Business Environment Analysis: Edexcel BTEC Unit 1 Report, 2016

This report analyzes the business environment, focusing on key aspects such as stakeholder relationships, organizational structures, and the influence of economic factors. It begins with a description of private and public companies, using Iceland Foods Ltd and Primark as examples, and explores the roles of different stakeholders, including owners, customers, suppliers, and employees. The report then delves into organizational structures, contrasting matrix and functional structures, and explaining how these structures help businesses like Primark and ASDA fulfill their purposes. Furthermore, it examines the impact of internal and external environmental factors on business activities, particularly within Primark, considering factors like management, technology, and economic conditions. The report concludes by discussing the political, social, and legal factors influencing business operations. The report provides a detailed overview of these aspects, offering insights into the complexities of the business environment.

Unit 1. Businesses Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1...................................................................................................................................3
P1 Description.............................................................................................................................3
P2 Description about the different stakeholders.........................................................................4
TASK 2............................................................................................................................................5
P3 Describe how two businesses are organised..........................................................................5
P4 Explain how their style of organisation helps them to fulfil their purposes..........................6
TASK 3............................................................................................................................................7
P5) Describe the influence of two contrasting economic environments on business activities
within a selected organisation.....................................................................................................7
TASK 4............................................................................................................................................8
P6 Political, Social And Legal Factors Impact On Business Activities......................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
In this modern world of technology there is always a question arises of livelihood,
survival and assistance and for that purpose one needs to do different activities. One of the main
ways of earning or to exchange certain things is business. Business is an activity performed by
an individual or by an organization to commercialize certain goods or services of to achieve a
definite purpose. The focus point of this report is to explain the various aspects of businesses and
their environment (Aguilar, 2017). Workplace and the conditions of business bears a lot of
importance in a business organization as it helps their employees to do their work assigned to
them peacefully and in safe premise. Now a day’s approximately every organization wants to set
up a healthy business environment in their office to protect their interests and helps in to increase
their moral for efficient working.
TASK 1
P1 Description
Private company-This type of organisation are owned and run by the private individuals. This
can be operated by two ways that is either in the form of sole proprietor or with partnership.
There aim is to deliver quality product and effective services to earn maximum profitability and
market share. In this type of organisation,, rules and regulation are governed by the manger of
company who is liable to develop working practices, policies and norms of business (Davis and
Blomstrom, 2016). Iceland foods Ltd is an e.g. of private organisation, it is a chain of
supermarket which deals with the sale of frozen food which also include prepared meals. They
also sell non-frozen vegetable among the frozen, including meat and dairy products.. It can be
said that private organisation's aim is only to earn the highest profitability in the competitive
market and deliver effective customer satisfaction. For this purpose, they develop effective
marketing strategy and tactics so as more customers can attract towards business organisation.
A) Public company- This types of organisation issues securities through an initial public
offering and trade them in at least one stock exchange. Main objective of this type of
organisation is to maximise shareholder's wealth by generating high profit and enhancing
organisational growth. Primark with limited liability is the example of Public company
which have major objective is to earn the maximum profitability by delivering effective
product and services. Further it wants to develop such brand image in the market so as it
can acquire large numbers of customers.

 Other organization: Other than above mentioned entities there are several other firms also
which are made to achieve their definite goals and have their different kinds of objectives
such as voluntary organization, government entities, charitable trusts, co-operative firms
etc. Charity is a non-profit organisation which have main function for the welfare of the
company. Its main objective to deliver the help of the society (Kennerley and Neely,
2013).
B) Voluntary organisation- Such kind of organisation have ownership is with the voluntary
people. Voluntary group is a group of people who decides to work together to bring out
task and decides there part of responsibility and obligations mutually and therefore, legal
form is being an issue when the rules and regulations are written
C)
P2 Description about the different stakeholders
Owners: These are the investors of the company and provide huge capital to run operations
of the business. Management of the corporation provides details of financial performance of the
business at the end of each year. They report and present financial statements of the entity in the
annual meetings. All the other needs will be fulfilled by the managers of company. In Primark
policy or strategies are made that its effective for all the shareholders. Statutory and compulsory
meetings are also an effective way for providing valuable information to the shareholders of the
company. Iceland is company with single owner. It doesn't need to satisfy any shareholders so
there policies or strategies mainly target to earn maximum profit for company. They also don't
need to have any type of meeting to explain or clarify there action. In this organisation all the
responsibility of any profit or loss is governed by there head that is the CEO of company.
Customers: Customer are important part of any company doesn't matter if its private,
public or any other. Pricing policy of the business is prepared by companies to provide important
information regarding products and services to their consumers. They set the quality standards
to provide equal and best quality goods and services to buyers of the company (Buchholz, 2016).
Suppliers: These are the individuals or business unit which provide raw material to
company. They also require payment on time and other important financial information of the
company to become more secure regarding regular supply. Company's must have an effective
payment system and sets the time limit for the payment to suppliers to fulfil their objectives.

Employees: Workforce of the business needs sufficient wages and salaries on time and
also expects some increments. To fulfil this kind of requirements of the employees, all the
companies can make special policy for employees in which rules and regulations regarding
workers are cleared. They also require managing and motivating their employees for doing smart
work.
TASK 2
P3 Describe how two businesses are organised
Matrix –
The matrix structure is usually found in organisations that can deal with the special one
off type of projects, also these companies can also work on several projects all at the same time.
Although while all of these projects are ongoing, they have and expert team seeing it through
making sure it goes well.
Product
A product structure is the way an organisation represents the parts of a product and the
way they fit together and interact, also the organized levels in the detail based on the type of
structure. Also, this type of structure that is also used to manage the changes, testing and the
problem resolution for the complex products with numerous parts and functions (Ward and Sum,
2015).
Functional
The functional structure is more of an organisational structure where the employees are
all grouped hierarchically and then these are managed through the clear lines of authority and
then only report to the only person in charge.
The purpose of a structure
Divisions of work
The divisions of work are where a company has different types of works and these are the
manager, a few deputy managers and then the workers. Having these divisions at work means
that the employees know, who to talk to if they need help.
Lines of control
This is important that they have deputy manager just in case the manager is in a meeting,
and the workers need help the deputy mangers are second in line to be in charge if help if needed

or if there is a problem. This also means that each layer in the structure for Primark has a certain
amount of control (Kaufmann and Schankerman, 2017).
The functional areas of ASDA
The finance department will manage the payrolls, invoices, P&L also balance sheets and
the business's performance, the finance department will also report how well the business is
doing to the rest of the company departments. This will happen each day if there is any major
area of concern, plus there will also be a monthly late lunch meeting for everyone in the ASDA
house this then will be videoed and sent out to all the stores.
Also, the Human Resources department will work with all the different departments and
will offer the training that will be needed, and will also help when recruiting the key people for
the different areas. Also, an example of this is the buyer may also leave a produce and then they
will need to recruit someone who has an experience and knowledge about buying products
(Child and Möllering, 2017).
P4 Explain how their style of organisation helps them to fulfil their purposes.
Primark is a public limited company it is formerly known as a PLC, they have a lot of
stores across the UK, plus they sell a wide range of products, and this variety from food, toys,
electronics, drinks, clothes, toiletries.
The organisational structure Primark has is a matrix style and this means, that there will
be fewer people at the top of the company managing the people below. Plus this also will allow
the managing directors, at the top of this chart to make the big decisions about which way the
business should take next. These decisions are important and should be made by the top
executives with the right experience and intelligence in this type of experience (Yew Wong. and
Aspinwall, 2014).
The sales director is responsible for making sure that all the right products are bought for
the store, although he doesn’t have change to check every individual one he knows they must
ensure that the right people are buying these products. Also, by having this type of organisational
structure it also allows each team to run in their own areas and research about them properly to

help them find out about the new trends across the world and also try to be one of the first to
market or offer out the best deals.
TASK 3
P5) Describe the influence of two contrasting economic environments on business activities
within a selected organisation
Environmental factors as internal and external environmental factors impact on business
operations and effectiveness of Primark. Where, internal environmental factors include
management of product services, funds, employees' performance, environment of entity etc.
which are manageable. While, external environmental factors remain uncontrollable including
political, social, technological, legal which are monitored by preparing and implementing
strategies. Therefore, mismanagement in these factors affect decisions regarding business
operations. In this regard, internal and external environmental factors' impact on decision-
making regarding business operations of Primark can be understood as follows briefly:
Internal environmental factors impact on decision-making process: It includes
factors which are controllable as men, machine, mission, management etc. Through analysing
these factors, several ideas are generated related to proper management of business operations,
using machinery equipment, adequacy of resources and funds etc. Therefore, these are helpful
for managing tools which remains controllable as contribution of workers for goal
accomplishment. In this regard, different tools are analysed for performance management and
enhancing working efficiencies of employees effectively (Montazemi, 2017). Moreover, internal
factors of business environment impact on operations and profitability effectively.
In addition to this, it is considered that if there is lack of any factor in the entity then all
business operations get affected. However, various strategies implemented that influence
productivity and profitability of organisation. Thus, various ideas are generated for improving
services and allocation of resources and funds efficiently. Including this, occurred changes in
internal environmental factors are controllable which plays as key role on overall business
operations for further implementations (Schiffer and Weder, 2016). Therefore, entity's strength
and weakness are obtained in which positive aspects can be maintained as well weaknesses can
be reduced efficiently for further operations. Besides this, internal environmental factors affect
atmosphere of enterprise as well tools for production and distribution of cloths provided by

Primark. Overall, it is determined that internal environmental factors that can monitor over and
also remains helpful for entity's development as of productivity and profit earning capabilities.
External environmental factors: Due to changes in these factors which are beyond
control are requireed to be implemented for managing them and creating balances. However, by
implementing strategies for fulfilling different people's requirements, adopting technological
changes, getting adjusted according to situations occurred would be effective to manage business
operations. Thus, implementing strategies for controlling over external environmental factors are
needed to be implemented for organisation’s effectiveness and profitability (Keiningham and
Evans, 2013). In addition to this, conducting market research related to different country's people
choices as are required for further operations and better-quality services. However, for managing
changes in technological factors, it is required to adopt innovative techniques and latest
technologies for better quality services.
Along with this, preparing strategies in accordance to social and cultural factors, it is
essential to consider different nations' social system and choices for business operations and
effectiveness in them. In this regard, by implementing strategies for managing economic
fluctuations, it is needed to create innovative ideas and implementing plans more efficiently.
Thus, it is considered that changes in macro environmental factors impact on decision making
and business operations of Primark as well its competitiveness. In addition to this, changes in
government policies including tax rates, interest rates, foreign trade and others impact on
decision making and effectiveness of organisation (Highsmith and Cockburn, 2016). As increase
in tax rate affects financial position of entity negatively while decrease in this rate, develops its
monetary position. Therefore, changes in these factors and different tools get affected on
business operations of Primark. It is linked with productivity and profitability of entity
efficiently.
TASK 4
P6 Political, Social And Legal Factors Impact On Business Activities
 Political factors:- Primark and UK business organisations should focus on political
factors like; the level of bureaucracy affairs, tariffs between UK and other countries etc.
By balancing on these factors, there is possibility for stability and growth of organisation
politically.

 Economic factors:-This case's situation will create high impact on UK business
organisation economically. Effect of stock market's flexibilities, World bank and WTO
will also be effected for organisation's growth. So, Primark should try to balance its
business in economic way on behalf of these factors (Batra and Stone, 2017). Social factors:- It will effect on Primark's business and UK business organisation at
large scale in terms of social environment of business. Social factors of environment for
business will be as; increasing popularity of immigration and transferring practices and
also greater concern for minorities in societies. Technological factors:-Due to situation, technological factors will effect on UK business
organisations as in continuous emergence of new communication technologies. There
would be innovative techniques occurs and level of global technological infrastructure
will also be effected. So, Primark and UK organisations will have to focus on these
factors for expansion of business. Ecological factors:-These factors are related to increasing levels of air and pollution and
impact of global warming tendencies (Tapscott and Caston, 2017). These factors plays
great role to impact on UK business organisations during the case. Ecology of business
will effect globally.
 Legal factors:- Global data protection laws will effect due to case's circumstances.Thus,
organisation should increase its level of legal globalisation and accept changes in cross
country employment and health and safety laws.
CONCLUSION
In this report, it is concluded that changes in environmental factors affect organisation's
effectiveness and business operations. In this regard, different sector organisations' purposes,
size, vision and mission are described. However, various organisational functions and their link
with organisational structure of Iceland is presented that is essential for creating coordination
among them and improving organisation's performance. Moreover, internal and external
environmental factors including SWOT and PESTLE are understood that affect decision-making
regarding further business operations and profitability of entity. In addition to this,
interrelationship between internal and external environmental factors is described that impacts on

business operations and different business activities. Therefore, significance of strategic planning
for getting adjusted towards occurred changes are understood through this report.

REFERENCES
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