Business and Business Environment: Vodafone Case Study

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BUSINESS AND BUSINESS
ENVIRONMENT
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Table of Contents
INTRODUCTION......................................................................................................................................................... 3
TASK 1............................................................................................................................................................................ 4
LO1 & LO2..................................................................................................................................................................... 4
P1................................................................................................................................................................................. 4
P2................................................................................................................................................................................. 7
M1............................................................................................................................................................................. 10
P3............................................................................................................................................................................... 11
M2............................................................................................................................................................................. 14
LO3................................................................................................................................................................................ 16
LO4................................................................................................................................................................................ 25
P6............................................................................................................................................................................... 25
CONCLUSION............................................................................................................................................................. 27
REFERENCES............................................................................................................................................................ 28
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INTRODUCTION
Business and business environment refers to the entire external and internal factors that
affect business activity. The business and business study helps the business organization to
assess these internal and external factors and plan their business strategies accordingly
(Madhavaram et al., 2017). The assignment presents the various factors of the business
environment and presents its significance as to how the study of the business environment
is important.
The chosen companies in this assignment are Iceland supermarket, Cancer research UK and
Vodafone Company which are a private organization, voluntary organization and public
organization respectively. The assignment is divided into two parts, 1st part presents the
study of different types of the organization included size, and scope etc. and 2nd part
presents the external and internal factors that affect the business activity of Iceland
supermarket (Murray, 2014).
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TASK 1
LO1 & LO2
P1
TYPES AND PURPOSE OF ORGANIZATION
Following are the types and purpose of the organization:
Public Organization
A public organization is generally managed by the government of the country but in some
special cases wealthy entrepreneur gain the rights of operating the public company
through buying the most number of shares in order to manage the company (Madhavaram
et al., 2017). The main objective of the public company is providing good quality products
and services at an affordable price.
Example – Vodafone and Environment agency is the public companies both have different
nature as one is provident service at affordable price whereas the second company
continue to work to sustain the environment. One has a goal of providing good service and
generate enough profit whereas second aims for protecting the environment.
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Figure 1: Organizational structure of Vodafone
Source: Murray, 2014
Private Organization
A private organization is managed and run by an independent individual or other private
companies where all the decision taken by these persons and government have no right to
interfere in the business activity unless they person some illegal activity (Murray, 2014).
The main aim and objective of the private organization is profit maximization.
Example: Iceland Supermarket and Virgin Atlantic both are a private organization whose
main motive is profit generation and provide the best quality services to the customers and
both the companies run by individual persons.
Figure 2: Organizational structure of Iceland Supermarket
Source: Murray, 2014
Voluntary Organization
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The voluntary organization aims to works for the welfare of society. They are like NGOs
and charitable trust that raise funds in order to start a campaign to make society healthy as
well as support people. The main aim of these types of organization is to work for the
society.
Example: Cancer Research UK and Oxfam are both voluntary organization that focuses on
the welfare of the society. Both start their campaign to spread the welfare thoughts such as
cancer research UK aims to make UK cancer free and spreads the negatives of alcohol and
smoking so that people avoid using them and well protected from serious diseases like
cancer.
Figure 3: Organizational structure of Cancer Research UK
Source: Madhavaram et al., 2017
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P2
DIFFERENCE BETWEEN PRIVATE, PUBLIC AND VOLUNTARY ORGANIZATIONS
BASIS PRIVATE PUBLIC VOLUNTARY
SIZE & SCOPE Both Iceland and
Virgin Atlantic are
broad in size as they
conduct their
business in outside
the UK as well as
globalization
provides various
opportunities to
earn more profit and
increase in sales that
result in better scope
for the organizations
(Patel et al., 2015).
The public company
are generally bigger
size compare to
private originations
depending on the
business nature and
a number of
employees are also
large as Vodafone
alone has over
111000 employees
and environment
agency has around
11200 staff (Murray,
2014). Both the
organization
effectively covers the
entire UK and as well
as has lots of scope
in future.
Voluntary
organization are
generally limited and
their size is also less
compared to private
and public as cancer
research UK and
Oxfam are limited to
the UK only but their
scope has very broad
because of their
campaign.
DIFFERENCE BETWEEN SMALL, MEDIUM AND LARGE ORGANIZATIONS
BASIS SMALL MEDIUM LARGE
GOALS &
OBJECTIVES
The ultimate goal of
the small business is
profit earning
(Hillary, 2017).
The main goal and
objective of the
medium business is
profit maximization.
The main goal of the
large business
organization is
expanding its
business (Shenkar et
al., 2014).
MARKET SHARE The market share of The medium The market share of
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the small business is
limited to a specific
region.
business covers the
entire domestic
market.
the Large
organization cover
domestic as well as
outside the country.
PROFIT SHARE Profit share is
limited.
The profit share of
the medium
organization is much
larger than the small
organization.
The large companies
earn the highest
amount of profit in
all three.
GROWTH AND
SUSTAINABILITY
It has less risk and
improving growth.
The risk is medium
and growth and
sustainability rate is
high
The risk is very
much according to
its sustainability and
growth are also very
high.
TRANSNATIONAL ORGANIZATION
Transnational organization refers to a business industry that operates substantial facilities
and conducts business activity in more than one country but does not consider any country
its domestic country (Hillary, 2017).
INTERNATIONAL ORGANIZATION
International organization are those organization that are domestic companies but also
have capabilities to pierce the overseas market.
GLOBAL ORGANIZATION
Global organizations treat the entire world as a single market and maintain control over
their entire business that spreads all over the world through a centralized home head office
(Patel et al., 2015).
MARKET FORCES AND ECONOMIC OPERATIONS
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Market forces are the elements that impact the price and convenience of services and
goods within the market economy. Market forces are responsible for the increase in price
with respect to the supply and availability of services and goods. Following are the market
forces:
Demand and Supply – Demand and Supply are responsible for the change in prices such as
if the demand is high and supply is low that results in an increase in the price of the
product and vice versa.
Income Elasticity – income elasticity responsible for the change in demand as negative
income elasticity is related to inferior good in which increase in income leads to increase in
demand of luxurious goods and decrease in demand of normal goods and vice versa
(Madhavaram et al., 2017).
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M1
The goals and objectives of different organizations are ultimately linked to business size
and scope such as business companies like Vodafone, Cancer research UK and Iceland
supermarket these are public, voluntary and private companies respectively in which size,
structure and scope are significant affects their business goals and objectives (Murray,
2014). The private organization ultimately aims for the profit maximization through
providing best quality services to their customers as it is their source of generating more
profit than any company in which the structure and size of the company ensure that the
company has basic resources to provide the services they aim for.
The public company aims to provide good quality services at an affordable price but also
earn some profit so that they can maintain sustainability in their organization. For that
their structure significantly affects them as the larger the structure of the organization the
more efficient service or product they can provide (Patel et al., 2015). Whereas cancer
research UK is a voluntary company whose aim is to work for the society in which the
company’s size and scope helps them to achieve their goals and objectives and effectively
initiate and conclude their campaign and spread the awareness of the business.
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P3
ORGANIZATIONAL STRUCTURES
Functional Structure
This is the most commonly used structure within an organization in which business
organization groups employees and workers according to their specific skills. Ex,
marketing, finance etc.
Figure 4: Diagram of Functional Structure
Source: Patel et al., 2015
Divisional Structure
This structure focuses on the product or services type rather than the skills of the
employees such as employees groups for specific services and products.
Figure 5: Diagram of Divisional Structure
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Source: Murray, 2014
Matrix Structure
In matrix structure employee has to report more than one manager or supervisor in his
work such as marketing employee have to report marketing manager and finance manager
for the expenses in marketing activity.
Figure 6: Diagram of Matrix Structure
Source: Shankar et al., 2014
ORGANIZATIONAL FUNCTIONS
Marketing
The marketing function of Vodafone is responsible for an increase in the reach of the
business and attracts new customers for the business (Shenkar et al., 2014). The marketing
functions are directly linked with matrix structure as it has to report multiple supervisors
and attract new customers directly link with profit maximization objective.
Operation
Operation function of Vodafone refers to its business activity as to how it plans and
strategies for the new service launching etc. it follows the divisional structure and
introducing new services serve its goals and achieve its objective.
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