these internal factors with the external macro-factors (Craig and
Campbell, 2012).
There is immediate connection between the strength and shortcoming of
Virgin money with the external elements of macro condition. With the assistance of
opportunities and threats, firm can decide the hazard present in the market. This will
assist them with operating successfully. Due to Brexit, movement will be stopped and
subsequently, it is crucial for the firm to look and utilize nearby individuals of UK so
as secure work supply (Belleflamme and Peitz, 2015). What's more, the organization
is bound to confront difficulties following Brexit submission, for example, increment in
the food costs and so on. It is crucial to makes changes in the valuing procedure of
the firm. Through this, the firm will have the option to snatch enormous piece of the
pie. Further, Virgin money additionally need to tailor their shortcomings to strengths
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