Comprehensive Business and Environment Analysis of SKODA Auto Company

This report offers a comprehensive business and environment analysis of SKODA Auto. It begins with an introduction to business concepts and the specific context of SKODA Auto, a subsidiary of the Volkswagen group. The report then delves into different types, sizes, and scopes of organizations, differentiating between profit, non-profit, and non-government entities, as well as micro, small, medium, and large enterprises. It examines the legal structures of businesses, including sole traders, partnerships, and private companies. The report further explores the scope and size differences among various organizations, including transnational, international, and global organizations, and discusses the differences between franchising, joint ventures, and licensing. A significant portion of the report is dedicated to an industrial structure and competitive analysis of the automotive industry, focusing on SKODA Auto's position. It covers market forces, economic operations, and stakeholder responsibilities, emphasizing how organizations meet different stakeholder interests and expectations. The report concludes with an overview of organizational functions, their relationship to structure, and the objectives of the organization, providing a holistic view of SKODA Auto's business operations and environment.

Business and
Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Different types, size and scope of organisation................................................................1
P2. Scope and size of different types of organisations...........................................................3
TASK 2............................................................................................................................................6
P3. Relationship between various organisational functions and their link with structure and
objectives of organisation.......................................................................................................6
TASK 3............................................................................................................................................7
P4 Impacts of macro environmental factors on business operations......................................7
TASK 4..........................................................................................................................................11
P5 Internal and External Analysis of Skoda Auto with other similar organisation..............11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business involves economic activities involving producing, buying and selling a
commodity in order to earn livelihood. Business can done by a person or group of persons in
order manage and run operations of business enterprise. Business enterprise is association run by
business man in order to sale product and services and earn revenue (Cassell and Blake, 2012).
This report is based on SKODA which is oldest car manufacturers. This organisation was
established in 1985. SKODA brand is known for its vast range of products and it is a completely
owned subsidiary of Volkswagen group. In this report there is discussion about different types,
size and scope of organisations, interrelationship among various functions and organisational
structure, effect of macro environment has on business operations. It also en-lights internal
strength and weakness of business.
TASK 1
P1. Different types, size and scope of organisation
Business involves activity having aim to earn high profits and satisfy customer need. In
society, there are different types of organisations having difference in their size, scope.
Difference between profit and not for profit and non-government organisations
Basis Profit organisations Not for profit
organisations
Non-government
organisations (NGO)
Meaning These are the
organisations which
has main aim to earn
profits. In such
organisations,
consumer want value
for money and up to
the mark product and
services. In such
organisations private
associations are
included such as
Not for profit
organisation deliver
goods and services at
reasonable price. This
includes clubs, trust,
etc. They provide
goods and services at
nominal price.
Example of not for
profit organisation is
Guide Star.
NGO work in order to
serve society in regard
to some suffering such
as AIDS disease,
education eradication,
etc. These organisation
run in order to
improve living of
standard of
association. In such
organisation voluntary
organisations are
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SKODA Auto. considered such as
Oxfam.
Management These are managed by
individual or group of
people or company.
Foundations,
associations, social
institutions run such
business.
These are managed
and run by trustees,
volunteers.
Source of funds These organisations
raise funds from bank
loans, debentures, etc.
They have individual
donations, tax revenue
interest from
investment, etc. as
source of funds.
Non government
associations has aids
from government,
sponsors, etc. as
source of funds
Aim Aim of profit
associations is to earn
good profits by
providing latest and
updated product and
services.
Their main aim is to
earn sufficient revenue
in order to cover their
costs of operation. .
Aim of NGO is to
serve society and
improve living of
standards of people.
Micro enterprises- Micro enterprise is small business run by less than ten people. These
are also by name of microenterprise. These business have lack of resources so they can not
transform operations in accordance to market trends. There are possibilities of shut down of
micro enterprise because of change in consumer demand, lack of resources, etc. The Main
purpose of micro enterprises is to earn livelihood and provide financial assistance to family.
These business are managed and owned by family members.
Small enterprises- Small enterprises have operations at small level and have few number
of workers. In these organisations, sole proprietor, partnership and corporations are included
operating with less than 50 employees (Cavalcante and et. al., 2011). Aim of small enterprise is
to earn profits and provide good quality product to customers. Managers of small business are
less resistance to change. They arise funds through internal as well as external sources such as
bank overdraft, etc.
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Medium-sized enterprises- Small business turns into medium sized organisation with the
help of slow and steady growth. They have staff of 250 employees. Their aim is to provide
products as per demand of customers and to expand business. They respond to changes quickly
because they want top compete with other firms more effectively.
Legal structure of business
Sole traders- Sole traders is the business run by single individual. An individual is
responsible or earning profits as well as bearing loss. They are responsible for raising funds from
internal as well as external sources. They do not make frequent changes according to market
trends. Grocery stores, barber, etc. are examples of sole traders.
Partnership- In partnership there is agreement among two or more people to share
profits, loss, capital, asset, liabilities and agreed upon same targets and goals. Partnership
business operates at mutual consent among partners. Partners are liable for share which they
have contributed in partnership business.
Private company: In private companies, there is essential role of group of individual
people. Their main aim is to earn profit ans customer also want value of their money. In this sole
proprietor, partnership and corporate bodies are included (Cronan and et. al., 2011).
P2. Scope and size of different types of organisations
There is difference in scope, objectives, working style, targets consumers, etc. of various
associations. These are discussed as under-
Differences between large, medium-sized and small organisations
Basis Small organisations Medium-sized
organisations
Large organisations
Objectives and
goals
Small organisation has
aim to make existence
in industry and stay in
market through profit
generation.
Medium sized
organisation have
objective to expand
business through
investigation of
operating market.
Large scale
organisations work as
per market trends.
Their aim is to provide
good quality services
to customer, so they
can make good brand
image in industry.
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Market share Market share of small
organisation is low as
compared to medium
sized organisation due
to availability of
limited resources and
scale.
Medium sized
organisation has more
market share than
small organisations but
are not big enough to
compete with large
organisations.
Large organisation has
largest market share as
they have to capability
to serve major share of
market with the
capabilities and
resources. .
Profit share Profitability of small
business is low.
Because they operate
at small level and
invest low capital.
Profit share of medium
sized organisation is
more as compared to
small organisation.
These business have
more capital as
compared to small
business. They have
small changes
according to market
trends.
Large organisation
earns good amount of
profits. They have
operations in different
parts of country and
have varieties of
products and services
in order to satisfy
customer demand.
Growth and
sustainability
These are less
sustainable. They have
lack of resources, so
sometimes they are not
able to modify
operations considering
the market. They have
less growth prospects.
They are sustainable in
case of changes and
have wide growth
prospects which helps
to provide products
and services according
to customer demand.
Large organisation can
sustain in frequent
change in external
environment. They
have greater growth
prospects as compared
to medium sized
organisation.
Transnational organisations- These are the associations which operates in more that one
country. They do not have one single country as their home nation. These organisation alter
policies more in countries from where they get good response. These organisations helps in
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raising economic condition of country along with themselves. As they operates in different parts
of country, so they are well known among industry. It is easy for transnational organisations to
expand and grow in market.
International organisations- When associations draw membership in at least three states
and have operations in different parts of country (Elliot, 2011). There is formal agreement among
country and association. These organisations also plays vital role in growth and development of
country. There is flow of currency between one country to another.
Global organisations- Global organisations deals in different parts of world. They
exchange goods from one place to another in order to provide best quality. With this trading
there is commercial relations among different nations and economic condition of country
improves.
Differences between franchising, joint ventures and licensing
Basis Franchising Joint venture Licensing
Meaning Franchising is a legal
agreement between
company and person.
In this organisation
grants permission to
operate business in
brand name of
organisation.
It is refer as an
agreement that two
business will give
resources to each other
or support each for a
various time and
payment.
In licensing
organisation delivers
right to person for
using patent asset such
as logo, design, etc.
Parties Parties involved in
franchise are
franchisor and
franchisee.
Parties of joint venture
are co- ventures or
partners.
Licensor and the
licensee are involved
in licensing agreement.
Industrial structures and competitive analysis
SKODA Auto is the company which deals in auto-mobile industry. This industry plays
vital role in improving condition of country. According to Criag Evans auto- mobile industry
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contributes 4% to GDP, 12% of total UK exports is because of car industry. This industry also
improves employment rate i.e. around 814000 people gets employment under auto-mobile
industry. In 2016 around 170000 vehicles were manufactured in single year (Criag Evans, 2018).
This company operates in different parts of country, so they have different competitors such as
Nissan, Ford, Mercedes Benz, etc. In order to make good image in industry market analysis is
essential. This helps to compete with other firms.
Market forces and economic operations
Scarcity and choice- When there is scarcity of product in market, then this there are less
options of choice with customers and possibilities that cost of product is also high. This affects
demand of consumer and market operations gets affected.
Supply and demand- Supply and demand of product has impact on economic operations.
When supply and demand alters then there is alteration in business operations of SKODA. When
demand of car is more in market such at the time of Christmas and New year, then managers of
SKODA has to modify their manufacturing and deliver operations.
Income elasticity- Income elasticity means demand of product increase with income in
income. There is positive relationship between quantity demanded and income(Hall, 2011).
Stakeholders – Stakeholders includes person, group of persons and association associated with
company. They have interest in dealings of company. Creditors, debtors., customers, employees,
etc. are stakeholders.
Responsibilities of organisations to meet different stakeholder interests and expectations
Managers of SKODA Auto are responsible for performing operations in effective way
which gives positive outcome in terms of good returns. There are different stakeholders having
different expectation and desire from organisation, so it is essential to analyse desire and then
actions has to be taken. For instance in order to satisfy customer, managers can plan to launch
model which give positive impact on environment. This helps to satisfy stakeholders and
sustainable development of society is possible.
TASK 2
P3. Relationship between various organisational functions and their link with structure and
objectives of organisation
Various functions of SKODA and its relationship various other organizational functions
are mentioned below:
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 Marketing and R&D functions: There is close relations among marketing and R&D
departments. SKODA has good image in industry because they analysis market and then
provide goods(Lee and et. al., 2012). There is difference in demand of consumer
according to buying power, social- cultural effect, etc. So it is responsibility of R&D
department to analyse demand and accordingly marketing strategies are farmed by
marketing manager. Thus by providing right and most authentic market information both
these departments work in coordination to attain SKODA'S mission and objectives.
 Human Resource and Sales Departments: The human resource department of SKODA
pays critical attention in its hiring process so as to recruit a proficient candidate at right
job profile who is available at right point of time whenever required (Teece., 2012). Thus,
it assist finance department by providing them with professional that are expert in
various accounting concepts and are well qualified having professional qualification.
Thus, by ensuring that firm is having efficient, talented and capable workforce that is
dedicated towards achieving firm's mission and objectives within specific time frame
with high efficiency.
ORGANIZATIONAL STRUCTURE
SKODA is quiet adaptive in its company's structure aspects. Being one of the leading
firm having various range and types of car models company basically follows two type of
structure mentioned below: . Matrix Structure: Under this type of structure reporting relationship of employees are
established up as grid, matrix where in they dual reporting both to functional as well as
general manager (López-Gamero and et. al., 2011). This assists firm in optimum
utilization of its resource since experts and equipments can be shared across project.
Also it induce in product innovation as people from different departments work together
sharing their knowledge, ideas and creative thinking. Functional Structure : Applying this structure managers of SKODA sets reporting
relationship of its workforce based on their key areas of functioning or expertise. In here
managers of SKODA divides employees into teams based on their roles and functions
that assist its staff to develop their individual skills rapidly within functional units in
order to be specialists (Onetti and et. al., 2012).
Complexities of organisational structure
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Transnational organisational
structures
Global organisational
structures
International organisational
structures
There is possibilities of
miscommunication among
employees because of change
in demand of different
geographical background.
In such organisational
structure, there are possibilities
of mismanagement of supply
chain. This affects sales and
customer satisfaction.
International organisational
structure have complexities of
running more than one project
at the same time. So there are
possibilities of confusion in
commercial operations.
TASK 3
P4 Impacts of macro environmental factors on business operations
In order to make good image in society, there is requirement of analysing market. It is
responsibility of managers of SKODA to alter business policies according to market trends.
PESTLE analysis is used to study macro factors.
Illustration 1: PESTLE Analysis of Skoda
(Source: PESTLE Analysis of Skoda, 2011)
Meaning Positive impact Negative impact
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Political In political factor,
government policies
such as tax policy,
terrorism, etc. are
included.
As SKODA is
following all
government rules and
norms related to air
pollution, various
export import related
policies etc. firm is
having its operations
in many countries
around the world.
Due to Brexit
company has to face
decline its sales
volumes, Also Strict
environmental laws
related to pollution
that are been enforced
by UK government
also made company to
make necessary
alteration in its vehicle
engine.
Economical It involves factors like
inflation fiscal
policies, deflation etc.
In case of developing
countries UK, USA
etc. where in there is
high demand for
luxury or high priced
vehicles firm is subject
to earn high revenues.
For instance till march
2018 SKODA sold
13300 units of its
Czech model (Skoda
car sales in the United
Kingdom (UK) from
January 2014 to July
2018, 2018).
Due to high demand
for diesel and
electronic cars that
boomed to 20% last
year SKODA is facing
decline in its petrol car
models (Skoda car
sales in the United
Kingdom (UK) from
January 2014 to July
2018, 2018).
Social It is concerned with
factors such as
lifestyles, habits,
SKODA offers a large
range of cars that fulfil
needs and
Due to difference in
demand of customer
such as in UK demand
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tastes, behaviours etc. requirements of people
belonging to various
income groups, age
etc. For instance
FABIA model of
SKODA is quiet
popular in youth
because of looks,
mileage, engine.
of Diesel car is more
as compared to India,
so manager has to alter
car engine in order to
satisfy consumer
demand which proves
to be costly and time
consuming.
Technological In technological
factor, changes in
techniques take place
such as use of social
media, internet, etc.
Technological up-
gradations helps to
provide luxury car to
customers. There is
less waiting time for
customers at the time
of purchase, servicing,
billing, etc.
Technological up-
gradation such as
updated machines
affects working style
of employees in
adverse way because
they have fear of being
fired from job role.
Legal Legal factors talks
about laws and
regulations.
There is chance to
achieve confidence of
stakeholders.
Due to change in laws
managers has to alter
business policies.
There is requirement
of legal practitioner
which affects cost of
SKODA.
Environmental In environmental
factors, impact of
operations of SKODA
on society.
This helps association
use environmental
friendly techniques
such as good quality
engine helps in
reduction in pollution
SKODA is not in
sector of electronic
cars which are
environment friendly,
so this is affects there
sales and profits. This
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and met environmental
aspects.
affects brand image
and customer loyalty
also.
Managers must use techniques which helps top analyse changes happening in external
environment. SKODA must give emphasise on research and development which helps to provide
knowledge about market trends and accordingly changes has to made in business operations.
Impact of macro environment on business activities
Impact of the digital revolution on production and consumption- There is requirement of
changes in working style of SKODA because of change in technology. E.g. Change in
communication techniques helps employees to interact quickly and appropriate information can
be delivered. This provides ease to employees in performing business operations. It is easy for
managers of SKODA to interact with internal as well as external parties of organisation.
Impact of social technologies- Social technology is one of the important aspects which
helps in marketing of brand. SKODA has many competitors such as Nissan, Ford so it is
essential to be in contact of consumers. Social technology such as websites, blogs, etc. ease to be
in contact of customers and marketing of product (Owusuand and Habiyakare, 2011).
Ethical and sustainable growth- Environmental factor must also be kept in mind by
managers of SKODA. They must give emphasise on use of renewable source, consumption of
energy, etc. so society development is also possible.
To deal with these environmental changes it is essential that managers of SKODA has to
accept changes in effective and efficient way. Managers must give emphasise motivating
workers to come with new and innovate ideas (Palo and TähtinenSaleem, 2017). Managers of
SKODA can train employees in order to deal with changes happening in environment. This give
positive impact on perform of workers and sales of organisation.
TASK 4
P5 Internal and External Analysis of Skoda Auto with other similar organisation
SWOT analysis is effective to know impact of internal elements on business operations
of SKODA. SWOT of SKODA is discussed as under-
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Strengths Weaknesses
 Strong brand image of firm in market
of United Kingdom and Europe.
 Adoption of upgraded technology in
process of production such as MSR,
EBS etc.
 SKODA has professional employees.
 They do not have good supply chain
management.
 In comparison of other rivals,
maintenance cost of firm is high.
Opportunities Threats
 E- cars are one of the best opportunity
for SKODA.
 Collaboration with other auto mobile
company can be beneficial for firm in
achievement of economies of scale.
 Offering hybrid car at lower cost.
 Frequent changes made in technology
or technological up-gradations.
 Fierce competition in market such as
Ford, Nissan, etc.
 change in demand of customers on
frequent basis is also threat for
decisions of organisation.
 Government policies and regulations.
SWOT analysis provides knowledge about internal as well as factors which are affects
decision making of managers. SKODA managers has to modify their care design according to
consumer demand on the basis of social, purchasing power, purpose, etc. There is requirement of
political party approval in order to operate in different nations. Managers has to plan for
electronic areas in order to conserve environment.
CONCLUSION
Above discussed facts helps to enhance knowledge about various types of organisations
such as public, private and voluntary with their legal structures. This report also talks about
objective, market share, profit share, growth and sustainability of large, medium and small sized
organisation. There are different departments in organisation such as production, marketing, HR,
operations, etc. which are related to each other. PESTLE is used to analyse impact of external
factors such as political, environmental, etc. While SWOT is used to analyse effect of internal

component on business such as employees, management, etc. which assist in formulation crucial
decisions for the organisation.
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