P2; Define the size and scope of Mark and Spencer, Tesco and Red cross

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
P1; Describe different type and purpose of organisation ...........................................................1
P2; Define the size and scope of Mark and Spencer, Tesco and Red cross ...............................2
P3; Explain the relationship of different functions of organizations and how they link to
achieve the organisational objectives..........................................................................................3
4. Various Macro Environmental Factors That Impact On The Business Operations And Its
Positive And Negative Impact....................................................................................................5
5. Internal And External Analysis Of Marks & Spencer To Identify Strength And Weakness
And Its Influence On Decision Making......................................................................................7
6. Interrelationship between strength and weakness with external macro factors......................8
CONCLUSIONS..............................................................................................................................9
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment refers to all internal and external factors and forces that affect how
the company functions and its ability to maintain customer’s relationship. There are two type of
business environment, micro environment and macro environment. Present study shows the
different types, size and scope of organisations. Report discusses about the interrelationship of
the various functions within an organisation and their interlinking with company’s structure.
Assignment highlights the positive and negative influence of macro environmental factors on
business operations. Study also determines the internal strength and weakness of Marks and
Spencer and its interrelationship with external environment factor.
1 Describe different type and purpose of organisation
Give a brief introduction of task
Public sector organisation- Public sectors are those sectors which are owned and
operate by the government to provide the services for their people. Tesco is a public limited
company. This sector do not have a motive for generates profit. The sources of getting fund in
public sectors are public taxes, fees, collect financial transfer from the state governments or other
level of governments. This sources may vary from country to country they have different
methods for the collecting of funds. It is possible that public sector starts a venture with private
sector this partnership provide service to the people of the country. Example of public sectors-
police services, fire services, municipal corporation, post office, water supply, railways
etc(Javeed and Mukhopadhyay 2017).
Purpose of public sector- These sectors main purpose is to serve the public, but on the
other hand it also contribute on the nation's growth and development. Public sector develops the
economy of the nation from its different type of corporations, public sectors have purpose to be
self-dependent for this purpose they set their enterprises in transportation, communications,
energy, petrochemicals. Public sectors purpose is to provide the employment, development of
backward areas, collect the funds for production of defence etc.
Private sector organisation- Private sectors are that type of sectors which is run by the
individual and companies the main aim of the private sector is generated the profit from its
products and services. Mark and Spencer is working as a private limited company. These sectors
are mostly generated its profit from these areas Finance, information banking, mining,
constructions, transportation, education and its raises its money from the issuing of shares and
1

debentures. There are many benefits for the workers who working with private sector like good
salary package, incentives. Interfere of the government in public sectors is less they can work
independently ion their organizations. Public sectors are growing very fast because they are
preferred quality of employees not the quantity(Hutchinson 2018 ).
Purpose of private sectors- the main objectives of the private sectors is to maximize the
profits for its owners and shareholders so desires of profit is more important than the serving of
people of country for the private sectors. Private companies have also an objective to choose
right organizational structure.
Voluntary sectors – Voluntary sectors are those type of sectors whose purpose is to
benefits and enrich society, profit is not their motive and there is no interfere of government.
Example of voluntary sectors are – charities, foundations, welfare organizations etc. Red Cross is
a voluntary sector.
Purpose of voluntary sectors- main purpose of voluntary sectors are to development of
the country and society. They provided the help of those people of group who are not able to do
help themselves or others.the main purpose of voluntary sector is to improve the lifestyle of
backwards area people.their purpose is to make social wealth rather than.
Legal structures of Marks & Spencer
Legal structure relate to the power of decision-making and owner of the business there are few
types of legal structures – sole proprietorship, partnership, limited partnership, limited liability
company and corporation etc. Marks and Spencer is a private limited company in this company
each shareholder has a limited liability for debts. Its very difficult for the shareholder to sell their
shares till they don't find a buyer within the company.
P2; Define the size and scope of Mark and Spencer, Tesco and Red cross
In first part our discussion was on the different types of organization and their purpose now we
will discuss of size and scope of Mark and Spencer, Tesco and Red Cross(Tesco plc.2018.).
Mark and Spencer size and scope - Mark and Spencer is founded in 1884 in Leeds,
United Kingdom by the Michael Marks and Thomas Spencer. It specialises in selling of clothing,
home products and food products. M&S currently has 979 stores across the U.K. And it’s over
600 stores only sell the food products. Till 2017 Mark and Spencer has more than 84000
2

employees working. Marks & Spencer revenue was £10.70 b in financial year 2018 (Fratričová
and Rudy 2015 ).
Illustration 1: revenue of marks and spencer
(Source: Marks and Spencer - Statistics & Facts.,2018.)
(
Marks and Spencer have to make relationship with the share holders there are many perks for the
shareholders they send selection of the spend and save voucher for the share holders there is no
minimum holding requirement for the participation, there is you only need to hold a share before
the distribution. This help to satisfy the needs of the customers
Tesco PCL. Size and scope-Tesco was founded in 1919 by jack Cohen its leading supermarket
in 20 years its opened more than the 6800 stores worldwide In Tesco 460000 employees are
working, everyone can buy shares from the London stock exchange, Tesco revenue has £55.9
billion in 2017. There are many portfolios of shops are followed in UK by Tesco like – Tesco
extra, Tesco Supermarket, Tesco Express, Tesco metro, One Stop, Tesco Dot-com etc. Tesco
offering a range of products and service, there is excellent work are done by the staff of Tesco at
all levels to satisfied the customers need.
3

Illustration 2: Size of
Tesco's
(Source;Tesco PLC - Statistics and Facts.2018.,)
This company is owned by the shareholders who fund the company, major shareholders of
Tesco. Has BlackRock, Inc. 6.64%, Norges Bank 3.99% , Schroders plc. The scope of tesco
enable it to deliver strong and sustainable growth by its customers into markets, Tesco create
value for customers to lifetime loyalty.
Red Cross scope and size - Red Cross was founded in 1863 in Geneva, Switzerland, it has 17
million volunteers worldwide, it is idea by the Jean Henri Dunant. It's non-government and non-
profit organisation which has 25 members have an authority under the international humanitarian
law to protect dignity and life of victims, the International Committee of the Red Cross was
awarded three times the Nobel Peace Prize (Mazzucato 2015).
4

Illustration 3: Red
cross graph
(Source;Coastal Disaster Risk Reduction.2013.)
Tesco has large scope of activities which it presents in many countries, there are many
companies foundations and individuals who support the ICRC by the Donations and Partnership.
P3; Explain the relationship of different functions of organizations and how they link to achieve
the organisational objectives
Illustration 4: organization chart
(Source;Organizational Chart.2018., )
5

Marks and Spencer is our chosen organisation which has different functions area that are work
for the company like Human Resource, Marketing, Finance etc.
Human Resource- The main work of the human resource is recruitment, training and
development. HR function of Marks and Spencer is to recruit the perfect candidate for
organization who can help to achieve their objectives. Employees are the responsible for the
company's growth, there are many ways for the recruitment which company used. It's help the
different department of the company to provide the right candidate on the assign work. H R
department is responsible for the provide proper staffing in finance and marketing team. It is not
always possible to provide right candidate on right place. Training and development is also
required a budget so that is expenses. HRM department have many recruitment of staff and their
training demand from different departments so they to fulfil their demand.
Marketing department- Marketing department is responsible to satisfy the customer
needs and wants but it’s not possible without the help of different sections of organisation. All
the department of a business are interdependent so they have relationship with each other
marketing is depended on Finance department for an adequate budget which need for promotion,
distributions and research. Marketing have relationship with HRM to get the proper staffing in
different areas of it. With the production department volumes of orders generated by marketing
met on the agreed time interrelationship help the speed of operations on the other hand there are
many disadvantages in it like lack of coordination can slow the operations that create a
misunderstanding, if any of function will not work properly it can affect the all the function of
the businesses(Schaefer 2016).
Finance department- Finance is most important department of the business
organisations, finance relationship with HRM department that it is allotted the wages, salary
commission, bonus, and other monetary benefits to HRM department. To distribute the goods
and service of Marks and Spencer in market by marketing team they have to need a sufficient
amount of fund so finance department allot the amount to the marketing team. Disadvantage of
finance department depend on the selling of product and service. If sales and marketing is not
getting a enough business its not easy to manage the functional activity of the business. HRM is
not provided the skilled staff it is tough generate business profit. This all are the disadvantage of
interdepartmental relationship.
6

4. Various Macro Environmental Factors That Impact On the Business Operations And Its
Positive And Negative Impact
The business and business operations are affected by the environmental factors.
Strategies and decisions are made keeping in mind these factors. The Marks & Spencer operating
its business in retail markets and it offers variety of products and services to its customers.
Therefore, Marks & Spencer's operation management focuses on environmental factors in order
to make strategies and find out its current market position. The management of Marks & Spencer
uses pestle analysis to analysis various external factors (Srdjevic, Bajcetic and Srdjevic, 2012).
POLITICAL FACTORS
Every organisation is affected by the political factors of the country or economy. The
political factors which affect the business and its operations are rules and regulations made by
government, its policies, foreign trade policies, tax law, labour law, etc.
Negative impact: The Marks & Spencer also gets affected as UK is leaving the European
union which can bring negative changes in rules and regulations for the company. As UK faces
political instability which can directly affect Marks & Spencer's business environment. It leads to
negative effects for business and operations of Marks & Spencer.
Positive impact: Government brings changes in foreign trade policy and allows free
entry of companies in new markets. This changes in foreign trade policy and also can benefit
Marks & Spencer to enter easily into new markets and expand its business in the global markets.
This bring positive results and positive outcome for business.
ECONOMIC FACTORS
The organisation is affected by the various economic factors of the business environment
(Bull and et.al., 2016). The economic factors are interest rates, cost of labour, inflation,
economic growth of the country, disposable income of people, etc. The Marks & Spencer is
affected by the various economic factors as it deals in retail market and its business has great
involvement of its customers and employees.
Negative impact: The cost of labour is low in recent times which benefits the
organisation, but changes in cost of labour affects negatively the business and operation of
Marks & Spencer. This affects business of Marks & Spencer in negative way.
7

Positive impact: The economic growth of a country is stable which benefits the Marks &
Spencer to expand its business by increasing its number of outlets. This brings positive result for
Marks & Spencer and also help it to gain advantage over competitors.
SOCIAL FACTORS
The social factors are directly or indirectly related to social environment. The social
factors which affects the business organisation are education level, changing trends, culture
followed by people, demographic factors, etc. The Marks & Spencer operates its business in
retail markets and provides variety of products to its customers. So, it needs to follow the recent
trends emerging in market in order to satisfy target market.
Positive impact: The demands of branded clothing is increasing in young age group can
benefit the Marks & Spencer to increase its clothing business outlets and meet the demands of
customers (Hannington, 2016). And it results in positive ways for Marks & Spencer to gain
competitive advantage.
Negative impact: There is constant change in demands of people which can affect Mark
& Spencer's business and operations. If company fails to fulfil the demands and expectation of
target market, it will not be able to sustain in competitive market. It greatly affects business of
marks & Spencer in negative way.
TECHNOLOGICAL FACTORS
The economy is experiencing new and advance technology in business operations and its
environment. The technological changes can be in developing advance ways in production of
goods and services, development of technological distribution channels, etc.
Positive impact: Marks & Spencer adopting advance technology in production of goods
and services will benefit organisation to meet demands of customers by providing innovative
products at low cost (Blockeel and et.al., 2016). This brings positive results for Marks & Spencer
and helps in increase its market share.
Negative impact: The adoption of new and advance technology will affect Marks &
Spencer to spend more on technologies and it also has to provide training to its employees
regarding updated technology. This negatively affects business environment of Marks & Spencer
to spend more which increases budget and cost of products.
ENVIRONMENTAL FACTORS
8

The environmental factors which affects the business environment are weather, climatic
changes, global warming or ecological factors.
Positive impact: Marks & Spencer provides environmental friendly and sustainable
products to its customers and maintains environmental balance. This way it can earn the trust of
its customers and can achieve the competitive advantage. And bring positive results and
outcomes and gain competitive advantage.
Negative impact: The increasing pollution, limited natural resources, scarcity of raw
materials affects the operations of Mark & Spencer. This brings negative results and negative
effects for Marks & Spencer.
LEGAL FACTORS
Legal factors include various law which affects the business environment and operations.
The laws are employment law, health and safety law, consumer law, etc.
Positive impact: Marks & Spencer follows health and safety laws in producing the food
products which benefits organisation to create its brand image and expand its market share.
Negative impact: The decision of UK to exit the European Union affects the business
environment of Marks & Spencer and face legal issues (Bohari and et.al., 2017).
5. Internal And External Analysis Of Marks & Spencer To Identify Strength And Weakness And
Its Influence On Decision Making
The internal and external analysis of organisation is done to find out its strength and
weakness. Both the internal and external factors affect business environment and strategic
decisions needs to be made. The internal analysis of Marks and Spencer allow company to find
out its internal strength, weakness, opportunities and threats. And external analysis helps
organisation to identify external factors that affect business environment.
The internal analysis of Marks & Spencer is done by using SWOT analysis to identify strength
and weakness and its influences on decision making of organisation.
Strength: Marks & Spencer uses advance technologies and updated systems which allows
company to increase its market share by providing innovative and quality products to its
customers. The decisions can be made to provide technical training to its employees so that
advanced technologies can be used effectively.
9

Weaknesses: Marks & Spencer is a retailer and provides variety of products such as luxury food
products, clothing, home products, etc. and offers a complete shopping experience to its
customers but it lacks providing quality as it has many streams and products to focus on.
Opportunities: Marks & Spencer has franchisee agreement with many developing countries
which benefits organisation to take advantage by entering in new markets and expand its
business(Bull and et.al., 2016).
Threats: There is large competition in market of retail businesses and new entries of business is
easy. Marks & Spencer has threat of losing its market share in global market due to increased
competition.
Marks & Spencer needs to come up with new and innovative ideas to bring innovation
and creation in its business activities and meet demands of customers and increase its market
share. The weakness and threats needs to be resolved and sustain competitive advantage.
The external analysis of Marks & Spencer is done by considering porter's force model in order
to find the strength and weakness of company. The porter's five force model focuses on
identifying competitive forces of business environment.
 Bargaining power of buyers: Marks & Spencer have captured a large market share by
offering products and services innovative and creative products and services. This creates
pressure for Marks & Spencer as it has to maintain the quality of its products and meet
their demands, and it also benefits in low bargaining power of buyers.
 Bargaining power of suppliers: Marks & Spencer being retail business needs to have
large number of suppliers to supply its product in target markets. Because higher number
of suppliers benefit in lower bargaining power and it acts as opportunity to
organisation(McDonagh and Prothero, 2014).
 Competition rivalry: marks & Spencer operates in retail market industry which has very
large rivalry and competition. Marks & Spencer can bring innovation and sustain in
competitive markets. It can also be treated as a threat, if it fails to provide quality good
and services to its customers.
 Threat of new entrants: new entrants in retail markets will bring marks & Spencer to
bring innovation in its business operation to meet demands of customers. The decisions
can be made to lower down the price of products and services so that it can take
competitive advantage over its competitors.
10

 Threat of substitute product: when a similar product is launched in market by another
company, it creates threat for existing company. Marks & Spencer faces threat of
substitute products as there are many organisation dealing retail markets and offering
same kind of products and services(Oraman, 2014). Marks & Spencer can take benefit of
this by understanding needs and wants of customer and meeting their expectations.
By properly analysing the external factors by porter's five force model, Marks & Spencer should
make its strategies in a way so that it overcomes the threats and take advantage of its
opportunities.
6. Interrelationship between strength and weakness with external macro factors
Organisation evaluates its internal and external factors to identify its strength and
weakness. By properly analysing the influencing factors, a company can make strategies to garb
the opportunities and correct and overcome weakness. Marks & Spencer analysis its business
environment by using SWOT analysis(Srdjevic, Bajcetic and Srdjevic, 2012). The external
macro factors affects business environment and also influences decision making and strategies of
organisation. Interrelation between strength and weakness and external macro factors of Marks
& Spencer's environment is given below.
Strength of M&S
Marks & Spencer operates its business in retail sector and provides home products, luxury food
items and clothing items that benefits organisation to develop and introduce new products in
markets and meet needs and wants of customers. The business environment is facing emerging
trends and changes in taste and preference of buyers, this affects Marks 7 Spencer to adopt
technological changes and bring innovation and creation to meet their expectations which results
in creating its brand image and loyalty.
Technological changes of using mobile phone for online shopping benefits Marks & Spencer to
increase its market share. Use of E-commerce results positive outcomes as there is less paper
work to maintain, advanced systems are used which increases efficiency and performance of
company(Hannington, 2016).
Weakness of M&S
The changes in government's rules and regulations regarding foreign trade policy or free trade
agreement influences business environment as Marks & Spencer has to bring with innovative
products and strategies to gain competitive advantage and face new rivalry.
11

The use of environment friendly products are trending in recent markets and adopted by many
rivalries companies of Marks & Spencer which puts pressure on organisation to use environment
friendly products and sustain in market.
CONCLUSIONS
Organisation should properly analysis both the internal and external environmental
factors which influences the organisational environment and its performance. This will benefit
the organisation to adopt and make accurate strategies and gain competitive advantage. SWOT
and PESTLE analysis of organisation helps organisation to identify its strength and weakness
and also helps in identifying factors which may influence the performance of business.
REFERENCES
Books And Journal
Blockeel, C., and et.al., 2016. A fresh look at the freeze-all protocol: a SWOT analysis. Human
reproduction. 31(3).pp.491-497.
Bohari, A.M. And et.al., 2017. The competitiveness of halal food industry in Malaysia: A
SWOT-ICT analysis. Geografia-Malaysian Journal of Society and Space. 9(1).
Bull, J.W., and et.al., 2016. Strengths, Weaknesses, Opportunities and Threats: A SWOT
analysis of the ecosystem services framework. Ecosystem Services. 17. pp.99-111.
Hannington, T., 2016. How to measure and manage your corporate reputation. Routledge.
McDonagh, P. and Prothero, A., 2014. Sustainability marketing research: Past, present and
future. Journal of Marketing Management. 30(11-12). pp.1186-1219.
Oraman, Y., 2014. An Analytic Study of Organic Food Industry as Part of Healthy Eating Habit
in Turkey: Market Growth, Challenges and Prospects. Procedia-Social and Behavioral
Sciences. 150. pp.1030-1039.
Srdjevic, Z., Bajcetic, R. and Srdjevic, B., 2012. Identifying the criteria set for multicriteria
decision making based on SWOT/PESTLE analysis: a case study of reconstructing a
water intake structure. Water resources management. 26(12). pp.3379-3393.
Javeed, N. and Mukhopadhyay, D., 2017. Exosomes and their role in the micro-/macro-
environment: A comprehensive review. Journal of biomedical research. 31(5). p.386.
Hutchinson, J., 2018. Champions of charity: war and the rise of the Red Cross. Routledge.
Fratričová, J. and Rudy, J., 2015. Get Strategic Human Resource Management Really Strategic:
Strategic HRM in Practice. International Journal of Management Cases. 17(4).
Mazzucato, M., 2015. The entrepreneurial state: Debunking public vs. private sector myths (Vol.
1). Anthem Press.
12

Schaefer, A., 2016. Different Types of Business.
Online
What Is a SWOT Analysis?. 2018. [ONLINE]. Available
through:<https://articles.bplans.com/how-to-perform-swot-analysis/>
Marks and Spencer - Statistics & Facts. 2018. [Online]. Available through
<https://www.statista.com/topics/3707/marks-and-spencer/>
Tesco PLC - Statistics and Facts.2018. [Online]. Available
through<https://www.statista.com/topics/3807/tesco-plc/>
Coastal Disaster Risk Reduction.2013. [Online]. Available
through<https://tectonicplatesindonesia.weebly.com/-red-cross.html>
Tesco plc.2018. [Online]. Available through<http://www.company-histories.com/Tesco-plc-
Company-History.html#>
Organizational Chart.2018. [Online]. Available through<https://www.smartdraw.com/organizational-chart/>
13

14