Hello Ive uploaded the Mark Scheme for this assignment in which only part C and D is going to be needed part A and B has been alr
Hello I’ve uploaded the Mark Scheme for this assignment in which only part C and D is going to be needed part A and B has been already completed. If you scroll down the mark scheme you will find everything that is needed for part C and D. I have also uploaded an exampler for this assignment on someone who has already completed part C and D on Burberry plc. It has to look very similar to the exampler but it can be a bit briefer as long as its between the 4,000-5,000 word range. This research has to be based on Tesla plc.
UNIT 1: EXPLORING BUSINESS
Pearson BTEC Level 3 National Diploma in Business – Specification – Issue 9 – October 2019 © Pearson Education Limited 2019
22
Summary of unit
Learning aim Key content areas Recommended assessment approach
A Explore the features of different businesses and analyse what makes them successful
A1 Features of businesses A2 Stakeholders and their
influence A3 Effective business
communications
A report that examines the features of two contrasting businesses, looking at how each is organised, how their structures enable achievement of their aims and objectives and the relationship and communication with stakeholders.
B Investigate how businesses are organised
B1 Structure and organisation B2 Aims and objectives
C Examine the environment in which businesses operate
C1 External environment C2 Internal environment C3 Competitive environment C4 Situational analysis A report that examines the
effects of the internal and external environment on a large business and how the business has, and will, respond to changes.
D Examine business markets D1 Different market structure D2 Relationship between
demand, supply and price D3 Pricing and output
decisions
E Investigate the role and contribution of innovation and enterprise to business success
E1 Role of innovation and enterprise
E2 Benefits and risks associated with innovation
A presentation that investigates the use of enterprise and innovation in an existing business.
UNIT 1: EXPLORING BUSINESS
Pearson BTEC Level 3 National Diploma in Business – Specification – Issue 9 – October 2019 © Pearson Education Limited 2019
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Content
Learning aim A: Explore the features of different businesses and analyse what makes them successful
A1 Features of businesses • Ownership and liability: o private, e.g. sole trader, partnership, private limited company, public limited
company, cooperative, limited and unlimited liability o public, e.g. government department o not-for-profit, e.g. charitable trust, voluntary.
• Purposes, e.g. supply of products or services, difference between for-profit and not-for-profit businesses.
• Sectors: primary, secondary, tertiary, quaternary. • Scope of business activities: local, national, international. • Size: micro – up to nine staff, Small and Medium Enterprises (SMEs): small – between
10 and 49 staff, medium – between 50 and 249 staff; large: more than 250 staff. • Reasons for success: how these differ depending on the type of business (profit or
non-profit), and its aims and objectives, e.g. clarity of vision, innovative products or processes.
A2 Stakeholders and their influence • Stakeholders: o internal, e.g. managers, employees, owners o external, e.g. suppliers, lenders, competitors, debtors, creditors, customers,
government agencies and departments (local, national, international), communities (local, national, international), pressure groups, interest groups.
• The influence of stakeholders on business success, e.g. shareholder value; customers as long-term assets (strong customer service enables customer loyalty and retention); employee involvement, corporate social responsibility (community groups and interest groups).
A3 Effective business communications
Appropriate presentation and delivery of information to a given audience: • written presentations, e.g. financial, non-financial, formal and informal reports • oral presentations, e.g. computer projection/PowerPoint with speaker notes • importance of communication to aid business success, e.g. social media,
virtual communities.
Learning aim B: Investigate how businesses are organised
B1 Structure and organisation • Organisational structure, e.g. hierarchical, flat, matrix, holacratic. • Functional/operational areas, e.g. human resources, research and development,
sales, marketing, purchasing, production and quality, finance, customer service, IT, administration.
B2 Aims and objectives • Aims of businesses in different sectors – mission, vision and values: o private, e.g. making profits, profit maximisation, break-even, survival, growth,
market leadership o public, e.g. service provision, cost control, value for money, service quality,
meeting government standards o not-for-profit, e.g. education, housing, alleviating poverty, healthcare.
• SMART (Specific, Measurable, Achievable, Relevant, Time constrained) objectives.
UNIT 1: EXPLORING BUSINESS
Pearson BTEC Level 3 National Diploma in Business – Specification – Issue 9 – October 2019 © Pearson Education Limited 2019
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Learning aim C: Examine the environment in which businesses operate
C1 External environment • Political, e.g. government support, membership of trading communities such as the
European Union. • Economic, fiscal, monetary and other government policies, e.g. supply side policy,
economic growth, exchange rates. • Social attitudes to saving, spending and debt; social responsibility requirements;
change, e.g. to demographic trends, consumers’ tastes/preferences. • Technological change, e.g. automation, improved communications. • Environmental factors and ethical trends, e.g. carbon emissions, waste, recycling,
pollution. • Legal environment, e.g. partnership legislation, companies acts, charities legislation,
competition legislation, UK Corporate Governance Code, financial services regulation, industry regulators, government departments.
(Statutes and regulations current at the time of teaching should be used. Outline understanding only is expected.)
C2 Internal environment • Corporate culture. • Corporate social responsibility (CSR), ethics.
C3 Competitive environment • Competition (local, national and international). • Factors influencing competitive advantage, e.g. differentiation, pricing policies, market
leadership, reputation, market share, cost control, technology relationships with customers, suppliers, employees.
• Benefits and importance of establishing and maintaining a competitive advantage.
C4 Situational analysis • Assessment of the business environment using various techniques, e.g. PESTEL
(Political, Economic, Social, Technological, Legal, Environmental) analysis, SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis, 5Cs (Company, Competitors, Customers, Collaborators, Climate) analysis, Porter’s Five Forces.
Learning aim D: Examine business markets
D1 Different market structures • Market structures: perfect competition, imperfect competition. • Features of different market structures: number of firms, freedom of entry,
nature of product.
D2 Relationship between demand, supply and price • Influences on demand, e.g. affordability, competition, availability of substitutes,
level of Gross Domestic Product (GDP), needs and aspirations of consumers. • Influences on supply, e.g. availability of raw materials and labour, logistics,
ability to produce profitably, competition for raw materials, government support. • Elasticity: price elasticity of demand.
D3 Pricing and output decisions • Impact on pricing and output decisions in different market structures. • Reponses by business to pricing and output decisions of competitors in different
market structures.
UNIT 1: EXPLORING BUSINESS
Pearson BTEC Level 3 National Diploma in Business – Specification – Issue 9 – October 2019 © Pearson Education Limited 2019
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Learning aim E: Investigate the role and contribution of innovation and enterprise to business success
E1 Role of innovation and enterprise • Innovation, e.g. creative process, product or service development, new ways of increasing
business efficiency or improving profitability, successfully exploiting a new idea, adding value to products, services or markets to differentiate the business from the competitors.
• Enterprise: identifying opportunities to develop business activities through, e.g. creative, lateral (approaching subjects from alternative perspectives) and ‘blue sky’ thinking (approaching subjects with no restrictions on perspectives); chance and serendipity, intuition.
E2 Benefits and risks associated with innovation and enterprise • Benefits: improvements to products, processes, services and customer experience,
business growth, development of new and niche markets, offering unique selling points, improved recognition and reputation, smarter working.
• Risks: failing to meet operational and commercial requirements, failing to achieve a return on investment, cultural problems (resistance to change, unsupportive systems and processes, insufficient support from leadership and management).
UNIT 1: EXPLORING BUSINESS
Pearson BTEC Level 3 National Diploma in Business – Specification – Issue 9 – October 2019 © Pearson Education Limited 2019
26
Assessment criteria
Pass Merit Distinction
Learning aim A: Explore the features of different businesses and what makes them successful
AB.D1 Evaluate the reasons for the success of two contrasting businesses, reflecting on evidence gathered.
A.P1 Explain the features of two contrasting businesses.
A.P2 Explain how two contrasting businesses are influenced by stakeholders.
A.M1 Assess the relationship and communication with stakeholders of two contrasting businesses using independent research.
Learning aim B: Investigate how businesses are organised
B.P3 Explore the organisation structures, aims and objectives of two contrasting businesses.
B.M2 Analyse how the structures of two contrasting businesses allow each to achieve its aims and objectives.
Learning aim C: Examine the environment in which businesses operate
C.D2 Evaluate the extent to which the business environment affects a given business, using a variety of situational analysis techniques.
D.D3 Evaluate how changes in the market have impacted on a given business and how this business may react to future changes.
C.P4 Discuss the internal, external and competitive environment on a given business.
C.P5 Select a variety of techniques to undertake a situational analysis of a given business.
C.M3 Assess the effects of the business environment on a given business.
Learning aim D: Examine business markets
D.P6 Explore how the market structure and influences on supply and demand affect the pricing and output decisions for a given business.
D.M4 Assess how a given business has responded to changes in the market.
Learning aim E: Investigate the role and contribution of innovation and enterprise to business success
E.D4 Justify the use of innovation and enterprise for a business in relation to its changing market and environment.
E.P7 Explore how innovation and enterprise contribute to the success of a business.
E.M5 Analyse how successful the use of innovation and enterprise has been for a given business.
,
Olivia Poole – Unit 1 Assignment 2 The effects of the environment on a business
6
Burberry PLC
In this report I will explain and analyse the effects of the internal and external business environment on Burberry. Introduction to Burberry Burberry Group PLC is a British luxury fashion house headquarter is London. It was founded in 1856 in Basingstoke, UK by Thomas Burberry. Thomas Burberry, at just 21 years old founded on the principle that that clothing should be designed
to protect people from the british weather. The company mainly focus on outdoor attire at the onset before moving on to the high fashion market. Burberry has more than 500 stores spread out over 50 different countries. They fall into the fashion industry and their products are aimed at wealthy upper class individuals with some of their goods retailing at almost £5,000.
External environment – Political
One political factor that can have a large effect on a large company like Burberry is the government. As a global luxury retailer and manufacturer operating in over 400 retail locations worldwide, they take their corporate, social and environmental responsibilities very seriously. Burberry operate throughout the world and the countries that they operate in require the organisation to abide by their domestic rules. This means that Burberry have ensure that they follow and respect the legislations in the countries that they supply their goods in. For example; some countries impose high tax rates on foreigners so they can promote domestic production, the higher the tax rate the more the operating cost increases. In september 2010, Burberry bought its first chinese franchise partner for £70 million deal. Burberry have 57 stores in 30 different cities across China. Due to Burberry having such a large control over their presence in China the difference in VAT rates has a large impact. The standard VAT rate in China is 16% whereas in the UK it is 20% but is 0% for childrens clothes as they are deemed as a necessity. The lower the VAT the better as itt means Burberrys profit amounts to more.
Burberry is one of the UK’s highest-profile exporters and claims that a non-deal Brexit could lead to ‘tens of millions of pounds a year in extra costs’ for its business. The tariff costs of trading would hit the company’s earnings before interest and tax. Brexit will also disrupt Burberry’s design process and its UK manufacturing in Yorkshire. Due to them importing and exporting significant amounts of raw materials, samples and finished goods between the UK and EU there would be large amounts of logistical delays. This would not only impact their design process but product development and customer fulfilment. The increase in costs of exportation and importation will increase excessively and with Burberry only having a 1% rise in comparable store sales they are not making the profit to deal with the potential increase. In order for Burberry to continue trading with countries in the EU they would need to conform a new trade deal which will be very consuming.
Olivia Poole – Unit 1 Assignment 2 The effects of the environment on a business
[source: https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates https://daxueconsulting.com/china-market-research-on-burberry/ https://www.ft.com/content/073cc80a-1edb-11e9-b126-46fc3ad87c65 ]
– Economic One economic factor that affects Burberry is a cut in prices. On July 14 2018 Burberry lowered their retail prices in mainland China. From July 1 2018, the Ministry of Finance lowered import duties for an average of 21 percent of a collection of customer goods. The aim of this was to drive more luxury consumption at home rather than abroad. On July 11 2018, Burberry reported a three-percent growth in retail sales to £479 million in the first quarter of FY 2018, citing strong demand from the American and Chinese markets. However, the ongoing pound’s rally against the Chinese yuan casts a shadow on Burberry’s ability to further profit from affluent traveling Chinese consumers. The exchange rate currently stands at 1 Pound sterling equals to 8.75 Yuan. The ‘Heritage Trench’ in China is ¥16,900.00 which converts to £1937.52 whereas in the UK the ‘Heritage Trench’ only costs £1450.00. Luxury fashion house said that higher exchange rates for pound and euro are deterring Chinese tourists. Chinese consumers account for 40% of Burberry’s sales and have the tendency to travel and shop in countries that offer the most favourable exchange rates.
Linking to the previous point, another economic factor that affects Burberry is stronger currencies.In July 2018 Burberry told press that they blame their fall in sales in the UK and Europe on stronger currencies. In 2018, the luxury fashion house posted revenues of £479 million in the 13 weeks to June 30th compared with £478 million the year before. As well as this, same-store sales only rose by 3% where as the previous year they had risen by 4% the reason for this ‘low single-digit percentage rate’ is because of weaker tourism demand in the UK and Europe. Over the years, sterling has strengthened making the UK a less desirable place to shop.
Another economic factor is the rising GDP. The UK’s gross domestic product was estimated to have increased by 0.5% in the first quarter of 2019. In 2018 the fashion industry contributed £32.3 billion to the UK GDP which is a 5.4% increase from the previous year. If the GDP per capita increases then Burberry goods will become more affordable therefore there target market will increase. This is useful for Burberry considering there profits have fallen in recent years, if the GDP keeps increasing they have more of a chance of becoming a competitor again.
[source: https://www.theguardian.com/business/2018/jul/11/burberry-blames-falling-uk-sales- on-stronger-pound https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpfirstquarterlyestimat euk/januarytomarch2019 ]
– Social One social factor is that as the market changes, Burberry's target audience and market positioning will also. Burberry have a variety of segments in the general population with a single theme standing out – functional luxury. Burberry uses social media platforms such as Twitter, Facebook and Instagram to engage with customers and to collect information on customer experience with Burberry products. Burberry's target audience is designed for both sexeshwoever it is dominated by females whom have a high disposable income. Their
Olivia Poole – Unit 1 Assignment 2 The effects of the environment on a business
childwear is also very popular but still appeals to parents who are likely to be from a wealthy background. In 2016, Burberry declared that they would aim their newer products at millennials, instead of the usual, older trench coat wearer that hd accounted for a large part of their sales. Millennials are the main influencers in the fashion market today, they have an increasing level of disposable income and are seen to be increasingly brand loyal.
Over recent years, there has been a growth in the affordable luxury and value sectors. This may due to the increasing customer uncertainty, luxury goods can be deemed as an emotional buy and if the market is fearful or unsure it will reduce spending on the more expensive luxury items. Therefore, affordable luxury has had a large rise whilst other luxury segments have fallen. Target customers of Burberry have different cultures and lifestyles as affirms. For example, consumer dress codes vary. Different communities will prefer different products. Some people prefer reserved dressing, and others prefer skimpy clothes, and therefore Burberry has to put this into consideration when distributing goods. When first established, Burberry was only worn and purchased by the upper class or at least those with a wealthy income. However as time progressed and average wages rose Burberry lost the luxury aspect and went through a period of time being deemed as a statement brand for the more common people. Though their status changed this increased sales and Burberry have no adopted the title of affordable luxury. Burberry's target audience is designed for both sexes however it is dominated by females who have a high disposable income. Their childwear is also very popular but still appeals to parents who are likely to be from a wealthy background.
[source: https://burberry2017.wordpress.com/blog/ ]
– Technological
One technological factor that has benefited Burberry is the development and improvement in the information technology front. The company has be become a lot more effective in terms of its publishing and its selling, this is due to crucial changes to latest technological tendencies in advertisement. In 2017, Burberry used technology to drive its digital strategy (aims and objectives). Burberry uses the latest form of technology in advertising to reach out to its targeted end users. For example, Burberry live streaming allowed many consumers to purchase products online and get them delivered. Online shopping creates efficiency since every consumer in any part of the world can access products online without travelling. Additionally, Burberry's fast delivery is considered by some customers luxurious, which gives the organisation a competitive advantage.
Another technological factor that has impacted Burberry is the increase in popularity of social media. Burberry started using snapchat to deliver exclusive content – their main products promoted via snapchat is its fragrances and collections. The brand provides users with a snapcode that they can use to unlock exclusive content. This content includes Mr. Burberry fragrance and behind the scenes events of its campaigns. In 2015/16 Burberry decided to debut their spring/summer collection, a day before its release. By doing this, Christopher Bailey has expanded his target market and increased sales by 6% just from advertising on snapchat.
Olivia Poole – Unit 1 Assignment 2 The effects of the environment on a business
[source: https://jamilareddy.com/evaluation-of-business-and-strategy-analysis-burberry- group-marketing-essay/2924/ https://www.referralcandy.com/blog/burberry-marketing- strategy/ ]
– Legal
In order to retain its success, Burberry must abide by legal laws of the countries within which it operates. The main legal regulations that influence activities of Burberry are labour laws and employment laws. Burberry must also patent its products to maintain the exclusive rights to produce and sell Burberry products. Patenting rights does not solve the problem of imitations but minimises their volumes.
Labour laws is the law relating to the rights and responsibilities of workers. The basic subject matter of labour law can be considered under nine broad heads: employment; individual employment relationships; wages and remuneration; conditions of work; health, safety, and welfare; social security; trade unions and industrial relations; the administration of labour law; and special provisions for particular occupational or other groups. In other words, the labour law is commonly known as the employment law – this regulates the the relationship between employers and employees.It governs what employers can expect from employees, what employers can ask employees to do and employees’ rights at work.
This law dictates, to a certain extent, how Burberry treat their employees. The employment law regulates generic things such as; data protection, holiday entitlement and pay, working time, health and safety and maternity and parental rights. These elements mean that Burberry have set rules of each of these categories. For example; in the UK the minimum statutory requirement for paid holiday each year from a full time employee is 28 days, 5.6 weeks. Therefore Burberry must offer this to all of there full time employees, though this may be a hindrance as it means there can be at least one employee not in work a week they must comply as it is a legal matter. It also means that Burberry must conform with the regulations of sex, age, disability, race/religion and sexual orientation discrimination, equal pay, bullying/harassment and redundancy. This affects Burberry when recruiting new employees as it means that they have to accept everyone no matter what they’re like relating to the listed factors.
[source: https://www.britannica.com/topic/labour-law#ref21752 https://www.cipd.co.uk/knowledge/fundamentals/emp-law ]
– Ethical and Environmental
One ethical prospect that has impacted Burberry is its burning of goods scandal. In 2018, Burberry was discovered to be burning their unsold goods to prevent them from being stolen or sold cheaply. Throughout of 2017, Burberry destroyed £28.6m of clothing and cosmetics as part of efforts to protect its upmarket brand and guard against counterfeiting. They incinerated the equivalent of 81,000 of its signature plaid scarves, according to its latest annual accounts, in a practice said to be rife among fashion houses. Many of Burberrys customers disagree with the burning of the products as they believe that it can only be justified if the products were going to waste. A lot of people believed that this was not the
Olivia Poole – Unit 1 Assignment 2 The effects of the environment on a business
case, rather that the products were surplus which makes them perfectly useable. This lead to Burberry getting a lot of bad press and being deemed as a wasteful company. Being a clothing line of their hierarchy, customers did not expect this.
The managed to destroy £28.6m of unsold clothes, accessories and perfume in 2017 to protect its brand. It takes the total value of goods it has destroyed over the past five years to more than £90m. The reason fashion firms including Burberry destroy unwanted items is to prevent them being stolen or sold cheaply. Burberry say that the energy generated from burning its products was captured, making it environmentally friendly. In their own words Burberry “has careful processes in place to minimise the amount of excess stock we produce. On the occasions when disposal of products is necessary, we do so in a responsible manner and we continue to seek ways to reduce and revalue our waste," (a spokesperson for the company said).
[source: https://businessteacher.org.uk/pestel/burberry.php http://fernfortuniversity.com/term- papers/pestel/nyse4/6609-burberry-group-plc.php https://www.bbc.co.uk/news/business- 44885983 https://www.independent.co.uk/news/business/news/burberry-burns-stock- designer-clothing-fashion-industry-environment-a8454671.html ]
How the external environment impacts Burberry
The most important short term factor from the PESTLE analysis that affects Burberry would be the ethical factor about the burning and destruction of their products. This is because as it stands one of the biggest issues that the world faces is climate change, therefore Burberrys act of burning and destroying goods has given them a bad brand reputation a lot of consumers are becoming more drawn to brands that are sustainable with both their production and disposal. Burning clothes release carbon dioxide and other harmful greenhouse gases. It is actions like this exacerbates global warming and thus climate change. Furthermore, burning clothes that are made from synthetic fibres may release plastic microfibers into the air. Therefore, I believe this is the most important factor due to the fact that Burberry will continue receiving bad press unless they change their actions purely because of how much climate change issues are in the media.Consequently, if they were to carry on receiving bad press their profits and share prices are likely to drop exceedingly more than they already have. Despite this, this factor is all dependent on the views and emotions of their existing customers as well as potential new ones – if the customers are not too bothered and would rather the brand name over the sustainability of the products supplied than this factor is not likely to impact Burberry massively. On the other hand the most important long term factor that will affect Burberry is one that is in the political sector – Brexit. Though Brexit hasn't happened yet it is
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