Business Environment Analysis and PESTEL Framework

The provided assignment involves analyzing the business environment using the PESTEL (Political, Economic, Social, Technological, Environmental, and Legal) framework. It requires identifying the impact of these external factors on businesses and understanding how they coevolve with corporate cultures. The assignment also includes a list of references to relevant academic articles and books, as well as online resources, which provide additional context and insights.

Business And Business
Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Purpose of private, public and voluntary organisation......................................................1
P2 Size and scope of Marks and Spencer organisation..........................................................3
TASK 2............................................................................................................................................4
P3 Relationship between functions of the organisation for achieving mission......................4
P4 Positive and negative influence the macro environment on the business activities of M&S 5
P5 SWOT analysis of Marks and Spencer.............................................................................7
P6 Interrelate with strength and weaknesses with external macro factors.............................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Books and Journals...............................................................................................................10

INTRODUCTION
Every organisation can analyse their external and internal environment which help in
enhancing growth and development. Business is commercialised action by which they can
exchange various goods and services. It assists in generating more revenue and profit. In an
organisation, there are various types of employees who help in gaining profit and maximise it by
selling products in huge market. Company manager will give their full effort in attaining target
goals and objectives (Aula, 2010). . In an enterprise, there are various form of administration
which have various scope and motive and it includes public, private and voluntary firm. These
organisations perform different functions and activities and each have their separate objective.
This project is based on Marks and Spencer which is multinational company and it has approx.
1433 stores in all over the world. They sell various products such as online food and branded
clothes and home-based items.
TASK 1
P1 Purpose of private, public and voluntary organisation
Business is commercialised action by which they can exchange various goods and
services. It assist in generating more revenue and profit. In an organisation, there are various
types of employees who help in gaining profit and maximise it by selling products in huge
market.
Private sector- Private sector includes all profit businesses which are not controlled as
well as run by the government. This is owned by single or group of people. Only they are
responsible for handling all the risks and enjoying profit as well. It is that sector in which private
owners hold country economy and distribute market shares for people. They required to followed
all rules and regulations which is essential for the firm. Basically private sector works for earn
maximum profitability. Private organisation help in increasing employment opportunities which
is necessary for the company. All the resolution and industrial growth and development are
based on this sector. This will works for their secured profit income. The example of private
company is Marks and Spencer which is situated in United Kingdom. They serve all home
products, branded clothes and other items of house. It has almost 1233 stores in all over the
world.
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Public sector- Public sector refers to that potion of an economical system that is operated
by local, state or national government. Legal bodies are responsible of investing money and
offering services to common people at minimum prices or even at free of cost. Public
organisation are that sector where all activities and functions are totally operated by government
authorities. All companies shares are controlled by government on behalf of them. Public
organisation only works for satisfy need of people. It will also known as PSU public sector
which is undertaking all functions. There are various sources which provide funds that include
tax, fees and other sources. Country has different methods by which they easily increase amount
in effective manner.
TESCO is an example of public company which is multinational firm of UK. This is
largest grocery store which is situated in Europe and it is broad businessperson firm. All the
public sector satisfy their government work in United Kingdom. It also works for providing
insurance services and banking sector facilities. This will used for development new ideas and
formats and also modify their preferences. It is largest store of retail firm and also a public sector
company of UK. They usually works for provide basic need of poor people and make rich by
health not by wealth. This will known as non profit sector and it is called as third sector. These
firms are also works for fulfilling demand and needs of persons in better manner. They were also
known as NGO, unspecific foundation, social benefit and unit of people and non earnings
organisation which relates to voluntary sector.
Voluntary sector- It is also known as non- profit sector having duty of doing social
activity and provide public services to needy people. For example, these groups provide food to
poor people who are not able to earn money. Voluntary sector is non profit organisation who
works for welfare of society people. The main aim and objective of this firm is to fulfil needs
and wants of an individual. They also focus on various types of health issues and social
problems. OXFAM is an example of this sector. It is multinational charity firm which is based in
UK. It will works for providing help to needed person and assist government in eliminating
poverty, illiteracy and other major issues. This also fights for people rights which provide safety,
livelihood and food. The main objective of this enterprise is to remove all issues which create
hurdle between growth and development. Oxfam is works in almost 90 countries and it control
and manage long term programme.
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P2 Size and scope of Marks and Spencer organisation
Marks and Spencer- It is one of the leading retail company which is situated in UK.
They sale branded clothes, home appliances and luxury food items to their customers. They
manage approx. 959 stores in UK and in 600 stores they only provide food products. It has
almost 82,904 employees who works for accomplishing goals and objectives in better manner.
Total revenue of this enterprise is approx. 10,622 million. Marks and Spencer tries to became
successful retail firm in 1988 and earn approx. 1 billion profit amount. They will grow in global
market and set target for achieving continuous profitability in the market. In many countries such
as Russia, France, Poland, Spain, Turkey, Marks and Spencer has made huge profits approx. 223
which attract more customers. They will also introduce first online market where buyers can
easily purchase products in choosing high quality. Company will make demanded goods which
usually wants by desired customers in large market. They also adopt latest techniques and
methods which help in analysing whole market and reach their target customers. Firm try to
expand their business in all over the world and enhance their sale approximately 800 million to 1
billion in current time period.
TESCO- It is largest retail sector which has huge market share in large market place. This
is third biggest company which generates maximum profit in the country. This also provides
various types of goods and services in 13 different countries and they are opening further stores
in different countries . Almost 47,0000 employees who perform function for achieving target
goals and objectives in proper manner. At same time, they offers products or services to approx.
50 million customers and only provide quality goods. It help in attracting more customers
mainly from international market who are desired to buy specific commodity. Tesco hold large
market share which is 28% and it will increasing day by day. By keeping that type of market
they usually deal with difficult condition where their sale also reducing at particular time.
OXFAM- It is non profit organisation which is large in size and they usually works for
welfare of people. The firm is established in 1942 and the main aim of this organisation is to
resolve social issues. They also make sure that enterprise must fights for human rights and
remove poverty at common places. The firm control and manage all functions and activities
which are necessary for their employees. Government also made different schemes and policies
which will assist in giving rights to people and ensure that they get benefits of their rights. They
mainly donated all amount which is either earned and collected by them and organise various
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functions for the welfare of poor people of the country. All the money they collect are used in
providing social benefits and issues.
TASK 2
P3 Relationship between functions of the organisation for achieving mission
Organisation structures refers to that system which make rules and regulations and
analyse all roles and responsibilities of company managers who will managed and controlled
functions of firm. They are focus on providing information from one level to another level of the
firm (Robbins, Judge and Campbell, 2010). There are various structural in organisation such as
centralized in which decision flow from top to down, and another is decentralized in which
decision flow from down to top. Firm used hierarchy approach which assist in smooth running of
business operations. Whole system and functions are operated by managers and only he is
responsible for developing effective leadership. An organisation can maintain whole functions
and activities which is necessary for the firm. They also perform task or work in achieving target
goals and objectives in proper manner. To motivate their employees and encourage for doing
best work within an organisation. The market share can be distributed in whole market in
effective and efficient way. The relation between business operations which help in explaining
basic function properly. Marks and Spencer also concentrate on developmental model and attain
growth of the country. The main reason behind this changes are that it directly affects on
company image and they need to set good image in the mind of customers that assist in attracting
towards them. Cited firm also gives preferences to environmental and infrastructural
development which is essential for setting growth. Company managers works for managing and
controlling all selection, hiring, planning, recruiting and monitoring business operations
(Guglielmetti, 2011). They also ensure that all task or works for achieving target goals and
objectives which enhance profitability and productivity of firm. Mangers should improve their
performance according to the demand and need of products and services.
Marks and Spencer will adopt hybrid strategy and matrix structure which provide growth
to their employees. An organisation assist in effectively and flexibility in different department so
that they will assign task in given time period. For effective management, they used to carry
increase amount of funds which assist in carrying business functions and operation in appropriate
manner (Gebauer, Paiola and Edvardsson, 2010). All the functions are connected with each other
and focus on accomplish targets and goals.
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These are certain departments of Marks and Spencer which are interlinked with each other that
are discussed as under:
 Marketing and Sale- It is one of major and important department of the firm which is
used by Marks and Spencer and they sell various types of products and services to their
customers. Marketing department assist company in convince buyers to purchase their
goods and services. They also identify consumer demand and wants and they need to
provide data and information to the consumers. Cite firm tries to position their place in
taking advantage of competition. All the products and services should be distribution
among different types of customers in better manner.
 Finance- It is that department who prepare budgets for developing products and services
in each manner. They are provide money for organising campaign and functions which
create awareness between buyers (Fernando, 2011). Marketing manager main
responsibility is to gain information to their customers about respective goods and
services. This is important for firm to make accurate decision about promoting products
in large market and how it is helpful for them. There are many sources which help in
maintaining finance amount in effective manner.
 Customer services- Each organisation has maintain their customer department in which
employees listen customers issues about products and services and try to solve it within
given time period. Buyers can complaint about their goods features and also to exchange
it with another commodity. This department manager also take feedback and reviews
regarding their respective products or services in better manner.
P4 Positive and negative influence the macro environment on the business activities of M&S
There are certain factors which directly or indirectly impact on business operations. In
external factor, company will effects organisational activities in high level. It includes political,
economical, technological, social, legal and environmental components. Various situations
affects positively and negatively in proper manner (Belás and et. al., 2015). Marks and Spencer
analyse PESTLE factors which identify external forces which occurs during production and
profitability. These are discussed as follows:
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(Source: PESTEL analysis, 2017) Political factor- Each firm operate their business in different countries so there is an
opportunity for facing any political stability. United kingdom are totally in favour of
Brexit sign which is directly impact on business and its outcome is unstimulated in any
situation. Therefore, the sale of cited firm is continuously go down. Economical- All business operations are done by effectively and economy of country
gives direction in each situation (Bill Pasmore PhD and CMC, 2010). It is important for
business to present in favour of different situations and conditions. If income is high of
consumer then they will buy more products and services from Marks and Spencer. Social factors- It is external factor which changes whole market trends among customers
and modify their thinking about particular goods. The consumer behaviour are totally
change according to see the new and latest brand in the market. An organisation provide
full attention towards social trends and it enhance growth and development of economy
in given time period (Blanchard, Tolbert and Mencken, 2011). Company will adopt
planned strategies which help in increasing their brand image in the large market and also
enhance growth.
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Illustration 1: PESTEL analysis

 Technological factors- Marks and Spencer required to adopt various techniques and
methods which is essential for the growth and development. They update their
technologies with new and latest equipments. If an enterprise adopt methods and tools
they easily attracts world wide customers towards their products and services. There are
various sources which assist in promoting their goods and services such as newspaper,
television, radio, online marketing, templates and others. They provide home products,
branded clothes and high quality food items. Legal factors- It is legal factor which help in identifying latest rules and regulations
which are made by government. The external rules and norms are directly impact on
company business operations and also employees policies. Firm hire a person who is
responsible for solving legal issues or problems which arises in making strategies and
plans in better manner. When enterprise expand their branch, it will assist in solving
related issues and problems (Cantwell, Dunning and Lundan, 2010). UK decided to
develop European union by which business resolve all necessary issues relates to legal.
Company required to modify their value added tax rules and structures and also works for
export or import scenario.
 Environmental factors- In United Kingdom, there are some strict rules and regulations
which help in developing growth. Global products should analyse their products from
root and required to adopt planned strategies. In this factor, business serve their goods
and services in proper manner (Erving and et. al., 2011). It will assist in reducing the
waste and help shareholder society.
P5 SWOT analysis of Marks and Spencer
SWOT analysis is an essential factor of company which assist in identifying internal and
external factor such as strength, weaknesses, opportunities and threats. It is pillars of company
that will evaluate basic need. Strategic analysis help in making products and services in accurate
manner. SWOT analysis are discussed as under:
Strength- Marks and Spencer gives franchising for international market and developing
in firm in comparison to other tough competitors. They were operate their retail business in
different countries. It will make stability among customers and organisation that assist I
developing internal strategies which create risk factors (Chow and et. al., 2012). This is
multinational company which serve quality products in various locations by using many sources
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such as newspaper, online marketing, advertisement and promotional activities. It is consumer
oriented policy which help in taking good experience and provide benefits to them.
Weakness- There are various task which can not properly performed by firm. They does
not choose accurate strategies which help in gaining more income to them. Researcher estimation
is that there are some products which are not sale in the market by its bad quality. They can not
cover whole market and customers. The employees can not motivate in better manner by
company managers. They have lack of technology equipments, tools and effective methods. Firm
enter in digital market when there is no scope in it and it is too late for them.
Opportunities- The firm try to expand their business in rural areas which enhance their
customers volume and earn maximum profit (Business Environment. 2017). They have strong
hold in selling food products because their most of the stores are only serve food items. Marks
and Spencer will promote various schemes and policies and provide gift cards to their buyers
(Commander and Svejnar, 2011). This will provide appraisal and make strong performance of
banks in United kingdom.
Threats- There are various competitors who also provide similar type products and
services in the market place. In 2009, recession will badly effects on economy of country. This
create decrease in sale of goods and services among customers. Marks and Spencer is one of the
leading firm which offers different types of food items, home products and clothes. In recession
time they loss their top position and down in badly manner (De Jonge, 2011). The terrorist
activities take place in UK which target consumers and this create loss effectively. Instability is
growing fast in these days which directly affects on growth of company.
P6 Interrelate with strength and weaknesses with external macro factors
Strengths and weaknesses of organisation which directly interrelated with external factors
that are discussed as under:
 Political- If political situation of the country will not be good then it will less productivity
and their quality and capacity will also decreased.
 Economical- If enhancing in inflation rates and deflation rate so that marks and Spencer
face many issues or problems related to their business operations (Cordes, Richerson and
Schwesinger, 2010). They daily hold market and it reduce the prices of goods.
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 Social- In an organisation, there are various latest trends which are change by impact on
business modifications. They should distribute all products and services in large market
according to the demand.
 Technological- Company adopt new techniques and methods by analyse whole market
scenario and they will help in controlling and managing all training session which
provide direction.
 Legal- Company will hire a person who responsible for mange all legal issues and
problems relates to organisation which impact on their internal functions.
 Environment- They will develop that environment that does not face any negative result
then they will use renewable source of energy (Cronan and et.al., 2011). This will assist
in managing all issues of environment which is necessary for them.
CONCLUSION
From the above report, it can be concluded that business is commercialised action by
which can exchange various goods and services. It assists in generating revenue and profits. In
external factor, company will affects organisational activities in high level. There are two factors
which are internal and external factors such as PESTLE and SWOT analysis. It will help in
identifying extrinsic and intrinsic elements which directly effects on business operations. It
includes political, economic, technological, social, legal and environmental components. Various
situations affect positively and negatively . SWOT analysis is an necessary for the company
which aid in identifying internal and external element such as strength, weaknesses,
opportunities and threats. It is principle of company that will evaluate basic need. Also company
will make interrelationship between external macro factors and strength and weaknesses.
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REFERENCES
Books and Journals
Aula, P., 2010. Social media, reputation risk and ambient publicity management. Strategy &
Leadership. 38(6). pp.43-49.
Belás, J and et. al., 2015. The business environment of small and medium-sized enterprises in
selected regions of the Czech Republic and Slovakia. E+ M Ekonomie a Management.
(1). p.95.
Bill Pasmore PhD, S. V. P and CMC, T. O. S., 2010. Leadership agility: A business imperative
for a VUCA world. People and Strategy. 33(4). p.32.
Blanchard, T. C., Tolbert, C and Mencken, C., 2011. The health and wealth of US counties: how
the small business environment impacts alternative measures of development. Cambridge
Journal of Regions, Economy and Society. 5(1). pp.149-162.
Cantwell, J., Dunning, J. H and Lundan, S. M., 2010. An evolutionary approach to understanding
Cronan, T.P and et. al., 2011. Decision making in an integrated business process context:
Learning using an ERP simulation game. Decision Sciences Journal of Innovative
Education. 9(2). pp.227-234.
Chow, A. T and et. al., 2012. Computer readable medium with embedded instructions for
providing communication services between a broadband network and an enterprise
wireless communication platform within a residential or business environment. U.S.
Patent 8.155.155.
Commander, S and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance. The Review of Economics and Statistics. 93(1). pp.309-337.
Cordes, C., Richerson, P. J and Schwesinger, G., 2010. How corporate cultures coevolve with
the business environment: The case of firm growth crises and industry evolution. Journal
of Economic Behavior & Organization. 76(3). pp.465-480.
Cronan, T. P and et. al., 2011. Decision making in an integrated business process context:
Learning using an ERP simulation game. Decision Sciences Journal of Innovative
Education. 9(2). pp.227-234.
De Jonge, A., 2011. Transnational corporations and international law: accountability in the
global business environment. Edward Elgar Publishing.
Erving, R. H and et. al., 2011. Broadband network with enterprise wireless communication
system for residential and business environment. U.S. Patent 7.944.948.
Fernando, A. C., 2011. Business environment. Pearson Education India.
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Gebauer, H., Paiola, M and Edvardsson, B., 2010. Service business development in small and
medium capital goods manufacturing companies. Managing Service Quality: An
International Journal. 20(2). pp.123-139.
Guglielmetti, C., 2011. Measuring the business environment for entrepreneurship in fragile
states. In Entrepreneurship and Economic Development (pp. 124-143). Palgrave
Macmillan UK.
Robbins, S. P., Judge, T and Campbell, T. T., 2010. Organizational behaviour. Financial Times
Prentice Hall.
Siewiorek, A and et. al., 2012. Learning leadership skills in a simulated business environment.
Computers & Education. 58(1). pp.121-135.
Online
Business Environment. 2017. [Online]. Available through: <http://businessjargons.com/business-
environment.html>. [Accessed on 17th October 2017].
Scanning the Environment: PESTEL Analysis. 2017. [Online]. Available through:
<http://www.business-to-you.com/scanning-the-environment-pestel-analysis/>.
[Accessed on 17th October 2017]
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