Business and Business Environment Analysis Report - Nelson College

This report provides a comprehensive analysis of General Motors (GM) and its business environment. It begins by examining different organizational types, including public, private, and voluntary sectors, along with their legal structures, purposes, and market dynamics. The report then delves into the interrelationship of various organizational functions like finance, sales, marketing, and human resources, and how they contribute to organizational objectives and structure, using GM as a case study. A key component is the PESTLE analysis, which explores the positive and negative impacts of political, economic, social, technological, legal, and environmental factors on GM's operations. Furthermore, the report includes a SWOT analysis to assess GM's internal strengths and weaknesses, and their connection to external macro factors. The analysis considers Porter's Five Forces model to understand competitive dynamics and provides insights into how GM can navigate the complexities of its business environment. The report is structured to meet the requirements of the Business and the Business Environment unit, as per the assignment brief provided.

BUSINESS AND THE
BUSINESS ENVIRONMENT

INTRODUCTION
This report will lay emphasis on different types of organization like public sector
organization, private sector organization and voluntary sector organization their purpose and
their legal structure, their size, market share, growth and scope. This report will also lay
emphasis on interrelationship of various functions and how they are linked to organizational
objective and structure, using general motors as an example both positive and negative
impact of macro environment (PESTLE) has on business operations, at last internal strength
and weakness of General Motors and their interrelationship with external macro factors will
be explained. General Motors is a automobile manufacturing private organization which
design and sell vehicles and their parts.
LO1
P1 Different Types And Purposes Of Organisations; Public, Private And Voluntary Sectors And
Legal Structures
There are three different types of organizations and each organization has its own
purpose and legal structures. All of them are explained below:
 Public sector: Public sector is basically a portion of country's economy that is under
government's control and is run efficiently(Scott., 2015). There are three types of public
organizations. One which is purely run by government called department organization,
second type of organization is purely made by acts passes by parliament and the third
type of company is which has minimum of 51% share owned by government called
government organizations. Most basic purpose of public sector organizations is to serve
the customers and provide them with the best quality service. These type of
organizations do not think of profit as the main factor. For instance General Motors is a
automotive company whose few shares are owned by the government i.e. its business is
run by board of directors on behalf of all the shareholders. No decision can be passed
without boards of director's approval. These type of companies are listed in the stock
exchange.
 Private Sector: Private sectors are organizations which are run by company or
individuals not by government. Purpose of most private sector organizations is to make
profit and employs more workers. This sector has relatively fewer restrictions as
compared to public sector organizations. These type of companies are owned by single

individual and their financial structure in such a way that it makes company or the owner
same purpose of all its legal purposes. All the profit made by company is taxed as
personal income. For instance Jaguar is an automotive company which comes under
private sector and make huge profit.
 Voluntary Sector: It basically consists of organizations with purpose of serving society
or benefit society mostly with no profit with little or with no intervention of government.
Voluntary sector organizations can also run with partnership of government(Hair Jr and
et.al., 2015). There are many legal structures of voluntary sector like: trust,
Unincorporated associations, company limited by guarantee and charitable incorporated
organization or community benefit society. For instance NHS is as voluntary sector
organization with legal structure as community benefit organization. It is a non profit
organization with partnership between local government and voluntary sector.
P2 Size And Scope Of Range Of Different Type Of Organization.
Public sector
organization
Private sector
organization
Voluntary sector
organization
Objective and goal Main objectives of
public sectors is
transformation in
economy, wealth and
income redistribution,
source of capital
formation etc. Goal of
public sector is to
focus on customers,
serving them with
good quality and look
for their interest.
Main objectives of
private sector is profit
maximization,
transparency in
financial reporting,
Choosing correct legal
as well as organization
structure etc.
There goals are to
reduce liability, by
selling shares to
investors and owners
raise capital, tax
benefits etc.
Main objective of
voluntary
organizations is to
serve the society
without concerning
about profit. Different
non-profit
organizations have
different goals, for
instance goal of NHS
is serve people,
provide medical help
at lowest price etc.

Market share/ profit
share
According to recent
reports market share of
general motors is
continuously
decreasing from past
few years. Its market
share has decreased
from 5% to 2% in
UK's market.
Market share of jaguar
is increasing if
compared to past few
years market share. It
has increased from 2%
to 7% market share.
As it is a non-profit
organization it doesn’t
have its profit share.
Growth and
sustainability
In past few years,
growth rate of general
Motors has been
decreasing
continuously(Schmidt.
, 2015). They are
continuously
struggling to become a
sustainable company
who can meet all their
present requirements.
Growth rate of Jaguar
in UK is good. Their
sales growth is very
strong in UK and is a
sustainable
organization.
NHS is the most
growing organization
in UK providing
health care service.
Recently government
has announced that
they will increase its
funding by 3.5%.
LO2
P3 Relationship between different organizational functions and their link to organizational
objectives and structure.
Organizational functions are the main part or set of activities within a company. There are
various functions within an organization and each function has different roles like: Marketing,
sales, HR, Finance and research and development.
 Role of finance function is to deal with all the money related operations i.e. to finance
different projects, pay employees salaries. If marketing functions is done properly then
income, economy and wealth redistribution objective can be achieved.

 Role of sales function is to sell a company’s products and services which is provided by
them. If this function is performed properly then another company’s objective can be
achieved i.e. to provide quality products to its customers.
 Role of marketing functions is to do the marketing of its product, services by
advertisement etc. and build brands name. If marketing function in an organization is
done properly then it can help in building brands name which is the main objective of
general motors.
 Role of human resource function is to deal with employees(Anderson and Raeisinia.,
2018). If this function is done properly then another objective of company can be
achieved i.e. to provide employment.
Organizational structure is the relationship between different parts of business and how
chain o commands flows through different levels of business. There are four types of
organizational structure like: Functional structure, divisional structure, matrix structure and
organizational charts. All these functions depend upon scope, size of an organization. General
motors follow regional divisional structure. This organizational structure group business
activities according to their operational areas. Like all the operations of general motors in Europe
are under one segment i.e. company has divided its business into four segments namely North
America, South America, Europe, and international operations. Further it is divided into two
divisions i.e. Automotive and GM finance.
LO3
P4 Positive and negative impact the macro environment (PESTLE model) has upon business
operations, supported by specific example of General Motors
Pestle analysis: PESTLE analysis is an acronym for political, economic, social,
technological, legal and environmental factors. It is a way of explaining how to outside forces
impact of General motors company(Adar and et.al., 2016). Here PESTLE analysis of General
motors will be explained.
 Political Factors: This factors tells us the effect of political conditions and trends on the
company. General Motor being a public company it has a major effect of political factors

on itself. Like Political stability in major market provide an opportunity for them in
macro environment.
Sometimes it is harmful for them as government is supporting public to use public
transport is a threat for them, aggressive tax policies is also a threat for general motors as
increasing tax will decrease profit.
 Economic Factors: This factor tells us about the economic conditions of the company
where it operates. Growing growth rate is an opportunity for general motors to grow and
expand. They can expect few or probably nothing related to major market economic
issues as there is stability in market.
Major threat to general motors is the growing competition in developing markets from
both local or international automotive firms.
 Social Factors: This factor shows social trend and condition effect on remote
environment condition. For General Motors electric vehicles and self-driven cars
increasing demand is a major opportunity.
Whereas nowadays ride-hailing programs or vehicle sharing programs are continuously
increasing which is a threat for General Motors.
 Technological factors: This factors tells that how use to technology and its use can affect
a business of the company. Increasing demand of self-driven cars has created an
opportunity for General Motors. Nowadays fuel efficiency in cars is increasing which is
beneficial for General Motors. Use of social media is a good opportunity for social media
promotions and to reach customers more easily.
Use of social media, hacking also comes under technological factors which is creating a
threat for the company as hacking websites or making online payment through accounts
is a threat for General Motors so they need to increase their cyber security
 Legal Factors: This factor includes how legal factors affects the company’s business.
Automobile safety regulations are expanding which is an opportunity for General Motors.
But growing environmental rules and regulations is a threat for them it has put many bans
on use of technology which creates environmental pollution.
 Environmental Factors: this factor includes how natural environmental affect the
business. General Motors has a huge opportunity of developing solutions for
transportation problems of people due to changing climatic condition.

But also vehicle’s creating environmental pollution is a major threat for General Motors.
LO4
P5 Internal And External Analysis Of General Motors In Order To Identify Strengths and
Weaknesses
SWOT Analysis: SWOT analysis helps a company to identify all the internal factors
(strength and weakness) and external factors (opportunities and threat) of the company. Here,
SWOT analysis of General motors is explained.
 Strengths: This aspect of SWOT analysis explains the internal strategic factor that
supports the company. Strong brand name is the strength of General Motors in terms of
competitiveness and loyalty of customers who gets attracted towards their brand.
Continuous product innovation and growth in technology is also the strength of General
Motors. Increasing demand of luxurious vehicles has also given the strength to General
motors.
 Weaknesses: As it is well known that General Motors is a public organization, So
bureaucracy is its major weakness because it is responsible for less flexibility in
responding to external factors(Grant, R.M., 2016). Another weakness of General Motors
is its limited presence in developing countries that affects its potential growth.
 Opportunities: As it is known that bureaucracy is the weakness of general motors, it has
an opportunity of growth by reducing bureaucracy in the organization. If General Motors
try to expand its market in developing countries then opportunities for General Motors
will increase.
 Threats: Major threat for General Motors is the increasing high level of competition in
the market as it affects the company’s business performance. Government promotions for
use of public transport is the major threat to the organization. These factors will
continuously affect the company’s performance.
P6 Strength and weakness interrelate with external macro factors.
We will explain these factors with the help of Porter’s five force model.
 Competitive rivalry: Influence of other competitors on the company is shown in this
factor. High exit barriers for companies like general motors is one of the reasons because

of which rivalry force is strong. There are many small-scale automobile industries in their
regional market which makes it difficult to compete for companies like general motors.
General Motors should compete with local, global, regional or domestic automotive
companies to grow in the business and achieve success. Because it has a strong influence
on the performance of business.
 Bargaining power of buyers: In this factor effect of customers decisions and power of
buying is considered. On e of the factor is the cost of switching form one organization to
another for customer is moderate. General motors also face this factor of bargaining of
customers because of availability of substitutes like other firms. This aspect will have a
considerable but limited effect on General Motor or any automotive industry.
 Bargaining power of supplier: This factor deals with the effect that suppliers have on
the company. Suppliers have full control of material availability and availability of
products. General motors have access to very limited suppliers like producers and steel.
This factor lead to very little force on company(Khan and Quaddus., 2015). If there are
less suppliers then they will have more power on the firm. This aspect will have a very
limited effect on General Motors strategic success.
 Threat of substitution: Influence of substitute product on company’s performance is
shown in this factor. Moderate switching cost has an effect on General motors as
substitute products are easily available with almost comparable price in the market.
However this threat is weakened as there are very low variety of substitutes available in
the market, so customers are very less likely to shift from General Motors because of less
availability of substitutes. This aspect will have a moderate effect on performance of
General Motors.
 Threat of new entry: This entry tells the effect of new entry will have on the
organization. New entries can disturb the profitability and market share of the company.
If there is a new entry with strong competitive force in the market then it will have a
strong influence on General Motors performance and whole automotive industry
environment. For example new firms or joint ventures with Apple or Google using latest
advance computing technology has effected the overall performance of General Motors.
However high scale of economy in automotive industry is tythe major challenge for new

entries. So, overall this factor will have very less effect on performance of General
Motors as significance of new entries is limited for a long term of business success.
CONCLUSION
From the above study, it can be summarized that different types of organizations (public sector,
private sector, voluntary sector) can have different types of purposes and legal structure,
different organizations have different objectives, market share, profit share, growth and
sustainability, there are different types of organizational structure and different organizations
follow different organization structure and all of them will have different functions which
are interlinked with each other and has a interrelation with the objective of the company, all
the positive and negative impact of macro environment which an organization will have on
its business operations had been explained through PESTLE analysis, all the internal and
external factors of general motors had been explained through SWOT analysis to identify all
the strength and weakness of the organization and at last all the strength and weakness with
respect to external macro factors had been explained through Porter’s five force model of
General Motors.

REFERENCES
Scott, W.R., 2015. Organizations and organizing: Rational, natural and open systems
perspectives. Routledge.
Hair Jr and et.al., 2015. Essentials of business research methods. Routledge.
Schmidt, I., 2015. Beyond Solutrean point types: technological organization and behavioral
implications. Journal of Anthropological Research. 71(4). pp.493-508.
Anderson, D. and Raeisinia, B., 2018, September. Micro and Macro Analysis of Anisotropy of
an AA3104 Aluminum Alloy. In IOP Conference Series: Materials Science and
Engineering(Vol. 418, No. 1, p. 012088). IOP Publishing.
Adar, E., Karatop, B., İnce, M. and Bilgili, M.S., 2016. Comparison of methods for sustainable
energy management with sewage sludge in Turkey based on SWOT-FAHP
analysis. Renewable and Sustainable Energy Reviews. 62. pp.429-440.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Khan, E.A. and Quaddus, M., 2015. Examining the influence of business environment on socio-
economic performance of informal microenterprises: content analysis and partial least
square approach. International Journal of Sociology and Social Policy. 35(3/4). pp.273-
288.
Narayanan, V.K. and Fahey, L., 2005. The relevance of the institutional underpinnings of
Porter's five forces framework to emerging economies: An epistemological
analysis. Journal of Management Studies. 42(1). pp.207-223.
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review. 24(1). pp.32-45.