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BUS3001 Business Environment Level 6

17 Pages 4267 Words 850 Downloads

Introduction

Today in fast developing world, every organisation wants to expand its business in vast area. For this purpose, managers of enterprises used to formulate unique and effective strategies as well as policies through which they can complete the need of business environment. But for this purpose, employers are needed to analyse all factors that may impact on operational activities in both internal and external manner. It includes factors like economical changes, fluctuations in legal terms and taxation policy, ethical demand, environmental law etc. All these attributes are necessary to analyse, which aid organisations to run their business in a required way. In addition to these, managers are also required to identify demand and needs of customers as per area in which they live (Cai and Yang, 2014). This would aid in manufacturing products or services as per their requirement. In order to measure impact of factors on business environment, present assignment help has been made on a UK based organisation named by Coca Cola. It operates business at multinational level in various countries with offering a wide range of products like soft drink, food and beverages etc. This report highlights various enterprises classified on the basis of business sectors like public, private and voluntary along with legal structure. In addition to this, impact of macro environment on business operations also discuss.

Task 1

P1. Different types and purposes of organisations

In UK marketplace, there are several companies are running their business at small and large scale organisation. These industries are working on different basis and opinions as per business objectives, aims and goals. Therefore, they have possessed distinct legal structures also. Generally, enterprises can be classified on profit and non-profit basis. As per present scenario, Coca Cola Company has run its operational business in various countries for generating more and more income. This firm is manufacturing business in confectionary products like soft drinks, beverages and snacks. Along with this, in order to get attention of customers, marketing department has made several campaigns like ‘Taste the Feeling’. Through this slogan, they promote products in a large manner and convince people to avail. For generating high return on investment, this enterprise used to create modifications in commodities on regular basis by adding value in them. Therefore, Coca Cola has come under profit organisation.

The profit organisations are also called private companies in which regulatory bodies have no control on business. These enterprises are work for earning more and more profit like Coca Cola, Starbucks, Cafe Coffee Day and more. While non-governmental companies are like charity firms which generate money only to improve conditions of people by fulfilling their basic necessities of life. It includes organisations like Oxfam, NGO and more. On the other hand, NHS, Military, Law Firms and more include in Not-profit enterprises as well as are worked to provide safety for citizens. Basic difference among companies of different sector can be classified as:-

Basis of Comparison

Non-government organisation

Non-profit organisation (Charity)

For profit organisation

Meaning

Companies like NGO or voluntary firms are non-government organisations who are independent from national and international government. These are the non commercial organisation who are worked to resolve issues of people.

Non-profit Firms are charitable organisations which are dedicated efforts and business to improve poor conditions of people living at a particular place. Along with support of government, they provide funds to small organisation who want to launch business for earning their livelihood and complete need of family and society.

Private sector organisations which are operated businesses only to fulfil demands and needs of people at any cost in order to earn more and more income are come under profit organisation. These firms manufacture or deliver services as per need of people and improve their standard of life in a high manner. it includes commercial enterprises like retail sectors, banks, restaurants, insurance companies and more.

Area of Operations

These firms are operated business on a large level. Therefore, require lot of funds which they gain from charitable trusts.

These corporations are small in number.

In this, company can be both small and large.

Objectives

The main objective of these companies is to prevent society from social causes, unusual activities, harassment, discrimination and more. So that people can live a terror free life.

Purpose of these enterprises is to maintain normal life of people and complete their basic necessities.

Earning more and more profit as per demand of customers in a short period of interval is main goal of commercial organisations. Along with providing high satisfaction to customers and gain their retention is another objective.

In addition to above, companies can be classified on the basis of size of organisation also as well as area of operation. It can be described as below:-

Public Sector:

Companies under this sector is governed by regulatory bodies. All business operations are held under supervision of government. Generally, these enterprises are worked on large scale for common purpose is to fulfil demands of people on affordable rates. Since these industries are under governmental control, therefore, factors under business environment impact in less as compared to private organisations. The main objective of public sectors is to deliver services to people of domestic country on large level. These firms are earned money also in the form of taxation and interest rates which they are applied on business of private firms. The laws and legislations formulated by these firms are amended for all other companies of a country. For example: Royal Bank of Scotland is an financial institution which provide various services to people like saving their income, provide loans and funds on easy rates etc.

Purpose of this sector:

Public Organisations are mostly concern on providing goods and services to people on easy rates as well as fulfil their basic necessities. These firms also improvise condition of society by constructing infrastructures like building, roads, temples, public parks and more. Creating healthy environment is main objective of these firms.

Private Sector:

In this category, business organisation has operated either in the form of sole traders, partnership or joint business. Government has no control on operational activities of these enterprise but laws and regulations made by them are amended for private firms. Companies under this sector are depended on regulatory bodies only for funds. Due to private ownership, factors present at micro and macro level affects business environment of such companies in a large manner. For example: Coca Cola is a private and multinational company which sells its commodities in various countries and hope to launch business in other locations like remote areas also.

Purpose of this sector:

Earning profitability and generating high revenue as well as expand business area are the some of the main objectives of private enterprises. They manufacture products as per demand and need of customers at national and international level. Therefore, providing high satisfaction to them is also a major concern for these organisations.

Voluntary Sector:

Companies in this sector are come under for non-governmental sector whose main objective is to provide help to poor and needy people. It includes NGO type enterprises with main motto is to improve living condition of society. For example: Oxfam, The National Trust, Cancer Research UK and more are provided necessary help to citizens of UK.

Purpose of this sector:

Providing healthy environment and disease free life is main purpose of these organisations.

Legal Structure of the sectors:

Public Sector:

Business of public sectors are fully governed by regulatory bodies. Therefore, legal structures of these firms are divided on the basis of geographical locations i.e. State, Central and Local. All have different type of roles and responsibilities. Central government form laws and legislation while state government help in executing the same on companies and citizens. Apart from this, local bodies are worked for improving life of people.

Private Sector:

Business structure of private firms is divided on the basis of ownership like sole proprietor, partnership and joint business. If business of company is operated by single person than they are come under sole proprietors. While having two or more partners of business are come under partnership type of enterprise. Both type of legal firms doesn’t require much paper work as in partnership, business is divided among owners equally. Apart from this, joint business partners have make a proper document in which business is distributed in terms of capital investment made by owners.

P2. Size and Scope of various types of organisations

As in UK, organisations are divided on the basis of legal structure, ownership and objectives. Therefore, they have different scope and size also. All these can be elaborated as:-

Micro Scale:

In context with size of firms, companies at micro level have generally 4 to 5 members in staff. It includes departmental stores, cafes, small restaurants, food stalls and more. The main aim of these enterprises is to earn for livelihood and improve economical condition of own family by completing basic necessities of life i.e. food, shelter and cloth.

Small scale:

Enterprise at small scale has more than 50 members at workplace who contribute their efforts in accomplishing short term demand of business. In UK marketplace, there are 1000 of companies are running at small level, therefore, profitability of them affects economy of country also. Therefore, regulatory bodies provide necessary funds to them so that they can operate at large level. It includes retail industries, insurance firms, consultancies and more.

Medium Scale:

Under this sector, near about 150 employees are associated with business of organisations. It includes technological firms, software companies and more. In addition to this, these industries are worked with main purpose is to expand business at large level.

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Large Scale:

Organisation which are established at big level and have unlimited number of employees is come under large scale enterprises. They consider more on gaining sustainability at marketplace as well as competitive advantage.

Objectives differentiation and scope:

Micro

Small

Medium

Large

In context with objectives, companies at micro level have main scope is to earn profit for own consumption. Necessity of needs of family members is concerning point of view of these companies rather than demand of customers.

Small scale enterprises are concerned more on need and demand of customers, therefore, manufacture products accordingly. Generating high revenues and more profit is main objective of these companies.

Expansion of business at large level and selling commodities in international market are some major objectives of medium enterprises.

Gaining high attention of customers, their retention with products or services, increase profit share at marketplace, enhance competitive advancement are some major objectives and goals of companies operating at large level.

Task 2

P3 Relationship between different organisational functions

An organisation can be divided on the basis of various functions performed by different departments. All divisions have own role and responsibilities but worked with common purpose i.e. to achieve objectives and goals of a company in a given period of interval. Therefore, operational functions of all sections are interconnected with each other also. In addition this, employers of firm distribute duties to all departments as per their functions (Botha, Kourie and Snyman, 2014). In context with a private organisation of UK i.e. Coca Cola has various divisions, all of which contribute efforts in enhancing profitability as well as productivity of business in large manner and in short period of interval. Functions of all sections can be explained as:-

Marketing department:

This department carriers various activities like promotion and advertisement. Managers formulate effective strategies and policies in order to marketing products of Coca Cola in a vast manner. In addition to this, they also perform other activities also like identifying demand and needs of people as well as purchasing power of them. Along with, searching marketing area where they can deliver commodities in bulk and generate high revenues from them. Marketing team also examine bargaining power of suppliers and buyers in order to reduce expenditure of company and distribute products in large area simultaneously. Apart from this, they also examine the need of changes in company’s operation and products to avail competitive advancement (Cascio, 2018). This department helps sales division in allocating areas where they can sell commodities in profitable manner.

Human Resource Management:

This is the main department of an enterprise which performs various functions like recruitment & selection, training & development, reward & compensation, etc. Through these functions, HR managers used to provide necessary employees in other divisions as per roles and responsibilities (Huang-Horowitz, 2015). Along with this, they make workers capable to work according to needs of departments. For increasing their efficiencies and motivational level, managers also provide them appraisals and rewards in order to retain them with business for long period of time. In addition to this, HR managers are also worked running business in legal manner.

Operations and production department:

These divisions also perform major responsibilities of business like they manufacture products or services as per requirement of customers. The main goal of Coca Cola is to generate higher profitability, therefore, these department provide services in a profitable manner. In addition to this, managers of these divisions perform severe type of duties viz. transforming raw materials into finished goods by utilising resources in an economical way (Congleton, Hölzel and Lazar, 2015). Functions of these departments are dependent on other divisions in gaining raw materials on low cost, manufacturing them by contributing efforts of manpower, distributing the same in marketplace and more.

Financial department:

This department also holds its importance among others, it performs major responsibilities as utilisation of money. This division provides finance to other departments in providing necessary funds as per need of them in performing their functions. For tjis assistance, they raise funds from various sources of marketplace and distribute them in other divisions as per want. Along with this, finance managers make effective budget plans as represent the same in front of investors, stakeholders and shareholders in an effective way (Klapper, Love and Randall, 2015).

The main organisational structure of a company are described as below:

  • Functional structure: This section is generally common for every type of organisation whether dealing at large level or small. In this area, management of firm used to divide roles and responsibilities to various departments as per objectives.
  • Product Based: In this era, management of enterprises are used to manufacture products and services as per demand of people in a particular area (Doh, McGuire and Ozaki, 2015). Through this function, an organisation can find systematic way for categorising product line in an effective manner.
  • Customer Based: Under this category, management of firm used to divide marketplace into different segments as per need, demand and purchasing power (Menychtas and et. al., 2014). Through these activities, a firm like Coca Cola can deliver its services as per requirement of each section. This would help in completing requirement of customers as per their want as well as in a short interval of time. These things aid organisations in enhancing brand image as well.

Task 3

P4. Positive and negative impact of macro environment upon business organisation

In present technological world, there are various elements present at internal and external environment of business organisation which affects operational activities in a large manner. Any changes in such factors, demand enterprises to change strategies and policies in order to stay competitive and run business in smooth manner. For examining negative and positive impact of such factors, management of Coca Cola are required to make analyses by using PESTLE technique. It can be elaborated as:-

  • Political Factors: These elements are directly impact on trade of a company. Legislative rules and regulations formed by regulatory bodies are used to keep an eye on activities and business operations in order to eliminate corruptions. Along with this, political laws are affected much on those companies which are operated business in various countries as well. Therefore, business of Coca Cola is also affected by these laws. It demands this firm to manufacture high quality of carbonated drink.
  • Economic Factors: Economical condition of a country impacts on business of an organisation in both positive and negative manner (Bah and Fang, 2015). For an instance, in inflation period, purchasing power of people becomes high due to high level of income, therefore, it helps enterprises in increasing their sales performance as well as gain high return on investment. While in deflation period, all process goes in negative way. In addition to this, fluctuations in interest rates and economical terminology, demand enterprises to change strategies and policies accordingly.
  • Social Factors: It includes perceptions and views of society and people living at there. Due to modernisation, taste and preference of customers gets changes on regular interval of time. This would effect on sales performance of as company as it demand to manufacture innovative products or add value in existing commodities. Therefore, it is essential for Coca Cola to keep modification in productions and deliver products of unique taste in marketplace as per taste of people.
  • Technology Factors: Today without technological advancement, any organisation cannot achieve its success in a required manner (Moroni, Arruda and Araujo, 2015). Therefore, in order to gain competitive advancement, it is necessary for all companies including Coca Cola to adopt latest technology in business. This would help in manufacturing good quality of products as well. But, it requires heavy amount of funds which creates negative impact on financial situations of organisations.
  • Legal Factors: It is necessary for managers of Coca Cola to keep update its activities with legal formalities. This will help in running business in a smooth manner. Legal factors include employment legislations in order to prevent employees from unusual activities and discriminations held at workplace (Apăvăloaie, 2014). Therefore, Government of UK has established various laws like Anti-Discrimination Act, Health & Safety Law, The National Minimum Wage Act and more. Therefore, Coca Cola had compliance its organisation with all legislations and provide healthy environment to its employees as well.
  • Environmental Factors: This section demands a firm to reduce its wastages as well as keep a safety measure to destroy the same in a proper manner. Since, beverages of Coca Cola contain high amount of carbonate, therefore, this firm has faced several issues in running business successful. This would effect its brand image as well as sales performance in a negative way.

Task 4

P5 Studying on Internal and External Analysis

In order to analyse internal and external factors of business activities, executive are required to use effective method. This would help in gathering complete information of a company like how it goes in marketplace as well as what are the opportunities present at marketplace through they can enhance productivity. By conducting this, they can evaluate number of competitors as well as barriers come in accomplishing objectives of business successfully (SWOT of Coca Cola. 2018)

SWOT analysis of Coca Cola:

Strengths:

  • At present scenario, brand image of Coca Cola is enhancing in a good manner through which products of this firm are becoming more popular in all over world.
  • Unique way of marketing, effective use of tools and techniques help in attracting minds of national and international customers in a large way. Along with this, its products give a tough competition to beverages of competitors.
  • The major advantage of this firm is its taste of drink and food products which aid in retaining loyal customers for longer period of time.

Weakness:

  • Presence of high carbonate in drinks effects health of people in a large manner. Due to this, customers are now started move on other confectionary beverages like coffee and healthy drinks. This factor has shown its major weakness.
  • Less product differentiation as well as usage of old techniques affects brand image of this company (Armstrong and et. al., 2015).
  • Unhealthy food items also reveal its weakness.

Opportunities:

  • Providing healthy drinks and organic fruit juices are some major segments through which Coca Cola can gain attention of customers again.
  • Usage of latest technique helps in providing more healthy and tasty products. Along with keep them safe in a good manner (Pinto, 2015).
  • Economical stability of UK Government provides an opportunity to raise funds on easy interest.

Threats:

  • Presence of competitors impact on sales performance of this company in a high manner.
  • Increasing rate of suppliers who are provided raw materials impact on business of Coca Cola.
  • Awareness in people regarding their health has become a threat for confectionary products of a company.

Thumsup, Pepsi, Costa Coffee, Cafe Coffee day and Star Bucks are various rival enterprises that are affecting function of business in indirect manner.

P6 Ways in which Strengths and Weaknesses interrelate with macro factors

Through examining properly on factors of macro environment, managers of a firm can measure impact of these easily on operational activities (Baesens and et. al., 2014). In addition to this, by conducting proper analysis, they can strengthen the system more easily as well as reduce weaknesses also. Therefore, superiors of Coca Cola have used PEST analysis to evaluate the weaknesses and strengths in a proper manner:

Political Factors:

These factors normally impact in negative way of business operations of a company, therefore, superiors are required to make modifications in policies and strategies as per changes in political rules. It will prove beneficial in running business organisation in a more affected way.

Economical Factors:

This factor generally effects profitability and sales performance of a company. It includes factors like exchange rate, deflation, inflation, taxation policy and more. As per present situation, economical condition of UK is so good, this, sales performance of Coca Cola is also enhanced in a large manner (Niemann-Struweg, 2014)..

Social Factors:

Through manufacturing products in a high qualitative way by concerning more on health factor of people help Coca Cola in providing high satisfaction to customers. Along with utilisation of resources, also proves beneficial for production of this company.

Technological Factors:

Coca Cola needs to make improvement in technologies, which help in manufacturing good in a proper way.

Conclusion

From the given project report, it can be stated that for attain set business goals and objective it is very essential for a business entity to first study the environment and examine the various factors exist in that. One of the main benefit of this analysis is that it help business firm in formulate an effective business strategy which provide competitive benefit to entity. Tool called SWOT analysis can be use by entity to identify its m ain strengths and weakness. Further there is a tool called PESTLE which can be use by firm to identify and examine the major factors exist in business environment.

References

  • Apăvăloaie, E. I., 2014. The impact of the internet on the business environment.Procedia Economics and finance.15. pp.951-958.
  • Armstrong, G. and et. al., 2015.Marketing: an introduction. Pearson Education.
  • Baesens, B. and et. al., 2014. Transformational issues of big data and analytics in networked business.MIS quarterly.38(2). pp.629-631.
  • Bah, E. H. and Fang, L., 2015. Impact of the business environment on output and productivity in Africa.Journal of Development Economics.114. pp.159-171.
  • Botha, A., Kourie, D. and Snyman, R., 2014.Coping with continuous change in the business environment: Knowledge management and knowledge management technology. Elsevier.
  • Cai, S. and Yang, Z., 2014. On the relationship between business environment and competitive priorities: The role of performance frontiers.International Journal of Production Economics.151. pp.131-145.

 

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