BAM4009: Analyzing the Business Environment of Magnet Consultancy

This report provides a comprehensive analysis of Magnet Consultancy's business environment, examining both internal and external factors that influence its operations. The internal environment is assessed using SWOT analysis, identifying strengths, weaknesses, opportunities, and threats. The external environment is analyzed through the PESTEL framework, considering political, economic, social, technological, legal, and environmental factors. Furthermore, the report identifies potential business risks faced by Magnet Consultancy, such as missed deadlines, misrepresentation, cost overruns, and failure to meet customer expectations. An action plan is proposed to manage these risks effectively, ensuring the organization's continued success and profitability. Desklib is a valuable resource for students seeking similar solved assignments and study tools.

BAM4009 Business
Environment
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Carry out an internal environment analysis of an organisation using suitable conceptual
models.........................................................................................................................................3
Conduct an external environment analysis of an organisation using suitable conceptual
models.........................................................................................................................................4
Risk assessment, identify business risks and prepare an action plan showing how could these
risks be managed.........................................................................................................................7
CONCLUSION...............................................................................................................................9
REFERENCES:.............................................................................................................................10
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INTRODUCTION
Business environment is refers to the collection of all internal and external factors which
includes customers' needs and wants, employees, supply and demand, customers' expectations,
owners, suppliers, innovation in technology, market trends, government, economic changes, etc.
It is very important for the organisation to identify and analyse the business environment so that
they are able to reduce the negative impacts of upcoming challenges (Cepel and et.al., 2019).
This report aims to analyse the internal and external factors of business environment with the
special reference to Magnet consultancy firm. It is the Certified Women-Owned business.
Magnet consultancy firm is working with different types of organisation so that they can provide
assistance to them in their team leadership development, cultural development, etc. This report
will be discussing internal environment analysis, external environment analysis, and risk
assessment with an action plan.
MAIN BODY
Carry out an internal environment analysis of an organisation using suitable conceptual models
In today's business environment, it is found that every day the complexities as well as
dynamic nature of environment (Contractor and et.al., 2020). So if organisation wants to work in
an effective way then they have to focus on analysing internal environment first so that they get
to know their core capabilities and weaknesses. After that company have to use them to combat
all the external forces. In order to analyse the internal environment, Magnet consultancy firm
used SWOT analysis tool so that they are able to know their strengths, weaknesses, opportunities
and threats. The SWOT analysis will be mentioned below:
Strengths Weaknesses
 It is the company which is design to
assists organisations for achieving their
goals and objectives with the
integration of proven scientific methods
of workplace development.
 It also assists organisation to adopt
 There work is not easy as it is found
that every organisation has different
culture and perception (Cepel, 2019).
So it becomes a weakness of Magnet
consultancy firm as they are not able to
understand each organisation so how
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different cultural people and engage
with one common goal.
they can provide solutions to them.
Opportunities Threats
 Magnet consultancy firm are taking
time for the purpose of understanding
the problems of organisation so they
have an opportunity to understand each
organisational culture in an effective
manner.
 In addition to this, they also have an
opportunity to grow their business in
worldwide as it is found that every
organisation is facing problems related
to the culture.
 Competition and complexities of
business environment is increasing
every day which creates threats for
Magnet consultancy firm as how they
can achieve either goal in competitive
and dynamic world.
 Continuous changes in the demand of
people become tough to understand and
recognise during the selection of
strategies.
From the SWOT analysis tool, it is analysed that Magnet consultancy firm is a leading
organisation in order to combine the business practicality with tenets of workplace psychology.
So they have an opportunity to grow their business. In addition to this, they give an ample
amount of time to each organisation so that they are able to understand their problems and give
solution accordingly. Due to this factor, they can easily overcome with the external environment
forces. It is also analysed that continuous changes in demand of organisation and people can be
overcome with the assistance of their strengths (Hamilton and Webster, 2018). They are
regularly dealing with multiples organisation that possess different problems so now they have a
good experience of solving the problems of companies.
Conduct an external environment analysis of an organisation using suitable conceptual models
External environment analysis is also playing an important role in the success and growth
of an organisation. It is found that external environment provides a direct as well as indirect
impact on the organisational operations and functions (Escaleras and Chiang, 2017). That's why
Magnet consultancy firm have to focus on analysing external environment. For that purpose, it
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can be possible with the assistance of using PESTEL analysis model. It is an important model
which is used for the purpose of analysing the external environment. The explanation of each
factor is mentioned below:
Political factors
It is the factor which includes political stability, different policies of government,
taxation policy, etc. This is necessary to understand by an organisation that political factors
provided a great influence on organisational operations and functions. For example, government
was changing the tax rate and their slabs. Due to this, it becomes crucial for Magnet consultancy
firm to adopt and apply new taxation rate as it is not possible to work with old rate. In addition to
this, it is identified that company is operating in many countries so the influence of political
factors may be increase as every nation has different policies which should be adhere by
company in order to survive in the market.
Economical factors
In today's economic situation, it is found that every country is suffering from economic
slowdown due to the impact of pandemic situation i.e. COVID-19. It is identified that there are
any economic factors which influence on organisational operations and performance. Due to
COVID-19, it is found that the potential customers purchasing power is declining which gives a
negative impact on the success and growth of Magnet consultancy firm. Economic factors are
also include interest rates, inflation rates, economic growth rates. It is very important for Magnet
consultancy firm to analyse the economic factors as it provided an impact on the profitability and
customer base of company (Belyaeva, 2018).
Social factors
Every day the consumer tastes and preferences are changing and due to this it becomes
very difficult for organisation to understand satisfy them. In the case of Magnet consultancy
firm, it becomes more difficult for organisations to understand the workplace culture of
organisations as they are not only deal with one organisation. They have to understand the
perception as well as culture of different organisation which is not easy for them.
Technological factors
Technological factors are considered as the most important external factors which makes
the pressure to organisation as they have to use innovative techniques in order to run a business.
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It is also found that technology is an important concern which affects on the organisational
competitive edge. Those companies which are using innovative technologies in the company,
they are able to gain competitive advantage. This will assists them to make difference between
normal organisation and technological organisation. In the case of Magnet consultancy firm, they
have to sue new and update technologies as mostly work is done through technology and that's
why it becomes an opportunity as well as a threat for them (Belas and et.al., 2018). It becomes
an opportunity if Magnet consultancy firm is using new technologies. On the other hand, if
Magnet consultancy firm needs to use updates and new technologies which is not easy for them
as it is costly.
Legal factors
It is important to note that every country should focus on complying all legal policies and
laws in order to survive in the market. If it is found that company is not able to comply necessary
laws then they may be in a threat of legal actions against them.
Environmental factors
Every day, it is found that organisations are increasingly providing an negative impact on
environment as they released hazardous chemicals as well as gases which are very harmful for
the natural environment. This is the reason that country is focusing on reducing the releasing of
harmful elements in the natural environment (Newman and et.al., 2020). For that purpose, they
giving a pressure on organisation to use sustainability in the workplaces so that they can become
sustainable responsible organisation. In the case of Magnet consultancy firm, it is found that they
are not releasing any harmful elements in the environment as they are providing services. But
yes they can participate in this initiative by changing the vision of other organisations towards
sustainable company.
From the above discussion, it is analysed that external environment has many important
factors which should be analysed by an organisation such as political, legal, environmental,
social, economical and technological. These factors should be considered by every organisation
so that they can able to reduce the negative impact of future risk. They are easily find the
upcoming risks in organisation which they can considered in order to prepare themselves. It is
also found that Magnet consultancy firm is the service organisation so that's why they have to
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mainly focus on economical, technological, social and political factors as these factors may be
create problems for organisation.
Risk assessment, identify business risks and prepare an action plan showing how could these
risks be managed
Risk assessment is refers to the process which used by organisations for identification of
hazards which are responsible for the negative impact on organisation's ability. Risk assessment
is very helpful for organisation as they are able to find the business risks which may be get affect
on the organisational performance and profitability (Sinay, 2019). It assists an organisation to
reduce the negative impact of risk on organisational profitability. There are many business risk
identified by Magnet consultancy firm so that they are able to overcome with the risk issues:
Missed deadlines
In consulting firm, it is very important for the company that they should not miss the
deadlines of the projects. For example, in the case of Magnet consultancy firm, they are doing a
projects with different organisations so that they are able to integrate the business practicality
with tenets of workplace psychology. But for that purpose, it is found that company needs to
focus on completing the projects on time so that their client are not switching other consultancy
firm.
Misrepresentation
There is a heavy risk of misrepresentation as Magnet consultancy firm is doing business
with other organisation so that's why they have risk of misrepresentation. In this case, they may
be talk with other people who are not the real client. So there is a heavy risk of
misrepresentation. There are many cases found in which fictitious organisations are formed and
try to steal the information of other organisation and their financial statement so that they can do
fraud with them.
Cost overruns
It is found by Magnet consultancy firm that the estimated budget is not always become
real as it is the estimated one which is not real. So that's why Magnet consultancy firm may be
face cost overruns risk in which their budget may be increase or overrun. This situation occurred
when company is not effectively calculated the budget or underestimation of budget then it will
cause cost overruns (Ahmed and Alam, 2021). This risk is very problematic for Magnet
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consultancy firm as company have only limited financial capabilities so how they can afford the
extra cost.
Failure to deliver on expectations
In the consultancy firm, one important business risk is to get fail to meet the expectations
of customers. It is very important to note that consultancy service business is very complex in
nature as they have a pressure to satisfy the needs and wants of their clients if they want to
successfully survive in the market. So there is a major business risk in which they have a fear to
get fail in delivering the services according to the expectations of customers.
These are the important business risk which identified by Magnet consultancy firm. It is
important to note that an organisation needs to necessary course of action if they want to
overcome with the risk or its negative impacts on organisational performance. Sudden changes in
organisation is generally not acceptable by organisations as it is found that people are resistant to
change (World Bank, 2017). This is the reason that company needs to formulate an action plan
which should be in flexible nature so that it can be mould or change whenever organisation feels
to change. This can be possible with the help of using risk assessment frameworks as it is act like
an action plan which becomes very useful for the success and growth of an organisation. It
enables to reduce the negative impact of risk on organisation performance. In the case of Magnet
consultancy firm, it is found that they should use risk assessment frameworks so that they can
able to prioritize and share the details of risk. The risk assessment frameworks work according to
the below mentioned steps:
 Identification of hazards: It is very important for Magnet consultancy firm to identify
the hazards. This is the first and foremost step of an action plan or risk assessment
framework. In this step, they need to identify all the potential hazards (Erasmus, Strydom
and Rudansky-Kloppers, 2017). In addition to this, they also have to focus on the
negative impact on organisational ability.
 Determine what, or who, could be harmed: After identification of hazards, the next
step for organisation is to determine that which hazard affects on whom. So that they can
take necessary course of actions accordingly.
 Evaluate the risks and develop control measures: Now it is the step in which an
organisation needs to evaluate each risk that how it impacts on the organisational success
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and growth. In addition to this, after analysing of each risk, Magnet consultancy firm
needs to develop control measures so that they are able to reduce risk.
 Record the findings: It is important to note that Magnet consultancy firm needs to
record the findings which they found from risk assessment. This will helps them to easily
accessible by an organisation in order to formulate plans.
 Review and update the risk assessment regularly: After that, it is important to review
the risks again and again or on a regular basis so that they are able to update the risk
assessment. This will helps them to achieve the goals and objectives of an organisation as
now they know the risk which may be can occur in near future. It is important to note that
organisations should focus on reviewing the risk on a regular basis.
It is analysed that company needs to focus on risk assessment on a regular basis. For that
purpose, the above mentioned steps are necessary to use so that a company is able to apply this
action plan into reality. It is also found that these steps are considered as in action plan that helps
an organisation to manage the risk in an effective way.
CONCLUSION
It can be concluded from the above discussion that analysing of business environment
which includes both internal and external environment. This report analysed different models
which helps an organisation to analyse the internal and external environment. For external
environment, company have to use PESTEL analysis model. On the other hand, this report
analysed SWOT analysis model which assists in analysing the internal environment. In addition
to this, it also covered risk assessment that undertakes identification of business risks and an
action plan for managing risks.
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REFERENCES:
Books and Journals
Ahmed, F. and Alam, M. A., 2021. Business Environment: Indian and Global Perspective. PHI
Learning Pvt. Ltd..
Belas, J., and et.al., 2018. Relationship of gender to the position of Slovak University students
on the socio-economic determinants of the business environment and the development
of entrepreneurship. Entrepreneurship and Sustainability Issues.
Belyaeva, Z., 2018. Business environment challenges and trends for contemporary SMEs in
Europe. In The sustainable marketing concept in European SMEs. Emerald Publishing
Limited.
Cepel, M., 2019. Social and Cultural Factors and their Impact on the Quality of Business
Environment in the SME Segment.
Cepel, M., and et.al., 2019. Selected economic factors of the quality of business
environment. Journal of International Studies.
Contractor, F. J., and et.al., 2020. How do country regulations and business environment impact
foreign direct investment (FDI) inflows?. International Business Review, 29(2),
p.101640.
Erasmus, B., Strydom, J. and Rudansky-Kloppers, S., 2017. Introduction to business
management. Oxford University Press: Cape Town.
Escaleras, M. and Chiang, E. P., 2017. Fiscal decentralization and institutional quality on the
business environment. Economics Letters, 159, pp.161-163.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Newman, C., and et.al., 2020. Corporate social responsibility in a competitive business
environment. The Journal of Development Studies, 56(8), pp.1455-1472.
Sinay, J., 2019. Safety management in a competitive business environment. CRC Press.
World Bank, 2017. Doing business 2018: reforming to create jobs. The World Bank.
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