Business Environment Report: Analysis of Business Types and Operations

This report delves into the multifaceted business environment, examining the influence of internal and external factors on organizational activities. It begins by defining the business environment and its key components, such as customer demands, economic changes, and technological advancement...Read More

Business and the Business
Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P1: Different types and purposes of organisations......................................................................3
P2: Size and scope of different types of organisations................................................................5
LO 2.................................................................................................................................................7
P3: Relationship between organisational functions and it's objectives and structure..................7
LO 3.................................................................................................................................................8
P4: Positive and negative impacts the macro environment has upon the business operations....8
LO 4...............................................................................................................................................10
P5: Internal and external assessment in terms of strengths and weaknesses.............................10
P6: Strengths and weaknesses interrelate with external macro factors......................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Business environment is the totality of the internal and external environmental factors
which influence the business. Customer demands, employees, managerial activities, clients,
suppliers, governmental activities, owner, advancement in technology, economic changes,
market trends are includes in the business activities which affected by both environmental
factors. This report discusses on these factors to get insight knowledge how the organisation's
activities influenced by them, John Lewis and partners is the largest cooperative chain of high
end department stores in UK established in 1925. This is public limited company which works
for the citizens to provide lower pricing of products. Report discusses the organisations types and
their structures with their size and scope. Also, discussion on organisational functions, their
relationship with objectives. Further, it discusses the macro environment factors how they impact
on the business activities. Later there is discussion about the company's strength's and
weaknesses.
LO 1
P1: Different types and purposes of organisations.
Business activities like fulfilling the customers demand, managing the resources,
supplying the products etc. these processes are influenced by different environmental factors like
supplier, distributor, resources, substitutes,, market trend, industry trend, competitors, policies,
regulation, governmental activities, population, economy, social activities, technology
development (Prajogo,2016). Discussing these factors which affect the different types of
businesses in their own ways. There are basically three types of the business sectors which are
Private, Public, Voluntary. Explained as
PRIVATE SECTOR
It is known for the private ownership over the business which has the controlled of the
whole organisation. According to this the personally owned business circulate by the individual
or group of the individual. These are less secure and stable, in this sector the employment is not
assured. If there is fluctuation in the economy of the country it may face ups and downs in the
business profitability (Kljucnikov and et.al., 2016.). The so if the revenue suddenly drops, they
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may cut off the manpower and other expenditure to reduce their expenses. So it is highly risky
sector. Private sectors main aim to earn high revenue or profits.
For example TESCO company in UK. It operates the largest chain of the supermarkets
in the country so that they have to face many types of risks in their business.
PUBLIC SECTOR
The public sectors are mainly concerned about the public and works under the
government authorities. The economy of the private sectors are controlled by the government
directly. There are various opportunities available in this sector because it reflects the
diversity .also there is rigidity in terms of policies and procedures, as the government handle this
sector so these are not revenue driven while the salaries are given from the governmental funds
arise by taxes. It is less risky in context of employment for the people who work there, also it is
more flexible than the private sectors (Bah and Fang, 2015). On the other hand, this sector pays
health and travel benefits to their employees, and retirement and job security. Public sector
works for fulfilling the demand of the citizens at lower cost and serve better to the communities.
For example John Lewis and Partners, it is public limited company, which serves the
communities by providing the different range of the products such as clothing range for men,
women and home décor and furnitures, electricals etc. all these products are available in their
stores at very low price which should be affordable by the public.
VOLUNTARY SECTOR
this sector works for the welfare of the public and communities. The organisation are
owned which rum voluntarily by the stakeholder or the different trustees of the firm. As said
these organisations does not work for the profit motives only while they help the communities by
their services and products. They are operated by the donations and charitable initiatives which
are given by the different people to organisation and they re-invest the amount in it again. It is
flexible and creative (Erasmus, Strydom and Rudansky-Kloppers, 2016). It may be the
combination of both private and public, so there collaboration leads to do the social activities.
These main aim to spread awareness and helping the public and hence the profit is not governing
factor.
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For example Red Cross is the charitable firm, which serves the public with no profit
motives, as they work to provide relief when there is any disaster. They help the communities to
be prepared for the emergency. There only mission is volunteering.
Limited companies are mainly corporate associations. They have their legal identity as
their own, and they have the right on it. So the assets at the workplace are owned by the
company itself there is no right of the members. So the liability is limited for the individual.
Firms which are operated in partnerships, the partners have to submit the memorandum of joint
associations and other documents which relate to the association articles (Gerow, Thatcher and
Grover, 2015). There should be one shareholder of the company but in case of the large sized
company offer shares to public.
Public limited company which are in large sized they offer their share to public. Like
John Lewis and Partner has shareholders majorly public. The organisation followed different
rules and regulations set by the government, as they maintained the legislation the company's
prestige is maintained in market. Also, it is registered at LSE(London stock exchange), which
strictly monitor the share trading processes.
The voluntary sectors follow the government policies which is used for the welfare of the
people, and they follow the legislation to provide justice to the people. As they fight against for
the rule break (Dijkman and et.al., 2015). Such as environmental policies should be obeyed by
the people. They try to spread awareness about such laws.
P2: Size and scope of different types of organisations.
Organisations support different working styles as they have different sizes, and scope.
Public limited organisations work according to their sizes like they possess three different sizes
which are small, medium, and large.
The small businesses may be start up or small scaled business which faces tough
competition to stay in front of the large organisations. Also, these small businesses wok in the
local market or small market. These businesses have few employees, approx range 1-10
employees. As they posses very small scope for themselves, for which they change their
marketing strategies (Hair Jr, Page and Brunsveld, 2019). As they have less resources to prevent
from the competitors or new entrants in the market.
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Medium sized businesses possess better condition than the small business units. They
work in large market to serve more people. They work for the expansion of their business with
the available products. These businesses can changes their business strategies according to their
needs but most of them change twice in a year. They try to compete with competitors to become
stable in market as they have more resources with them in terms to prevent from new entrants or
competitors in market. Companies haven large risk ratio with large organisation. It may have up
to 50 to 300 employees in their company.
Large sized organisation works at large scale, as they serve to a big part of market. It
includes the regional or global market. They have maximum resources to prevent from the
competitors and new entrants (Virtala-Raskila, 2018). They can change their business strategies
to sustain their future in market. Large size of employees in their companies up to 1000 or more.
On the basis of the production, organisations are categorised as primary, secondary and
tertiary. The primary firm always acts as the (supplier) of the raw material, they produce the raw
material which sends to the secondary organisations. Secondary company take the raw material
and used to convert them into products. These products are finally sent to the tertiary
organisations. Then the tertiary firms are generally the retailers who sales the products in market.
Scope of the company is always depends on their product types. So the John Lewis
provide the products like clothes, home décor etc. which is under retail industry. The red cross
provide their services at last when the victims are suffered from the disaster. So the organisation
selects their target to be achieved. They have vision, mission, objectives, goals, which help them
find the scope of the improvisation in business. Vision is always the place where the company
wants to go, mission refer to their roles or purposes. So the mission chooses by the company to
give the scope to the business which reach to the objectives and lastly objective refer to the target
they want to achieve.
The John Lewis and Partner have the aim to provide the products at low cost and serve
many people. They have scope to lower their prices as they can make it more affordable for the
poor. Company's operation is dependent on their stakeholders, like the people who are the part of
the business, so they influence the business activities (Vannan, and et.al., 2018). Also, the impact
of the society and consumers it leas to change the business environment for the company. This is
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international expanded brand with supportive industries, so there is sometimes uncontrollable
situations dues to macro environmental factors.
LO 2
P3: Relationship between organisational functions and it's objectives and structure.
Functioning of the organisation is dependents on the different functions like human
resources, finances, marketing and sales, production, administration, technology.
The marketing of the products is the ways to promote the product in market and meet the
customer demands. John Lewis and Partners have large ranges of the stores in the UK, they
operate them by using different criteria of promoting their brand and products. They attract the
customers by providing different offers to them. As they have set the high competition in the
market in terms to serve the customers as they provide the good s at low prices.
As lo the finance is related to the investments of capital and the utilised funds and
maintains the record of the expenditure or sales or cash flow in the organisation,. Company have
maintained the finance records so that it does not create any confusion among the investors or
stakeholder about financial conditions (FATRICIA, 2016). As they have the record of all the
finances or investments or return related thing they can evaluate the risks in their businesses
which may affect their business.
Accounting in the company is about the record of the sales, purchases, utilisation of
resources, cash flow for the John Lewis and partner is very important as they have to pay their
liabilities and pay on the need of then funds.
Human resources segmental handles all the liabilities related to the recruitments,
selection, job design, maintaining law of employments, relationships of the employees at
workplace, managing the compensation. HR department manages the employees efficiency by
arranging the training and development for the employees to improve their skills and
performance. John Lewis and Partners company works for the development of their employees
and thy also open new positions as they expand their business, so they have HR team which
handles the recruitment or selection or other employees related process which should be
maintained in company (Olaniyi and Reidolf, 2015). As they take care about the employees
salaries, rewards, leave balances etc. So that employee should feel comfortable at the workplace.
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Production should be maintained by the manger who are working in the manufacturing
unit. John Lewis and Partner company's managing team of the manufacturing unit take care of
the inventory as they have no loss of it, and they can utilise the resources properly.
John Lewis and Partners has adopted the corporate strategic plan which relate to their
working style or functions (Hoffmann-Burdzińska and Flak, 2015). These action plans has
different functions for the company to be operated. The owner set the goals for the lower level
and high level authorities to handle the task and later they distribute these task into sub tasks
which are operated by the people at lower level. They maintain this hierarchy of the work. This
hierarchy is very helpful when the goal is set by the top-level authority which is owner then only
is has to circulate among the employees. Company follows the bureaucratic leadership style for
their workplace in which the mangers set the objectives to be achieved by the employees and
leader motivates them to achieve the target in particular time.
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Illustration 1: Organisational Functions

LO 3
P4: Positive and negative impacts the macro environment has upon the business operations.
PESTEL analysis to discuss the positive and negative impacts on the organisations.
Political factors
In UK political condition is stable. Government supports the trading in corporate industry
as they have excluded the tax duties from the goods. They have changes the policies and
procedure for the reliability of the business. Governmental policies are change to support
business activities (Day, 2019). While it implies the taxes on the private sectors.
Positive impact– John Lewis and Partners company can expand their business at global level,
because there are changes in policies which supports the trading and implies less tax amount on
the public limited companies.
Negative impact– company had suffered minimal as the expansion in the EU is affected. They
have suffered from the loss of the investors which can collaborate with it .
Economic factors
Economic condition is stable in UK as they give support to the SME's. So this helps a lot
to improve the company. Also, country has benefits from the rapid growth of the developing
countries as they invest in their country for trade purposes. The country faced the financial
crises, so it affects the economy is last years. Due to Brexit the country people suffer form the
unemployment.
Positive impact– John Lewis and partner can enter into global market which help to generate the
large revenue and again it helps to increase the economy of the country.
Negative impact– as the currency rate is changes in other countries it may affect the business for
the company.
Social factors
People in UK prefer the quality products rather than cheap products. Socially people are
more concern for their growth. They are health conscious and social communities spread the
awareness (Maheshwari, and et.al., 2017). They are more socialise with each other.
Positive impact– John Lewis and Partner company can provide the quality products at low
prices which creates more potential buyers for the John Lewis and Partner.
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Negative impact– If any product is not up to the mark for the consumer then they would have
been suffered from bad image in market, as people are more aware in the country.
Technological factors
Technological advancement in the country. The use of the e-commerce websites is higher
and mobiles are in tend.
Positive impact- John Lewis and Partner has the opportunity to use the technological innovation
in their company and promote their products. Also, they can sell their products online.
Negative impact- It affects the company's sales as there are lot of competitors in the market as e-
commerce. Also, there may be threat of cybercrime like they unknown brand can theft their
intellectual property and sale their products.
Environmental factors
Country has strict environmental laws, which should be obeyed by the businesses. The
products should be eco-friendly (Georgescu and Popescul, 2015).
Positive impact– John Lewis and Partners follows environmental laws so this creates positive
impact on the consumers to attract for the products.
Negative impact- As climate change affect the inventory, it may loss the company. So the
company should be aware of the climate changes and fashion changes.
Legal factors
UK has their own terms and conditions as they provide support to the businesses and
start-ups they give full support in legal terms (Komljenovic, Loiselle and Kumral, 2017).
Companies can have heir intellectual property, increment in the environmental laws, increment
in consumer laws.
Positive impact- John Lewis and Partner have to be concern about these laws and legal
procedures so that it may lead to profit for the organisation.
Negative impact- If the consumer is unsatisfied then it and go against the company, and the
company have to pay the fine or suffer from the punishment if there is any law breakage.
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LO 4
P5: Internal and external assessment in terms of strengths and weaknesses.
John Lewis and Partner company has the potential to achieve new milestones and serve
better to public with generating good revenue. It is operating large ranges of the stores of the
clothing, home décor and electrical. They have proper management of the resources and funds.
So it can step in to the global market. SWOT Analysis of John Lewis and Partners company will
provide the strategic factors knowledge of the which has influenced the company's capability
Strength of John Lewis and Partnership
It is largest chain of the clothing, home décor and electrical products stores which has
lowest price in the market (Benmamoun and et.al., 2016). Company have benefits of the lowest
price and quality products, more consumers are attracted towards them.
They are adopting the changes in their workplace like technology innovation. Using
technology to spread their business which enhance the reach of the customer for the company
and it finds the more potential buyers.
Company has strong brand value in the market. So they can take advantage of it to
establish new branches.
Company has provide the job security to their employees, so they work fearlessly and
with motivation.
Weaknesses of John Lewis and Partners
Company follows the hierarchical structure so it develops the differences among the
higher and lower level authorities. Employees sometimes does not support the decision taken by
the upper management. Employees are only instructed to follow it,
Company does not have the e-commerce website to make available the products online, it
decreases the sales of the company (Hoffmann-Burdzińska and Flak, 2015). It losses the
company in terms to get competitive advantage.
They have secret organisational culture. It affects the manufacturing or production units.
As there is lack of transparency in the company. So the employees are not satisfied.
Lack of the international presence.
They have inconsistency in their profitability.
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P6: Strengths and weaknesses interrelate with external macro factors.
Strengths
John Lewis and Partners company is trying to cope up with the competitors and adopting
the latest trends and fashion which affect their business. As the company have good will and
brand value in the market the company can expand their business in other countries as well as in
global market.
Due to the lower prices of the products there will be more consumers. As increment in
the sales it generates good revenue.
The UK suffers from the unemployment so this will give new hope to the people in the
country to grab a job in this company as it is public limited company, there is more job security
for the people.
Expanding the business with environmental friendly products, like they provide high
ranges of the electrical products as well. So they can make it more efficient to save the energy
and save the bill of the electricity (Olaniyi and Reidolf, 2015). So public will prefer the brand
more than other competitors. Company can also step in to the developing countries so that they
can take the competitive advantage, it increases their sales. As, they spread awareness or do
online marketing which help them to achieve the high profit which helps the country's economic
condition. As the UK has favouring political conditions for trading, the laws supports the
business activities and lower the taxes amount on them.
Weaknesses
John Lewis and Partners provides the product low cost but there are increment in the
competitors with same strategies of business. Like they also sale their products at low cost which
lower the profit margin of the company.
There is rapid innovation in the market in terms of the culture changes, fashion changes
and climate changes. So these factors may exhibits loss to the company top achieve their
revenues (Komljenovic, Loiselle and Kumral, 2017). Like they may have inventory losses due
to the climate changes or culture trend change.
Company may have loss of the investors form EU countries, and they may suffer tot
establish their business in that country.
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As they have inconsistency in their profits amount it unsecure the company.
CONCLUSION
According to this report the business environment affects the organisational activities in
many ways. Internal and external environmental factors influences the business so that
companies have to take care about these changes. Types of the businesses, their sizes and scope
is discussed in it. It tells how different organisations work. Also, discusses the business functions
in context to the John Lewis company, how they operate different activities at companies. Macro
environmental factors affects the company and their business strategies. Company's strengths and
weakness discusses and their relationship with the macro environmental factors.
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Online
John Lewis SWOT and Pestle analysis. 2019. [Online] Available Through:
<https://www.swotandpestle.com/john-lewis/>.
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