Unit 1: Exploring Business

Learning Aim C: Examine the environment in which businesses operate

The Internal Environment = factors within the business that can affect their success.
Corporate Culture
= “The values and standards shared by people and groups within an organisation”

https://www.toyota-europe.com/world-of-toyota/this-is-toyota/the-toyota-way
a) How would you describe the corporate culture at Toyota? How does this corporate culture
help them to be successful?

https://www.startups.com/library/expert-advice/best-worst-company-culture-examples
b) Give two further examples (one positive, one negative) of the culture in different
organisations. Explain what makes this corporate culture positive or negative.

Corporate Social Responsibility

https://digitalmarketinginstitute.com/blog/corporate-16-brands-doing-corporate-social-
responsibility-successfully
a) What is Corporate Social Responsibility?
b) Give three examples of businesses that have strong CSR policies and explain what they do.
c) How does CSR help these businesses to be more successful? Why is CSR becoming more
important to businesses?
d) Do you think businesses introduce CSR policies because it is the right thing to do or because
it can increase their profits? Justify your answer.

Ethics
= doing what is morally right.

https://www.bbc.co.uk/news/business-34324772
a) Explain how VW acted in an unethical way. What impact did this have on the business?
b) Give an example of a business that has a reputation for being ethical. Explain what this
business does to act in an ethical

Competitive Environment
a) How does having competition affect a business? Explain the impact on…
- the number of customers/sales
- pricing
- the drive to be innovative
b) Give an example of an industry where there is strong competition.
i) Who is the biggest/most successful business in this industry?
ii) What has made this business stand out from its competition? Consider:
-Differentiation: what makes their products different/better than their
competitors?
-Pricing: how do their prices compare to their competitors?
 -Reputation: how have they developed a good reputation?
-Technology: how do they use the internet, social media, automation in
manufacturing etc?
-Employees: what do their employees say about working at the business?
Why is it important to have motivated, productive staff?

c) Why is it important that a business has a competitive advantage i.e. they do something
new/better than their competition?

Situational Analysis

SWOT Analysis
Choose ONE business from the following industries and carry out a SWOT analysis on this business:

Industry Business Examples to Choose From:

Aerospace Airbus
Pharamaceuticals AstraZeneca, GlaxoSmithKline
Food Manufacturing Brakes (previously BrakesBros Ltd), 2 Sisters Food Group
Transport Jaguar, Ford, Nissan, Toyota.

Include graphs/facts/statistics/news articles etc in your SWOT Analysis.

In your SWOT Analysis you should consider:

Strengths (Internal Factors):

- Product/Service: quality, product range
- Reputation: reviews, positive news stories, publicity
- Finance: revenue, profit
- Market Share/Market Position: are they one of the biggest businesses in the industry? Is
their market share growing?
- Employees: are employees skilled/trained? Do they treat their staff well?
- Anything else the business does well

Weaknesses (Internal Factors)

- Product/Service: quality issues, product recalls, supply issues
- Reputation: negative publicity
- Finance: Losses, falling revenue
- Market Share: is their market share falling?
- Employees: has there been any trade union action (strikes etc)? Any staffing issues?
- Anything else the business isn’t good at.
What action is/could the business take to address these weaknesses?

Opportunities (External Factors)

- Technology: How could the business take advantage of new technology (in its
manufacturing, promotion, communication etc)?
- Economy: How could a growing economy be an opportunity for the business? How could
low interest rates and therefore cheaper borrowing help the business?
 - Expansion: New markets for the business?

Threats (External Factors)

- Competition: Who is their strongest competitor? What does their competition do better?
- Brexit: How is this business affected by Brexit?
- Recession: Impact of a possible recession on sales/profits etc?
What action is/could the business take to address these threats?

Do the businesses Strengths and Opportunities outweigh the Weaknesses and Threats? Justify
your answer.

5Cs Analysis

For the same business you used in your SWOT Analysis complete the following 5Cs Analysis:
Complete the Judgement column giving your opinion on the different categories. You must justify
this judgement.

Category Factors Judgement

Company  Product image & branding Is the company successful
 Technology based on the factors
 Culture identified?
 Aims/Vision
Collaborators  Suppliers Does the business work well
 Distributors with the collaborators
identified? Why is this
important?
Customers  Target Market Does the business have a high
 Sales Figures number of customers/sales?
 Pricing Are they targeting the right
market?
Competitors  Current & potential Is the business successfully
competitors competing against others?
 Market Share
Climate  Political & Environmental Is the business affected by the
 Financial (interest rates, factors identified in a positive
exchange rates) or negative way?

Porter’s Five Forces

This is used to evaluate the position of a business in terms of its competition. This considers five
categories: (use the same business as in your SWOT and 5Cs.

a) Existing Competitive Rivalry Between Suppliers:

Who are the business’s main rivals?
 b) Threat of New Market Entrants:
What other businesses have recently entered this market? Do you think it would be easy for a new
business to set up a business in this market? Why/why not? e.g. would it be expensive to set up this
type of business? Would it be hard to attract customers from a business they are already loyal to?
etc.

c) Threat of Substitutes
Are the products sold by the businesses in this market similar? (i.e. could a customer simply swap
from one brand to another e.g. Coca Cola and Pepsi are substitutes).

d) Bargaining Power of Suppliers

Are the materials/parts/stock the business uses rare? Are they competing against a large number of
other businesses for supplies?

e) Bargaining Power of Customers

Does the business sell to individuals or to other businesses? Do they sell in large or small quantities
to their customers?

Based on your SWOT, 5Cs and Porter’s Five Forces Analysis, do you think the business you have
researched is successful? Why? Why not?

What are the main issues this business is going to face in the future? (Identify three). For each of
these issues explain what the business can do to address these and ensure they are successful.