Business Environment Analysis

The assignment delves into the multifaceted aspects of the business environment. It examines various legal structures within the private and public sectors, highlighting their distinct characteristics. The analysis extends to identifying key stakeholders who shape business decisions and operations. Furthermore, the document explores the impact of globalization on businesses, emphasizing its influence on strategies and performance.

Business and Business
Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PARTTASK 1..................................................................................................................................1
P1. Various types or purposes of organisations such as public, private and voluntary sectors
with their legal structures.......................................................................................................1
P2 SizeP2. Size or scope of range of range of different kind of organisations....................4
TASK 2............................................................................................................................................5
P3. Relationship between different functions of organisation................................................5
PART 2TASK 3...............................................................................................................................7
P4. Positive and negative impact of macro-environment upon business operations..............7
TASK 4............................................................................................................................................8
P5. SWOT analysis of company.............................................................................................8
P6. Interrelation of Strengths and weaknesses with external macro factors..........................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment is affected by both internal as well as external factors. They affect
all operational functions of company which include many forces like customers, suppliers,
technology, social trends or government activities. Business is a legally authorised organisational
entity which is started by a person or group to earn maximum profit (Teece, 2010). For effective
management, it is very important to consider all environmental factors which can affect the
business activities or decisions otherwise, company cannot attain its desired goals or objectives.
This project report is based on Marks and Spencer which is the UK's leading company in retail
sector that deals in clothing, food items or home products. In the present project report, different
typologies, size, scope and purpose of company have been discussed.
PART 1
P1. Various types or purposes of organisations such as public, private and voluntary sectors with
their legal structures
Business organisation is a legally authorised association which is started by any person or
group and set their common goals or objectives to achieve in certain time period. Some business
organisation work to earn high income or profit. Whereas, on the other hand some business
organisation formed for public purposes which called non-profits. When person make
registration of company only than it can be considered as legally authorised organisation. There
are mainly three sectors on the basis of economy such as primary, secondary or tertiary. Other
side, organisation is divided into three category such as private, public or voluntary. All these are
defined as follows:
Private sector: The main motive of this kind of organisation is to earn more and more
profit and enhance their business growth or development. Marks and Spencer Company provide
importance to customer satisfaction by providing them high quality products and services. The
main objective of company is to maximise their financial income or profit at any price (Sørensen,
2012). Private sector is divided into following parts such as:
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 Sole traders: In this kind of organisation one person manage all operational activity and
control them to earn maximum profit. Sole traders are like hairstylists, plumbers,
photographers and many more. They are liable for profit and debt of the business
organisation individually. Partnership: When any business organisation is operated by any two or more than two
person is known as partnership. Who comes together to achieve any set goals or
objectives and they share profit and debt in defined ratio.
Public sector: All those enterprises which is control or operated by any legal government
body is called public sector organisation. National Health Service is one of the public funded
organisation which is national health care system. The main product and services of organisation
is health care services for all public cited in UK. The hospital provide free health care services
to poor peoples. The services of NHS include pharmacy, GP, eye care, sexual health, pathology
and dental services in reasonable price. Legal structure of public sector is define below:
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Illustration 1: Legal structure of private sector, 2017

 Central government: This is also known as federal government which define rules and
powers for different level of states in country. There is various member of authority
delegated in all states to control exercise international diplomacy and also maintain
national security. Local government: They achieve power and rules from central government. It help to
resolve issues and problem of local peoples. It is kind of public management which is
also known as lower level administration.
Voluntary sector: This kind of organisation is known as non-profitable which help to
poor people by providing them basic needs free. Cancer Research UK comes in voluntary sector
which is charitable organisation situated in UK. They supply skill structure programs to all poor
or old people cited so that they can survive well in the society (Griffin and Pustay 2012). The
organisation provide information related to the cancer and operate campaigns to raise awareness
of disease and give proper guidelines. Cancer research funded by the public through legacies,
donations, community, retail, events or corporate partnerships. The organisation provide
treatment to poor cancer patients in free who cannot afford money for their treatment. It spread
more information about cancer to improve understanding of people of how cancer formed or
spread. The cancer foundation support research around 100 specific types of cancer. From their
total income sixty percent amount is spend on cancer research projects and remaining cost spent
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Illustration 2: Legal structure of Public sector, 2017

on information services, advocacy, trading, campaigning, administration and on many more
other activities.
P2. Size or scope of range of different kind of organisations
There is three forms of business organisation such public, private and voluntary. They
play very important role in the growth and development of economic as well as nations. They
create job opportunities for unemployed people so that they can also contribute towards the
development of country. In today's era every company try to perform their activities in ethical
way so that they can contribute more in economic. The national income is depend upon the
organisational development or growth which is operating their activity within the country
(Iskanius, Page and Anbuudayasankar, 2010). The living standard of people also improve if they
get job and can develop their personal as well as work life. The scope or size of various kind of
organisation are as follows:
Private sector: Company of this sector play very important role in growth and
development of country. Now days mostly people want to start their own business through
which they create various job opportunities for the unemployed people in the country. Private
sector organisation divided into three parts like sole proprietorship, partnership or private limited
company. Marks and Spencer is private sector firm which mainly focus to earn high profit by
giving high quality products and services to their customers. Also, hire new talented young mind
to get success and growth of business at next level in competitive market place. It is a leading
retailer company in UK
Scope and size: Company has 1,433 stores worldwide which provide high quality
services to their customers to retain them for long period of time. In organisation around 3,000
employees working and across 65,000 people are associated with marks and Spencer (Cavusgil,
et. al., 2014). The main objective of company is to provide high quality products and services to
fulfil their needs and wants. Marks and Spencer operate services of home products, clothing and
food items at international level. Company earn maximum profit and grow their level of business
by satisfying their customers.
Public sector: Those organisation which come under this sector are operated by
government which make power, rules and regulation for all companies (Wild Wild and Han,
2014). The national health services is charitable organisation which collect their maximum fund
through donation, taxation policy, community and events. They spend this money on the
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treatment of poor people who cannot afford high amount bill and charge. Their main objective is
to supply various services to normal public. The company protect interest of poor peoples by
providing them free services and treatments. NHS operate services like dental, eye care,
pharmacy, mental, emergency services and many more most of them are delivered free of cost to
poor economy people. The main service and products of organisation is its health care services.
The main objectives of NHS is to give good health product and services to all the peoples of the
society.
Scope and size: The organisation has employees across than 1.5 million in the work
system for effective management. It is one of the largest healthcare system of UK. There is some
other services of NHS for healthcare motive is provided to poor section of economy in free of
cost. The scope of organisation is to deliver high quality health products, services and treatments
to their weaker section patients at free of cost. Organisation enhance their treatments time to time
so that they can deliver treatments or services accordingly patients.
Voluntary sector: The Cancer research is mainly charitable organisation in UK. Their
main aim is to provide services to general public without any profit making motive as, they are
non-profitable organisation. They work as charitable trusts which provide free treatment services
to poor people in free of cost so, that they can make treatment of their disease. The organisation
have main objective is to improve nation condition by focused on poor section of economy.
Size and scope: This is largest donation organisation in UK which spend their money on
the treatment of people who cannot afford (Cantwell, Dunning and Lundan, 2010). The cancer
research was started in 2002 as a fund. The main scope of this fund is to provide more and more
information to the normal people related to the cancer like how it can be formed and spread in
body. There is around 3,964 employees working in the organisation. They spend their money to
spread information among people and their treatments. It is international charitable organisation
which works on across 100 types of cancer.
P3. Relationship between different functions of organisation
The Marks and Spencer includes all divisional organisational structure which is based on
delivering effective and high quality services to all their customers and people in the economy.
Because of the involvement of divisional structure in the organisation, the company has some
separate duty and responsibilities for each department which help them in effective financial
operations. The company perform its functions in systematic manner through strong strategies
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and effective plan. The divisional organisational structure includes many rules, positions,
obligations and regulation for each department so, that company can achieve high profit and
growth in competitive business market place. The organisational structure is define as follows:
Matrix structure: The employees is divided in this organisational structure on the basis
of their functions or work. To achieve organisation goals and objective company use this
structure in which team work is perform by the employees (Carroll and Shabana, 2010).
Divisional structure: In this organisational functions is divided into different department.
It is most effective structure of organisation in which employees are responsible for their work or
functions. There is delegate authority in each department so, that individual can perform his
work or duty freely. Marks and Spencer having this organisational structure for their effective
management.
Functional structure: It involve all activities like allocation of work, coordination and
supervision in the business organisation. It help in effective operating of all activities at work
place in fixed time period.
Every organisation small or large have their own objectives for which they are
constituted. For growth and development of business every company should set their clear
measurable and specific set of goals which can convey to employees so, that they work
according to them (O sterwalder and Pigneur, 2010). Marks and Spencer is one of the leading
retailer company in UK which provide various goods and services in high quality to their
customers. The company have goals and objectives according to which its organisational
structure settled. While making important decision company considered micro and macro factors
of environment. There are some objectives of company: Profitability: The major objective of every organisation is to get maximum profitability
in business market. So, this is main objective of Marks and Spencer. Organisational development: The Marks and Spencer have achieved huge growth and
success in United Kingdom. The company attract more and more customers by providing
them high quality products at reasonable cost.
 Customer satisfaction: There is no company which can survive in market without
satisfying their customers’ needs and wants. Now a days, customer is a king of market
and so, it is the responsibility of manager of Marks and Spencer to give good services to
people according to their desired expectations (Chavis, Klapper and Love, 2011).
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Without making interrelation between business functions and organisational objectives
company cannot get success and growth in business market. There are some functions through
which company can easily achieve their desired goals. Marketing: It plays the most important role in every organisation which helps company
to communicate with their customers related to products and services. With effective
advertisement activities Marks and Spencer can promote its products and services at
international level.
 Human resource management: It is core department of each company which help in
controlling and managing all work force for effective management. It help to solve any
kind of work issue and problem. HRM should provide good working environment to their
employees so that they perform well in the organisation.
Marks and Spencer use matrix organisational structure in which employees divided into
different groups to accomplish organisational objectives and goals in specific time period. In this
structure all department of organisation are interlinked with each other for effective business
management. Member of HRM and marketing have to give report to functional manager so, that
company operate their functions in systematic manner (Carroll and Buchholtz, 2014).Company
achieve goals and objectives only by interrelating their all departments with each other to get
best result and high profitability. Marks and Spencer have objective to provide good quality
products and services to their customers for satisfying their needs and wants.
PART 2
P4. Positive and negative impact of macro-environment upon business operations
Every organisation highly effected by internal or external environment factors. Any
company cannot accomplish their desired goals or objectives without following environmental
factors like political, social and legal factors which affect organisational growth and success.
Internal factors affect company from inside whereas, external factors affect organisational
performance from outside. M & S considered its business environment for the growth and
success in competitive market place. Company can determine environmental factors by using
PESTLE analysis.
Political factors: It include so many rules and regulation made by any government to
control all the business activities. Every company big or small is obligated to work according to
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them otherwise, government can make charge on them or stop their business activities. M & S
makes their plans or strategies according to the political factors.
Economic factors: While providing goods and services to customers, company should
considered social factors as it help to fix amount of products according to the market situation.
The biggest advantage of this factor is that people get goods and services in low price.
Social factors: It include socio cultural of environment, which is very important to be
considered by company while making any plan or strategies. This factor also help to create
goodwill as well as good image of company by paying corporate social responsibility.
Technological factors: It is very important for growth and success of company as it help
to increase profitability and productivity with the help of new technology tools and equipment.
M & S use high technology machines in manufacturing process through which company can
reduce cost of production and wastage.
TASK 4
P5. SWOT analysis of company
Marks and Spencer use SWOT analysis which can help to evaluate all internal and
external factors of environment which can affect the performance and position of business
organisation.
Strengths:
 It is leading retailer in United Kingdom
which deal with across 21 million
customers in each week.
 Company have more than one
thousands stores across 40
countries.There is around 80,000
employees working in the company.
 The brand have high value because of
its high quality goods and products
which give best shopping experience to
their customers. Company has their own brand labels
Weaknesses:
 The other competitors give tough
competition to M&S Company by
covering high market share.
 Company provides out dated fashioned
or non-trendy clothes to their
customers.
 It has many new store space which is
stuffed by old fashion clothes there is
no new trendy cloths there.
 In the manufacturing process, they use
old technology which increase cost.
 There is customer's perception in
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(Trkman, 2010). market that company takes high cost
from people.
Opportunities:
 Organisation can create new segment in
the market place to cover more
customers which help to increase
profitability (Commander and Svejnar,
2011).
 M&S can grow their level of business
in competitive business market by
providing new trendy fashion clothes to
their customers. Company can also create their online
website to sell their goods and products
at international level easily.
Threats:
 The social environment continuously
changes after some time due to which
customers taste and preferences also
change, which effect the lifestyle of
customers.
 High competition is biggest threat for
Marks and Spencer which can affect the
performance as well as position of
company.
 Change in government rules, regulation
and policies can affect its operations as
it is international retailer.
P6. Interrelation of Strengths and weaknesses with external macro factors
The M & S organisation have some weaknesses and strengths which help in decision
making process. The Marks and Spencer improve its position in business economy by evaluating
its weaknesses and strengths so, company should find them properly. Every company should
create link between objectives and activities to achieve best outcomes. Both strengths and
weaknesses help in planning, strategies and decision making process. It also help to check
internal as well as external working operations to see whether all operational activities, task and
project are executing in systematic manner or not (Aterido, Hallward-Driemeier and Pagés,
2011).
Strengths: For the growth and development it is important for Marks and Spencer to find
out all weaknesses and strengths. It helps to know ability and capabilities of employees to
perform task and duty within company to achieve organisational goals and objectives. Marks and
Spencer use new technology in manufacturing process which help to increase their profitability
as well as productivity. Every company should follow technology for effective business
management. To maintain stability in competitive business market Marks and Spencer open its
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many store in different location to cover large segment in market place. It help to increase their
number of customers and adaptability.
Weaknesses: It helps in strong strategy making process which leads to grow business at
peak point. It is important for company to identify its weaknesses to deal with them effectually.
Company can achieve higher profitability in business by dealing with its weaknesses on
time.Marks and Spencer faces tough competition in business markets by their competitors which
reduce profit level of company. Weaknesses play an important role in all operational activities of
company it can reduce the production level as well as profit level of company.Political factors
change continuously when government change which effect directly on the procedures of
company. Due to this, manager have to change all process, procedures and methods which need
more cost and more time. If goods and products not manufactured according to customers
demand than company can suffer from high loss. Change in social factors can affect the
customer’s perception and need due to which company get loss in business market place.Weak
strategies and plan also affect the performance of company. So, Marks and Spencer should make
strong strategies and plans for gaining higher growth and development of enterprise in
competitive business market as there are so many competitors who give tough competition to
each other (Craig and Campbell, 2012).
CONCLUSION
From the above project report, it can be concluded that every business organisation is
affected by various environmental factors such as legal, political and social factors. The business
environment is categorised into two parts i.e. micro and macro both that affect the performance
of company. It has been assessed that business environment is the most important part which
needs to be considered by each company while making any important decision, strategies or plan
for growth and development. It has also been articulated that manager should keep in mind all
internal or external factors while taking any important decision otherwise, company like M&S
cannot gain success and growth for longer span of time.
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REFERENCES
Books and Journals
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growth? Business environment and employment growth across firms. Economic
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international business activity: The co-evolution of MNEs and the institutional
environment. Journal of International Business Studies. 41(4). pp.567-586.
Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and stakeholder
management. Nelson Education.
Carroll, A.B. and Shabana, K.M., 2010. The business case for corporate social responsibility: A
review of concepts, research and practice. International journal of management reviews.
12(1).pp.85-105.
Cavusgil, et. al., 2014. International business. Pearson Australia.
Chavis, L.W., Klapper, L.F. and Love, I., 2011. The impact of the business environment on
young firm financing. The world bank economic review. 25(3). pp.486-507.
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Craig, T. and Campbell, D., 2012. Organisations and the business environment. Routledge.
Griffin, R.W. and Pustay, M.W., 2012. International business. Pearson Higher Ed.
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changing business environment–a case study of the Finnish steel product industry.
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Trkman, P., 2010. The critical success factors of business process management. International
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Wild, J.J., Wild, K.L. and Han, J.C., 2014. International business. Pearson Education Limited.
Online
Business Environment. 2017. [Online]. Available through: <http://businessjargons.com/business-
environment.html>. [Accessed on 23rd October 2017].
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