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Unit 3 Business and the Business Environment Level 5 Regent College

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INTRODUCTION

Business environment refers to overall internal and external factors which impacts on operational activities or procedures in an organization. It involves several elements such as staff members, customers, management, supply, stakeholders, legal policies, technology and many more. Moreover, these components may impacts in positive or negative way so tat it is essential to thoroughly analyze all of them to take appropriate steps for business welfare (Hilton & Platt, (2013). The present report is based on Cadbury which is a British multinational Confectionery company wholly owned by Mondelez International. It was founded by John Cadbury in the year around 1824, almost 194 years ago. Additionally, this firm is known for several products such as Dairy Milk chocolate, the Creme Egg & Roses selection box and many other confectionery products. This assignment will focus on different types of organizations like private, public and voluntary with their legal structures along with size as well as scope. It also include various organizational functions and positive & negative impacts of eternal factors along with SWOT analysis.

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TASK 1

P1 Different organizational functions relevant to objectives and structure

Every organization has various operational function which are carrying out on daily basis for generating required outcomes properly.

Human resource Department – This can be described as an important section of an organization having role to recruit candidates to fulfill overall required position. It is very essential in terms to select desired individuals for specific designation in company so that they can fulfill roles and responsibilities in proper manner (Deasy and et. al., (2016) . HRD have duty to hire team for marketing to promote products or brand which helps to increase sales of Cadbury.

Finance Department – The funds are mandatory resource which is required for very small activity of business from starting to the end. They have a role to maintain records of overall of credits and debits along with making budgets for various procedures. Moreover, they are helpful to marketing section in terms of providing funds for conducting effective promotional activities to attract more customers towards Cadbury.

Research and Development Department – This section of very company conduct research to determine actual needs or people and analyze trends of market for conveying appropriate information to production department. In context of Cadbury, they can render real taste of people to marketing team which helps to to conduct efficient promotional campaigns to gain objectives of sustaining position in market competition (SavrulIncekara & Sener, (2014) .

Marketing Department – This department is responsible for conducting promotions of products to make people aware about brand and making them convince to prefer the same. Additionally, it is helpful to attract new client along with retaining the current ones for attaining growth objectives of Cadbury (Hamilton & Webster, (2015) .

TASK 2

P2 PESTEL analysis with positive and negative impacts

There are kinds of factors which are included in business environment are required to be thoroughly studied for evaluating their favorable and unfavorable condition for business. It include several external elements such as political, economic, social, technological, environmental and legal which impacts positively or negatively on operations of an organization. In context to Cadbury, they are required to conduct analyze of external components of business environment which are as under –

Political factor – This can be described as political stability of particular place where company is going to establish business to grab more customers for brand and gain better profitability as well. It include various norms of government of specific country which are flexible because it is changeable as per authority of different political parties.

Positive impact: It involves about favorable political condition of particular place which facilitates to conduct easy transportation of raw material and other resources proper to run business successfully in Cadbury (Moutinho, (2011) .

Negative impact: Unstable political situation of specific geographical area creates many problems in carrying different activities which results into non- achievement of targets on desired time in given company.

Economic factor – This factor include several elements like taxation, custom duties, inflation, interest rate and growth rates which impacts on practices of business. It is necessary to take appropriate decisions as per economic condition by Cadbury.

Positive impact: If inflation takes place and price of products will reduced then sales of brand will start increasing and mostly people prefer them which impacts positively on profits and brand image of selected firm.

Negative impact: When taxation rate increased then it will directly impacts on profitability of business which is not favorable for growth of Cadbury.

Social factor – This can be described about cultural or religious values of people which impacts on their choice of purchasing particular product and usually they skip product against their beliefs (Kew & Stredwick, (2017) .

Positive impact: If firm will organize marketing events through respecting overall cultures then it is beneficial for influencing customers to buy goods of Cadbury.

Negative impact: It include that minor mistake in conducting promotional activities may create major issues between people and impacts negatively on goodwill of given company.

Technological factor – There are various kinds of technological trends which are observed in market in terms of several innovative techniques, applications, software and machines. In context of Cadbury, they can utilize creative technological aspects for welfare of business. .

Positive impact: The innovative applications and machines can be utilized by given company as it provide support to improve effectiveness of operational procedures. It will facilitates to manufacture better quality of goods in limited period of time and achieve desired goals successfully (Cai & Yang, (2014) .

Negative impact: This includes that a minor mistake of technological equipment may corrupt whole data and create major problems in operations which is considered as loss for Selected enterprise.

Environmental factor – There are various kinds of environmental issues which are required to focused by organizations while conducting operations. Moreover, it involve global warming, pollution, extinction of species and ozone depletion which are generated due to several manufacturing procedures of businesses. In case of Cadbury, they are required to be make an appropriate policy to contribute for reducing environmental problems.

Positive impact: In this part, contribution for decreasing natural issues provide help to boost up brand image in front of government as well as people of country.

Negative impact: Avoiding responsibility towards nature may create legal problems which become barrier for conducting operations properly.

Legal factor – This can be described about various kinds of legal rules o regulations which should be followed by each and every organization properly. It is mandatory for Cadbury to adopt legislation to run business successfully (Belás and et. al., (2014) .

Positive impact: Legal norms provide an appropriate direction to firms for choosing correct path for running business which is helpful to gain prosperity and growth.

Negative impact: Several legal rules interrupts and may become barrier in adopting certain techniques which are helpful for achieving success of business.

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P3 Internal and external analysis of organization to identify strengths and weaknesses

Business environment include both internal and external factor which is an important analysis to facilitates correct decision making. It provide help to understand actual situation of overall external elements which results into strengths and weaknesses of company. Moreover, it is essential to determine actual strengths, weakness, opportunities and threats by carrying out an effective as well as efficient SWOT analysis to take an appropriate action for welfare of business (Sodeyfi, (2016) . In context of Cadbury, several strong and weak points are identified which are as follows –

Strengths

  • It has high brand value in market which is beneficial to retain customers for a long time to ensure long- term profitability of company.
  • It has an effective research and development section which determine actual taste of people which facilitates to grab better market share which is around 70 %.
  • They have better pricing strategies which are comfortably affordable by common people due to that it is more preferable brand (Cronan and et. al., (2011) .
  • Utilization of innovative technologies in manufacturing which helps to produce build of units in limited period of time and facilitates to fulfill demands of customers properly.

Weaknesses

  • Due to having teeth or gums problems due top which people avoid to purchase chocolates for their kids which reduce customer count of brand.
  • It also include that its sales tend to be seasonal and few or good are a bit highly priced which are not affordable for every person as per their budget of income.
  • This involves about lack of penetration in rural market.
  • Additionally, more people are suffered from diabetes and cholesterol disorders which impacts on sales of brand due to avoid purchasing products (Ratten, (2014) .

Opportunities

  • They have an opportunity to increase share through targeted acquisition for expanding business along with improving profitability.
  • It has an appropriate chance to provide its product to people at global level through achieving international acceptance of goods.
  • They can implement several innovative thoughts or ideas for boosting up quality of products in terms of grabbing more profit share of market.
  • They can adopt present trends of creative technology to improve productivity as well as profitability of company (Boons & Lüdeke-Freund,(2013) .

Threats

  • It faces a tough and cut throat competition with other competitors like Nestle.
  • The competition get increased due to entry of many new international brands which may impacts negatively on sales of products.
  • Sometimes, it face negative publicity and certain controversies because of that goodwill of brand get decreased.
  • Use of technology may create minor faults which can results into huge loss of company.

P4 Strengths and weaknesses interrelate with external macro factors

In context of Cadbury, inter- relation of strengths and weaknesses with external macro factors which are helpful in conducting business to earn desired results of given below:

Political factors : The change of government from free labour law to the conservative law influence the operations of the cad bury. Government take obesity very seriously due to which they led the proposal regarding the sugar tax and create pressure on the manufacturer to reduce the amount of sugar in their product.

Strength : Due to this people intake less amount of sugar in the body and live healthy life. It will increase the sales of the organisation because in today's time people are get attracted to the healthy food (Lee, Kao & Yang (2014) .

Weakness : Political factors of country can affect the working of the cad bury chocolates on the bases of that it was not healthy and secured for the individual.

Social factors : Cadbury make changes in their product according to the taste and demand of the product.

Strength : When cadbury make products according to the customer needs and wants then it will increase the sale of the company.

Weakness : Due to making changes according to the customer sometimes create a huge loss for the organization as they have to make modification in their full structure. Cad bury is responded to the campaign of reintroduction of chocolate bar.

Technological factor – This includes about different innovative trends including several applications, software and techniques which are beneficial for operations.

Strengths: Implementation of new and creative technology is helpful to increase accuracy of messages within organization and improve speed of manufacturing.

Weaknesses: It include that minor technical mistake can create major fault in company and may corrupt overall organizational data which is important to be maintained (SWOT Analysis of Marks & Spencer.2017).

CONCLUSION

The above report had conclude that business environment can be described about various internal and external elements which impacts on operations of an organization. It include discussion about types of organizations such as private, public & voluntary including their size, scope, vision, mission, objectives, legal structure and stakeholders. It also involves various departments like human resource, marketing, research & development and finance which put efforts to complete desired objectives of business. Moreover, PESTEL analysis of given firm is conducted along with their positive as well as negative impacts on operations. It include determining strengths, weaknesses, opportunities and threats in terms of analyzing external factors. At last, inter- relation between external factor and internal elements is also mentioned.

REFERENCES

  • Hilton, R. W., & Platt, D. E. (2013).Managerial accounting: creating value in a dynamic business environment. McGraw-Hill Education.
  • Deasy, S and et. al., (2016).U.S. Patent No. 9,247,042. Washington, DC: U.S. Patent and Trademark Office.
  • Savrul, M., Incekara, A., & Sener, S. (2014). The potential of e-commerce for SMEs in a globalizing business environment.Procedia-Social and Behavioral Sciences,150, 35-45.
  • Hamilton, L., & Webster, P. (2015).The international business environment. Oxford University Press, USA.
  • Moutinho, L. (Ed.). (2011).Strategic management in tourism. Cabi.
  • Kew, J., & Stredwick, J. (2017).Business environment: managing in a strategic context. Kogan Page Publishers.
  • Cai, S., & Yang, Z. (2014). On the relationship between business environment and competitive priorities: The role of performance frontiers.International Journal of Production Economics,151, 131-145.
  • Belás, J and et. al., (2014). Significant attributes of the business environment in small and meduim-sized enterprises.Economics and Sociology.
  • Sodeyfi, S. (2016). Review of literature on the nexus of financial leverage, product quality, & business conditions.International Journal of Economic Perspectives,10(2), 146-150.
  • Cronan, T. P and et. al., (2011). Decision making in an integrated business process context: Learning using an ERP simulation game.Decision Sciences Journal of Innovative Education,9(2), 227-234.
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