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Business Environment and operations - Body Shop

University: University of Northampton

  • Unit No: N/A
  • Level: Undergraduate/College
  • Pages: 9 / Words 2313
  • Paper Type: Assignment
  • Course Code: PE7003
  • Downloads: 46
Organization Selected : The Body Shop International Limited

INTRODUCTION

Overall performance and sustainability of business depends on many factors, such factor like this includes its suppliers, competitors, government, media, investors and many other institutional factors. In this report chosen organisation is The Body International Limited which deals in cosmetics. This present report will cover explanation of different types of organisation, their size and scope and also interrelationship between various functions of organisation and their link with organisational structure. Furthermore, positive and negative factor that influence macro environment of business operation and strength and weaknesses of business that interrelates with macro- environmental factors. Further, in this report Pestle analysis of chosen organisation is going to be study in this report.

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Task 1

1. An explanation of different types of organisation

Explanation of different types of organisation that is public, private and voluntary including their purpose, scope, size and legal status.(Calabrese and et.al., 2018.)

Public organisation. This types of organisation include an entity that is comprised for the purpose of providing goods and services to public and which is regulated and operate by government and trade their share in stock exchange. British Petroleum is multinational oil company which comes under this sector. Size of this company is that it has 7.5 million barrel material resources based on 5.7 million acre. Their scope is to fit new technologies which expand their business growth.

Private organisation. This types of organisation are run by individuals or by companies. They do not trade their share on stock exchange and their main motive is to generate profit in the company. The Body Shop international limited is a private company which doing their business in providing cosmetics products, perfumes to public. Scope of this company is to sell range of 1000 products. Their purpose is to increase their business towards social and environmental campaign and to raise self-esteem to women. They do business in many countries therefore they wide structure of doing business.

Voluntary organisation. This types of organisation establish to provide benefits to the society. Their main motive is not to earn profit and if they generate profit in the company that amount will be invest back to provide benefits to the society. Oxfam is one of the voluntary organisation which motive is to reduce poverty and injustice which going on international stage. Oxfam business is flat which run by chairwoman. Their scope is to provide maximum benefits to the society and provides equal treatment to both male and females of the society.

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2. Explanation of different organisations structure, size and scope which affect business objectives.

Public organisation (British petroleum)

Private organisation (The Body shop)

Voluntary organisation (Oxfam)

structure

Legal structure of public company says that it must have at least two shareholders, must have to issue at least £50,000 shares to public and have to registered at company house and must have at-least two directors which runs company.(Kew and Stredwick,2017.) Positive impact of this legal structure is that companies functions runs smoothly in the organisation but negative impact is that in running business operations members influence in decision making process of the company.

This types of companies must have at least one member and one director. At least one shareholder who finance in the company. Positive impact of this structure is that decision of company can be taken with proper communication between director, member and with their shareholders. Negative impact is that influence of members is more than public limited company.

This types of organisation set precise form of legal structure. Three forms are there unincorporated association, trust and company limited by guarantee. Positive impact structure in organisation is that members do go out of there main motive of organisation and negative impact is that they have to provide each and every details of money which invested to provide public benefits.

size

British petroleum has large size business. They are doing business in a billion dollar marketing operation which runs their business across in 50 countries and employ 40,000 peoples. As they have large size of business so there growth opportunities are more with this size of business.

The body shop company has its many franchises stores which doing their business in 66 countries. They currently have range of thousand products which sells in every stores of the company. Therefore, with this size they have large opportunities to achieve growth of the company.

Oxfam doing business in more than 90 countries and they have confederation of 19 organisation which are working to provide benefits to the people who are suffering from poverty and injustice from society. This structure helps them to provide maximum benefits to societies.

scope

Scope of this company is to develop changes in organisation regarding new technologies and to change pattern of demand rather than search for supply. Their intention is to make world ambition to use low carbon future. This intention of company makes them to build good image among customers.

Their scope is to provide the best quality cosmetics products with greater social values. Their aim is not to harm any animals in beauty products and to provides the best quality of services to customers.(Maula and Murray, 2017. )

Scope of this organisation is to make world rich in resources so that poverty will not have to face by peoples of the society. Their air is save lives of the people and to make them strong again.

3. Explanation of different organisation function and their impact on business objectives and structures.

Different organisation function in the companies include production, finance, human resources and their link to organisation objective and impact or organisational structure are as follows.

Production department of the organisation takes care about production of goods and services of the organisation. On business objective their impact is that they work for company's productivity, and for profitability. Production department of the companies shows overall performance of the organisation by which company generates their profitability. Advantage of production department impact is that they maintain company's demand and make good and services according to supply of the company. Organisational structure also influence with production department. To achieve company's growth, innovation and marketability confirmation of production department is necessary for the organisation.(Hamilton, and Webster,  2015.)

Finance department of the company plays an important to role to achieve growth of the company. For the fulfilment or organisational objectives finance department role is to maintain that much amount which company want to invest and future outcomes of that investment for company. Advantage of having finance department in the company is that they main total inflows and outflows of the company. Organisation structure which company follow whether flat, matrix, tall they maintain that structure to achieve growth.

TASK 2

1.PESTLE analysis of The Body Shop Limited.

The effect of macro environmental factors on the Body Shop International Limited are as  follows.

Political factor which The Body Shop industry is facing is that they have to maintain strict guild lines for product safety which is given by government. Cosmetics products needs proper security just because they are in direct contact in face of the customers.

Economic factor which company face are regarding recession and this company employs  thousands of people and number of employees are increasing day by day and because of this factor company cannot able to employ many peoples.(Boyd and et.al., 2017.)

Social factor includes for The Body Shop organisation is brand loyalty. Products which are in direct contact with face, hair, skin are needs to safe in use.

Terotechnological factor includes 24 hours of access as internet brings revaluation in beauty industry their sales increases heavily and this impact helps them to attract more customers in organisation.

Legal factor in this company is that they have to follow two major acts that is Federal food, drug and cosmetic act and fair packaging and labelling act.

Environmental factor in this industry is that they main green attempt towards environment and provides less stress to environment.

2. Internal and external analysis of The Body Shop organisation and their inter-relation with macro environmental factors.

To identify internal and external factors of The Body Shop organization, SWOT analysis is as follows.

Strength-

  • Company has huge franchisee which is almost in 60 countries and have 2600+ stores.
  • Have wide range of products of more than 1000 and create in doing innovation to products.
  • Company has power to attract customer by providing well designed stores and layouts.( Dobbs,2014.)
  • Have high brand value and famous for socially responsible because of giving environmental practises.

Weakness-

  • Less advertisement of products.
  • Have many franchisees and because of these proprietors have control on products.
  • Retail outlets are less which impacts sales volume.

Opportunities-

  • As this company provides eco- friendly products' growth opportunities increases.
  • Number of customers are increasing because of online service provided by company.

Threats-

  • Company have to face lot competition in market as there are lot more other cosmetic company.
  • Have to problem in trading with suppliers of different countries because of exquisite raw-material in products.

Its inter-relation with macro external factors.

To analysis external factors that affect organisation, PORTER'S five models are applied to analyse.(What is Five Forces Analysis. 2018.) Here is the diagram which shows five forces model.

Bargaining power of suppliers. In cosmetic company like The body shop they have low bargaining power of suppliers because they have large numbers of suppliers. As many substitutions are available in the market impact on cost of input is low.

Bargaining power of buyers. Company have to face lot more competition in market because of that alternative are available for the customer and company has to face high bargaining power of buyers.

Threat of new entrants. This is high in the cosmetic and skin care market. Company have high competition and many new entrant came and capture market of this type of industry and because of this company's profitability will reduce.

Threat of substitute. This factor in company is low because skin care products only have two substitute one is home remedy and other products which are made with natural ingredients so company does not have to face many substitutes of products, therefore switching cost and buyer tendency towards substitution is low. (Leiber, Stensaker and Harvey,2018.)

Rivalry among existing competition. This factor of the company is high as they have many existing competitors in the market and therefore cosmetics company's supply is greater than demand. Exit barriers of this company is also low and differentiation of product is medium.

How strength and weakness influence decision making.

Strength of the Body Shop company is that they have huge franchisee stores because of this if company wants to expand their business in different countries they will easily get growth because consumers are aware of their brand loyalty. Another strength of the company is that they have well designed store and if company wants to expand new stores in the country this factor gives positive impact as customer will get attracted with well designed store.(SHTAL and et.al., 2018.)

Weakness of the company is they do less advertisement of products and if company wants to expand their business in new area then their turnover will get reduced because of this decision of the company. Another weakness is that they have less retail outlets and if company takes decision to increase their production of products then their sales will not grown up because of this factor.

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Conclusion

From the above study it can be concluded that overall performance and sustainability of business depends on many factors and to retain that factor in the organisation company has to maintain different rules and regulations. In this report, an explanation is given on different types of organisation their structure, size, scope and purpose also defined in this report. After that in this report an explanation is given in different departments of organisational function and their impact on business objective and business structure. In this report, PESTLE analysis and SWOT analysis is given of The Body Shop organisation and their effect on macro environmental factor and decision making process of the company.

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