Business and Business Environment Report: Merril Lynch Analysis

This report provides a comprehensive analysis of the business environment, focusing on Merril Lynch, an American investing and wealth management organization. It begins by defining the business environment and its internal and external factors, including micro and macro environments. The report then explores different types of organizations, such as sole traders, partnerships, private companies, public sector entities, and voluntary organizations, using examples like Kurt Geiger, Carphone Warehouse, Barford & Perkins, and NHS. It examines organizational structures, including divisional and functional hierarchical structures, and their interrelationships. The report also assesses the positive and negative effects of the macro environment on Merril Lynch, using PESTLE analysis to examine political, economic, social, technological, legal, and environmental factors. Finally, it identifies internal strengths and weaknesses of the business and their relationship with external macro factors, providing a detailed overview of the company's operations and challenges.

Business and business
environment

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
Different types of organisation ...................................................................................................3
Limited funding is provided to such type of organisation. .........................................................6
LO 2.................................................................................................................................................6
Interrelationship between various function of an organisation ...................................................6
LO 3.................................................................................................................................................9
Demonstrating the positive as well as negative effect of macro environment on Merril Lych
Investment....................................................................................................................................9
LO 4 ..............................................................................................................................................11
Determine internal strength and weakness of business and its interrelationship with external
macro factors..............................................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business environment consists of all the factors that affects directly or indirectly the
operations of business. These are the internal and external; factors that affect the working,
growth and profitability of the business(Prajogo, 2016). Internal factors comprises of the
organizational structure, management, functional departments and the employees of the
organization whereas external factors consists of micro and macro environmental factors of the
organization that are uncontrollable in nature. This report is based on Merril Lynch, and
American investing and wealth management organization under A Bank of America. The
company is headquartered in New York, US. The services are served worldwide with the overall
revenue of US$13.8 billion for the company(Allayannis and Allayannis, 2017). It consists of
15,100 employees working for it and also known as Financial advisors. This report will highlight
the different types, size and scope of organizations. The report will include the interrelationship
between the different functions of an organization and how they link with the organizational
structure. Further, the report will include the positive and negative impact of macro environment
on business operations of an organization. The report will also include the internal strengths and
weaknesses of the business and determine their interrelationship with external macro factors.
TASK 1
LO 1
Different types of organisation
Sole trader
It is the simplest form of business structure which is easy and inexpensive to set up. An
owner of the business is legally responsible for all the profit and losses which occurs in business.
Kurt Geiger is a company who is in shoe business. The company was founded in year
1965 by an entrepreneur name Kurt Geiger. The store was first opened in Sloane street and Bond
street in London.
Size and scope of organisation
The company sells about 5 hundred million pairs of shoes every year. The operating
profit of company is euro 24.6 million. According to the analysts the estimated growth of
company is about 4.2% which means that company has outperformed in UK market(Geiger and
Stockinger, 2019). The revenue of company is about euro 260 million. The number of
employees working under the company is 1700.

Legal structure: Sole trader ship can be defined as a company which is operated and
administered by a single individual.
Objective : the objective of company is to obtain unique position in footwear market.
Advantage :
The main advantage of such type of company is that the business owner can make
decision on their own. Secondly all the profit which is earned by the company belong to the sole
trader or owner of the business.
Disadvantage :
 An owner of the business is responsible for the loss occurred which can affect the assets
of company.
 A company in such type of business in not a separate legal entity means one cannot
separate his name from business.
Partnership
Carphone Warehouse was started by two old school friends Sir Charles Dunstone and
David Ross in year 1989. The company is best in mobile phone deals.
Size and scope of organisation
The company has about 2400 plus stores across Europe. The company is also listed in
London Stock Exchange. Net operating income of company is about euro 57.1 million. The
number of employees working under the company is about 11,500(Paton, 2016).
Legal structure: This type of structure is suitable for those who want to start business with two
or more persons. All the partners involved is responsible for sharing all the profits and losses of a
company.
Objective : the aim of company is to be the first choice of the customers.
Advantages
 It is easy way to start a business as it requires low investment. All the partners act on behalf of business.
Disadvantages
 Due to presence of large number of members, decision process can be affected.
 Loosing partner may prove costly to company's profit as well as to other partners.
Private
Barford & Perkins was started in year 1840. The company was a road roller and

agricultural machinery manufacturers. The company was situated in London. The company
provides various products such as motor road rollers, road making machinery, Dairy plant,
Boilers, Laundry machinery and agricultural machinery.
Size and scope of organisation
The company is currently having about 2000 employees. The company operates its
services worldwide. The company has merged with Aveling and Porter in year 1934 in order to
become Aveiling Barford (Rampling and et.al., 2016). The subsidiary of company is Barford
Developments and Barford Agricultural.
Legal structure: Barford & Perkins is a private company. Private company are those companies
whose shares are not offered to public for sale. Such type of companies has less legal restrictions
in comparison to public sector company.
Objective : The company aims at maximising profit of the organisation.
Advantages:
 The main advantage of such type of companies is that the company has a less legal
restrictions. Such companies can be formed by two persons only. The business can be started
immediately after incorporation.
Disadvantages
 The main disadvantage of such type of company is that a private company can not issues
its shares to the public.
 Such type of company needs to appoint at least one director thus leading to higher
administration costs. In some cases company may require to recruit company secretary,
accountants and other professionals in order to provide accurate reporting and avoid
penalties.
Public
NHS is the largest single payer healthcare system across the world. The company
provides healthcare services to the people (Erasmus and et. al., 2016). The company was
established in year 1984. The organisation is primarily funded by government. The company
provide various services such as NHS app, urgent and emergency care, hospitals etc.
Size and scope of organisation
The company have about 1.4 million employees. The company contribute for about 7.4

percent of GDP. The government of England invest about 107.9 billion GBP on the
organisation(Lindsay and Ellis, 2018).
Legal structure
The companies which are owned as well as operated by government are known as public sector
company. And NHS comes under public sector company.
Objective : The main objective of a company is to provide healthcare to those who need it.
Advantages
 Such type of organisation work for the betterment of society by providing services such
as education, health etc., at free or low cost Provide expert administrative services
Disadvantages
 The public organisation may experience political pressure
 Increase government interference
Voluntary
Cancer research UK is a charity organisation of United Kingdom. The organisation was
started by a merger between Imperial cancer research fund and Cancer research campaign.
Size and scope of organisation
The number of employees who are working in a company is about 3,964 and the number
of volunteers are 40,000. It is the leading charity organisation across the world.
Legal structure
Cancer research UK is a voluntary organisation. The voluntary organisation can be
defined as those organisations which are flexible, non-profit, secular, democratic and
independent. Any individual can become volunteer in such type of organisation. A voluntary
group works toward a common goal.
Objective: The main objective of a company is to reduce number of deaths which is causing due
to cancer.
Advantages
 Such types of organisation operates even after their co founders Non profit organisation work for the social welfare.
Disadvantages
 Limited funding is provided to such type of organisation.

 Financial statement of such type of organisation are subject to public scrutiny.
TASK 2
LO 2
Interrelationship between various function of an organisation
As the organisation has a different functions such as production, marketing, sales,
research etc. Organisational structure can be defined as a system which outlines that how
activities can be directed so that goal of the organisation can be achieved. Here activities refers
to role, rule and responsibilities(Seidl, 2016).
The two types of organisational structure are that can be found in clients of Meriil Lynch
Investment are :
NHS
The company has a divisional organisational structure. Divisional organisational structure
can be defined as structure in which company is divided on the basis of services the company is
providing. Under such type of structure each division operates on its own. All the department of
the organisation work together in order to achieve common goal. An organisation can only be

successful if all the departments of the organisation perform their work well(Jorna, 2017).
Cancer research UK
A company has a functional top down hierarchical organisational structure. In functional
top down hierarchical structure there is only one person at top which guides senior management,
middle management under them (Types of organisational structure, 2019). Such type of structure
is divided on the basis of departments in the organisation such as Information technology
department, Research and development, Human resource department, sales and marketing etc.
Such type of organisational structure allows its department to work and concentrate on
goals or task of its particular department. In such type of organisational structure employees at
lower level have to report to their seniors and then the seniors report to the top management thus
helping the organisation to work collaboratively with each other.
Interrelationship between different organisation

It is important that all department should work with each other so that organisational goal
can be successfully achieved. For example marketing department should work closely with
finance department, the reason behind this is that as the marketing department has to perform
various marketing activities such as organising promotional campaign, advertising, etc., for
which the company requires cost for which finance department prepares the budget. As the
finance department has record of financial condition of company, therefore budget can be
prepared accordingly.
Similarly, human resource management and marketing department should work with
each other so that recruitment activities, employee welfare activities etc., should be properly
planned. Therefore it is necessary that all department of organisation work collaboratively with
each other so that business operations can be successfully run.
TASK 3
LO 3
Demonstrating the positive as well as negative effect of macro environment on Merril Lych
Investment
Merril Lych is among the leading investment company which has number of offices
worldwide. The products or services offered by an organization include commercial banking,
personal financial services etc. As an enterprise is operating business at global level there are
many external variables which might have great influence on the business operations of firms
such as social, technological, legal, environmental etc. Pestle analysis is considered to be as one
of the tool which can be utilized by management in Merril Lych Investment company for
analysing the way different external variables are influencing the business operations. Changes
in the external business environment have both positive as well as negative effect on business
operations as well as performance of firm (Begg, Van der Woerd and Levy, 2018.). Some
external variables which are highly influencing the business operations of Merril Lych
Investment company are :
Political factors: It is considered to be one of important external variables which has
great influence on the business operations of the Merril Lych Investment company. These are
basically external variables which includes political condition in the nation. The negative effect
of the changes in political structure is that due to political instability in the nation an organization
might have to face difficulty in making delivery of goods or services to customers. Positive

impact is that the continuous political instability in the nation assist financial companies in
increase the confidence that they will get assured return on their investment.
Economic factors: In context of financial sector, changes in the economic variables in
external business environment has significant influence on the business operations as well as
financial performance of company. Some economic variables which might influence the business
operations of the Merril Lych Investment company Include increase in sales ta, prices of
products or services, fluctuations in the exchange rate etc. Changes in economic variables have
great effect on the profitability of organization. Example of positive effect of economic factor on
business operation of the Merril Lych Investment company is that decline in the exchange rate
assist firm in getting the transactional benefit which further have positive impact on the
profitability of organisation. Changes in economic variables alos have great influence on the
investment making ability of an enterprise. Increase in different types of tax such as income tax
has lead to the decline in return gained by organization by making investment in particular -
project.
Social factors: It is considered to important factor which has influences the operations of Merril
Lych Investment company that is financial provider firm. This is the external factor which
consider attitude towards health and safety (Phadermrod, Crowder and Wills, 2019). For
example: norms of healthy and safety is provide protection to employees by their workplace and
also within the company for positive attraction of employees. Other hand, in adverse affect of the
attitude towards healthy and safety with increasing liberalization are getting tax and some time
leads to cost failure which is so high.
Technological factors: It is considered to be as important factors which has significant influence
on the business operations of the financial service provider organization . These external factors
include advancement in the technology. It is the advancement in technology such as emergence
of social media has provided the Merril Lych Investment company an ease in exploring as well
as capturing profitable investment opportunity (Chaskin and Greenberg, 2015.). Example of
adverse effect of the technology is that the investment made by the company on the basis of
information provided online can some time lead to big financial loss for an enterprise.
Legal factor: In context of financial sector, privacy issues are affect to business and its growth
factor. Data protection has emerged as critical part of privacy issue and also for intellectual
property rights. This can be give negative impact on Merril Lych Investment company by liking

and misuse of customers data against of work. In adverse the company has to consider whether
the country have a technological equipments in order to protect against data breaches.
Environmental factors: The sustainability and environmental factors are become more critical
for the business. It is more important for the company Merril Lych Investment because presence
from group and government asking fast for maintaining the environmental standards (PESTEl
analysis, 2018). Customers activism also impact to Merrill Lynch investment where from day by
day increasing awareness between customers for putting efforts in the environment strategy
where consumers expect to not only fix the legal standards but also exceeding for becoming the
loyal and responsible stakeholders for the community.
TASK 4
LO 4
Determine internal strength and weakness of business and its interrelationship with external
macro factors.
SWOT analysis is very important and effective tool for each and every business. This
strategic technique which is generally undertaken by a company in order to identify their internal
strength and weaknesses and also external opportunities and threats. This is also helps to
management of Merrill Lynch Investment company in order to formatting strategy as per
requirement. The company is select SWOT analysis for understand to those strength and
weakness are as follows:
Strength:
It is the one of best leading company in the industry, other hand it has number of
strengths that help it to thrive market place. The main strength of the company are as follows:
 The company have strength which is successful in executing new project and generating
a good return on capital expenditure with the help of build new revenue (Gürel and Tat,
2017).
 The company have strong brand portfolio which is extremely useful for company for
expanding into new product categories.
 The bank is highly dedicated to customers relationship management section and has able
to accomplish a high level of customer satisfaction.
Weakness:

Weakness is the areas where bank have to improve their performance of work by building
strategy. Weakness of Merrill Lynch Investment company are as follows:
 Bank management have investment in research and development is below as compared
fastest players in the industry. With this, management is not able to compete with their
competitors in the industry in terms of innovation.
 Merrill Lynch Investment company has high attribution rate in the workforce as compare
to other organisation in the industry (SWOT analysis of Merrill Lynch investment.
2017). Company has to spend a more compare with its competitors on training and
development of their employees.
Opportunities:
Opportunity is the external strategic factors which give chance to management in order to
compete with their competitors in an effective manner. Opportunities of Merrill Lynch
Investment company are as follows:
 New customers in online channel is the best opportunity for the company Merrill Lynch
Investment for enhancing customer base. This will help to open new sales channel for the
bank (Hillary, 2017). This provides great opportunity for business by knowing their
customer needs and wants in a better manner by serving their needs using big data
analysis.
 New and current trends or behaviour open up new market for company of Merrill Lynch
Investment. This serves great opportunity for business and management in order to build
new revenue streams and also modify in old product and service to make new product by
analysing needs customers.
 Changes in government regulations creates difficulties for unorganized players (like
those companies that are not registered in company law) who want to operates in industry
(Hair Jr and et.al., 2015). This will help to company by providing opportunity to increase
the customer base by creating difficulties for unregistered company.
Threats:
Threats are the external factors which can danger for company's business model because
of changes in macro economic factor and also changing in customers perceptions. Threats of
Merrill Lynch Investment company are as follows:

 New technology uses by competitor are the serious threat to the industry and company of
Merrill Lynch Investment in medium to long term future.
 Changing in customers buying behaviour by online channel can be generate threat for
company and also to existing infrastructure.
Micro environment factor affect decision-making and objectives of business
The micro environmental factor has affect to business decision making process and
objectives because it influence to customers by providing good quality of product and facilities.
The economic environment factor is affect to the aims and objectives of Merrill Lynch
Investment company because the financial support is not strong and healthier or not easy to
achieve goals and objectives (Erasmus, Strydom and Rudansky-Kloppers, 2016). The strength of
company which is interrelates with the technology factor of the Merrill Lynch investment is from
adopting technology advancements helps in maintaining the supply chain process for collecting
relevant data & information which helps in making greater profits and revenues.
Other hand the micro environment factor help to identifies opportunities for the business
which is highly helps in making more revenue because work on the opportunities gives a new as
well as best direction to company Merrill Lynch investment for development and growth of
business.
CONCLUSION
From the above study it had been concluded that the business environment has the
mixture of external and internal factors which has influence operations of company. There are
various types of organisations in business environment based on the legal structure. The
functioning of each company, their fund raising process, their objectives all vary with each other.
The business are affected by many macro factors such as rules and regulations, market, economic
trends, social factors and technology advancement. These factors affect the working of business
both in positive as well as negative way.

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ONLINE
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<http://blueoceanuniversity.com/frontpage/pestelcase/12881-merrill-lynch>
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