ASSIGNMENT 1 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 1: Business and Business Environment

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 Introduction

Business is a diversified environment. Multiple business models have been developed, depending on the
goals and direction of the management to gain the attention of a specific demographic. However, in all
forms of business, there are constant competition, which requires the chairman to be ahead of the
competitors to achieve the needs of customers throughout the business’ lifespan.

Nike, Inc.
https://about.nike.com/

One of the world's leading sports shoes and

apparel brands, founded in 1964, based in the
United States. The head of the company is
located in Beaverton, near the Portland
metropolitan area of Oregon. The company is a leading supplier of sports shoes and clothing in the world
and is a major sports equipment manufacturer with a total revenue of more than US $ 18.6 billion in 2008.

LO1 Explain the different types, size and scope of organisations

The developmental phase of worldwide progression to the economic society reflects the necessities of
having various types of organizational structure to accomplish the goals. Overall, it can be simply divided
into public, private, voluntary sectors and legal structures, and from each of these parts, it can be divided
into many different forms.

Based on the scope of organization, it can be divided into

 Non-government organizations (NGOs).

NGOs can be defined as an organization which does not belong to any governmental figure and making
profit is not its only goal. It can be organized in many levels from local to national or international. Some
are created to serve a specific purpose (E.g. educational, scientific, charitable, literary, religious, etc.).
An example of this would be the Red Cross Vietnam, it operates in the humanitarian field and participates
with individual organizations to carry out Red Cross activities. The purpose of this association is to build a
humane and peaceful society.

 For profit organization

Alternatively, for profit organizations utmost important goal is to make profit because without a huge
growing capital the organization cannot operate and evolve. According to General Statistics Office of
Vietnam, 78% of businesses are categorizes as “For profit organization”.

For instance: Vingroup, Coca cola, Grab and many more

Also there many forms of business

 Sole trader is the most basic form of business structure which is simple to set up, since an
individual can operate it. For example: coffee shop, hairdresser, stationary, restaurant, etc. The
benefits of being a sole trade are that it is easy to manage, requires fewer business report, and is a
relatively easy to change business structure. However, the business owner is liable for all financial
& legal responsibilities which means if anything goes wrong, all their personal assets are at risk.

 Partnership is an agreement between two or more entities to maintain a profitable business. It is

managed by a capital agreement. Like sole trader, partnership is not a separate legal entity
therefore it has unlimited liabilities. However, the advantages of partnership are there are more
people to contribute in business decisions, to share responsibility, increase capital and share
expertise.

 Limited company is a type of business structure in which that company has its own legal identity.
In other words, the legal, finance and properties of the company are separate from its owners, if
business goes wrong, the owners and shareholders are not personally responsible for any debts.
Limited company is divided into two kinds: public limited company and private limited company.
Private limited company has its own rule on its ownership, such as, it cannot offer shares to the
general public. On the other hand, public limited company can publicly raise capital by offering
shares on a stock exchange. This business structure generally applies to large-scale companies
which have at least £50,000 in net-worth.

Depend on the size of organization

 Micro, small, medium-sized enterprises (SMEs)

- Micro, small, medium-sized enterprises (SMEs) are small-scale in terms of

capital, labor or revenue compared to more mainstream multi-million dollar
enterprises. According to the criteria of the World Bank Group, micro
enterprises have less than 10 employees, small businesses have employees
between 10 to less than 200 with a working capital of 20 billion or less. Medium enterprises has 200 to
300 employees with a working capital of 20 to 100 billion. However, each country has their own criteria
to identify small and medium enterprises in their countries.

a. Advantages of SMEs:

It has the ability to operate flexibly in response to market changes, such as business activities. Also SMEs
has an advantage of managing business goods and changing personnel are simpler and easier. The capital
spent in the process of construction and development is not costly, therefore can recover working capital
quickly. The ability to raise capital of SMEs are quite good as they can acquire loans from large national
banks as they are the targeted demographic. Currently SMEs are now the go to business model that many
young entrepreneurs are aiming for today, not only in Vietnam but also internationally.

b. Disadvantages of SMEs:

SMEs are always in fierce competition against the bigger and wealthier enterprises, as large long-term
businesses have a huge number of loyal customers also because of the limited capital potential of SMEs,
they can never be able to compete with the business giants. In addition to the cost of operating, managing
and carrying out huge advertising activities always make SMEs encounter difficulties and hardships.
Therefore, if you want to conduct your business as an SME business model, business owners need to build
trust from their customers, build a customer support system and care centers. customer.

 Large firms

In Vietnam, business can be considered large must meet these

two criteria: first one is the capital of the company must be
over 100 billion VND, next is it must have more than 300
employees. A large firm often has a lot of shareholders and not
to mention the investors and buyers of their stock. So they have
a strong business capital and stability in the rotation of capital.
With that many advantages, large firms are usually accounting
for the majority of the market share. Because they are the key
GDP contributors, they have to carries on a heavy role mission
which is stabilizing the national economy.

Depending on the business activity, business can be defined into four sectors

1. Primary sector: a part of business related to activities of production such as extracting and
transforming natural resources into primitive and preliminary products. These products are raw
materials for other economic sectors. The main economic activities of this sector include
agriculture, fishing, forestry, mining and quarrying. In the modern era, this sector has declined
due to the introduction of technology in this sector.
 2. Secondary sector: this sector generally uses the output provided by primary industries for
manufacturing and construction-related activities. Because of the demand for more goods and
services, this sector has developed dramatically, in the USA more than 20% of the workforce is
involved in this sector. Examples of this industry are building furniture, manufacturing car,
shipbuilding.

3. Tertiary sector: also known as service sector or third economic sector. This sector involves
bringing non-tangible value to its customers instead of a physical product, meaning that the
focus of this industry is how people interact with each other to fulfil customers’ needs. It
includes entertainment, banking, insurance, accounting, tourism. In today's economic world,
the tertiary sector is the most developed industry.

For all types of businesses, the most important first step is to define the mission and vision of the
company. Vision is what businesses want to achieve or become, it determines the long term for the
company. A classic example is Henry Ford (founder of Ford automobile), he predicted that every
American garage will all have cars. Mission is the reason for existence of the organization. In addition,
each business need to have a specific goal to show the purpose of the business, which is the specific
milestone developed step by step. A goal is a question that needs to be answered within a certain period of
time. The requirement is set with the intention of achieving the goal both in quantity and quality, and at
the pre-determined timeline. The goal of the business must always be close to each stage of its
development. To be able to achieve success, a business must have a clear objective and a suitable market
share because market share is the factor that directly affects business decisions. Leading brands often
occupy the largest market share. Therefore, market share is one of the first criteria used to assess the
success of a business. Although market share is not the only criterion for determining a dominant market
position, the market share and market power are closely related.

About Nike.inc
Nike is public limited company under the symbol NKE. It is also a large firm with 700 shops all around
the world and has offices situated in 45 countries outside the United States. Most of its factories are placed
in Southeast Asia including China, Indonesia, Taiwan, India, Vietnam, Thailand, Philippines, Pakistan,
and Malaysia.

Number of Nike's employees worldwide from 2009 to 2018

 Mission

In 2010, Nike mission is to bring inspiration and

innovation to every athlete in the world and if you
have a body you are an athlete. The purpose of this
statement is to show organization's key objective
of reaching out to the global leisure and sports
footwear, apparel and equipment market. Nike's
vision is "to help Nike, Incorporated and our
consumers thrive in a sustainable economy where people, profit, and planet are in balance". Nike's values
are shaped by the strategy teams who main focus is to work constantly on each part of the vision, strategy,
factories, environment, community people, and culture the process keeping Nike accordance with working
toward the objectives of Nike organization. Nike's mission, vision, values, and goals take on the
responsibility living up to these stated purposes. Cooperating to provide inclusiveness, and diversity
inventing ways for individuals, products and profit to thrive for the Nike organization.

Target markets

Nike’s targets customers between the age of 11-45 years old, with mainstream focus is on teenagers in
order to build long-term loyal consumers. For example, before the 2014 World Cup, Nike promoted a
campaign that honor iconic football athletes playing football with teenagers inspiring them to become like
their idols.

LO2 Demonstrate the interrelationship of the various functions within an organisation and
how they link to organisational structure

Human Resource Marketing Finance

Function Planning and recruiting, Research information, Managing, inspecting, guiding

training and development,
maintenance and
management, provision,
communication and human
resource services.
Prepare market records and and implementing accounting
revenue forecasts and statistics regimes.
Survey the behavior of Managing finance and assets
potential customers according to the State
Market segmentation, Ordinance, the Company's
targeting, brand positioning Charter and financial
regulations. Meeting financial
needs for all production and
business activities of the
Company as planned;

Inter- Coordinate with the
relationship departments in the company
among to develop human resource
functions plan: monitor the company's
personnel information, give
a standardized job
description for each staff
position, plan personnel
recruitment .
Why it is The function of the HR
important department in the enterprise
is very important. Therefore,
people do administrative
personnel should be trained
regularly to change the
method of human resource
management to match the
general trend of other
businesses, retain talents at
the present time.
In partner with R&D to
develop products, perfect
products with the attributes
that the market wants (done
before producing products)
It play a role as a bridge
between inside and outside
of the business, between
products and customers,
between product attributes
and customer needs.
Preserving and developing the
capital of the Company and its
shareholders.
Coordinate with other
functional departments to
establish pricing options, draft
price decisions and in
exploiting ,using the company's
assets and machinery in the
most effective way.
As one of many aspects of
business operations, financial
activities are associated with
the creation, distribution, use
and movement of the monetary
fund, taking place on the basis
of subjective decisions of the
house. corporate governance.
Decisions in corporate financial
management are a matter of
concern and much discussed.

Organizational structure
Business organizations are identifying by a distribution of labor which allows employees to focus in
particular roles and to occupy designated positions to achieve the organization's goals. The structure is
important because it shows the needs of the organization within its existing context and taking into
account of its future requirement

Main organizational structures are functional, multidivisional, matrix, project based etc.

1. Divisional organizational structure

An organizational structure built on specific demands of products, markets or customers in their specific
business environment. Therefore, each division often has all the necessary resources and functions within
it to satisfy the demands based on the working of an organization.
Advantages:

- Workforce just have to focus upon a single product or service

- Avoid overlapping functions and tasks between departments
- Easily perform specialization of management functions. Thereby creating a premise to attract
professionals with deep knowledge of professional skills into management

Disadvantages:

- Incompatibilities

2. Hierarchical:

Organization chart of hierarchical is split into different levels where the line of command follows
downwards from the top level to the bottom or the lower level. The hierarchical organizations chart work
best in solid environments that do not require rapid change of strategy or in organizations that provide
multiple services or products

.
Advantages:

- Clear communication channel, which means members know to whom they report and who reports
to them
- Advancement path is clear
- Make the company work efficiency by distribute human resources into various specialize
department.

Disadvantages:

- Poor flexibility, adapt slowly to new market demands or advancing technologies

- Members of different departments are hard to communicate with each other due to
departmental specialization

3. Matrix organizational structure

This structure is built by combine both the product of the project and the function of the management
producing it. There will be a management for each organization's activities (scientific research, survey,
design, production, supply ...) and they are divided in accordance with the business structure - objectives.
In this structure, the managers according to functions and products are equally positioned. They are
responsible for reporting to the same level of leadership and having the authority to make decisions in
their area of responsibility.

\
Advantages:

- It helps to exchange information in businesses more effectively. The problems are easily solved
because of the close communication and working between the departments. At the same time,
effective communication helps increase productivity and enable quick decision making.
- It encourages leadership according to democratic trends, in which members' opinions are heard
before management decides. This helps improve employee satisfaction and improve work
motivation.

Disadvantages:

- Intricate internal, employees may be confused about who is their direct manager. Dual authority
can cause disruption between employees and managers. It is possible that there is a major conflict
between management levels from different departments when assigning jobs to employees.
- Costly because overall cost of the company increased due to double management needs. The extra
wage that an organization must pay is quite significant with the company's resources

References
- Mindcoral.com. (2019). Nike: An Analysis of the Mission, Vision, Values, and Goals. [online]
Available at: https://www.mindcoral.com/questionlibrary/view/1526 [Accessed 14 Feb. 2019].
- Condor.depaul.edu. (2019). Strategic Analysis of Nike, Inc. [online] Available at:
http://condor.depaul.edu/aalmaney/StrategicAnalysisofNike.htm [Accessed 14 Feb. 2019].
- Statista. (2019). Nike: employees worldwide 2018 | Statista. [online] Available at:
https://www.statista.com/statistics/243199/number-of-employees-of-nike-worldwide/ [Accessed
14 Feb. 2019].
- Ngo.org. (2019). DEFINITION OF NGOS. [online] Available at:
http://www.ngo.org/ngoinfo/define.html [Accessed 14 Feb. 2019].
- Debitoor.com. (2019). Limited company - What is a limited company? [online] Available at:
https://debitoor.com/dictionary/limited-companies [Accessed 14 Feb. 2019].
- Slideshare.net. (2019). Organization structure and relationship. [online] Available at:
https://www.slideshare.net/swtnspicyaqua/organisation-structure-and-
relationship?from_action=save [Accessed 14 Feb. 2019].
- Nike News. (2019). Read Nike's Mission Statement and find information about NIKE, Inc.
innovation, sustainability, community impact and more. [online] Available at:
https://about.nike.com/ [Accessed 14 Feb. 2019].