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Unit 1: Business and the Business Environment

Introduction: Business and the Business Environment

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The report is divided into two parts. The first part of the report includes a critical analysis of the logistics industry to gain access to industry perspectives. Different types of organizations along with their purpose and legal structure are discussed in the report. The study also involves a complete factsheet of Royal Mail Company which is identified as plc in the UK. The factsheet includes a visual map of internal departments of the case company to achieve business objectives and their influence on organization structure. The critical analysis of the complexities of different organizations and their structure are also considered in the first part of the report.

The key feature of the second part is to find out the impacts of external and internal factors on the travel and tourism industry. The traffic light chart is also highlighted in the report to ease the understanding level of the study. The second part also carries out the identification of internal weaknesses and strengths of a case company. Along with all the highlighted points the report also includes the interrelation between external factors and the company’s strengths and weaknesses. The report critically evaluates a SWOT analysis and provides Royal Mail Group’s expansion plans to justify all the recommendations.

Part 1

Letter to the group chairman of Royal Mail Company presenting the factsheet portfolio 

The honorable Keith Williams,

185 Farrington Road, London

Subject: Factsheet portfolio for future development of Royal Mail

Dear group chairman,

A. Analysis of the logistics industry to gain access to an industry viewpoint

Logistics analysis has been outlook as an important element in the business strategy of many organizations. Logistics refers to a procedure that is linked with a stream of information, goods, and services offered to customers and suppliers, from the end of the foundation to the point of destination. The industry analysis consists of the packaging activity, facility location, and incorporation of inventory, informational flow, and transportation. The industry analysis helps in managing business functions and effective substantial movement of inbound and outbound products or services in a cutthroat environment. Logistics firms are in front of an era of exceptional changes as digitization has led to customers' changing demands (Buchheim, et.al 220). New technologies enable-superior efficiency and a more mutual operating model. The industry is considered a critical sector to improve international trade as a result of digitalization and globalization. Logistics services in the nation is an important sector in term of support to the state and national economy, FDI (Foreign Direct Investment), trade flows, as well as employment.  

The firm’s structure and size are determined according to the products and services or activities provided by the company to its customers. 3 types of organizations i.e. private, public, and voluntary are explained below through a flowchart:

Types of organization



































Legal structure


Private Organization



Organizations that are operated by the person individually and whatever losses or profit earned during the trade period are particularly owned by that person are known as the private organization (Villajos, et.al 2020).






IT companies such as Google. MNCs, P & G, and Amazon.






The privately owned organizations work upon providing jobs for the development and growth of the economy to earn profit from the operations of the business.



The legal structure of private organization include businesses, sole traders, cooperatives, LTD, private, and partnership firms.

Public Organization



A public organization is governed by the rules and regulations of the country. The organizations are made for the interest of the community and are owned by the national government as public organizations.






Indian oil, IRCTC, united India insurance.







Public organizations work for the sovereignty of the country by delivering services to the general public.




Just like other firms under the companies act, the public organization is a separate legal entity and they can be sued and can sue.


Voluntary organization



A voluntary organization is an independent organization that runs differently from public and private organizations.

This type of organization works on providing a solution to public issues in society.







Research centers, charitable trusts, and non-profit organizations are included in a voluntary organizations.




The main purpose of voluntary organization is the development of society by creating harmony among people through problem-solving methods.



These organizations are registered as charitable trust, societies, and not profit-earning companies under state regulations.

B.  A factsheet for Royal Mail Company

  • Brief background of the organization: Royal Mail Group is the main postal service public limited company (plc) that operating in the United Kingdom. The organization provides delivery services to all its customers and has a sound history. Royal Mail Group focuses on leveraging the inflated number of posts being determined by the development of an online shopping industry. Business innovation carries on today as technology and digital services are introduced and expanded globally and nationally (Quan, al 2020).


  • Products and services: Royal Mail Group (RMG) is a contributor to delivery and postal services. The business offers letters and parcel delivery services under the brand name and express parcel service under the parcel force global brand in the UK. The organization also provides overnight parcel carrier service through postal express. The company serves medium and Small-sized enterprises, sole traders, consumers, access operators, and big enterprises.


  • Market segments: Royal Mail Group has separated itself into three different categories in a different market. The first one is the personal consumer gets their everyday demands and needs satisfied by sending out a small package to other people around for individual use. The second is small and medium businesses as this provides their services to the small business, which need to send the package to their customers and other small businesses. The last one is the public sector and corporate which provide their services to all the big companies that want to increase their consumer base and desire to send packages and mail to different businesses and people.


  • Targets: The Company has a straightforward target of achieving net zero carbon business by 2040. Royal mail is also targeted to become a universal service provider and also wants to cover-up more regulations than its competitors and other postal operators.


  • Several local and international branches: International Distributions Services (IDS) plc is a British international courier and postal company that was recognized in the year 1516 as a government functional unit. The company is a subsidiary of Royal Mail Group which carries letter and parcel services worldwide through Parcelforce.


  • The organizational size and legal structure: The company is owned by Royal Mail Holdings plc which comprises 3 main businesses that includes Parcelforce worldwide, Royal Mail, and General Logistic System (GLC). Parcel Force Worldwide is operated in the UK and provides international parcel services. Royal Mail provides modernization and operation in the global market through letter and postal services. The general logistic system is an international logistic company that helps the company to run its business efficiently. Post Office Ltd is now an entirely detached corporation from Royal Mail Group as the firm continues to provide a variety of counter services as well as receipt of products for cart and delivery by Parcel Force and Royal Mail Company.

Critically evaluate a business size, structure, and scope of the organization interrelate to the organization's objects or products and services.

The size, structure, and area of any organization are linked with the goal, mission, vision, and objectives of the business organization. It is observed that any company can set enormous targets as its objective only, when they have a superior managerial structure. If the company has limited employees in the organizational structure and work has not been known regarding their job roles and subordinates, then it becomes difficult for the company to reach the target. As it becomes not possible to achieve the targets because of less clarity in the role.

C. Royal mail factsheet that reflects the interrelation between different functional units with a chart map of the finance and marketing department

Royal Mail provides safe and planned distribution of urgent documents, parcels, and division stock between all locations overnight (Royalmail, 2022). Its flexible, fast, and efficient services save money, by rolling all of the company’s logistics requirements into a particular service. 

Interrelation between different departments of royal mail plc

Figure 1: Interrelation between different departments of Royal Mail Plc 

Income statement of Royal Mail Company

Reported results(continuing operations)




Total revenue




Operating profit




Profit before tax




Net debt




Net income




 The financial and operating performance of Royal Mail

Reporting revenues












Other business




According to a comparative analysis of the financial report of Royal Mail Group, total revenue and operating profit have regularly been continued. In the year 2014, there was a major increase in profit before taxes. Producing marketing partnerships and services with diverse types of companies will help to grow more funds for Royal Mail Group to increase its financial portfolio.

Marketing mix of Royal Mail

Pricing: Price is the complex element that the consumer must exchange to obtain the offering. The Royal Mail Group's pricing strategy is based on generating different prices for different customer segments. The product and service can charge more for the firm and can move from profit to loss but these losses can reach the prospective customer and it can readdress the company to other profitable products or services. Bearing in mind this pricing strategy Royal Mail should focus on positionquo-oriented pricing.

Place: The place aspect is considered by the efficiency of delivering definite products or services to consumers. Royal Mail Group needs to look for new ways to sustain place factor as it will help the company to get high reachability. This is the major way to reach potential customers in different countries.

Product/ services: These are the main factors of the company’s promotion plan. The main purpose of a company providing efficient products and services is to produce better value for consumers which is the main factor of business marketing strategy. The Royal Mail Group re-evaluates its products/services according to its present marketing position. Supporting an efficient balance for tomorrow and today's changes in the market has key points and to achieve this new type of product or service needs to royal Mail to improve its range of products and services line. The existing product line should have the suitability to respond to potential changes in delivery markets.

Promotions: It is a marketing tool that generates short-term improvement in the current sale and helps firms reach new customers situated in specific areas or segments. To create an effectual promotional mix, Royal Mail needs to target retail advertisements based on a loyalty scheme. This can help the company to gain more information about new customer sectors to access. This also establishes diversified priced promotional offer organization, based on customers who get services from the business which may aid in increasing the variety of promotions (Sokol and Flach, 2020).

Interrelationship in organizational structure and critical analysis of different organizational complexities

The postal market is the most vital segment of business in the world which includes delivering products or services and it efficiently has become a key factor for the corporate opportunity. The Royal Mail Group is the oldest and largest parcel company which has a significant role in national as well as global markets. Reflecting on the main objective the Royal Mail Group has inspected their sustainability in their marketplace with successful activities in the short-term, according to the financial report of the company and its subsidiaries, particularly on annual turnover rate, a major increase rate between 2013 and 2015. In a marketplace that has rising rates and a growing number of consumers, the business makes no development in a specific period. Royal Mail Group's income is higher because of its brand reputation and market share but when new competitors are taken into account, it is extracted that they also have effective and aggressive marketing plans. The Royal Mail’s reputation and market share would not help to continue its market shares in the long and medium term periods (Dekker, et.al 2019).

The above letter presents the factsheets portfolio of the royal mail plc. The factsheets are divided into three different parts. The first part contains different types of organizations, the second part has a factsheet of the Royal Mail group, and the third part involves a visual map of internal departments for the analysis of the industry's future development.

Part 2

The positive and negative effects of external factors and influences on the tourism industry with appropriate examples

Tourism is a vital industry that aids the growth and expansion of low-income countries. The industry is very significant for countries as it brings a lot of money into a country but the tourism industry can have negative as well as positive effects on countries in political, economic, social, legal, technological, and environmental factors (Capobianco, et.al 2019). To observed the external environment of the tourism industry, the PESTLE analysis is conducted:

Political- The government's decision to open up restrictions to foreigners has made it easier than ever to travel to new countries. These factors also include policy-related factors like labor law, legislation, taxation, trade-related restrictions, and official charges or tariffs. In many countries, tourists can maintain a tax repayment on the product purchased during their trip upon departure.

Economic- These factors include economic issues like growth, interest rate fluctuations, currency value change, and changes in price level and purchasing power of money, such as inflation and deflation. The failure of purchasing power will have a downfall effect on consumer consumption patterns, which harm the travel and Tourism companies’ sales and economic growth (Nikbin, et.al 2021). As the world economy grows, people can earn more money with increased living expenses growing.

Socio-cultural- This factor includes things like attitude, social trends, lifestyles, family demographics, educational levels, age distribution, as well as falling or rising trends in people. The social factor has a huge impact on society which affects seasonal sales and holiday recessions in the tourism industry. This factor contributes to the strategies and plans of travel companies.

Technological- The factor includes technological changes related to issues like research and development and technological innovation. This factor may include artificial or virtual intelligence, automation technology, enlarged intelligence, and virtual reality to name a few. Technology has a significant market effect on tourism firms in terms of control, price, quality, security and safety, cost, production, distribution, and service (Steininger, 2019).

Legal- Legal factors are closely related to politics and include subjects such as consumer protection, competition, legislation on discrimination, employees' rights, worker health, and employees' safety and health. From a business viewpoint, the legal factor is divided into 2 parts i.e. internal and external factors which affect the firms in the long run. The external part of the travel industry consists of different requirements, laws, and restrictions from outside the industry that contribute to the company's operation. The internal factor of a Tourism Company consists of a business-to-business policy that dictates the industry's internal operating environment, such as safety practices and regulations.

Environmental- This factor includes concerns related to the environment and ecology, such as weather, environmental constraints, climate changes, recycling, carbon footprint, and sustainability. The environment has a significant impact on practitioners in some fields of the tourism industry. Indirectly, each business contributes to the environment either negatively or positively, which affects the way firms operate in the market. 

'Traffic light chart' evaluating the level of competition, legal complexity, funding activity, political and social influences on and investment opportunity 

Royal mail plc traffic light chart

Figure 2: Royal Mail plc traffic light chart

Currently, 0.6% of all the letter deliveries by volume and 0.4% of all the letter deliveries by value are due to E2E competition. 99.4% of all letters are delivered by Royal Mail, and 95.9% of all letters are delivered by value. Bulk mail is also the mail with the lowest value and smallest margin per item, whether it be entrance mail or E2E bulk mail. An access letter typically costs 23p, whereas a 2nd class stamped letter costs 53p, and the 2nd class meter letter costs 37p. 32 Prices will rise to 54p and 38p as of April 2015.

Due to the aforementioned circumstance, Royal Mail submitted a thorough report to Ofcom in June 2014. Because competition from Whistl presented a major threat to its ability to provide a universal service, it sought Ofcom to enact regulation on Whistl (in the form of specific regulatory criteria known as "generic universal service conditions"). 31 Among other things, Royal Mail claimed that Whistl unfairly chooses low-cost areas, high-density, like London, for E2E competition, leaving Royal Mail to deliver in remaining unprofitable areas and winding down the cross-subsidies from other mail services required to support a universal service (Van de Vyvere, et.al 2019). The USO, according to Royal Mail, places it at a competitive disadvantage because it must deliver six days a week, whereas an entrant is not required to do so. Entrants are not subject to such a demand.

Royal Mail, on the other hand, is allegedly given an unfair edge in the postal market by its VAT status, according to Whistl. However, the High Court recently ruled in a case brought by Whistl that the UK Government's exemption of Royal Mail's DSA services from VAT is legal. Therefore, according to Ofcom, unless Whistl can offer prices containing VAT that match (or are lower than) Royal Mail's VAT-exempt access prices, VAT-exempt customers (such as charities and financial institutions) are not likely to find E2E services provided by Whistl financially attractive, which is likely to limit the market share that Whistl will reach. Royal Mail claims, however, that VAT exemption is insufficient to the price difference Whistl can give, which it argues is substantiated by the fact that Whistl is attracting customers from financial institutions like banks that are unable to claim VAT.

According to Ofcom's statement from December 2014, Whistl's arrival in a specific geographic area did not constitute "unfair competition" or threaten the cross-subsidies required to fund a universal service. Royal Mail's ability to deliver the universal service in a financially viable manner is not endangered by end-to-end competition at this time, according to Ofcom, who also noted that "universal service mail is now more profitable than many other categories of mail, including bulk mail." Royal Mail's delivery network, which "is characterized by a high amount of fixed expenses," was taken into consideration by Ofcom. So, even if entrance were on a national basis, the average cost of sending a universal service mail increases when quantities fall. This might happen for several reasons other than E2E competition, such as e-substitution and competition in packages. Ofcom noted that a general universal service requirement might be implemented "within six to nine months" should it decide to intervene in light of new evidence (Turchin, et.al 2018).

The internal strengths and weaknesses of GLS Group

Most notably, GLS employees are specialists in transportation and organized operations, caring for various specialists. They contribute to differentiation through excellent execution, coordinated computerized technology, location, mastery, quality, a distinctive expectation of administration, and the ability to meet the most demanding requirements.


In an industry where rules, terms, and preferences are subject to rapid change, GLS has chosen to strengthen its internal expertise by bringing together experts and talented people who will strengthen Gathering's administration offering, yield value and separation, and enable the opening-up of new business sectors.

Controlled enhancement is followed by the ability profit as a driver of advancement in emerging fields. The Gathering can accompany its clients into new development markets because of the restored trust of their customers, providing appropriate arrangements. The organization has achieved similar success to the new presence in India, the Middle East, and Russia (Villajos, et.al 2020).

The first concern is the highest quality for a package delivery, and dependability is a great supporter. The company’s cargo will be delivered efficiently and quickly in Belgium and in 40 other European countries thanks to GLS. In the Benelux countries, the products can travel in a day, and the rest of Europe and the world may be reached in a short amount of time.

For a surcharge, GLS also provides express delivery options for several domestic and international transportation services (Royalmail, 2022).


Through its extensive planned operations network throughout Europe and in the USA/Canada, GLS provides freight delivering administrations. The biggest drawback is that this assistance is only offered to businesses, and clients must file a request in order to receive a response.

GLS protection options vary according on the country and the selected administration. For instance, the company is liable for up to €750 per package at the time when bundle departs from Germany.

However, firms that frequently need to plan shipments between Europe and the USA and that need cargo or capacity arrangements may use GLS as their best alternative.

The strengths and weaknesses linked with external factors that influence the business economy

The business environment changes regularly and requires thought when forecasting, planning, and performing operations. Business managers have the accountability of examining internal concerns for how they may influence the company's decisions.It is also vital to supervise any external environmental factor that can involve the business functions and also develop a method to overcome these challenges. External factors are significant because they can have an indirect and direct effect on business personnel, operations, sales, and revenue.The weakness and strength of a corporation are interrelated with the external macro factor because an organization may be exaggerated by the outside factor. The firms are not able to recognize various factors that affect the organization's decision-making directly and indirectly. So the macro factor can be recognized with the help of external factor analysis.

Strength and weakness are the reverse forces that give power and disadvantage to the organization. A proper analysis of these 2 factors provides different kinds of achievement to the corporate.Both factors are interconnected to each other and they may enlarge the risk of macro factors in an organization. These factors may affect the company from outside restrictions of the organization and affect the business operations positively and negatively. They areobserved with the help of PESTLE analysis like political factors which may affect the business in political ways whichincreases the weakness of a business.Social factors have an impact on the business in a negative way like corporate social responsibility (CSR) in the organization thus industry is liable to do social activities. Social accountability is a responsibility and obligation of every business and in financial conditions, it can be a weakness for the organization. External factors consist of government policy, market changes, competitors' policies, legal rules and regulations, and many other factors.

Critical evaluation of macro and micro factors along with SWOT analysis and their impacts on business objectives and decision-making

The SWOT analysis appraises a company’s potential opportunities and threats, which can then be mitigated. Organizations can critically estimate their competitors and build up strategies to ensure that they maintain and gain a sustainable competitive advantage. The analysis will help the organization in strategic planning and brainstorming (Mir, 2019). This will help the company to decide to take benefit of new business opportunities and respond to new trends. This will also help in implementing new technology and dealing with changes from competitor firms.The SWOT analysis will help a corporation to identify the areas of an industry that are performing well. These areas are the company’s essential success factors that provide businesses to gain a competitive advantage in the global as well as national markets.

Identifying the strengths can help an organization to ensure maintain lose of competitive advantage. Growing the business includesresulting ways of building and using these strengths. Weakness is the distinctiveness that put the business at a weakness to competitors. Conducting a SWOT analysis can help to identify the characteristics and minimizethe risk along withto improve them before they become a big issue in an organization. When accomplishingananalysis, it is important to be practical about the weaknesses in a companyto deal with them adequately.Itcan help the company to recognize opportunities that it could take an advantage of to make better profits and increase sales. Opportunities are formed by macro factors, such as new customer trends and changes in the market.This will also help the company to understand an internal that will influence the ability to take an advantage of a new opportunity (Puyt, et.al 2020).

Threats are those macro factors that can cause big problems for any business operations, such as a competitor's new advertising campaign, changes to the market, and the new government policies. A SWOT analysis can help the firm to identify threats and ways to offset them, depending on the strengths and weaknesses of an organization. The company can handle these issues related to staffing, business culture and image, organization structure, new product expansion, financial resources, promotion, and operational efficiency. While conducting a personage SWOT analysis the company should strengthen for one issue may be the weakness for another. They might also recognize a weakness, such as a gap in marketplace that is not covered, and that can become an opportunity for the business. 


In response, Royal Mail sent a fresh DSA value proposition to the Ofcom in January 2014. This was monitored by an administrative accommodation to Ofcom in June 2014 that stated the Whistl's E2E extension plan is amounted to "carefully choosing" and would cause Royal Mail to lose up to £200 million by 2017 (Royalmail, 2022). Royal Mail felt this could seriously jeopardize its ability to support the money of USO and asked that Ofcom mediate. Privatization may result in more significant business awareness and benefit focus, as well as improved access to venture capital, which Illustrious Mail requires to compete with Whistl and Amazon in its core business areas and achieve the vital development it needs in a package market. As a component of their foray into singlefor Royal Mail's mailing station organization, additional package administrators have set up optional get and drop-off access organizations. Various administrators have agreed to game plans with current merchants, such as Warble's CollectPlus product, which makes use of numerous local businesses to supply selection and delivery services across the nation, and DHL's agreement with Rymans. It is anticipated that the cost of competition will continue to decrease. Royal Mail's potential to raise prices in the future, however, remains a concern given its market share in the single piece packages sector and its prior evaluation practices. This concern specifically relates to whether or not the protection cap on packages under 2 kg should be maintained.


From the above report it is concluded that the Royal Mail Company which is considered as a case company for the report has large base of market in the UK as well as at international level. The SWOT analysis of a company provides greater opportunity criteria with the advance estimation of upcoming threats in the market. The report concludes that how interrelationships of different functional units define the organizational structure of a company. The brief overview of a case company’s factsheet defines the various business functions of an organization with an interrelationship among them. To better understanding the external factors of Royal Mail Company, the PESTLE analysis are taken into consideration.


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