Macro and Micro Environmental Factors In Business Environment

LO 1 Explaining different types, size and scope of the organisations

P1 Explaining types and purpose of organization with legal structu

There are different types of organization such as private, public and voluntary sector orgnization. These organization have their purpose and legal structure for work properly in effective manner. Those explanation are as follows:

Private company:

Private organization is the organization which is individually operates and run the business. That have main purpose to run business are earn profit in higher level by providing best quality of services. The private organization is mainlt managed by shareholders such as owners, individual person or any other person who had the capability to run business in effective manner (Ji-fan Ren and et. al., 2017). The main purpose of private organization to earn profits and enhance investors interest by presentating the more stable finanical statements in  order ro fulfill the needs of public in correct manner. For example: Lidi is private supermarket company. The legal structure of company is to follow flat organizational structure in that their are various level of management and also the communication decision making power is raised.

Public company:

Public organization is refers to such organiztaion whcih they equaliy managed company with proper intergration. That are managed and run by government. The main purpose of public company is not to eran profits as that of private company as well as maximise shareholders values by providing the more quality services and also fulfilling tehir needs. For example: British council is public coampny. The legal structure of company is to consist with borad of directors and seniors liable to take better decisions. Considering the legal structure British Council is governed by a Royal Charter and it is also public corporation and an executive Non-departmental Public Body (NDPB), sponsored by the Foreign and Commonwealth Office. Through the above mentioned values, the organisation is efficient to serve the people and enhance creativity in education (British council, 2019).

Voluntry organisation:

This type of organisation is called as union organization which is the main functsion to be carry the certai rtights of citizen of country. The main purpose of voluntaruy company is to create values for the social communities as a whole and help to people for settle their life. For example: Oxfam is volunatry sector organisation (Kozubíková, Homolka and Kristalas, 2017). The legal structure is trustees are persoanlly liable for any such issue.

P2 Explianing size and scope of range of differentb types of organization.

            There are different type and size of organisations, where the sizes are large corporations, medium sized firm and small sized business and the types are as private and public and voluntary sector. In private sector, companies are owned by private proprietor and in the public sector, the organisations are owned by the government of the country. In the voluntary sector, whereas profit or non-profit firms who are focusing on maximisation of the social welfare as a whole. In the private sector, the company is Lidl and there are British Council and Oxfam in the public and voluntary sectors respectively. The organisational size, scope and structure will be evaluated further.

• Lidl

            Lidl is a famous discounted super market chain, based on Germany and it has more than 10000 stores across the Europe for delivering high quality products and efficient services to the customers. It mainly developed supply chain through discounted super market chains for strengthening their customers where more than 315000 employees are serving the consumers in the market efficiently (Lidl, 2019a).

The scope of the business is such as,

• Maximising the organisational profitability and sales volume in near future through enhancing the operational activities
• Creating values for all the stakeholders
• Strengthening the global supply chain
• Successful global expansion of the business

 

• Public sector company: British Council

British council is the British organisation, specialising on international culture and educational opportunities. The organisation works for 100 countries and it aims on promoting a wider knowledge of the United Kingdom and the English language by encouraging the culture, scientific, technological and educational co-operation. It has been founded in the year of 1934 and it serves worldwide with their best teaching professionals, effective infrastructure and organisational structure (British council, 2019a). The size of the company is also large, and it is efficient to serve the people who seek for personal and professional development and the future scope are such as,

• Providing help to maximise personal an professionals development
• Increasing the numbers of students for motivating them with enhancing creativity and innovation
• Expanding the organisations across the globe through maintaining professionalism
• Voluntary sector company: Oxfam

Oxfam is a confederation of 19 independent charitable organisations and it focuses on the alleviation of global poverty, led by the Oxfam international. The organisation has been founded in the year of 1942, and it is an international non-profit organisation, where the aim of the organisation is to mitigate global poverty, disaster relief, policy research and pro-migration and advocacy. As per the annual report and accounts 2017/2018 Oxfam GB employed 5,274 staff which is increase of 3.8% on the number compare to last year reports. The organisation is a large sized firm, where it is successful to serve the people around the globed through Oxfam international. The scope of the business is to take care of the people, who are living under the below poverty line and help them efficiently to resolve their issues, so that their basic needs can be managed. The vision of the organisation is to work together internationally to enable the people to exercise their rights and manage their own lives. The mission of the organisation is to develop the programs to address the structural causes of poverty and related justice (Oxfam, 2019).

The purposes of the company are such as,

• To make the business sustainable
• To expand their operations across the globe for social development

Through the services, the organisation is successful to take care of huge numbers of people around the international borders, where it has the scope to eradicate the issue global poverty and help the people to live a normal standard of living. The scope that the organisation has to include the people, who are suffering from the issue of poverty and it further provides an opportunity to the organisation to provide proper support and care to the people with food, shelter, health care and water, which are basic social services that the people have right to access the services in living in the society.

LO 2 Interrelationship of various functions with the organisational structure

P3 Explaining relationship between different organizational functions.

There is effective linkage between the organisational functions and organisational structure where in the recent of globalisation, the multinational corporations are trying to develop effective organisational structure according to the organisational functions through which it is easy to run the business operational activities strategically. Lidl is a hierarchical functional organisational structure with two main features, hierarchy and function based. The organisation focuses on the organisational functions and according to the functions, proper organisational structure has been developed so that the leaders and the managers can follow the hierarchy and fulfil the objective of the organisation. Vertical hierarchy with proper authority is managed well in the organisation, where the company is successful with the proper organisational structure, where there is CEO at the top of the structure. Under the CEO proper management team is there to handle the different activities and department of the organisation.

On the other hand, Lidl is a large organisation, serving worldwide and in this regard, there activities such as management of geographical areas, products and services, customers, departments and divisions are crucial through  managing the operational activities, where the operation manager is responsible to handle the activities of transfer of raw materials, maintaining warehouse for storing final products and distribution of the final goods and services across the international borders as per the market demand. These are managed by the operational manager and the employees, who are responsible to manage the organisational operations such as in store staff, suppliers, distributors etc. In addition to these, the marketing function is another important part of the organisation, where the marketing manager designs and develops proper tactics to promote the brand in the market. The interrelatiosnhip between organizational fucntion for achieving objectives are as follows:

            Interrelations between Marketing and finance: They both are the pillars of organisation without of these functaion Lidl do not run their operation in effective manner. The markting is completly responsible for promoting products and finance provide funds for paying its expenses. On the other side, marketing team generate funds with marketing activity and hand over to finance. Through both are linked with each other (.Moroni, Arruda and Araujo, 2015). So without marketing sales, target and publicity of products of Lidl do not enahce for increasing sales of company in effective manner.

            Interrelationship between human resources and production: both are interlinked with each other within the organization. The human resource department is responsible for hire employees and best candidates for production team by covereing marking criteria. On the otherv side, production department have to sets and provide information to human resource team for proper hiring. Through taht employees are highered properly and ready to gove hard contribution for achieving goals and objectives.

            As the retail industry is competitive and it is necessary for the company to grab the market opportunities and gain high market share as compared to other retail firms in the market, it is the major strategy of the organisation to develop effective marketing mix strategic planning, in order to improve brand visibility, so that they can retain the long run and trustworthy customers for the benefits of the firm. In this regard, the marketing manager is responsible for developing the marketing planning as well as supervise the team members to promote the brand, there are content developer, digital content management, creative workforce and efficient technical team who can handle the online activities and promotional activities through which it is possible to strengthen their customers base by promoting their organisational products and services.

            The organisation tries to handle the operational activities through store expansion, so that the brand image and product promotion can be handled well and the customers can access their products and services, directly from the market. In this regard, the market managers and regional vice president are responsible to operate above the functions by distributing the handling the products and services efficiently. In addition to these, the in store management team includes the general manager, assistant manager and co-manager so that it is possible to handle and mange the employees at the store and provide proper training for maximising the customer service excellence. In addition to these, the in store management includes the support manager, customer service supervisor, as well as the finance team including cashiers, stockers ad sales associates for which it is possible to serve the customers in a better and efficient way. Hereby, it can be stated that, the organisational structures linked with the functional activities of the firms and in the recent era of globalisation, there is high competition in the market and for gaining the market share, the companies are trying to develop the organisational structure and legal hierarchy according to the business functions so that the mangers and the employees can follow a suitable path to manage the functions and develop effective tactics to run the organisational activities efficiently.

LO 3 Analysing the impacts of macro environment on business

P4 Positive and negative impact of the macro environmenty by using PESTLE model.

Through the PESTLE analysis, it is effective to analyse the macro environment and its impacts on the business activities of Lidl. The political, economic, social as well as technological, legal and environmental factors for the organisation Lidl will be evaluated further,

ü  Political factors:

There is highly stable political environment in the country and apart from that, the international trade is developed efficiently where the government of the international countries are cooperative and truing to enhance international trade. Supporting globalisation and increasing the wage policies and practice of the government are also having positive impacts on the organisation to secure future development with the help of the government.

ü  Economic:

Considering the economic factors, there is adequate increase in the National Income and Gross domestic products and international trade which contributes in country’s economic development. In this regard, the employment is also increasing across the globe, where the industrialisation and globalisation provide a scope to the firms in the recent years to increase the productive activities successfully. Hereby, the economic stability and growth are effective or the organisation Lidl to invest more in the organisation and expand their brand across the globe; hereby the economic growth has positive impacts on Lidl.

ü  Social:

In the recent era of globalisation, social development is a contributing factor in the organisational context. The literacy rate and educational activities in the society s increasing at a rapid rate and it further helps to ensure social development. It is effective for the organisation to improve their activities in the society and retain more customers successfully (Leeand Ha-Brookshire, 2017). Apart from that, the preference of healthy lifestyle and diversity in culture further provides a scope to the business Lidl to conduct their operations successfully. The cultural diversity can be managed well, where the urban immigration is effective to improve employment in the society and ensure social development. Hereby, social development has positive impacts on the organisation Lidl to run their business activities strategically in the market (Thompson and McLarney, 2017).

ü  Technological:

Technology is playing an important role in the era of technological advancement and globalisation, where the organisations are beneficial to invest ion technological enhancement in order to improve the creativity and innovation in the business. Big data analysis, cloud computing as well as e-commerce growth has positive impacts on the firm where Lidl is efficient to manage the customers worldwide and retain them for long run and it has positive impacts on the business activities of Lidl in doing their operations internationally.

ü  Legal:

There are various legal compliances in doing business internationally, the major changes are such as strict employment laws after such urban immigration, protection laws, the inclusion of tariff and quota system on the international trade, as well as environmental friendly laws and legislations which have negative impacts on the business, as it deteriorate the first pace of business (Sandbergand Mena, 2015). Legal compliances are strict and it further has negative impacts, where Lidl face difficulties in international trade due to tariff and quota system as well as copyright and intellectual property rights. On the other hand, intellectual property rights and customer protection law are effective to run the business ethically and strengthen their customer’s base.

ü  Environmental:

The environmental activities such as tax norms, regulations for food safety and social development and regulations of employment play in both negative and positive way. These are positive for Lidl to run their business in an ethical manner, but apart from that, it raises complications in doing the business internationally as the employments laws and the international trade laws differs in each of the international borders. On the other hand, the activities of reducing greenhouse gas emission by raising the use of electric cars, using renewable resources are effective and this has positive impacts on the operational activities of Lidl to secure future sustainable development (Hammad, 2015).

LO 4 Determining the internal strengths and weaknesses of the business

P5 Conducting internal analysis of company by using SWOT analysis.

For analysing the internal and external analysis of Lidl company here is uses SWOT analysis for company. In that two aspects of SWOT analysis are Strength and weaknesses are consider as a the internal aspects and another two like opportunity and threats are external factors. Through the SWOT analysis, it is possible to analyse the internal strength and weakness as well as identify the future market opportunities and threats for the firm.

Table 1: SWOT analysis

Strengths	Weaknesses
Loyal customer base Great pricing policy Good locations Efficient employees Revenue generation Financial stability Cost leadership strategy	large inventories Stopped buying in America Unfair labour laws Lack of product selection facility for the customers
Opportunities	Threats
Expansion across the globe Improving local communities involvement Social media marketing High demand for fashionable products Enhancing creativity and innovation Promoting green world Promotion trade fair and labour laws e-commerce business expansion	Current economic fluctuations Tariff laws Employees unions High competition Costly operations for retailer

 

• Strengths:

Lidl has customer base, where the company is efficient to serve better products to satisfy them. Moreover, strong employee base and the product differentiation help the bran to sustain in the business and fulfil the choice and preferences of the customers as a whole. Additionally, Lidl tries to enhance their performance by strengthening their supply chain and in this regard financial stability and the organisational asset are other strengths of the company, where Lidl tries to establish the brand strategically in the market (Lidl, 2019b). The macro economic factors are related to the strengths and weaknesses of the company, where the company tries to utilise the political stability in the UK, strong customer base and social group, social media marketing and economic growth as well as environmental sustainability and technological advancement which contribute positively in doing the operational activities of Lidl.

• Weaknesses:

The major weaknesses of the firm are such as large inventories, stopped buying in America, unfair labour laws and lack of size selection facility for the customers which deteriorate the smooth pace of operations across the globe. The labour laws become more complicated and it is difficult for the organisation to manage the employees across the globe, where there are more than 2.2 million people working for the organisation.

• Opportunities:

There are major opportunities forth company Lidl which provides a scope to the business to explore new opportunities and expand their business internationally. The global expansion is one of the great opportunities, which provide a scope to explore new market for expansion. In addition to this, the technological advancement and enhancing creativity and innovation in retail industry are also providing opportunities to the company to run their business internationally by developing effective strategic planning to serve the customers in a better way. Moreover, social media marketing and promotional tools are effective where the brand has the opportunity to utilise the social platform for successful promotion of the organisational products and services. Additionally, the e-commerce industry is growing rapidly and it is further beneficial for the company to utilise the e-commerce platform and retail the long run and trustworthy customers through online activities. This is also beneficial for Lidl to secure future sustainable development. Apart from that, the restructured employment laws and fair trade activities are also effective for the organisation to run their operational activities effectively across the globe. The organisational also has the scope to retain the customers who love fashionable outfits and creative products. the changing preference of the customers towards innovative products is the opportunity for Lidl to enhance their creativity to retain and attract the audiences in the market.

• Threats:

The major threats for the firms are such as high competition in the global retail industry, presence of substitute products and services in the market, and costly operational activities, which deteriorate the chances of gaining competitive advantage in the global retail market. Apart from that, complicated tariff and quota and employments rules and legislations have been increasing at a rapid rate which hampers the smooth operational activities in the market.

P6 strength and weakness are linked with macro environment.

The strength and weakness of Lidl company are linked with macro environment are exploer here in proper manner. The compamy have loyal customers base which is help to increase profit margin of company in effective manner beacuse company is use better technological advantage at market place. This strength loyal customer base are linked with technological factors of macro environment in effective manner. Political stability enhace the productivity and performance of company in effective manner, it allow them to wok with earliar structire without making any changes (Newman, Schwarz and Ahlstrom, 2017). With the help of skilled and talented staff firm will perform better when any chances occurs related to technological advantage. By using ths digital technology organization gain hire opportunity for generate awareness of their products at global level.

On the other side, weakness of Lidl is unfair labour law which is directly linked with legal factor of macro environment. In the legal aspects various rules and regulations are come and affect to business. Like the employee wanted to do work from home in any emergency in that case company need to allow them as per labour law. As per that both weakness and legal factors of macro environment are interre linked with each other.

CONCLUSION

It can be concluded that, the scope and size as well as organisational functions and structure are effective to be analysed to understand the tactics of the firm to perform better in the market. Lidl follows the hierarchical organisational structure according to their functions which provides a scope to the organisation to run their operational activities efficiently and grab the market opportunities. The PESTLE and SWOT analysis in this study is effective to analyse the macro and micro environment and its impacts on the business of Lidl, where it focuses on creating values for all the stakeholders, mainly for the customers by providing quality products at effective price through technological development, enhancing creativity and innovation, environmental sustainability and utilising own strengths and opportunities of market expansion across the international borders.

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