Analyzing Marks & Spencer's Business Environment

This assignment provides a comprehensive analysis of Marks & Spencer's (M&S) business environment, highlighting the impact of macro and micro environmental factors on the company's performance. It suggests adopting effective strategies to minimize the effects of these factors and improve M&S' growth and success.

Business and
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Objective of private, Public and voluntary organisation and their legal structure.................1
P2 Size and Scope of organisation..............................................................................................2
P3 Explain the relationship between different functional department and the way they are
associated with organisational goal and structure.......................................................................2
P4 Identification of the positive and negative impact of the macro environment with respect of
Marks and Spencer......................................................................................................................3
P5 Identifying Internal and external analysis of Marks and Spenser.........................................5
P6 The way Strength and weakness interrelate with external macro environmental factors......7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment is consisted with several kinds of the micro and macro components
which can highly influence to the business activities and function. While any business unit start
and survive its business then it is very important to consider the various aspect and component of
business environment. In the macro business environment consisted with macro factors such as
political, legal, social, cultural, economical, technological etc (Cantwell, Dunning and Lundan,
2010). On the other hand micro business environment consist with micro factor such as supplier,
employees, investors, competitors etc. In this project, business environment and its various
component has been systematically discussed with respect of Marks and Spencer. It is one of the
most leading retailer in the UK which delivers high quality of customer products like clothes,
home ware good, accessories etc.
P1 Objective of private, Public and voluntary organisation and their legal structure
Private organisation consists of all profit businesses that are owned and managed by
individual. These companies are considered as small entity. In such types of firm owners'
liability is limited to their shares. The organisation have 50 employees or even few shareholders.
Business entity becomes independent legal structure when it incorporates its business. Marks and
Spenser is a privately owned company. Virgin Media Offers various products such as clothes,
home accessories, food products etc. The purpose of the firm is to maximised profit. The
objective of organisation is to deliver good quality product at reasonable price. M&S has flat
legal structure. The company employees are burdened with a lot of responsibilities. The Flat
legal structure has allowed Manager to communicate and define clearly the roles as
responsibilities of each and every employees and functional department.
Sole trader- The sole trader organisation are those which are owned and managed by single
person. The purpose of the organisation is to increasing profitability and generate revenue. Such
type of business unit provide specialised service to their customer.
Partnership organisation- These commercial enterprise are generally managed by two or more
partners. The main objective of this kind of enterprise is to expand their business,The main
characteristics of this form of business entity is that profit , risk and losses are being sharesd by
partners.
Public organisation-Public limited enterprise is form of business entity that operates as a
separate legal entity from its owners. This type of organisation is owned, controlled and managed
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by government. The objective of this enterprise is to provide basic services to customer. Example
of Public limited company is Primark which is the private company. It is a subsidiary of AB
food. The business entity is delivering various products such as clothes, accessories etc. The
mission of the organisation is to provide satisfaction to consumers by offering them good quality
and wide range as well as variety products. It legal structure more influenced by company
suppliers.
Voluntary organisation-The voluntary organisation is group of people that have common interest
and objectives, These voluntary group are formed for the purpose of social welfare. The
voluntary enterprise is one which relies on regular or occasional volunteers for its operations
may or ca not have paid employees. These type of organisation are generally done not have legal
structure. Such business entity is generally established for charitable purpose. Child care
organisation are the example of voluntary enterprise. The purpose of this business unit is to
provide welfare, care and education to orphanage children.
P2 Size and Scope of organisation
The size of M&S is referred to as the structural property that have some specialised
characteristics that includes talented and skilled large number of employee, high market share
stores and workers turnover. M&S is a multinational British company, operating in retail
industry in UK.
Number of employees-Marks and Spenser has wide number of employees the company has
employed estimated around Employees between 80 to 85 thousand employees including those
who are working at upper level management. The organisation have estimated 84939 worker
working in its different retail stores that are located in many countries.
Stores -The enterprise have estimated 1330 retail outlet worldwide. Its business has mainly two
division That is food which contribute approximately 57 percent of their turnover rest percentage
of income is generated by clothing and home accessories segments. The global revenue that was
generated by organisation in 2016 is estimated as 100 billion British pound. This revenue has
been generated from both domestic and international market. Wide range and variety of products
are being offered by company. M&S has 274 retail store in UK. The company is able to establish
its brand image in market by offering good quality products. It provides customer with value for
money. For instance the organisation has many store in several countries. It big and attractive
stores are located in UK. The business entity has further scope to squeeze supplier and increase
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profit margins. Value based human resource strategy has allowed commercial enterprise to
expand their business in global market.
P3 Explain the relationship between different functional department and the way they are
associated with organisational goal and structure
M&S is a multinational British company that is dealing in fashion and food industry. The
organisation specialises in home products, clothing and luxury food items. It also sells brand like
Kellogg corn Flakes. Presently the enterprise has estimated 979 retail outlets across UK
including 615 stores that only delivers foods items. M&S is a first British retailer that has made
pre tax profit of over 1 billion pound.
The various functions that are performed by its various functional department are-
Purchase department- This department is accountable for purchasing al resources that are
essential for company to acquire in order to achieve its goals and objectives. Purchase
department coordinates with operation and production department in order to analyse their
requirement. This divisional unit assist firm in fulfilling their objective of increasing productivity
and operational efficiency.
Marketing department-The marketing department is responsible for promoting products, services
and brand of the organisation. It allows business entity in achieving their marketing objectives
such as increasing market share, fostering marketing growth etc. This department supports
designing and production department In developing products and services according to customer
needs.
Research department- The role of this department is to conduct market research for organisation
and assist firm in fulfilling their objectives of customer satisfaction. This department coordinates
with marketing department and provide them techniques for conducting promotional activities
(Cantwell, Dunning and Lundan, 2010. )
Relationship between marketing and production department-There is very healthy relationship
between production and marketing department. The marketing department provides various
customer related data which includes client demands and needs are being provided by marketing
manager to production department. This allow production unit to produce desired quantity and
standard quality of product. It also provides production unit an opportunity to reduce cost of
production and improving production capacity as well as efficiency.
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P4 Identification of the positive and negative impact of the macro environment with respect of
Marks and Spencer
In order to conduct the business operation in competitive environment, it is very
important for the organisation to analyse the macro business components which can affect
business decision of entity (Bryman and Bell, 2015). In this macro environmental factors
includes political, social, cultural, technological, environmental etc which can positively and
negatively influence to the Marks and Spencer business operation. Following are some positive
and negative impact of the macro business environment factors-
 Political- This is one of the major factor of business environment which affect business
operation of Marks and Spencer in large manner. In this includes governmental rules,
regulation, code of conduct, taxation policies etc which imposed by the government in
the UK. The positive impact of this component on the cited venture is that with help of
imposed regulation, policies, code of conduct etc business unit can protect its business
from illegal and unethical activities. On the other hand due to changing policies,
regulation and code of conduct, corporation have to change its operation and follow the
new regulation. Thus, it can be said that some time company can influence in negative
manner. Thus, it can be said that there are positive and negative impact of the political
environment which can impact the Marks and Spencer organisation.
 Social and cultural- In this factor includes customer taste, preferences, choice, cultural
value, life style, income level, occupation, background etc. If company introduce its
service and commodity then it has to focus on the cultural and social factor of business
environment (Brinckmann, Grichnik and Kapsa, 2010). The positive impact of this factor
is that company can learn more profitability and mar share by deliver accurate services
and commodity according to their taste and requirement. On the other hand negative
impact is that due to regular changing taste, preferences and life style company have to
change its operation and production of commodities. Thus, it can be said that there are
positive and negative impact of the social and cultural environment which can impact on
the Marks and Spencer company.
 Economical- The positive impact of the economic factor is that company can effectively
recover from the situation of financial crises. (Boons and et.al., 2013). On the other hand
in the context of negative factor, condition of recession in the economy can lead
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unemployment which can decline purchasing power of the individual. By this condition,
company's profitability and growth can decline. Economic factor can affected the cited
venture as it can influence by the both positive and negative manner. Recovery of
financial crises have assisted company in increasing its growth rate and profitability
 Technological- The positive impact of technological factor in the Marks and Spencer is
that with help of this component company can improve quality and productivity of
business operation and commodity. On the other hand due to regular changing
technology, company have to invest large amount of capital and also update the
technological infrastructure according to the new one. High quality of technology can
assist in enhancing quality and efficiency of business operation (Becker, 2017).Thus, it
can be said that there are positive and negative impact of the technological environment
which can impact on the Marks and Spencer company.
 Environmental- The positive impact of environment factor is that with help of this
consideration firm can easily cope up with changes in the country as it includes weather,
natural resources, Climate, water etc (Al-Debei and Avison, 2010). On the other hand due
to regular changing environmental element company have to redesign and set its business
operation.
 Legal-In this component of business environment have major positive impact on the
Marks and Spencer is that with help of various law, legislation like employment rights,
customer good act etc company can protect and safe its employees, customer and
business as well. On the other hand strict regulation can compress the functioning of
Marks and Spencer.
P5 Identifying Internal and external analysis of Marks and Spenser
SWOT Analysis of Marks & Spencer
SWOT analysis of Marks & Spencer shows the company's internal strengths and
weaknesses of an organisation, opportunities and threats of the external business. SWOT analysis
is a systematic way to calculate the facts and figures which helps in the strategic planning of the
organisation.
Strengths
Marks and Spencer has great strengths but this analysis focuses on the brand value of the
organisation and huge range of the products and various outlets which help to increase the brand
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value of the business. High brand recognition. The company is offering wide range of products
and services. Organisation has large number of stores and outlets. It is the most popular brand
and offering the latest trend of products and services. Enterprise has highly skilled and talented
team of workers. It believes in concept of providing value for money
Weaknesses
Marks and Spencer also has a weakness in the market as the organisation is out fashioned
and non trendy. The main weakness of the M&S has to face the strong competitors in the market.
Bad publicity and ineffective marketing strategy. Business entity is unable to maintain its cash
flows. Great effect of economic and social factors. Less attractive retail stores.
Opportunities
The brand name of the Marks and Spencer is growing fast. M&S can develop their own
website by through they can do their business at online basis. They also propound new market
segment that offer more profit. The organisation has opportunity to increase market share and
expand their core business activity.
it has a change to transform negative perception of consumers into positive by providing them
good quality of products as well as services. It can improve its quality of gods and services by
adopting advance technology.
Threats
Marks and Spencer get affected by other retails stores discounted prices. They also face the
political issues and also affected by the government policies. High risk of losing market share
and reputation.
Copying of brand
Increase competition.
Economic crisis in the country may have great effect on financial performance of company.
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PESTLE Analysis of the Marks & Spencer
PESTLE analysis is framework of the external analysis which overviews the different
macro environmental factors that the company has to take into consideration in order to achieve
its goals.
Political factors
Political factors are those which are made, run and changed by the government. M&S in
international markets has disadvantage through the higher cost structure. The various political
variables includes various code of conduct and policies framed by legal authorities in order to
ensure fair business practices. As M&S is operational business worldwide it may have great
impact of various political factors. It is required by firm to understand the code and conduct and
policies before entering into new market.
Economical
M&S is affected by the competitors' discounted pricing . M&S has needs to consider the
state economy in the short and long term. Economical factor involves some major issues such
as : interest rates, inflation, GDP, employment levels etc. The economic factors include income
distribution , economic condition of the country, income level of individual. As all these
variables have great effect on the profitability and revenue generation capacity of commercial
enterprise. These factors have great impact on the financial performance of organisation.
Social
Social factors are those which cannot directly control but definitely affects to business
and marketing strategies. Social factors also affect the demand for a company's product and how
the company will operate.
Technological

M&S has a large social media and also online presence so it is well capitalized on this
avenue. At the present time all consumers are go on online marketing and online retailing. So the
M&S build up its presence in the digital medium to take full benefit of this shift.
Legal

Marks and Spencer has also faces some legal legislations, they are always changing day
by day. M&S always changing , updating to keep up to date new laws or legislations and health
and safety regarding issues they also ensure that their legal protection is updated. M&S invites
the new objects and methods that need to be changed and new training and also ongoing
development (Boons and Lüdeke-Freund,2013. )
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Environmental
Marks and Spencer is one of the most popular brands out there in market. With the
changing environmental climate as it stands some major issues which are being promoted on the
television, in magazines and newspapers and also on the radio. All the companies industries and
the organisation are being affected to change their way of production.
P6 The way Strength and weakness interrelate with external macro environmental factors
Macro environmental factors are the major environmental; elements that have great
influence various decisions and strategies of firm. These constituent are uncontrollable in nature
and have great effect on company performance as well as structure. These factors have great
impact on financial stability of M&S.
The various external macro environmental factors have created hindrance in success and growth
of firm.
It has built various barriers for business entity by developing various complexities due to which
has diverted organisation focus.
Increase in competition has encouraged organisation to improve its performance and quality of
products and services.
Various external factors has provided firm an opportunity to expand its core business
opportunities.
It has supported business unit in formulating suitable strategies and policies. Technological
constituent has allowed organisation to produce innovative products and enabled entity to
maintain or improve their quality of goods.
Economic factors has provided firm a chance to gain transactional benefit and provided them a
path to increase their profit margins (Bøllingtoft, 2012)
CONCLUSION
From this entire report it has been concluded that Marks and Spencer can largely
influence by the macro and micro business environmental factors. By analysing macro
competent, company can easily survive in the competitive business environment. It has been also
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concluded that political condition and taxation policies can influence business operation of cited
venture. It has concluded from study that various macro environmental factors have great impact
on firm growth, success and profitability. As M&S is operating in global market its business
activities are much influenced by social and economical variables.
M&S company has been suggested that they are required to adopt various effective
strategies as this plans would help them in imp[roving their performance in market and
enhancing their growth. These strategies will assist M&s in minimising the effect of various
macro environmental factors on business.
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REFERENCES
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Becker, K., 2017. Editorial. Journal of Transnational Management. 22(1). pp.1-3.
Boons, F and et.al., 2013. Sustainable innovation, business models and economic performance:
an overview. Journal of Cleaner Production. 45. pp.1-8.
Brinckmann, J., Grichnik, D and Kapsa, D., 2010. Should entrepreneurs plan or just storm the
castle? A meta-analysis on contextual factors impacting the business planning–
performance relationship in small firms. Journal of Business Venturing. 25(1). pp.24-
40.
Bryman, A and Bell, E., 2015. Business research methods. Oxford University Press, USA.
Cantwell, J., Dunning, J.H and Lundan, S.M., 2010. An evolutionary approach to understanding
international business activity: The co-evolution of MNEs and the institutional
environment. Journal of International Business Studies. 41(4). pp.567-586.
Carroll, A.B and Shabana, K.M., 2010. The business case for corporate social responsibility: A
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12(1). pp.85-105.
Bøllingtoft, A., 2012. The bottom-up business incubator: Leverage to networking and
cooperation practices in a self-generated, entrepreneurial-enabled environment.
Technovation,.32(5). pp.304-315.
Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-the-
art and steps towards a research agenda. Journal of Cleaner Production. 45. pp.9-19.
Cantwell, J., Dunning, J.H. and Lundan, S.M., 2010. An evolutionary approach to understanding
international business activity: The co-evolution of MNEs and the institutional
environment. Journal of International Business Studies. 41(4). pp.567-586.
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