Business is an economic system which is associated with the trading of products and services from one company to another. Business environment means all the external and internal factors those are affecting the operation of an organisation are covered under this report. It is simply related with the attainment of various objectives and aims that are set by the company for the near future (Andersson, Forsgren and Holm, 2015). This project is all about explaining various types and purpose of organisation such as private, public, voluntary sector and legal sectors. Apart from this, size and scope of wide range of organisation is been mentioned under this report. Along with this relationship among organisational functions and they can link to attain objective are covered clearly in this project.
P1: Various types and purpose of organisation
It is vital for an organisation to make use of essential plan that can help in attaining overall aims within the set limit (Business environment, 2018). There is various organisations which are having their own scope and purpose which will assist them in performing their role in effective manner. Some of them are mentioned underneath:
Private company (Profit): These are said to be those organisations which are run and operated by individuals and companies instead of government bodies. It is essential part of economic system as it would share all their liabilities and gains in decided ratios. Ryanair is one of the private airline companies which is started in the year 1985 with around 57 staff’s members. However, despite the increase in total number of passengers, the company is not so effective in managing the cost because of lost money (Boons and Lüdeke-Freund, 2013).
The major objective of these types of organisation is to earn sufficient amount of profit it would also assist the company to protect them from longer period of time. In case of Ryanair, the mission is to offer low fares that would incur total number of passenger traffic as well as focus on the cost containment and efficiency operations.
The legal structure of the private company:
- Partnership: It is said to that businesses with multiple owners, each of them are invested in the business. Some of the are related with the partners that have limited participation and also have limited liabilities.
- Sole proprietorship: It is types of business that is owned and run by an individual without there is no any legal restriction among their owner and business entity. It is simply related with that business which is personally responsible for their liabilities.
- Limited companies: This seems to be form of incorporation that limits the amount of debts those are undertaken through the company’s shareholders. It is a legal structure that can ensure that overall liability of company can be related with their stake in the company.
- Public limited company (Not for profit): It refers as those organisations whose stocks are traded on the stock exchange as it would be publicly traded or that the company is been publicly traded by the corporation. This business has been related with the activities that have been covered under the specific areas of transport, education and other health care sectors. NHS is one of the best examples of public sectors organisation which provide effective services to the nation (Bryman and Bell, 2015).
The primary aim of public sector business is to deliver services to the society. It would strive to develop employment. It would provide effective services rather than developing valuable profits.
Legal structure of public sector:
There are various governments such as central, state and local that are equally having their own functions that would be helpful for regulating their activities in proper manner. Each of them is having their own rules and regulations which would be essential for the managing their resources effectively in coming time.
- Voluntary organisation (Non-profit): This is said to be that organisation which are made with the objective of providing all essential activities for the fulfilment of society needs and wants. There motive is to serve the society rather than earning profits. “Imperial Cancer Research Fund” is a charitable organisation which would be established to control over the growth of deaths happening because of cancer (Charter, 2017).
The main aim of this organisation is to provide all medical services to the patient that is suffering from Cancer. One of the effective aspects for the voluntary sector is that they can aim is to create social growth as well as wealth in accordance with the wealth.
Not for profit
Non profit organisation
They are highly work with the motive of earning profit
They are entirely controlled by the government and its shares can be traded on the stock exchange.
These types of organisation work for serving the society rather than earning profit.
P2: Size and scope of various business organisation
From the above mentioned various types of business organisation, it has been seen that its purpose and legal structure which are valuable for the overall growth of an organisation. The best part of this organisation is that they used to carry out a well organised platform under which employees are operating by motivating overall growth and productivity for the company. The size and scope of different organisation has been change as per the operations and overall nature of the business. It would be analyse by the help of using information about private, public and non-profit organisation in the future sustainability during the period of time (Chen, Chiang and Storey, 2012). It can be further analyse by the help of their total size and scope. It can be mentioned below:
- Ryanair: It is one of the major low cost airlines which are founded in 1984. It was considered as largest European airline through scheduled passengers and used to carry more international passenger rather than other company.
- Size: Ryanair used to operate in more than 400 Boeing 737-800 with charter aircrafts. This has been rapidly characterised through its rapid expansion in the aviation industries. It has been total fleet size of 450 and destination of 225 during the current point of time. from the establishment of this particular company, it is having more than 13000 people that are working for this company (Crane and Matten, 2016).
- Scope: The Company is wider as the amount of business that Ryanair can be attracted to the airports in which it will used to operate. It has gained maximum growth and bargaining power with them. It is very useful for their overall time optimisation of the effective strategies and even in respects of getting subsidies. Basically, Ryanair would have attain maximum operating efficiency because of their focus on the costs, allowing it to deal with a significantly low cost for a single passenger. Seat occupation has been gone high because of the company maximum punctuality and use of low cost policy.
- Size: In respect with the overall size of their organisation, it can be seen that basic aspects of the staff’s members are operating within an organisation. The services that are used to serve in different nations must be acceptable among each people. During the current time, 1.5 million employees are working and provide more effective assessment while delivering services in more than one country. This particular organisation has been come into existences in the year 1948. The main aim of this company is to work more accurately to the needy person for free cost. It would be more effectively helpful for delivering results that can satisfy the needs of the society.
- Scope: This has been noticed that this scope of this organisation is to serve as much more society from their overall valuable operation so that maximum chances of getting maximum value in coming point of time. There are various crucial facilities that have been delivering by NHS to different people in the form of medical services and other care facilities. It was originated with the wide ideal that has been good healthcare which are available to various staffs that are working within an organisation. The NHS is operating in proper healthcare services to various UK people those are related with requirement of the people (Hamilton and Webster, 2015).
Imperial Cancer Research Fund
Size:This research charitable organisation is working with the aimed of serving the society and those people those are suffering from cancer disease. The charity grew over the coming 20 years time. In accordance to provide all the valuable services to the people this organisation is working with 3964 employees as well as 40000 volunteers. All the research activities are used to carry out in institutes, colleges and universities across the UK both through the charity own employees.
Scope: This particular charitable organisation with its total income earn by 31 million in the previous year. It is one of the crucial ways by which they can make improvement in how to treat and manger cancer as well as examine the process of reducing risk of person those are facing with such kind of disease. It has been seen that most of them they work with the aim of changing the country by mobilizing the ability of patient in accordance to deal with the cancer kind of issues which is nowadays a big problem for most of the country.
It can enjoy substantial aspect for measuring of free negations.
The shared cost as well as risk is associated with the partners.
There is standard fee structure is been followed within an organisation.
There is minimum control from an organisation.
There is a reduction of political risk.
In this the expert charges high control in the exchange of services.
Industry structure and competitive analysis:
It would pertain specific number as well as size of distribution of competitors in an industry as per the size of the business. A well organise structure has been designed in order to fulfil the certain function in sector or can support raw material as well as communication lines. In the modern time, more than percent of total cost of production and work can be related with the airline services.
Competitive analysis is said to be one of the effective marketing strategies which will assess overall strength and weakness of current and potential competitors. This would examine both offensive and defensive strategies in relation with the opportunity and threats in the market (Hilton and Platt, 2013).
Stakeholders and responsibilities or organisation: It has been seen that it can be get affected or be hamper by the organisation decision or action, polices and other aspects. Key stakeholders are creditors, directors, government and employees from which business can be easily drawn. It is the way of examined among stakeholder who can have the most positive and negative impacts on an effort which would likely to be more affected through the effort. The main role of all the organisation to create interest for the stakeholders so that chances of growth can be more in coming period of time.
P3: Interrelation between different organisation department
As this Ryanair is working in order to provide better services to their passengers as compare to other airlines company in terms of low cost fare or other services. This particular company is presenting operating as one of the largest airlines in the country in terms of total amount or list of passengers. According to the overall market capitalization this would seems to be one the reliable company that can assist them to perform their role in more effective manner. there are certain structure that can be followed through using specific operation which would assist in organising their activities in more effective manner.
- Human resource (HR) with marketing: The main function of HR department within Ryanair is associated with overall recruitment of staffs and support people in the workforce planning. They can make sure that a well capable people can be hired within an organisation so that chances of growth and stability can be attain in near future. However, the purpose of serving people can be earned towards their overall management of the department. The interrelation among marketing department has been determined from the aspects of skilled employees that are having ability to perform their role in effective manner (Savrul, Incekara and Sener, 2014).
- Finance and operation department: This particular department is considered as one of the primary part within an organisation. Without which no any planning or investment can be made within the company. This can be ensure that a well skilled accountant and finance executive can be able to keep record of all the financial information which will helpful in planning their coming projects. The interrelation among operation department can assist with the total amount of funds requirement which will be needed to produce certain among of products during the period of time.
- Research and development department with marketing: These particular departments are more innovative activities which are used by Ryanair or other organisation. It is basically essential for overall direction toward the giving right direction and alternation of services that are provided by the Airlines Company. The interrelation with marketing can be equally related with the analysis of the ability of the competitors that are based on current demand. It would be more crucial for the company as this will be make certain changes in the overall promotion and targeting those customer that are valuable for the company.
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P4 Identification of the positive and negative impact of macro environment on Ryanair's operations.
To understand external environment through which the operations of the business get effected positivity as well as the negativity. Its essential for the organisation to analyse in the advance the problems which are faced in the operations. The PESTLE is way to analyse the external environment through which the operations get effected in the business of the Ryanair's airlines. The PESTLE analyse are:-
Political factor:- In this factors are included which influence by the government in the economy. The new taxes are imposed in the organisation by which the operations get effected in Ryanair's airlines. If the government is stable or installable then it become very difficult to form the polices by which operations get effected.
- Positive: As the government of UK changed the corporate tax structure as well as reduce the value through which the organisation operations positivity grow in the market as well as growth is possible in the organisation (Andersson, Forsgren and Holm, 2015).
- Negative:If the government changed in UK then tax rate will increase which effect the business in a negative way.
Economy factor:This includes the factor like exchange rate, economic rate, inflation rate etc. if these are not controlled on time then business operations of Ryanair will get effected.
- Positive:The inflations rate increased in the market by which growth is possible in the operations.
- Negative:If the economy GDP decrease then operations of the company get effected negativity. So plans are required to make in the advance by which these aspects can't get effected.
Social factor:- These factors includes the items labour market and the health care. The operations in the business need to be done as per the customers. The trends are keep on changing in the economy so the operations are also required to be changed in the organisation.
- Positive:The prices which the Ryanair's airlines set is as per the customer demand as the demand for the airlines are keep on increasing.
- Negative:If the quality is not provided as per the standards then trends and customer preferences effect the operations of the airlines.
Technological factor:- This factor describes about the technological changes that are being experienced in external environment which may influence the operations performed by a company (Boons and Lüdeke-Freund, 2013). Ryanair airlines company belongs to UK which is consider as one of the technologically advanced country in world.
- Positive:- London is a hub of technological and financial institutions which is a positive factor for Ryanair airlines as it will easily get governmental assistance to implement new technologies in its operations.
- Negative:- As country is technological advanced which means Ryanair airlines has to regularly update its process or operations as competition is relatively high as a result of which technologies used by company get obsolete much quickly.
Legal factor:- This factor includes number of laws and legislations related to the operations and action performed by Ryanair airlines.
- Positive:- Ryanair airlines generally formulated its policies after evaluating the requirement of following particular law which support them in improving their brand image at marketplace.
- Negative:- Ryanair airlines has to follow laws and legislations in performing its operations as The Equality Act is strictly followed by companies in UK.
Environmental factor:- In this factors include through which the Ryanair airlines operations get influence. The factors are environmental laws, global change, climatic change etc. are the factors which impact the organisation operations positivity as well as negatively.
- Positive:- The products which are used have to be as per the changes otherwise operations get effected.
- Negative:- If the changes are not made as per the required time then it become difficult for them to make the changes at the time its required to the airlines.
P5 Internal and external analysis of Ryanair
It is basically a framework to identify the the current position of a company by mainly classifying its strength, weaknesses, opportunities and threads. It is foundational assessment model that helps the company what can be done and and what should not be done. It is a great to guide a business strategy meetings. A company can use SWOT analysis for the specific segments like marketing, production and sales. In context of Ryan air, they uses SWOT analysis to evaluate what are the factors that might bring impact on airlines.
Strength:In strength, the organisation try to find out its strength that separates it from the competition. In context of Ryanair:
- They have established more than 200 destination which covers around 1800 routes with in Europe.
- Their strong balance sheet and positive sign of shareholder return create more impact on people.
- The main advantage of Ryanair is economic base tickets which provides more opportunity for people to travel frequently.
- Company operates in short distance flights which help customers to reach their destination in short period of interval.
Weaknesses:Weaknesses create obstacles in organisation to perform at its optimum level. This shows the area in which an organisation need to improve for future growth. In terms of Ryanair, their weaknesses are listed below:
- the main weakness of Ryanair is unstable employee's compensation and labour relation where they need to improve a lot for future growth.
- Increasing in number of their aircraft may result towards lack of proper utilisation of resources.
Opportunities:It refer to favourable external factors that organisation can for competitive advantage. In terms of Ryanair, their opportunities are:
- They have the opportunity to decline charter planes area.
- Focus on clients experience via always acquiring better programs such as AGB.
- Maximise in Irish Corporation tax rates
- Competition or revivals from other low cost regional carriers.
P6 Interrelationship between SWOT and PESTEL analysis of company
- Political Factors:The political instability of Europe will lead to effect the demand of air travel. The political instability is due to frequent terrorist attacks in Europe which impacts the air travelling in Europe and affects the demand of air travelling of Ryanair. It can become a strength for Ryanair as immigration will increase and people will shift from one place to another. Thus creating an effect on the demand of air travelling. The weakness for Ryanair can be uncertainty over Brexit which can be a challenge for the Business Environment of Ryanair.
- Economical Factors:Economical Factors are those factors which are connected with the goods, services, and money such as the change in exchange rates, recession, inflation, taxes, etc. As from this point of view, the stable oil prices can become a strength for Ryanair as there is no need to increase the prices and make the sale stable so that the demand will continue at the same price. The weakness for Ryanair can be Brexit as it can put pressure on the fare prices and can be a reason for declining the sale of tickets of the company.
- Social factor:There is difference in demand of consumers which is relevant for making charges in working style of Ryanair. These days consumer wants good and fast services in the form of airlines services. Hence in this case, if managers of Ryanair are able to analyse demand and fulfil it, then this is beneficial for growth and development of association. So this is strength for Ryanair. But due to difference it demand, there is confusion for Ryanair to follow which strategy and trends, hence there is requirement of proper marketing department which is weakness for Ryanair.
- Technological Factors:These are those factors which includes any advancement in the technology which can affect positively or negatively the business working. The strength for the Ryanair can be made through the advancement in the digital platforms such as mobile and website which will help in enhancing the experience of customers. The company can find new ways of improvement in the technology so that it can attract new customers and the sales of the company can be increased.
- Legal Factor:These factors are related to the legislations and these factors can decide whether or not there is behind selling a certain products and can affect the business of the company. In Ryanair, it can be related to the rules and laws of the company and the government policies also that affect the business of the company positively or negatively. If the policies and laws are in favour of the company, they can be positive and help in the growth of the company and on the other hand if they are opposite, they can be negative and create problems for the company and employees also.
- Environmental Factor:These factor are those that affect an organisation or its business, these factors are physical, cultural, demographical, economical, regularity and technological that affect the business of the company positively or negatively. In Ryanair, environmental factor can be related to the environment of the organisation that affect positively if the work place culture is good and negatively if the employees relation not be good. Some times, it can be related to climate, geographical and others that affect the business of the company. In the form of climate such as storm, rain and others that can be positive or negative for Ryanair.
From the above project report, it has been articulated that business environment is an important aspects for an organisation. It will be more valuable for the companies to determine external and internal factors. Further this report is based on certain size and scope of various types of business in relation with the SME is evaluated effectively in order to attain more valuable growth in near future time.