Business Report: Organizational Structure, PEST Analysis of Two Cities

This business report delves into the intricacies of organizational structures, exploring both functional and divisional models, and their respective advantages and disadvantages. It provides a detailed PEST analysis of two major cities, New Delhi and Shanghai, evaluating the political, economic, social, and technological factors influencing the business environment. The report also assesses the competitiveness of the environment for a business like Deliveroo, considering the impact of these factors on market dynamics. Furthermore, the report highlights the importance of organizational structure in achieving business goals. The report also includes a table of contents, introduction, conclusion and references.

BUSINESS REPORT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
1 Organizational structure............................................................................................................3
2 PEST analysis of two cities......................................................................................................7
3 Competitiveness of environment............................................................................................10
4 Conclusions.................................................................................................................................11
REFERECES.................................................................................................................................12
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INTRODUCTION
The role of the business has increases with the increasing external challenges in the
overall business market. The business needs to focus on the current organizational structure
which will define the overall business structure by defining their roles and the responsibilities.
This project report is all about stressing upon the major elements such as the organizational
structure such as functional and the divisional organizational structure. The selection of different
organizational structure will be beneficial for an enterprise in accordance with the external
business requirements. It also explains regarding PESTLE and SWOT of the company.
1 Organizational structure
The organizational structure of an enterprise is a mixture of different activities includes in
the business without which a business entity will not able to achieve their desired goals and the
objectives (Poddar and Jesudasan, 2016). The organizational framework has designed in
order to complete all the business tasks such as task allocation, coordination and supervision
which are directed an entity towards the achievement of the goals and the objectives of an entity.
It can alps be regarded as the most efficient method which is viewed as glass as it transparently
reflects the overall organizational activities in a systematic flow. The organization is clustered of
different entities who play a significant role in an enterprise in relieving the work load pressures
by accomplishing all the assigned tasks by their superiors. The designing of different
organization structures will be highly dependent on the overall business nature as the complex
nature of the business can divert the path of the owner from its main objectives. The structure of
an organization will allow an entity in order to express their allocation of responsibilities for
playing different functions in an enterprise (Sugiharto, 2016). The different functions played
by an enterprise include functions and processes to different entities such as branch, department,
workgroup and individual. There are various types of the organizational structures which can be
used by an entity which are mention as below:
Functional structure- This form of the organizational structure which consists of different
activities such as coordination, supervision and the allocation of tasks which is the essential duty
of an enterprise. This structure has determines how the organization performs or operates in
order to achieve their objectives in a given time span. The division of all the job responsibilities
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is done on the basis of the functions played by an enterprise owner on accomplishing their
desired goal and the objectives (Liu, 2016). The common functions played by an entity such as
production, marketing, human resources and accounting. The decisions of the business concern
are taken all around the major categories as these regarded as one of the integral aspects of the
business. The organization of different segments which gets specialized services that leads to the
operational efficiency where employees become experts in the assigned task and the duties. The
division of overall organi8sation into various segments will help an entity in achieving higher
level of growth by developing solutions for all the discovered problems by the same business
enterprise.
Advantages
 Efficiency and productivity- This form of the organizational structure which defines all the
tasks and the duties of an organization on the basis of different business functions. An
enterprise may get benefit of increasing their individual capabilities by enhancing their
existing skills and talents in order to grab future opportunities (Sugiharto, 2016). An
employee can become expert in the allotted field as they get expert by in their functional area
which can perform tasks with a high level of speed and efficiency. This increasing efficiency
of an employee by working continuously in the same field will increase the productivity of
an single individual. The workers in the given field will know their personal jobs as all the
job profile are explained clearly will boosted the confidence of an individual. This business
efficiency has increases which will reduces the mistakes simultaneously occurred as the
small errors are reduced by using specialized services by an entity. The functional services
used by an enterprise will be helpful for an entity which will clarify the overall career path of
the business.
 Specialization- This form of functional organizational structures in which an individual will
get expert knowledge as they are working in a same field (McDowell, 2016). The high
level of specialization benefit can take by an employee while working in the field in which
the tasks and duties are assigned. The workers working in a stream like finance can make
decisions related to this form of stream as they regarded as one of expert in the given field.
 Disadvantages
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 Lack of teamwork- The functional organization enhances the individual efficiency as single
individual involved in this form of structure will needs to enhance their own skills and
talents. The personal goal accomplishment will reduces the team spirit among the business
enterprise as the common interest of an entity which is to earn the high level of profitability
will not achieved in the given time period (Cegarra-Navarro, 2016). This delayed in the
given time span will decreases the discipline at the workplace as the common has shifted to
the achievement of the personal needs and the expectations. The performance of a single
individual will be decreases as the evaluation of their internal performance will results into
the deficiency and inability of an entity. The workers doing work in a team will be beneficial
for an enterprise as in that case it needs to be strong enough in order to meet the obligations
of the internal or external environment simultaneously.
 Difficult to hold management control- The basic disadvantages of the functional
organizational structure is that it can poses challenges for the top management employees in
order to establish management control to ensure the stability in an entity in terms of equal
performance of all the individuals. The decision of expanding the overall organization is not
possible as the common interest of the business concern has been declining by not flowing all
the standard rules and regulations imposed by the internal entity (Flax, 2016). The
departments are segmented by an enterprise to assign all the tasks and the duties to ensure the
proper working in the business. The stability needs to be maintained in the business concern
as they are highly responsible for making changes in their current business organization by
considering each and every thing. The expansion of the overall business requires the support
from all the employees as they are representatives of an organization whose support are
regarded as the integral aspect of an entity. The assigning of job responsibilities are as per the
rules and regulations as this can guide an enterprise in achieving their aims with high level of
accuracy and authenticity.
 Divisional structure – The divisional structure or it can be said that the product structure
will consists of self-contained divisions as the overall organization are further segmented into
different divisions and these divisions are treated as separate business units (Hsu, 2016).
The aims and objectives of these separate divisions are properly designed and achieve it in a
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same time frame with different set of personnel to support the overall organization in
achieving all the objectives with precision.
Advantages
1. The division of different tasks or different segments are allotted in order to provide benefit
to the overall business personnel to give emphasizes on their major objectives.
2. The divisional structure of an enterprise will be beneficial for an entity as it will promoted
the good leadership among the business entity in motivating their employees to strive harder
for the business in generating higher output to support the aim of the corporation
(Frambach, 2016).
3. The product efficiency also increases with the help of these processes involved in an
enterprise which will lubricate the business operations of an entity as the employees who are
assigned with the work get increases their overall morale along with the allotted work.
4. The knowledge of an individual will get enhanced by working on a project which leads an
organization towards the path of success.
Disadvantages
1. The primary limitation of this kind of the organizational structure as it comprised of
competing with different divisions which allow work dynamics to be establish instead of
making sound and strategic decisions.
2. The work politics will ruin the daily efficiency of the individual which will affect the overall
point of view on certain matters that are related to the allocation of the various resources of
the company.
3. Management theories are executed by an enterprise as it will be beneficial for them in
improving their work efficiency by completing each and every tasks and duties in a given
time span. There are various that can be used by this particular organization in taking
advantage from the various forms of the organizational structures.
4. Contingency theory will help the top management by assisting the managers in making
decisions that are based on the particular situation on one size fits method approach
(Schaper, 2016). The decision taken on the basis of this method states that the managers
who are the leaders can analyses the current situations in order to comment upon the existing
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situation by making corrective adjustments on the basis of the given theory chosen by an
entity.
2 PEST analysis of two cities
PEST analysis of two cities is given below. These two cities are New Delhi which is
capital of India and Shanghai which is capital of China. PEST analysis of these two cities is
given below.
New Delhi
Business environment Particulars
Political Political environment greatly influence the business environment
in any nation. Government of India is focusing on increasing
tourism on its land. In this regard number of initiatives is taken by
the local government to enhance tourism in New Delhi and other
areas of the country. With increase in tourism demand for fast food
also increases. Moreover, demand for foreign dishes will certainly
enhance (Ryu, Lee and Gon Kim, 2012). Hence, it can be said that
political environment is in favor of the firm Deliveroo.
Economical Economic factor greatly influence the demand for fast food in the
nation. Over the past few years income level of middle class of the
nation enhance at fast pace. Due to this reason people are spending
large amount of money on consumption of fast food in a year. In
future with reforms in the domestic economy many positive
changes may come in the nation which will lead to enhancement in
people consumption level. Hence, positive signs are observed in
the Indian economy which will positively affect the Deliveroo.
Social and culture Big shift comes in the social environment of the nation. 10 years
earlier people mentality was different. At that time most of people
believe in saving more money (Gammeltoft, Pradhan and
Goldstein, 2010). This trend is not changing and now people
believe in making more expenditure. Hence, consumption of fast
food increases in the India. In India varied culture people live
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together who different sort of foods. In last few years new trend
comes in existence under which it is observed that more and ore
people are eating dishes that belong to the different states that are
part of India (Cappelli, 2010). Hence, now people are now not
stick to indigenous dishes. They are eating dishes that belong to
other states. Thus, Deliveroo can offered varied sort of dishes to
the people under one roof.
Technology Technology is the factor that greatly influences the firm business
operations. In India restaurants are not using much advanced
technology in order to perform their day to day operations. Hence,
this is the big area where by focusing Deliveroo can beat its
competitors.
Shanghai
Business environment Particulars
Political environment Political environment in the China is fully congenial for the
business. There is a communist party which is ruling the party.
Current government is fully committed towards the growth of the
business in the nation. China is focusing on tourism sector in order
to enhance its growth rate. It is expected that in future mentioned
sector will improve. Demand for fast food will increase. Hence, it
can be said that Deliveroo can open its business in the Shanghai.
Economic environment Economic environment of the nation is in good condition if
compared to the other growing and developed economies of the
world (Alam and Hoque, 2010). However, in past months it is
observed that economy of China derail from growth track. If this
trend will continue then problem may come in existence for China.
However, there is a huge population of China and due to this
reason there is huge revenue generating opportunity for the
Deliveroo.
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Social and cultural Social environment greatly affect the market conditions. In past
few years consumption of fast food increases in the China. It is
observed that people often like to consume indigenous dishes in
comparison to foreign edible item. Which is to some extent threat
for Deliveroo? In China there is very low probability that dishes
served by the firm in the other nations will be liked by the Chinese
people.
Technology Technology is the factor that determines success or failure of the
firm in the industry (Jang, Liu and Namkung, 2011). In China
there are few restaurants that are using innovative technology to
perform their business operations. It can be said that by using
innovative technology firm can established its business in proper
way in the Chinese market.
On comparison of both cities it can be said that it will be better to open business in the
New Delhi instead of Shanghai. This is because in many points New Delhi is ahead of Shanghai.
It can be observed that in the India large population is of young age. On other hand, in case of
China majority of population is covered by the old people. It must be noted that young people
often like to consume fast food in comparison to old people. Hence, on this ground it can be said
that it will be beneficial for the firm to open its business in New Delhi instead of Shanghai.
Economic condition of the India is much better then China in terms of growth rate (Liu-Farrer,
2011). There is a positive economic outlook for India across the globe. Same type of outlook is
formed for China but same is not so strong in comparison to India. Hence, on this basis it can be
said that it will be better to make investment in India then China. The big problem in China is
that people often prefer to eat indigenous dishes, they does not like to eat foreign dishes. This
problem does not exist in New Delhi. Youngsters like to eat domestic and indigenous dishes.
Moreover, there are large numbers of domestic dishes that are available in India. By opening
business in New Delhi firm can serve diverse type of people.
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3 Competitiveness of environment
In order to analyze competitiveness of the business environment Porter five forces model
is given below. Supplier power: There is a moderate bargaining power of the supplier. In the Indian market
as restaurant chain normally two firms are operating Mc Donald and KFC. Most of
restaurants are domestic and serve indigenous dishes. Hence, they need domestic raw
material which is supplied by the number of suppliers. From this point of view it can be said
that suppliers have very low bargaining power (Gill and et.al., 2010). On other hand, for
foreign dishes scene is different and restaurant needs to purchase raw material from foreign
nations. There are few suppliers of the relevant items. Hence, it can be said that suppliers
have moderate power in the relevant industry. Threat of substitute: There is a very high threat from the substitute because for each fast
food there is other product. This means that if one wants to eat spicy fast food then there are
many products that are available to him. Hence, on this front there is a very high threat to the
business firm. In order to handle this problem firm needs to focus on its product quality. If
Deliveroo will make effort to produce and make available high quality product then only it
can handle this problem. Customer power: Customers have a very high bargaining power because number of
alternatives is available to them. In order to compete in the market there are many restaurant
that are serving dishes at very cheaper price to the customers. Hence, if any restaurant is
making available products at high price then customers have alternative where they can get
same product at cheaper price (Indian restaurant industry, 2016). Hence, it can be said that
there is a very high bargaining power of suppliers. Threat of new entrant: There is a very high threat from new entrant. This is because it is the
industry in which with small investment anyone can open its business. It is observed that
many entrepreneurs with small investment establish their business. In a year there are many
new restaurants that come in existence in the New Delhi. It can be said that there is high
threat from the new entrants to the Deliveroo in the Indian market (New Delhi).
4 CONCLUSIONS
SWOT analysis for the Deliveroo is given below.
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Strength
 Main strength of the business firm is
that it is already operating in the 12
nations of the world. Hence, it has
global footprints and long experience of
operating business at international
level. It is a big asset for the firm which
helps it opening its business in any
foreign nation in easy way.
Weakness
 The main weakness of the Deliveroo is
that it does not do its product
advertisement in the market. Hence, a
person of the specific city knows the
name of the restaurant. It can be said
that majority of population of the
nation is not aware about the name of
restaurant
Opportunity
 There are lots of hidden opportunities
for the firm in the Indian market. This
is because majority of population in
India young and belong to the middle
class whose income level and
consumption level is increasing at fast
pace. Hence, surely there are lots of
opportunities for the Deliveroo in the
Indian market.
Threat
 The main threat for the firm in the
Indian market is that rate of opening of
restaurants is very high in the New
Delhi. Hence, if firm open its business
in the Indian market then it will face
huge challenge in its business.
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