Business and Business Environment: An Analysis of River Island, UK

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Business and business environment
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Executive Summary
The entire report focuses on accentuate the several kinds of organizations that are categorized
with aspects to the size, scope, functions and objective of the company has been evaluated in the
below context. The report also evaluated the positive and negative aspects of the PESTLE
analysis with respect to the company River Island, UK. Moreover, the report demonstrates all the
positive as well as negative factors that are intrinsic in the SWOT analysis interrelating to the
company. The subtle relations between the macro and microenvironment are explained in the
report.
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Table of Content
Introduction......................................................................................................................................3
1. Introduction to provide an overview of the different types of organizations and the growth of
the international business environment (LO1)................................................................................3
2. An explanation of each of the chosen organisations, including background details of the
organisation; the products and services they supply; the size and scope of the organisation; their
vision; mission and business objectives; the organisational and legal structure; and information
about their stake holders (LO2).......................................................................................................6
Background of the company............................................................................................................6
3. In detail explain the functions for one of the chosen organisations, using an organisation chart
to show how the functions interrelate and an explanation of how they relate to structure (LO2)...7
Explanation of the various functions within the business...............................................................7
4. Use contemporary examples to demonstrate both the positive and negative influence/impact
the macro environment has on the business operations (LO3)......................................................10
5. Determine the internal strengths and weaknesses of specific businesses and explain their
interrelationship with external macro factors (LO4).....................................................................13
Conclusion.....................................................................................................................................17
References......................................................................................................................................18
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Introduction
An ecosystem or an organization where products and services are exchanged with respect in
monetary terms is considered as business. In order to commence a business an investment is
required as well as potential customers to with whom this process will take place. The main
objective is to earn maximum profit by minimizing the cost of production. The secondary
objective in an organization is to expand its business unit in the market. All the functions of
organization depend on various external and internal environmental factors. The external factors
are the macro factors that are beyond the control of the organizations, whereas the internal
factors are termed as the microenvironment, which can be controlled and managed by the
organization. The below context explains the consequences of both the environment in an
organizations. Different factors and methods that can be applied by the organization in order to
achieve the object is all demonstrated in the context.
1. Introduction to provide an overview of the different types of organizations and the
growth of the international business environment (LO1)
With respect to terms of scopes, objective, functions and size the company can be divided into
three broad categories that is public company, private company and voluntary company (Zur et
al., 2015).
● Public Company
The company whose ownership is in the hands of the public and the major control in the
company is in the hands of the government, state, local or central government are termed as the
Public Company. As the common public are related to this Government, intervention in this
company is relatively high as compared to the other company (Pearson, 2017). The minimum
number of members required in order to start a public company is seven and maximum number
is no limit. The main objective of this company is to provide goods and services to the public
without earning maximum profit like for example Prudential Public Limited Company, UK.
● Private Company
When two or more individual come together in order to carry o9n a business unit it is termed as
Private Company. The owners of the company are the number of members and directors in the
company. The minimum number of members required to operate this business is two and
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maximum 200. The private company is restricted to offer its shares to the public. The main
objective of this company is to earn maximum profit by maximizing the production cost like for
example in River Island, UK. The secondary objective is to expand the business in the market by
maintaining a good financial position. The company enjoys less government interference as it is
privately owned and controlled by individual.
● Voluntary Company
Some of the company are formed just for the sake of the society and serve the public. These
kinds of company are considered as Voluntary Company. Their object is different as compare to
the rest of the kinds of company in the market. Some of the examples of these kinds of company
are Foundations, Charities, and Social welfares and so on (Hair et al., 2015). Any two or more
person can come together with the common primary object to serve the society and start the
business operation. This voluntary company is also termed as the nonprofits making
organizations that are exempted from the burden of paying tax. These organizations are
established only to work for the welfare of the society so they are provided with many benefits
from the government.
● Legal Structure
The legal structure of the business determines how the functions and operations of the company
will be operated. Some of the legal structures that are: Sole trader, limited liability and
partnership firm (Besley, 2015). The business that requires performing several legal formalities
are instances in the legal structures of the company. These legal formalities are based on the size,
scope and functions of the company (Eisenberg, 2017). However, compare to the others the sole
proprietors enjoyed less legal formalities.
On the basis of size and scope of the organization
Organizations can be classified into three categories based on their scope and size:
Micro enterprise is a business unit that consist their business activities with the local market. The
size of the business unit is relatively small compared to the other organizations. An individual
can commence this business and carry out all the activities and operations on its behalf’s. The
maximum number of the members should not exceed 10 in this enterprise. The owner is free to
take decisions without consulting the other. The amount of investment in this kind of enterprise
should not exceed 10 lakhs.
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Small enterprise is very much similar to the micro enterprises and many of the fashions are also
familiar. In order to operate the business the minimum amount of investment required is more
than 25 lakhs that should not exceed 10 crore. Some of the
Medium enterprises are a business unit that is an abbreviation of the above-mentioned
organizations. The minimum number of employee should be 100 and the maximum limit should
not exceed 250. The investment that is required to operate this medium enterprise is between 50
million to 100 millions. The amount of investment should exceed the maximum limit. The
primary objective of the company is to earn profit by supplying goods and services in the market.
Large enterprises are the big business units that include industries and have the vast process of
operations. The annual revenue in this sector of business is more than 1 billion. The minimum
number of employee that is required to start the business operation is 250 that can exceed upto
1000. The mission of the company is common with respect to each members of the company.
One of the best examples to this type of enterprise is River Island, UK.
Difference between the Private, public and voluntary
Public Organization Private Organization Voluntary Organization
The Government intervention
is relatively high in this sector
of business, as the major
portion is related to the public
welfare.
The organizations in these
sectors enjoy less or no
government interference, as
the objective is based on
individuals personally.
As the motive behind the
formation of this organization
id top serves the society
without earning any kind of
profit there is no interference
from Government sides.
Revenues for the operations
are generated from the selling
of company shares to the
public in the market.
Revenue is generated by
supplying goods and services
to the potential customers in
the market.
Revenues are the funds that
are collected from the sources
like charities, foundations and
so on.
The legal formality are
relatively high as compared to
the other two organizations
The Legal formalities are less
irrespective to the public
organizations.
Legal formalities are needed
only the time of formation
that also very less.
Table 1: Difference between Public, Private and Voluntary Organization
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(Source: Created by Author)
2. An explanation of each of the chosen organisations, including background details of the
organisation; the products and services they supply; the size and scope of the organisation;
their vision; mission and business objectives; the organisational and legal structure; and
information about their stake holders (LO2)
Background of the company
River Island is one most renowned and highly favourite brand on the location of high street.
Since last 60 years they are running their business successfully. Their unique touch to their
collection makes them special from the rest of the other of high street.
Products and services
Their products include the women wear, menswear, girl swears and boy swears with the relevant
accessories of each category. Each category of clothes also categorized according to their are
destination of wearing.
Scope and size
All of the products are designed in in-house mode and they provide their products in in- house
and online stores. Around 350 stores across the UK are there including the Ireland and
throughout the Asia, Europe and Middle East with three online sites in four countries.
Vision and mission
The mission of River Island includes the extension of their business to the rest of the world with
providing quality products.
Business objectives
River Island is looking forward to beat their leading competitors that are already exists in the
market and the newly emerging companies.
Organizational structure
River Island follows the network organizational structure for conducting a successful business.
Stakeholders
The customers of the all over world, the employees of the organization, the global supply chain
network partner, are considered as stakeholders of River Island.
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3. In detail explain the functions for one of the chosen organisations, using an organisation
chart to show how the functions interrelate and an explanation of how they relate to
structure (LO2)
Explanation of the various functions within the business
River Island performs many important functions for the commerce and trade as a whole (Lüdeke-
Freund et al., 2017). Some of them is listed within this study. This company provides hassle free
shopping experiences to their customers. This facilitates the consumption and the maximization
of the customer satisfaction. The most important job of this company is to serve their product
immediately. The company finances the wholesaler during the booking of their order of products
in advance. In this manner the wholesaler gets the chances to run their job seamlessly. It is the
most important function of this company.
River Island invests their working capital for the building of range of inventory reflecting
requirements of market (Dijkman et al., 2016). The company also sells the clothes in necessary
quantity; however it is big or small to the final consumer. River Island stores and orders a large
quantity of clothes from their manufacturer. Hence they keep the extra products in their store
house for purpose. It involves the cost and also the risk that can damage the clothes. The river
island company encourages their customers for shopping that includes the vigour activities in the
field of commercialization. This respective company provides a wide range of offers in a
seasonal manner to attract the customers. River Island always tries to make their shop near the
housing complex for the convenience of the customers. This company measures the pulse of the
current market by hearing the expectations, feedback, complaints and change in preferences and
taste of the customers. This company plans for the execution of several promotional and
advertising on the basis of purchase.
Demonstration of the interrelationship between different functions and how they link to
organizational objectives and structure
Organizational structure is a most important approach of River Island. It is defined by creating a
business plan for the determination of their customers and also the appealing to them. This
company believes in the structure networking organizational structure (Macchion, 2015). This
network based structure of this company helps to visualize the internal as well as external
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relationships between the managers and the top level of management system. Hence this
organization follows a more decentralized and more pliable manner of business. A model of
operational activity of networking organizational structure is as follows:
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CEO of River Island
Marketing
department
Production
department
Quality control
department
Foreman
(fabrication)
Foreman
(assembly)
Sales officer
Sales officer
Quality
control expert
Quality
control expert
Organisational Chart of River
Island
(Source: Created by Author)

Analysis of the advantages and disadvantages of the interrelationship between
organizational functions and their impact on organizational structure
A direct or indirect manner of interrelationship is maintained between the organizational
functions and their impact on organizational structure (Maduenyi, et al., 2015). The function of
River Island includes the several aspect of responsibilities whereas the structure of organization
is considered as the relationship between those related works. Hence, the both of this term are
interlinked with each other. The different aspects of works such as delivery of goods to the end
customers, maintenance of distribution are linked with the marketing professional of this
company. In this regard, they need to interlink with the production group for the success of the
business. Hence, the networking structure of River Island is very beneficial for the maintenance
of this interrelationship (Baig, 2015). Either it could hamper the balance of the business that is
not desirable.
The networking aspect can make a negative approach towards the interrelationship. As diverse
employees are linked in different department, any of the failure of the departmental
malfunctioning can delay the other ones work.
Critical analysis of the complexities of different types of business structures and the
interrelationships of the different organizational functions
The organizational structure is associated with different types of advantages and disadvantages
related with the organizational structure of River Island (Faul, 2016). This organizational
structure of River Island is very flexible in nature that motivates working in hub organization.
The absence of horizontal and vertical boundaries in the hub organization promotes the retention
of rank differentials and minimum status. Hence, the employee can work with enthusiasm. The
structure of River Island allows the various organizations involved in doing different jobs for this
hub organization to show their best performance together. This can make the performance of this
company at their highest peak. This structure entertains less environmental uncertainties (Liao
and Marsillac, 2015). Depending on the environmental status, new alliances can be developed
and the old one is dropped out.
Coordination is the biggest challenge of River Island. Lack of coordination among the partners
of the company can be fatal. As each partner has their own pattern of work without any relation
with the work of their partner. In this regard reliability is a big issue for this chosen organization
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(Baird and van Liempt, 2016). There is necessity to have faith on partners during dealings. River
Island some time losses its control over marketing and manufacturing professional due to poor
operational activity.
4. Use contemporary examples to demonstrate both the positive and negative
influence/impact the macro environment has on the business operations (LO3)
The entire functions of the company depend upon the external and internal factors of the
company (Hillary, 2017). In which the external factors are the macro environmental factors,
which are beyond the control of the organization as it includes the factors relating to the political
issues, technological issues and so on. The internal factors are the microenvironment facts which
can be managed and controlled by organizations. The company is required to do proper
screening of the macro factors in order to plan its marketing strategies. This Macro Environment
factors includes PESTLE analysis, which is mainly followed by every organizations (Prajogo,
2016). The PESTLE analysis is the acronym of the politics, economical, social, technological,
legal and environment factors. All the above factors require proper analysis of the respected
factors.
Positive aspects Negative aspects
Political factors Due to the free economy
system that is applicable in
UK, The River Island, UK
hardly faces any kinds of
difficulties while operating its
business (Saleem, 2015).
It has around 350 store all
around the world, the changes
in the tax reforms, trade
traffics and fiscal policies can
create certain issues for the
organization.
Economical factors Due to the smooth
functioning of the trade traffic
River Island, UK is able to
supply its product globally.
The changes in the rate of the
currency in the other
countries can be one of the
negative aspects to the
company.
Social factors The changing of the lifestyle Due to the high demands of
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of the public increases the
demand of the luxurious
goods, which is one of the
positive factors for the
company. The staffs of the
River Islands are very much
ethical in providing the
standard services to the
potential customers (Chang,
2016). The River Island has
its own magazine on fashion,
accessories and its products.
appeal, the style and design
keeps changing, therefore the
taste and preferences changes
with the passage of time.
Technological factors The company has the entire
latest version updated to its
process of production. The
machines are advanced which
leads to the proper and
smooth productivity.
The changes in the
technologies required to
maintain the quality of the
products, which is very
challenging because of the
increased competition in the
market (Khilji et al., 2015).
Legal factors The formation of the
company has followed all the
rules and regulations. As the
laws are free and sustainable
in UK, River Island has a
positive impact to this basis.
The policies of the company
provide all the legal factors to
its employees like employees
funds and gratuities. This also
serves as one of the major
As the company has
established its business
globally, therefore the
changes of law in aspect to
trading or any other matter
that directly affects the supply
of the product is in the market
function smoothly.
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