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Unit: 14 Business and the Business Environment Level 5 BTEC HND Business

Introduction

Business environment is dynamic in nature and when it change gives direct impact on working of companies. The same is of two type’s micro (internal factors) and macro (external factors): micro consider all such things which are going on at small level like suppliers, customers, competitors and several others. On the other hand; macro includes wide level of factors such as political forces, market condition and so on. This whole assignment is based on the Habitat retail Ltd. Which is enterprise of retail sector founded in 1964 on 11th May as well founder of this firm is Terence Conran and Philip Pollock (Lee, Olson and Trimi, 2012). They are offering their goods and services only in United Kingdom and products serving by them are home accessories, furniture and upholstery. Below mention assignment has sub parts in four tasks i.e. different types, size and scope of organisation. Apart from this interrelationship of various function in the firm and how they are linked with structure of company. This also throws light on optimistic as well pessimistic impact of external environment on day to day working of business. In the last part of report SWOT and PESTEL analysis of the respect

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Task 1

P1 Different types and purposes of organisations: public, private and voluntary sectors and legal structures

There are three types of organisations public, private and voluntary sector. Description of these is given below along with this purpose also:-

Public sector: These are such companies which is controlled and managed by government of particular nation. Public company charge minimum amount of the services which they are providing to customer (Reeves, Love and Tillmanns, 2012). Because their main motive is providing services not formed for profit maximisation. Best illustration of Public sector organisation is child support agency which is introduced in 1993 on 5th April but this agency renders their offerings by the request of children’s parents. In that situation when they are out of the country or because of some agreement. Capital which is necessary for running business can be generated through charity, funds and donation given by peoples as well parents also gives money when they are giving responsibility of their child. Products provided by them are public goods, merit and essential. Legal structure of public sector company-

  • Central government department: There are some companies which are directly operated by the government of that particular country. It sub part in state, local and regional sections thus, when some firms comes under these three then managed by central government department.
  • Local authorities: This is a type of public administration formed at lowest tires under state government and in some states also have organisations which are running by legal administration (Rossi, Vrontis and Thrassou, 2012).

Private sectors: Businesses come under private sector have their own separate legal entity and these are mainly run by owner of the company but in some situation it business can be started in partnership also. Private Sector companies are running with the motive of profit maximisation because the person who are running these want standard of living for themselves as well as for their family member also. Habitat retail Ltd. Which is a retail sector company introduced in 1964 on 11th May and founder of the same is Terence Conran and Philip Pollok. They are offering only in United Kingdom and goods serving by them are home accessories, furniture and upholstery. Respective enterprise is working for earning money for their welfare. Legal structure of the Private sector company is explained below:-

  • Sole traders- They are individual person who run business and don’t have their individual identity from their company (Pham, Segers and Gijselaers, 2013). He/she whoever is running business is liable for all the losses and debt along with this they are the owner of all the profits earning by them.
  • Partnership- when there is no single owner of firm it is known as Partnership Company as well they can be two or twenty. The entire partners are liable for everything in same enterprise according to the ration of their invested by them. This is the most common and easiest way of raising capital and fund which needed for doing day to day operations of business.

Voluntary Sector: these are also non profit organisation running for social welfare and society. Apart from this it is distinct from public and private sector companies Wellcome Trust is the voluntary organisation of United Kingdom introduced in 1936 by Sir Henry Wellcome they mainly focus on Biomedical Research there are 2,057. This is the largest firm which provide services for research and the same is one of the largest in the entire world. Legal structure of this voluntary sector company is given below:-

  • Trust- there is some trustees who provide fund for operation of overall company. As well these types of organisations don’t have any members or owner but only have trustees (Gharajedaghi, 2011). For all of them written deed is prepared which shows appointment and retirement of each and every person.
  • Unincorporated association- these are management committees of enterprise or they also name as council with them a constitution as well don’t have any disconnect identify from trustees.
  • Others- Royal charter bodies, community Interest Company, co-operative society, community benefit and several other organisation (Van Vuuren, Roberts-Lombard and Van Tonder, 2012).

Above discussion talk about various types of organisations and there legal structure. Which help in simple understanding such firms consider in sector public, private and voluntary.

P2 size, scope and range of organisation

Public Sector Company and its overview- Child Support Agency is private sector Company which is formed with the motive to provide support to the Act which is established in 1991 for care and safety of children. They work for both kids who have parents or don’t have when some persons are not living in same nation with their son or daughter then give authority to Child Support Agency to take care of their babies for this service the payment is done by them guardian or parents of children (Crane and Matten, 2016). On the other hand if someone doesn’t have their family then government give funds for them to support and taking care of these children. Mission, vision and value of child support agency is given below:

  • Mission- employs most excellent people and resources through which support to government is simple and brings new idea, cost effective. Thus, there will be appropriate outcomes and provide healthier services to children and families to which they are joined.
  • Vision- when families are spends money of Child Safety Agency for their children then they have to do fair practices with their clients and customers as well direct also if they need. Apart from this it aids father, mother and family member in accomplishing success.
  • Values- customer focused, loyal, ethical, accountable, reliable and many more.

Child Safety Agency is executive agency of department for work and pensions and in this parents pay amount for services they are grabbing (Welter and Smallbone, 2011). This is given in the circumstances when parents have divorce, marital separation and annulment or can me various more reasons (Elliot, 2011).

Private sector company- Habitat is a limited firm which comes under private sector introduced in 1964 on 11th May. Respective business parent organisation is Sainsburys Argos and website is www.habitat.co.uk ‘they are providing several of daily consumable goods like home accessories, furniture and upholstery. Retail industry is having huge competition and main reason of this is numerous new firms are entering in this sector as well now a day’s many small stores are opening in colonies which give wide impact on business of others same sector organisation. The respective enterprise has its online site also which serving in United Kingdom, Germany and Republic of Ireland it was launched in 2009.

Mission- To grant superior quality of goods and services at worldwide level. Products must be satisfy the person they are offering in effectual manner main is grabbing entire customers of retail sector and switch them into loyal (Cotter and Fritzsche, 2014). .

  • Vision- Severs best quality of goods at least amount then others so it will be easy to create distinction in their products with others enterprise. Because satisfaction of customers is necessary.

Voluntary sector- This include organisation which is working for social and society welfare with no motive of profit maximisation because they are non profit companies. Welcome Trust is doing biomedical research in United Kingdom just about there are 2,057 employees working. The same trust is described by financial times which provide non- governmental funding for scientific research and largest in the world. Principles of Wellcome trust is to improve health of their ever client for whom they are working. Uses there resources, talent and energy in best manner so they can accomplish mission and vision of organisation.

  • Vision- Wellcome Trust vision is to accomplish extra development in health of human beings and animal for whom they are doing research.
  • Mission- To do work in such a way that no other is doing and bring sharp mind person or innovative in the area of biomedical research and medical humanities.

Task 2

P3 Relationship between organisation function and how to link with objectives and structure

Retail sector is broad and main part of business environment because it fulfils day to day needs of individual and the same industry has large number of companies some of them are ASDA, TESCO, ALDI and several more. They are providing their goods and services in different countries as well there are mainly three types of firms public, private and voluntary. Each and every company is different from each other in nature, objectives, working and for several other reasons also Zott, Amit and Massa, 2011). For example public enterprises charge least amount for the services they are giving and private organisations charge amount with the motive of profit maximisation because they are working for earning profit. So they can give better life to their family members. Whereas, this one is last who is named as voluntary company which work for social welfare or non profit firm. Habitat Retail Ltd. Is the private enterprise and their foremost objective is to be converted into world largest and most popular. Products and services offering by customers by the same organisation in good in quality and affordable by everyone this is the main reason because of that customer are satisfied.

Function of such companies is completely connected with their objective, structure and entirely depends upon the several departments and the person who are doing work. In association also there are various departments like finance and accounting which maintain records of overall funds available and invested in day to day activities or for production purpose. As well these are important for overall working of business. Marketing department is that who do advertisement and promotional actions for the fresh goods and services which is launched by same firm in market this whole procedure provides information about the products to their target customers. This aids in generating more and more income which is essential for continued existence in cut-throat competitive business environment. There is manufacturing section also in which goods are manufactured which need analysing demand and wants of customers then after that procedure of production must be started. Instead of this for this there are leader and manger in the company who manage working as well employees also.

Every enterprise have their stakeholders they can be from inside the company (owners, workers and management) or outside also (suppliers, community etc.) and are of two types mainly these are internal who is openly concerned in the activities of company and Play crucial role in the achievement of business. On the other hand, secondary is not that much main for companies and don’t gives direct impact. each type of holder have dissimilar motives like profit, growth, salary, quality of goods rendering by enterprise, fair and long term contract, interest, deposit, tax, donation, fair trade and many more (Hair, 2015).

Habitat retailer initially has to fulfil primary objectives because these are more important and essential for growth and development of business. After that then they have to focus towards the secondary stakeholders. Although, they have there own several theories i.e. normative theory, descriptive and instrumental. So organisation has to take care of their stakeholders because they give huge amount for development and growth of business.

Therefore carrying out activities of company gives impact on their structure and culture because if nonstop going process is not done in proper manner then ambience of company will effect and because of that personnel’s working can change their behaviours and manner of doing work automatically.

Every functional department are having major connection between each other because all the elements are interlinked with each other as well as interdependent upon each other. For example; funds is highly indispensable for accomplishing various other business activities such as; marketing is only possible if there is a presence of sufficient funds. It means sales department and finance have a major connection. Another example is about marketing and production like if sales section is failed in understanding the need or choice of consumer then manufacturing department can't able to design suitable product. Hence, it has been understood that every department are directly or indirectly linked with each other in various manner.

Task 3

P4 Relationship between organisation function and how to link with objectives and structure

A macro environment is the exploit that refers to the economy as a entire, a small piece of in an suitable part or field. In mostly, theworldwide environmentincludes propensity in gross domestic product (GDP), expansion, employ, and spending, monetary and fiscal policy as well several other. Macro environment is broad in nature and when it modifies then gives wide impact on operations of business and need day to day activities to be analysed (Low, Chen and Wu, 2011). The macro environment is brusquely associated to the ordinaryworkas quarrel to the performance of a particular business sector. Below the mention PESTL effect in habitat retailer ltd. Description of this is given below:-

  • Political effect -The political environment can gives their wide and direct impact on Business Company in several many ways. It includes all the risk taking factors mainly by the government. You should observe so that the economical aspects have the skills to change the outcome. It can also modify political approaches at district to combined level. Communities should be healthy to bond with the local and global event of official. Variety in the ministry practice combines the legitimate factors. The alteration can be prudent, legal or social. It could also be a mixture of these elements. The political environment stuffs various things including economic atmosphere of a state and international inventory group of trade. Raise or reduce in taxcould be an instance of a political factors. It needs changes in present process and policy of organisation.
  • Economic effects- There are varied monitory aspects that must be agreement as the undulating power production. The final apparently it may be capitalisation as this was identify in an article of shareholder as “the big difficult” to declining strength and that it is the essential to any ultimate development. In form of understand the real amount of co-worker with progress tidal strength of proof published. It was establish that ordinary value at a mean property were expenditure in million in capital expense per megawatt and million per megawatt per year in running consumption over the business expected utility entity.These can be linked to in and out of new enterprise which gives major impact on working of existing business.
  • Social effects- Social aspects in the chosen organisation of overpass by planner at fresh lap, probably real cost of fault for tidal planner as the club of shareholder in certain cases differed and alike cancel the projects finally. The public query was toted out after thousands of mark was collected research and evaluation as they would suffer from necessary attraction of the surrounded area. This feature the idea that major of civil allow renovate the energy, but with opposition to particular projects on a more local level remaining frequent officially with regards to not in my back yard syndrome.
  • Technology- The strength to undertake some of the world’s mainly overflows of full of intensity immediate in United Kingdom with a piece of technology that could have to understanding impact on the country worldwide energy bearing. The developer with the most gain power and abundance level may be seen as the most appealing to potential investors, but with the technology after tidal energy still in its early stages there is still big danger in the advance moment, with this real one of the major reasons why banks have not yet spend in the technology. Habitat Retailers also have to utilise new or updated technologies which attract more and more customers for them but for it there will be necessity of lost of funds because it is a costly process.
  • Legal- At present constitution and management guide costal and cursive application devices are very problematic, with the office culture, Food and Rustic employees. Classified the need to shorten them in order to reduce legislative risk for developers. Even if this simplification goes through there are still a number of senatorial rules which apply to tidal energy agent within. At world level there is the United Nations Convention on Law of the Sea which “lays down a comprehensive regime of charge and plan which are relevant to all oceans and seas to authorised rules to conduct their uses. This gives the absolute state the force over water within 200 nautical miles of its coast amongst other rights. They may be change because of changes in government and according to then companies also have to modify their existing policies and laws on which they are working.

Above mention information assist business for improvement in many ways which is necessary and require analysis on time to time basis. When alteration made in all these it gives both impact positive or negative. So these must be examining in proper ways.

Task 4

P5 Internal and external analysis for identifying strength and weakness

Business environment is divided into two parts internal and external. As, extrinsic atmosphere consist PESTEL analysis then intrinsic study acquires SWOT matrix in order to find out strengths and weaknesses of corporation along with grabbing all opportunities and eliminating all possible threats. To analyse all aspects in most efficient manner then TOWS matrix should be install in working pattern of venture. Internal environmental includes employees, employers, mission, vision, management and many more. On the other hand, external involves stakeholders, shareholders, suppliers, customers, competitors, government etc. In addition to this, Habitat Retail Ltd. is a venture of which is one out of all largest prominent in United Kingdom.

Swot Analysis Metrix

Strengths

  • In present time, retail store owns wide range of associations and franchises, whit help of these sub-ventures retail store become leading financial organisation in UK.
  • Reason behind success of retail store group is prominent channel of distribution of services and by taking aid of this element, company serves their clients very efficiently.
  • Venture is having successful track record of evolving new and improved services.
  • Regarding to brand portfolio, over the years this association has put their fund in developing strong brand portfolio.
  • Habitat Retail Ltd. is a successful business venture which is good in implementation of ventureing services for clients. This action is good in generating results and revenues streams in their business operations (Crane and Matten, 2016).
  • This venture is having talented labour because Habitat Retail Ltd. invests its funds in training and development program of employees. This program helps employees in enhancing their skill and specialisations.

Weaknesses

  • This venture is not able in facing challenges that are present in marketplace by new entrants in the same segment and along with this venture also lost their small market share.
  • venture has necessities of putting fund in implementing innovative techniques in their business operations so that all work could get completed with maximum efficiency and customer should get high quality services.
  • Employees financial planning should be done in effective manner by considering all asset and liquidity ratio (Chesbrough, Vanhaverbeke and West, 2014).
  • Controversies that are related with internal audits of retail store is a major weakness that sabotage image of corporation among customers.

Opportunities

  • According to need of clients company can launch novel services which should provide additional benefits and this action is able in developing business expansion opportunities for firm.
  • Lower inflation rate will make lesser interest rates and more people would be able in buying loans.
  • Novel innovations in technologies helps in working operations and are bale in providing better services to clients. This action helps in gaining consumer loyalty and trust towards company. This action then further develop stronger customer base by providing higher quality services.

Threats

  • Competitors are more eligible in accepting and inventing new technologies and their this kind of behaviour is reducing overall market share of association in industry.
  • There are some law issues that decrements trustworthy situation of organisation in front of clients.

In retailing industry, business rivals are increasing very rapidly and association is not quite eligible in competing with them.

P6 How strength and weakness interrelated with external macro factors

Business environment has capability to affect arranging operations of a business venture in positive and negative manner. It entails two aspects, i.e. internal and external environment which is briefly defined as under: -

Political and legislative factors – In accordance with political conditions of a nation, working activities of a business organisation get high affects. Although, political condition of UK is not so much stable especially after economic recession. Here government has regulated higher taxation policies and VAT rates which must follow by all business organisations. On the other hand, British government also regulated strict import and export laws. Therefore it can be said that political environment of UK is not in favour with corporate associations.

  • Strength:- Political bodies are always engaged in designing various types of norms for corporate companies which is sometime highly beneficial for overall association and act as potentiality. For example; corrective norms are giving potentiality to staff members to fight for its rights and duties. Thus they can fight for their rights and authorities so that they can easily accomplish business activities in proper manner. Along with this, organizational policies are mainly depend upon political rules and regulations in order to minimize probabilities of mistakes.
  • Weakness:- Sometime norms and rules are act as obstacle for company because it may control companies while expanding their business across the various borders. In fact, enforce to follow necessary terms and conditions which maximize the workload of managers.

Economic factors – After financial crises in 2008, UK economy went down but as per the time passes and Brexit economic condition of the nation is booming up. Basically, economic factors involves those aspects which internally affect a firm allot, such as- interest rates, bank rates, unemployment, disposable income of people, poverty etc. All these components incorporates with pricing of funds, monetary enrichment, expansion of market share and so on.

  • Strength:- Economical rates or development is automatically beneficial for corporate companies because it helps in providing employment opportunities to unemployed people. Thus, company is focussing in understanding each or every aspects that are changing at marketplace for acting as per requirement.
  • Weakness:- Sometime inflation or deflation rate is influencing organization in various manner such as; affecting consumers choice, changes in market trends and so on.

Social factors - In this modern era, needs and desires of customers are rapidly changing and it is essential for Habitat retail Ltd. To deliver satisfaction level to target audiences of the company. As the firm spend one third of its profits into research and development activities, it is one of the main strength of the company. It supports retailing organisation to recognise needs and wants of customers.

  • Strength:- It helps an organization while manufacturing company products as consumer are liable for final consumption. Thus, it helps in controlling the extra cost as well as aids in making positive relations with various clients.
  • Weakness:- According to this element, cost of manufacturing get increased due to which workload of an association is also maximized.

Technological factors - Habitat retail Ltd. is using new and innovative techniques of production so as to improve production level and efficiency. It is also helpful in attaining high competitive advantage and expand market share of the company. Adoption of digital tools and techniques supports to raise innovation and generate attractive products for customers.

Environmental factors – In present scenario, everyone is concern towards environment. Several manufacturing companies are not aware about environment which put negative impact on customers' mind. Ignorance of fulfilling social responsibilities also influence sales and profitability of companies.

Conclusion

As per the above discussion it has been concluded that business environment is dynamic and it modify because of several things. Along with this it gives wide impact on policies and procedure of association as well this also needs alteration in their present working for present and future growth or development. Business environment is of two type’s micro and macro both of these gives their direct impact on working of business. Companies comes in these is divided in three sectors public, private and voluntary. Although, for analysing all these elements market research is conducted by owner of company which includes SWOT and PESTL. For growth and development this is necessary or important work which must be done by enterprise.

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