FirstGroup: Business and Environment Analysis - PESTLE and SWOT

This report provides a comprehensive analysis of FirstGroup, a UK-based transport company. It begins by explaining different types and purposes of organizations, including private, public, and voluntary sectors, along with their objectives and funding methods. The report then examines the size and scope of various organizations, using examples like River Island and Virgin Atlantic. It also delves into global growth, transnational, international, and multinational organizations, and contrasts licensing, franchising, and joint ventures. Furthermore, the report explores the relationships between organizational functions such as production, marketing, human resources, and finance, and discusses different organizational structures, including functional, divisional, and matrix structures, highlighting their impact on FirstGroup. The second part of the report focuses on the external environment of FirstGroup using PESTLE and SWOT analyses, examining political, economic, social, technological, legal, and environmental factors, as well as the company's strengths, weaknesses, opportunities, and threats. The report concludes by connecting these internal and external analyses to provide a holistic view of FirstGroup's business environment.

BUSINESS AND THE
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Explain different types and purpose of organisation ........................................................1
P2 Explain the size and scope of range of different type of organisation .............................3
P3 Explain the relationship between different organisational functions of first group ........5
TASK 2 ...........................................................................................................................................7
P4 PESTLE of FirstGroup .....................................................................................................7
P5 SWOT analysis of FirstGroup...........................................................................................8
P6 How the strength and weakness are interrelated with macro external environment ........9
CONCLUSION ............................................................................................................................9
REFERENCES .............................................................................................................................11

INTRODUCTION
The business refers to engaging in the particular activities which can satisfy the wants of
people. Business includes the activities like production, distribution, and servicing of the
products (Wild, Wild and Han, 2014). Business environment is influence by external and internal
factors. These two factors affect business operations. Sometimes both these two elements can
affect each other.
The company which is taken into the consideration for particular report is FirstGroup.
The FirstGroup is transport company which operates and registered in UK. The enterprise is
listed in London Stock Exchange.
The different types and purpose of an organisation are mention in this report. The size
and scope of range of different enterprise are discuss in this assignment. Relation between the
different organisation functions and impact of macro environment on business operations are
describe in this report. The internal and external analyse of first group has been done in this
report.
TASK 1
P1 Explain different types and purpose of organisation
There are different types of organisation having its different rules, regulation and
operations. Following are different types of enterprises. Private sectors: Private sector is one kind of an organisation. These enterprises are run by
the private individual. These business units are main motive to earn profits. The
employees of private enterprise always motivated to earn money. For example, river
island is one of the famous clothing company in UK. Virgin Atlantic is the airlines
company (Bryman and Bell, 2015). These both companies operate by the private entities.
 Public sector organisation: Public sector is another type of the enterprise. In this
business operation is operate by the government. These enterprises main motive to serve
the public of the nation rather than earning the profits. They profit margin of these
organisations is less compare to the private enterprise. Royal bank of Scotland and British
business bank are the public owned companies which deals in financial services.

 Voluntary sector: This sector is also known as non profit sector. These enterprises
work for the social welfare. These firms are not government own companies. The group
of people can be a community who formed the business organisation to serve people.
There main purpose is to do the people welfare (Cavusgil and et. al, 2014). Examples
world vision and American red cross. World vision is charity organisation which serve
the child. American red cross provides the emergency assistance , disaster relief and
education.
Different between profit, not for profit and non government organisation
Basis Public sector Private sector Voluntary sector
Meaning This sector is under control of
the government.
This sector is owned
by the individual and
control by the private
companies
The group of the
people and
community start this
kind of enterprise.
objectives To serve the citizen of the
country
The main objective is
to earn the profits.
The main objective
is to do the welfare
of the people for
different reasons like
poverty, disable
people and for
education.
Raise the money Government get the revenues
from the tax, duties and
penalties.
Private company get
the capital from the
equity and debt.
These kind of
enterprises get the
found from the
business or any other
person in form of
donation and charity.
Benefits of job The employees get job security, The employees in The employees get

allowances and retirement
plans.
private company get
the good salary,
incentives and good
environment.
the self satisfaction
by serving the
community in good
manner.
Micro enterprises are those enterprise which can invest in their business up-to 25 lakhs.
Small enterprise are those organisation which can invest between the 25 to 500 lakhs and
medium enterprise are those which can invest and start their business with 500-1000 lakhs.
The main motive of the business are as follows.
 Innovation
 Creation of customers
 To supply quality of goods and services
 To have the fair return to investors
 To earn the profits
Legal form of organisation Sole traders is type of the business form in which there are less formalities of paper
work. The individual doesn't have the limited liability. In this type of the business trader
has to make the annual report to see position of business (Wheelen and Hunger, 2011). Partnership is deed in which document has been prepare in that partners gives their
consent for the partnership (Zott, Amit and Massa, 2011). This deed create legal relation
between partners. There are lots of formalities take place while doing the partnership
agreement.
 Company have the separate entity from its owner . The company need to follow the rules
and regulation mention in companies Act. There are various documents which company
need to prepare such as memorandum and article of association. There are different rules
for the private and public company like liabilities, number of members, shares issues etc.
P2 Explain the size and scope of range of different type of organisation
There are different kind of organisation as mention above. They have different
operations, market share, profit share and sustainability in the market.
Private sector

 River island: This company is UK based dealing with the clothing. The company is
having the high market share. People of British like this brand. They have the high sales
and profits. The brand is leading the market in their men apparel . The company initiate
the ethical trading and CSR to increase its sustainability. The main objective of the
company to satisfy its customers by giving the new experience of clothing.
 Virgin airlines: company is facing the huge losses from past three years and for this
reason market share also go down. But company after its joint venture with US carrier
Delta by which they improve their performance and finally the enterprise come back to
its normal position (Boons and Lüdeke-Freund, 2013).
Public sector Royal bank of Scotland: The company is performing good and its is holding good
position in the market by having high market share with high profits whatever the
company excepted that they can performing well more than their expectations.
 British business bank: The company finance the small scale businesses. The company
performance is increasing day by day in terms of market share, profits and sustainability.
The main objective of the company to promote the small scale industry to grow their
business.
Discuss of global growth, development of transnational, international and global
organisation. Global growth: It refers to the organisation growth by having global opportunity. Every
organisation want to expand their business globally so that they can serve more
customers and achieve their objectives (Crane and Matten, 2016). The companies having
its operation and commercialism with many countries are known as global companies. Development of transnational: These companies are the combination of the
international,global and multinational because the structure is complex. These companies
has flexible operations. Development of international: These companies are engage in selling the product in
other countries by exporting. These company doesn't have its own operations in foreign
country.

 Multinational organisation: These companies having its operation in two or more
countries. The range of the countries is limited.
Difference between joint venture, licensing and franchise
Basis Licensing Franchising Joint venture
Meaning In licensing the licensor
gives the right to the
licensee to produce goods
in the name of the company
in return of royalty.
In this the franchisor give
authority to franchisee to
use business models and
use brand name to sell the
goods.
In this the two and
more company come
together to do
particular project after
the project completion
they separate again.
Registration Not necessary to register Compulsory to register Mandatory
Training and
support
Not needed Provided by the company Not provided
Degree of
control
The licensor have control
on licensee.
The franchisor have
control on franchisee as
well as on the whole
business.
The two company
work with each to
finish common
project.
P3 Explain the relationship between different organisational functions of first group
There are different department in the organisation. every department having its own roles
and responsibilities (Ullah and Lai, 2011). These department coordinate each other and help
company to achieve its goals. following are different department and their functions.
Production department: This department engaged in the activities of manufacturing products
and services. The main function of production department are as follow.
 Planning scheduling the work.

 Monitoring the production activities
 Control the inventory
 Regular maintaining the machine and equipments Improve the product quality.
Marketing department: Marketing department look after the needs of consumer and try to
satisfy them by offering products and services. Following are function of marketing department
(Blanchard, Tolbert and Mencken, 2012).
 Understand the consumer needs
 Promote the product in the market
 Analyse the demand in market
 Communicate with the customers. Support sales
Human Resources Department: the functions of HR department area s follows.
 Recruitment and selection
 Training and development
 Handling health and safety matters Improve the employees relationship
Finance Department: The function finance department has to do are as follow. Keeping records of business transactions
 Preparing the final statement of company Give the accounting information to other department
Different type of organisational structure Functional structure: In this type of organisational structure every department having
its own functions (Sena Ferreira and et. al, 2012). There are departments like marketing,
production and finance. This structure is very help for the small scale as employees in
different department has particular skills and knowledge. Divisional structure: This kind of structure is useful in the large enterprises. In this
companies spread in wide area and having its small firms in different location. This
structure is costly because of its business size.

 Matrix: This structure is combination of divisional and functional structure. This is also
used in large enterprise as they give advantage to both functional and divisional area of
the organisation.
As the above function structure the FirstGroup is having functional structure in which
there are different department having their own set of skills and knowledge. There is relation
between the function, objectives and structure. These three affect each other and are interrelated
like structure followed by the objectives because company give the frame work to its operation
according to the objectives they has been set (Cai and Yang., 2014.). According the structure the
department do their functions. Different kind of organisation structure have different functions.
So these three elements follow each other.
TASK 2
P4 PESTLE of FirstGroup
Pestle analyse is done to determine the impact of the external environment on business
activities (Harrison, 2013). Every business need to do this analyse so that they can make the
strategies to over comes with external factors. Following the factors with affects an organisation. Political factors: The government of UK face the major issue of increasing CO2
emissions by the cars and personal reason. Because of this reason the firstgroup create
the bus and trains which has the less impact on an environment and government
encourage their idea. FirstGroup provide the safe services to customers to over come
with these problems. Economical and social factors: Economic factor influence by the income of people,
exchange rates, inflation (Ferraro and Briody, 2017). As demand of the school bus is
increasing the company come with new yellow buses. The prices of fuel is also high in
the UK because of this more people travel by public transport rather than their own
vehicles. Technological factor: This factor refers to adopt the new techniques, process and
methods to get the better solution. The firstgroup is using high technology in their
transport. Like the person need wheelchair company is providing these facilities.

 Legal factors: There are many European legislation rules which affect the business. The
legal authority impose that role that all transport companies should buy the carbon
credits so that they can reduce the CO2 emissions.
 Environmental factors: Citizen of the UK are green customers. consumers like to use
the products and services which eco friendly in that manner the company is designing
their transportation so that there shouldnot any harm cause to the environment.
P5 SWOT analysis of FirstGroup
SWOT analysis is conducted to identify the strength and weakness of an organisation.
Company need emphases its strength and try improve the its weakness so that they can reach to
the final goals. The company SWOT is given below.
Strengths
 A company is having the strong financial performance from many years.
 The company is having the large number of employees which serves large number of
customers very day.
 The drivers of the trains and bus are highly trained.
 The enterprise is having good brand name in UK market.
 FirstGroup is having the good brand loyalty and strong finical position.
Weakness
 The increase in fuel prices also increase the cost of operation for an enterprise. By this
labour cost is also rising.
 In travel industry there are many risk which an enterprise need to face like if any accident
occurs the expenditure is very high (Schaltegger, Lüdeke-Freund and Hansen, 2012).
Opportunities
 There is huge opportunity for a company to save its cost by advancing its technology. The people are using more public transport to safe the environment and because of rise in
the prices of fuel.
 Merger and acquisition with the other companies can increase customer base.
Threats
 The downturn in an economy can affect the business and its opportunities to grow.

 There are other competitors in the market so they face the competition which also be
threats for a business (Chen and et. al., 2014).
 The different laws can impact on a business such as changing in safety laws, employment
laws, environmental etc.
 The competitor of firstgroup is Arriva plc, Go-Ahead group plc and Atlantic express
transportation corp.
P6 How the strength and weakness are interrelated with macro external environment
SWOT and PESTLE are interrelated to each other. PESTLE refers to the political,
economical, social, technological, legal and environmental. Whether SWOT stands for strengths,
weakness, threats and opportunities. Pestle strongly related with the threats components of
SWOT and also with opportunities which company has in future.
Both SWOT and PEST ends with the letter T. SWOT study about the internal factors
which are influence by an external factor. PEST help the company to determine the strength and
weakness of the firm where an enterprise need to make the changes. The technology factor of
PEST determine an opportunity from SWOT (Palo and Tähtinen, 2011). There are many
challenges faced by a company because of the external factors these challenges are the weakness
of the firm for which company make strategies. By this way SWOT and PEST are interrelated to
each other.
CONCLUSION
There are different organisations in the business environment such as government, private
and voluntary sectors. These organisations have its different business nature, market share,
profits shares and business operations. The different enterprises have the different motives to run
business. First group is the transport company in UK which private enterprise. There are variety
of legal forms in which they have different rules and formalities to do the trade and business.
There are national, Multinational, transnational and multinational companies they are different in
nature of doing the trade. The business unit can adopt different ways to enter in the foreign
countries such as franchise, licensing and joint venture. According to the business company can
adopt the method so that they can expand their business outside the home country.

The company can analyse its external environment by the PESTLE. This gives an idea of
future challenges which company can face due to external factors. For the internal environment,
an enterprise adopts SWOT analysis which gives the strength and weakness to the company.

REFERENCES
Books and journals
Blanchard, T.C., Tolbert, C. and Mencken, C., 2012. The health and wealth of US counties: how
the small business environment impacts alternative measures of development.
Cambridge Journal of Regions, Economy and Society. 5(1). pp.149-162.
Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-
the-art and steps towards a research agenda. Journal of Cleaner Production. 45. pp.9-19.
Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
Cai, S. and Yang, Z., 2014. On the relationship between business environment and competitive
priorities: The role of performance frontiers. International Journal of Production
Economics. 151. pp.131-145.
Cavusgil, S.T et. al., 2014. International business. Pearson Australia.
Chen, Y and et. al., 2014. IT capability and organizational performance: the roles of business
process agility and environmental factors. European Journal of Information Systems,
23(3). pp.326-342.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Ferraro, G.P. and Briody, E.K., 2017. The cultural dimension of global business. Routledge.
Harrison, A., 2013. Business environment in a global context. Oxford University Press.
Palo, T. and Tähtinen, J., 2011. A network perspective on business models for emerging
technology-based services. Journal of Business & Industrial Marketing. 26(5). pp.377-
388.
Schaltegger, S., Lüdeke-Freund, F. and Hansen, E.G., 2012. Business cases for sustainability: the
role of business model innovation for corporate sustainability. International Journal of
Innovation and Sustainable Development. 6(2). pp.95-119.
Sena Ferreira and et. al., 2012. Framework for performance measurement and management in a
collaborative business environment. International Journal of Productivity and
Performance Management. 61(6). pp.672-690.
Solomon, M.R., 2014. Consumer behavior: Buying, having, and being (Vol. 10). Engelwood
Cliffs, NJ: Prentice Hall.
Ullah, A. and Lai, R., 2011. Modeling business goal for business/IT alignment using
requirements engineering. Journal of Computer Information Systems. 51(3). pp.21-28.
Wheelen, T.L. and Hunger, J.D., 2011. Concepts in strategic management and business policy.
Pearson Education India.
Wild, J., Wild, K.L. and Han, J.C., 2014. International business. Pearson Education Limited.
Zott, C., Amit, R. and Massa, L., 2011. The business model: recent developments and future
research. Journal of management. 37(4). pp.1019-1042.
Online
Differences between licensing and franchise. 2017. [Online]. Available Through:<
http://keydifferences.com/difference-between-licensing-and-franchising.html>.
[Accessed on 30th May 2017].

Different Types of Organizational Structure. 2017. [Online]. Available
Through:<http://smallbusiness.chron.com/different-types-organizational-structure-
723.html>. [Accessed on 30th May 2017].