Business and the Business Environment: An Analysis of H&M and NHC

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Business and the Business Environment
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Table of Contents
Introduction...................................................................................................................... 3
LO1.................................................................................................................................. 4
LO2.................................................................................................................................. 6
LO3.................................................................................................................................. 9
LO4................................................................................................................................ 14
Conclusion..................................................................................................................... 16
Reference List................................................................................................................ 17
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Introduction
In this paper it has been discussed the environment factors and its key role in order to
grow the business profits. The organisation has to face many circumstances in order to
run a business in a profitable way. They have to focus many factors in environment in
order to run a business of the particular area. In order to evaluate the business failure
and success the environments plays a major role. This report will evaluate the legal
structure, scope, size and other important key aspects in order to run the organisation.
In order to study the environment factors of micro and macro business the SWOT and
PESTILE has been done in order to understand the internal and external factors of the
environment (Vij and Bedi, 2016).
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LO1
Explain three different types of organisations their size and classification to
highlight the differences among them.
There are many types of organisation in the environment, but main types of
organisations are private, public and voluntary. They are explained in a detailed way.
Private: This type of organisation mainly works in an individual way or a group. They
only focus on gaining the profit making. They generate their profit with the help of
innovative decision making plans. They are main focus is to gain profit in the market
and somehow helps to give the better quality of product and services in the market.
Private organisations key intentions are to build up a company image and help to beat
their competitors in a broad way. These types of companies do not depend on the
government funds; they used to allocate their funds on the basis of sales in the
company. H&M is a foremost company in the UK that used to provide the various
fashion to their customers. They have the various fashions collections for both male and
female. They have entire collections of designed product over the world wide base.
They also have shares in the market that helps to gain the profit margin in the maximum
way. Their main shares are Swedish Fashion Company that allows giving the profits in
the company (Huma et al., 2017).
Public: This type of company mainly works on the basis of the government shares.
Their main share totally depends on the government funds. They work for the public that
helps to give the benefits to the public. Their main intentions are not to gain profits
rather than giving the better services to the public. Their main funding is somehow
depends on the basis of the tax and revenue collection from the public. They do not lack
the productivity value in the market. They have the unlimited resource for the publics. It
mainly engages themselves in emergences services such as health, emergencies care
and others. This somehow helps in growing the consumer in the broad way. Their main
intention is to create a transparency in between the public and the company. National
Health Care of UK is the public organisation that helps to build the consumer forum in
between the public. They help to create an transparency between the doctors and the
patients (Nuottila et al., 2016).
Voluntary: This type of organisation is maintain and controlled by a group of many
peoples in order to run the business they includes partners, share holders, governments
official, trustees and others basically it works by the conducting of board of members
that shares the company’s profit. Their profits can be evaluates at the year ending that
decide the company’s profit or amount of loss. In order to evaluate the accounting part
they have the skilled and experience worker in the company. There are main objectives
to provide the good quality and services to their customers that help to create relations
within the public and the helps to stand beside them. It is also known as the non-profit
organisation. They do not have focus for the profit they helps to give the customers
better services and products in the market. They also help to give a back up to the poor
and the lower cast in the society (Butler and Wilson, 2015).
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Analyse how the structure, size, and scope of different organisations link to the
business objectives and product and services offered by your chosen
organisation.
H&M is a foremost company in the fashion based industries. They somehow have the
employees above than 90,000 in the world base organisation. They have the great
scope in order to grow the company’s profit in the great way. They allot their shares to
their share holder in order to collect the funds and revenue. They somehow care for the
customer’s needs in a detailed way that helps to create a profit value in the company.
They also have the wide varieties of collections of product so the customers can access
to their desire products in a very easy way. They somehow have the skilled and
innovative employees that help in making of the strong decision making process. That
helps to create a company’s image in the broad market. This also helps in grow the
productivity value of the organisation in the great way that helps to maintain a
company’s brand image in the long run. Moreover they have the great scope in order to
build the company’s change in the international base.
NHC is a large organisation in terms of health care they somehow come forwards in the
terms of the customer’s satisfactions. They are main aims is not to earn profits rather
than give services to the entire peoples. They basically focus on public welfare. They
don’t have to promote their product and services in a various channels, but they have to
evaluate the market segmentations in a broad way. They earn their profits by the
collections of the taxes and revenues from the citizens and the business promoters.
They used to grow their image by providing the proper health care facilities to the
employees, so they have the great scope in order to build their image in the market.
That helps to earn proper business objectives in a short duration of time.
International care is a broad organisation and they have large employees over the world
base. Their projects have been connecting with government as well as the private. They
somehow help the public in a broad way. They help to give the proper services to the
customers. They collect their profits on the base of the projects, so there is a large
scope of growing their organisation in a broad way.
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LO2
Explain the various functions within the business and create an organisational
chart to demonstrate the interrelationships between different functions and how
they link to organisational objectives and structure.
H&M is a large fashion company in the world base, they somehow provides the various
types of fashion dress across the world. In order to grow the company’s profit they
follow a various activities they are mentioned below-
Marketing: Marketing plays an important role in order to grow the company’s profit in
the maximum way. So in the H&M Company they used to give the proper products to
their desired customers that they need. Somehow they look for the customer’s needs
that create a transparency in between the consumers. They have also a special
department for the market research they critically evaluate the market needs and wants
as per the customers that helps to beat their competitors in great way. Marketing
includes proper advertisement, implication of social media, promoting of sales and
others that helps in developing the market profits (Feng et al., 2015).
Logistic: Logistic plays an important role in order to generate the funds from the
market. Logistics helps in increasing the productivity value in the market. This also
helps in creating the customers demand. Proper logistic helps in developing the
company’s in the great way. This increase the sales demand in the company and parts.
So, the consumers can easily get access to their products in the proper way and that
helps in building the consumer value in the market and its segmentations. Logistic helps
in delivering right products in a right direction this helps to creates a transparency
between the consumer in the market (Malko and Gubin, 2017).
Human resource: It helps to develop the company’s profit in the great way. Human
resource management helps in maintain a transparency in between the employees. The
HRM department also helps to recruit the skilled and innovative people in the company
that helps to make the better business strategies over the market. HR also helps to
embed the positive factors in the employees that help in growing the productivity value
of the organisation. It also helps in building motivation to the employee in the
company’s. The HR department evaluates the customer performance in order to create
a productivity value in the company that helps to grow the company’s good image in the
market and creates an brand image in the market (Noe et al., 2017).
Finance: Finance is the important department in order to evaluate the company’s profit
in a great way. H&M has a skilled and experience finance department in order the
company’s profit. It helps in allocation of funds that increase the productivity value in the
company. Finance department organise and audit the invested money in order to
company’s growth that helps to grow the company’s profit in the long run. They used to
provide the availability of funds and how it should be invested in order grow the
productivity value of the company (Allen et al., 2016).
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Operation: H&M used operate their market in a wide way they first used ton promotes
the goods in a proper channels that make the profits for the company. The company
used to deals with the customers and suppliers in a proper way. They somehow used to
give their desire products that are needed by the customers in an appropriate price
segments. They used to operate many departments that include team operations, team
management and other. In this process they also evaluate the availability of products
and their resources. The proper operations help the company in order to gain the
maximum profit (Conway, 2018).
Customer Service: Customer service is to properly evaluate in order to grow the brand
image in the company. It can be evaluate only after the positive feedback from the
customers. It somehow helps to avoid the bias in the company and helps to maintain a
good will in the minds of the customers. The company also have to see the customers
satisfactions. They should be properly evaluated and should maintain in order to grow
the company’s profit in a great way (Subramanian et al., 2018).
Figure 1: Organisational Chart Of H&M
(Source: Flynn, 2015)
Organisations uses many departments in order to grow the productivity value and helps
to earn the profit in the market, they used to follow the functional structure of the
organisation that includes the higher authorities to the lower one. In the above structure
it has been shown the organisation structure of the H&M Company in a detailed way in
order to understand the working process in a detailed way.
Interrelationship between functions
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In order to get the profit in the market the company’s should follows an link in between
the organisation in order to grow the profit and helps to build up the company’s image.
They have to create a link between the HR departments that helps in creating an better
business strategies in order to grow the profits and maintain the company s image in the
long run. That helps in development of the product in the market.
The organisations should also helps to creates an link between the logistic department
that helps to know the customer’s demands in the market. This somehow helps to
develop the productivity in the market. It helps to build the company’s image in the long
run. Logistic helps in development of the company’s image in the great way.
Finance departments help in measuring the funds and allocations of the better
resources within the company that helps in giving the proper and good qualities of
product to their customers in a great way.
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LO3
Identify the positive and negative impact the macro environment has upon the business
operations of your chosen organization
The PESTEL Analysis will be conducted on H&M Company to understand how the
macro environmental factors are affecting their business (hm.com. 2019).Through this
analysis, the company will get a clear picture how its business is performing in the
market and how much the environmental, political, technological, legal, social and
economic factors are affecting the business (Ltd, A. 2019). Hence, a proper justification
of the 6 factors has been stated below:
Factors Impacts
Political Factors It includes all the policies that the
government has implemented on the
business world like trade relations,
taxations industry regulation.
Positive impact: UK is counted amongst
the countries that are free from all type of
corruption and all types of hassles. So,
H&M is maximising their source cost
because of the trade laws which is liberal
on the industry. Due to the liberal trade
policy, H&M has made it an opportunity
of expanding its wings in many parts of
the country. The business of the
company has been flourishing since past
years. Other than this, the corporate tax
has a probability to be reduced in the
next 2years. Hence, it will again become
a boon for the H&M company in
expanding its business.
Negative Impact: The biggest political
issue that has occurred in UK until date
is the Brexit Issue. This issue has
brought ye retail industry rather all the
industries in UK to a major downfall. The
Brexit issue has become a big reason for
the deterioration in the business world of
UK. Consumers are not keen in doing
unnecessary expenses this is also due to
deterioration in their financial condition.
This is gradually leading to the downfall
of the business of H&M.
Economical Factors This includes many things especially the
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inflation and deflation rate highly
influences the fluctuation of the
economy.
Positive Impact: The economy of the
country was declared of being in
recession this also lead to the reduction
of the unemployment rate in the country
and many candidates could get
employed this was a huge improvement
in the economy of the company. This is
also leading in the revenue generation of
the company because the companies are
getting more employees and the
production process is taking a higher
pace. The citizens are also getting a
good wage rate, which is again
contributing towards the economy of the
company.
Negative impact: The company has to
experience may disputes with the
retailers that are operating their business
locally as they are producing same
products and providing it to the
customers within the lowest possible
rates. Thus, the customers are also
getting attracted toward the products that
are of low cost and same design yet
ignoring the quality of the product.
Socio-cultural Factors It includes everything that is related to
the customers like their latest
preferences, the latest designs that has
been trending in the market
Positive impact: The customers of the
UK have a better power of spending
compared to the other countries.
Customers of UK are mainly fond of
spending on products that are new in
market rather that has been newly
launched. That is also making the
companies motivate in producing new
products to cater the needs of the
customers and increase their customer
base. The products that are becoming a
huge preference for the customers all tr
companies are also trying to produce
similar products implementing the
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competitive pricing strategy. Different
customers have different taste some
have facilitations for cosmetics some for
healthy food supplements, hence the
company are also getting options to
produce products and satisfy the
customers by making them reach to the
products. They need H&M is also trying
to expand it business by providing all
their products in their online portal as
nowadays customers are mainly keen in
buying from online stores than physically
visiting the stores.
Negative impact: The customers are
mainly keen in buying from the online
stores and not visiting the stores
physically so, the company cannot show
everything that they are producing. As
availing the new launches, in their online
portal is not very that practical the
demand for the products that are not in
trend are decreasing and the customers
cannot find alternatives in utilising those
clothes un any other way. Hence, the old
products are becoming a huge stock and
the revenue generation is being blocked
in a way.
Technological Factors This has many factors that are making
the life of the individuals’ faster ad well
as easier yet, they have a lot of
complication as well. Social networking,
innovation, security are some of the
examples.
Positive Impact: The advance technology
is enabling the companies to incorporate
them in their production process to make
the working of the company and its
processes easier and faster. The
processes of the company is also making
by their processes easier and faster by
incorporating the technologies. The
technologies that are being incorporated
in the production process and making it
faster so the company can produce a lot
products and maintain the supply chain
management in the market properly.
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Negative impact: With the increasing
advancements in the technology the
threats on cyber crime and hacking of the
accounts and websites, is again, a huge
concern for the companies as their
websites can b hacked and that can
cause a huge loss to the company. The
company must make sure that their
websites are well protected. Cyber crime
is a huge threat that is becoming
alarming with the progressive days.
Hence, the company must have all its
securities and prevent any kind of forgery
that can occur to them.
Environmental Factors It involves usage of resources, which are
sustainable, and having responsibilities,
which are social as well as corporate.
Positive impact: Products that are mainly
eco friendly have a huge demand in the
market hence, the companies are trying
to incorporate those factors in their
production process and serve that to the
customers before the other competitors
can provide. The eco friendly products
are also expensive but the companies
are implementing the competitive pricing
strategy. Therefore, they are pricing their
products as reasonable as they can so
that they can attract a good customer
base. The companies are trying to use
less energy consumption this is also
making the resources sustain for longer
periods.
Negative impact: The implications that
are required for producing products,
which are eco-friendly, are very
expensive, the suppliers also deny
negotiating the prices, and they are not
decreased. The companies face a lot of
capital investment and if the revenue is
not generated then it is a huge loss for
the company.
Legal Factors These include certain laws that are laid
down by the government and the
companies have to abide by it else they
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