BTEC Business Studies Level 3, Unit 1 Exploring Business

Learning Aim C - Assignment 2 - (Helpsheet)

Deadline date: Thursday, 28th March 2024 at 5:00pm
Learning Aim C – Examine the environment in Co
Assessment
Criteria which businesses operate Tips mpl
ete
Learning Aim D – Examine Business Markets
Method
Used Using Microsoft Word write the report. You must type in 12-point font only.

C.P4 – Discuss the internal, external and competitive environment on a given organisation

Suggested businesses to conduct your analysis on.

Select ‘One’ large business that trades in the European
Union (EU)
o Tesco
o Cadbury
o Nestle
o Dyson
o LEGGO
o H&M
o Primark

X DO NOT USE ‘APPLE’.

Report Title: The effects of the environment on a business

Introduction: -
• In full sentences introduce your business explaining:-
o Describe what the business does
o Country of origin
o No. of stores and countries they operate in Look at the businesses
o What country are their headquarters in? website and scroll to the
bottom – there will be
an about us section with
all the information you
need.

External Environment: -
• Describe what a PESTLE analysis is
• Explain why it is important for businesses to conduct PESTLE
analysis.
• Explain how PESTLE analysis helps a business to succeed.
 POLITICAL
Government
• Explain who the current political party in charge is.
• Describe the changes they have brought in since they have come into
power e.g living wage, zero hours contracts
• Discuss the impact these changes have had on the business.
• Identify support the Government offers businesses such as grants
and promotions e.g tax relief for being environmentally friendly
• Discuss the impact these changes have had on the business.
• Describe the Taxes the government has put in place that effect
businesses e.g Corporation tax, VAT
• Discuss the impact these have on the business e.g increases in VAT
mean the business will need to put prices up.
The EU
• Briefly explain what the EU is and how it helps businesses in those
countries.
• Explain the impact on your business of the UK leaving the EU – think
about:-
• Increasing costs – how will leaving the EU increase the costs
of production and supplies for your chosen business?
• Impact of exchange rates – how has the change in the value
of the pound affected the business?
• International Sales – What is the cost to the business of
having to negotiate new trade agreements with countries
that are remaining in the EU?
ECONOMIC
Fiscal Policy
• Explain what Fiscal Policy is
• Explain the impact of the current tax increase/levels of taxation on
your business.
• Explain the impact of Fiscal Policy on your business.
Monetary and other Government policies
• What is the current interest rate in the UK?
• Explain the impact on your business when they need to borrow and
save money.
• Explain the impact to the business’s customers if interest rates
increase and the impact this can have on the business
Economic Growth (Inflation, Recession, GDP)
• Explain what inflation is
• Explain what recession is
• What is the current inflation rate in the UK? – has it changed much
over the past 5 years. (get a graph to show changes in it over the last
5-10 years)
• Explain the impact inflation and recession has on your chosen
business e.g. if inflation rises they will have to pay more for stock.
• Explain the impact inflation and recession has on the business’s
customers and how this will affect your business.
• Explain some ways the Government find to grow the economy
Exchange Rates
• What is the current exchange rates in the UK and compare this to the
Euro
• Explain how the fluctuation of exchange rates impact your business.
• Explain some factors that influence exchange rates. (e.g. factors such
as unemployment, inflation, stock exchange)
SOCIAL
Population (Demographic) changes
• Identify 2 changes in the population that has an impact on your
business e.g aging population, growing population, immigration.
• Explain how the change effects your business – think about the types
of products, number of sales e.g if the population is aging
Consumers’ taste/preference
• Identify a change in consumer tastes/preferences that will affect your
business’s products. E.g. Apple releasing the IPhone S because
consumers wanted a smaller phone like the IPhone 5 but with all of
the technology of the IPhone 6.
• Explain how the change affects your business – think about
new/updated products they might need to bring in. Think about how
they promote their product, price changes and cost of producing the
extra product.
TECHNOLOGICAL
• Identify changes/improvements in technology from the list below
that have helped your business to improve and grow.
• Cashless payment e.g. Apple pay, contactless cards
• Wi-Fi
• Online shopping
• Production processes e.g. quicker machines
• Packaging – improvements in how products have been
packaged that reduces costs, makes the business more
environmentally friendly.
• Communication improvements e.g. Skype/video
conferencing (saving on travel costs)
Explain how the changes have impacted your business – think about how
it helps them to provide better services, reduce costs and be more
environmentally friendly.
LEGAL
You need to identify 2 legislations that affect your business and talk about the following for each
one.
• Identify what the legislation is.
• Explain what your business has to do to follow the legislation e.g.
costs involved in training.
• Explain the impact this has on the business and how it operates e.g.
have they had to make any changes to the product, production.
ENVIRONMENTAL
• Identify your chosen business’s recycling/waste management policy
• Explain what impact this has on the success of your business e.g. do
they get Government grants for doing this? What image does it give
customers?

CORPORATE CULTURE, CORPORATE SOCIAL RESPONSIBILITY, ETHICS

Internal Environment
• Identify what Corporate Social Responsibility is.
• Explain what your business’s Corporate Social Responsibility policy is
(this can be found on their website). Why is this important for them?
How does it help the business? (reputation)
 • Describe how they support charities and local communities and the
impact this has on their reputation as a business
• Explain what Corporate Culture is
• Explain the culture of your business
• Describe how they treat their employees and the impact this has on
their reputation as a business.
• Explain what is Ethics
• Describe some of the ethical practices/policies of your business

C.P5 Select a variety of techniques to undertake a situational analysis of a given business

Select one or two more ‘situational analysis’ from the three (3) below to complete

Competitor Activity – 5c’s

• Competitors: -
o Identify 3 competitors to your business – are they are local,
national or international competitor? Is their product
similar?
o Explain why they are a competitor – what makes them
better/worse than your business.
o Explain how they impact the activity of your business e.g.
pricing, products (e.g. supermarkets in price wars)

SWOT Analysis

• Describe what a SWOT analysis is

• Explain why it is important for businesses to conduct a
SWOT analysis.
• Explain how a SWOT analysis helps a business to succeed.
• Strengths :-
• Identify at least 5 strengths of your chosen business.

• Weaknesses :-
• Identify at least 5 weaknesses of your chosen business.
• Opportunities :-
• Identify at least 3 opportunities (external factors) the
business can take advantage of.
• Threats :-
• Identify at least 3 threats (external factors) the business can
take advantage of.

PORTER’S FIVE FORCES

• Describe what Porter’s Five Forces is
• Explain why a business might use Porter’s Five Forces.

Existing competitive rivalry between suppliers

• Identify the intensity of competition in the market
 • Is there high or low level of competition in the market e.g. how many
potential competitors to your business are there?
• Identify the size and growth prospects in your markets e.g. is the
product/business at its peak or is there room to grow?

Threat of new market entrants

• Identify how easy it is for new businesses to open and be successful
in your market.
• Identify the barriers to entry in your business – what makes it
easy/hard to be successful.
• Are the costs to open a business in the market expensive?
• Are there lots of legislations or copyrights in place that make
it hard?
• Are there big competitors that have high customer loyalty
which would make it difficult e.g. trying to compete with
Coca Cola and Pepsi in the soft drink market?
• Is it easy to get hold of the supplies and get the
products/services to customers?
Bargaining power of buyers/customers
• Identify how powerful the customers in the market are
• How big is the number of potential customers in your market?
• What quantity do they buy the products in your market e.g is it a one
off purchase or regular?
• How many other suppliers of the product are there?
• How easy is it for customers to switch to competitors if the price goes
down?
Power of Suppliers
• Identify the power the suppliers have in your business.
• How many suppliers of your products are there? What impact does
this have?
• How easy is it to get hold of the resources for your product? What
impact does this have on the price?

Threat of substitute products

• Identify the threat of substitute products (those in a different
industry that meet the same needs e.g trains are a substitute
product to flying)
• How loyal are the customers to the product and the brand? Will they
easily switch to other products?
• Will it cost customers to switch to substitute products?

D.P6 – Explore how the market structure and influences on supply and demand affect the
pricing and output decisions for a given business

o Define and explain a perfect competition • A perfect competition market is. …. an

market structure. example of this is ….
o Explain the features of a perfect • When a market has perfect competition
competition market this means ………
 o Give a real-life example • When a market has perfect competition
it will……..
• One feature of a perfect market is
o Define and explain an imperfect • An imperfect competition market is. ….
competition market structure. an example of this is ….
o Explain the features of an imperfect • When a market has imperfect
competition market competition this means ………
o Give a real-life example • When a market has imperfect
competition it will……..
Example: features of different market structures:
• One feature of an imperfect market is
number of firms, freedom of entry, nature of product
……..
• Your chosen business: - • I think the business I have chosen
• Identify which type of market structure operates within a …… market because
your business operates in ……..
• Explain with evidence why you think this • One reason I think my business
e.g . operates in a …… market is ……..
• Evaluate the impact being in this market
has on the business.

SUPPLY AND DEMAND

Influences on Demand
• Define what is meant by demand.
• Explain is meant by affordability. If there is a minor decrease in Cadbury’s
• Explain whether or not the price, the
product/service your chosen business demand for its goods may rise as consumers
sells is affordable move from competitors. The prices of the
• Explain the impact this has on demand products of
for your chosen businesses competitors such as Nestlé have an
product/service immediate effect on their demand. When
• What will be the impact be on demand the prices of its products are
if your chosen business increases prices? high, the demand of Cadbury’s products will
• What will the impact be on demand if increase as consumers move to Cadbury.
your chosen business decreases prices?

• Explain what is meant by competition.

• Describe how competitive the market
your chosen business operates in is e.g.
supermarkets operate in a very
competitive market as there are lots of
businesses competing for the same
consumers selling very similar products. Health has had a major influence on the
• Explain the impact this has on demand confectionery market as a whole, but despite
for your chosen businesses that, chocolate has not
product/service seen a significant decline in demand.
• Identify a recent change in the market Cadbury has adapted to 'healthier'
of your product (Customers wanting low requirements, and introduced
calorie hot drinks or ‘posh’ drinks) natural colours and flavours which have
▪ Evaluate how your chosen continued to drive sales. Using stevia, monk
business has adapted and fruit and other natural
developed to meet this change sweeteners instead of sugar has helped sales
and the impact it has had on remain steady. Cadbury has concentrated
demand for the product. on the introduction of new milk and dark
varieties, and new flavours. A recent
 introduction has been the Bubbly milk
chocolate bar. This is made with Fairtrade
cocoa and sugar so that it
appeals to the ethical nature of the
consumer, it is suitable for vegetarians and
is sold in a 4 portion 90g bar
to encourage sharing. Having a new bar
gives customers choice and so increases
sales.

• Define Gross Domestic Product.

• Identify the current GDP for the UK
• Explain the impact this has on demand
for your chosen businesses
product/service

• Define what is meant by needs and aspirations of

consumers.
• Identify if the product/service your
chosen business offers is a need or
aspiration.
• Explain the impact this has on demand
for your chosen businesses
product/service
• Hot drinks can be seen as a need by
many customers; if the price had to be
increased to due other issues discussed
what impact would this have on
demand of the products?

Influences on Supply • Supply is …….

• Define what is meant by Supply.

• Explain is meant by availability of raw materials

and labour. When there is a shortage of cocoa in Africa
• Explain the impact this has on supply for this would ultimately affect Cadbury and any
your chosen businesses product/service. chocolate based production company
• The availability of the raw materials because with the shortage of cocoa
needed to make your product decreases everywhere the suppliers selling the cocoa
(e.g bad weather has decreased cocoa will increase the price at which they sell it.
plant growth) how would this affect This is possible because with a shortage or
your chosen business? How could they limited supply the big companies won’t have
deal with this? much choice as to where to buy it from. An
• Has this happened previously for your increase in costs will always have a negative
business? How did they deal with this impact on a business and very often the
issue? business will pass on the increase in their
• E.g. Tesco and Unilever, how did Tesco costs to the customer by an increase in the
deal with it? selling price.
 Many workers in the UK are not of British
• How will Brexit and the decline in labour nationality and are currently allowed to
availability affect your chosen business? work here with ease due to the rules put in
place by the European Union. When article
50 is finally evoked and the UK leave the
European Union businesses may find that
many of their employees may no longer be
able to automatically work in the UK without
paperwork from the Government such as a
Visa. This means that Cadburys may have to
pay for any workers who do not hold a
British passport to gain a working visa which
would significantly increase costs. In
addition it will limit the pool of potential
employees that Cadburys can recruit from.
If they cannot recruit enough staff they will
not be able to supply enough products to
meet demand.

Cadburys need to be aware of the ever

increasing national wage to ensure they are
meeting the legal requirements. This will
mean that their employment costs will
• Analyse the impact on demand in your increase yearly and for a business that hires
business when the Government increase a significant number of staff this means they
minimum wage? may have to increase the price of their
• Would staff numbers have to be products to cover it. If they increase their
reduced? Will staff get fewer benefits as costs this will effect demand for the product.
a result of the increases?

In response to rising transport costs and

concerns for the environment Cadbury has
reduced its food transport miles. Cadbury’s
UK food distribution was originally based
upon 15 warehouses spread across the UK
• Explain what is meant by Logistics. and an in‐house fleet of over 60 vehicles
• Explain the impact this has on supply for backed up by contracts with 63 third‐party
your chosen businesses product/service hauliers. Today all distribution is carried out
• What impact will rising or decreasing by just 5 third party hauliers and there are
transport costs have on the ability of three strategically placed warehouses. By
your chosen business to supply the outsourcing all of its haulage and
product or to receive the products they rationalising its warehousing, Cadbury has
need? reduced distribution movements for its
products and avoided 4.7m road miles. The
company has saved 7,500 tonnes of CO2 and
15% on its haulage costs. This change has
benefited both Cadbury and the
environment.
 The suppliers play a massive part in the
pricing because they can affect the price of
which it is later sold for
via Cadbury. Cadbury relies heavily on cocoa
beans to manufacture its products, and this
is a crop that varies in quantity and price
year on year.

• Define availability to produce profitably.

• Explain the impact this has on supply for
your chosen businesses product/service
• If the cost of the raw materials increases
how would this impact the ability of
your chosen business to supply the
product?
• If the cost of the raw materials
decreases how this would impact the
ability of your chosen business to supply
the product?

• Define what is meant by Government Support

• Give a real life example
• Explain the impact this has on supply for
your chosen businesses product/service

Elasticity – Price Elasticity of demand

• Explain what price elasticity of demand is.
o Give a real life example
o Explain the impact this has on your chosen
businesses product/service

Pricing and Output Decisions

• Explain how the above you have discussed has
effected the pricing and output decisions made by
your business.
• Identify if they use loss leaders and the impact
this has
• Explain the impact pricing and output decisions
made by competitors have on your business.

C.M3 Assess the effects of the business environment on a given organisation

 • Use one of the situational analysis to assess how the points made in
the analysis have affected your business.
• Discuss how CSR/Ethics has impacted the business. Does the business
consider ethical practices?
• How does the culture of the business impact the organisation.
For example – how did the social factor of people wanting less sugar-
filled drinks affect Coca-Cola?

Assess how a given business has responded to changes in the market

D.M4
• For the Merit Task you must choose 3 changes in the market that your
business has responded to.
(They are included in (P6) above in the red font, choose 2 that are
applicable to your business) Make a judgement on how they responded to
the change

C.D2 Evaluate the extent to which the business environment affects a given business, using a variety
of situational analysis techniques.

• Evaluate the extent the PESTLE analysis can have on your chosen
business. (pros and cons)
• Explain which situational analysis affects your business more, e.g.
SWOT, PESTLE, Competitive environment or Porter’s Five Forces.
• Explain whether the business has responded positively giving
evidence of this.

Evaluate how changes in the market have impacted on a given business and how
D.D3
this business may react to future changes
• Evaluate how the changes in the business
environment (external and internal) had on your
business (positives and negatives)
• How have they responded to the changes?
• Discuss how the business will respond to future
changes/developments. (E.g. Brexit, recession)
Consider any future/current indication of changes
that the business might react to (example current
recession, inflation etc)
BIBLIOGRAPHY

You must include a bibliography table with each webpage you used. You must detail what you used
each page for. If you use any textbooks for research you must include the name of the textbook and
what you used it for.

Example

Webpage used What it was used for

https://www.hokh.org/about-us/our-team To find out the organisation structure of
Heart of Kent Hospice
Websites
Sources of information www.tutor2u.co.uk
to support you with www.bbcbitesize.co.uk
this Assignment http://www.bbc.co.uk/education/guides/z4br87h/revision
https://www.tescoplc.com/about-us/
http://www.starbucks.co.uk/
http://www.costa.co.uk/about-us/
http://www.nestle.com/
http://www.coca-cola.co.uk/about-us/our-business
http://www.newlookgroup.com/who-are-we?page=1002
https://www.primark.com/en/about-us/about-primark
http://www.tutor2u.net/business/presentations/external/demandsupply/
default.html

Above are examples of websites. Further useful resources may be

found at www.edexcel.com/resources/Pages/default.aspx.

SAVE YOUR WORK AS A PDF DOCUMENT BEFORE SUBMITTING.