Factors Affecting Company Performance

This assignment examines how various criteria, both external and internal, impact a company's performance within a competitive market. The report delves into the relationship between these factors and their influence on organizational operations at different functional levels. It explores the macro environment's positive and negative effects on the company. The analysis is supported by academic references from renowned authors like Teece, Drucker, Cantwell, Carroll, and Osterwalder.

BUSINESS AND
BUSINESS
ENVIRONMENT

Introduction
The business environment is that which means all the internal and external factors which
affect the company functions that are employees, customers, management and having its supply
and demand and its regulations. This is something which cannot be controlled by firm itself and
they affect functions of the entity in great manner. Some of factors which affect them in huge
way those are customers, competitors, social, political, legal and technological factors etc.
Company always wants to secure themselves from such environment and they are facing a lot
problem with internal and external changes. The report is based on marks and spencer (M&S).
Company is leading retailers in UK and somewhere the firm is having around 1433 stores
around the globe and they are serving own brand food, clothing and home products too.
Approximately 85000 employees are working for industry; Entity is founded by Sir Michael
Marks and Thomas Spencer. The report will discuss about purpose of private/ public and
voluntary organization, size and scope of public and voluntary sector, relationship of various
functions within company, positive and negative impacts the macro environment have on entity,
pestle and SWOT of M&S, how strength and weakness with external factors.
P1 Purpose private, public and voluntary organization and legal system.
The every organisation is having a different legal structure in which they work. The
private, public and voluntary organization has various companies’ laws which have to be
followed by them to form their firm. If firm does not follow the rules and regulation of law than
they has to wind up. The legal structure of such companies is as follows:
Private structure: This is the company which is owned by privately individuals. This
type of company is easy in formation because provisions of Companies' act 2013 does not
applicable with this. This company is formed with 2 members and only 2 directors. Such kind of
firms is usually preferred by the investors just because they can buy and sell their stakes easily.
The stakeholders are limit to 50 only. The maximum number of partners a firm can have is 200
according to act. There is no limit for such firm to have number of employees work with them.
Public structure: This Company is owned by public or by government. These types of
company raise funds from the public directly through issues of shares. Public company can have
minimum 7 numbers of stakeholders and minimum with 3 directors. There is no limit in the

number of shareholders but they have limited liability to its extent with its face values of its
shares. Public structure generally does not earn those profits for which they have been formed.
Private sector earns more than the public sector always.
Voluntary organisation: This provides some public service or having some purposes
which goes beyond the serving society with personal interest as a member of NPO (nonprofit
organization). Somehow they make profit but they do not use such profit for personal use but
they use such profit for the development of society. Voluntary organisations generally have more
expenses than income so they use to raise funds from the public. It uses section 21, and there is
trust which uses the common law and trust and property control Act 57/1988.
This organization system is different from each other; every firm uses various laws to
form them. Many things are there which makes this entity different from each other. It is
necessary to form their business according to the law stated. A firm who follows the companies
act in right way than they not get any issues after getting registered with such laws. These firms
work according to requirement by business.
P2 Size and scope of M&S and one from public and voluntary sector.
The size and scope of company is very large, M&S is totally in serving society of UK
with their products. M&S has more than approximately 970 stores in particular UK only,
company is having around 450 international stores around the globe, somewhere the firms food
products has taken rise in recent years and clothing sector has fallen down. The number of
employees is around 85,000.
The scope of company is like that firm can utilize technology and competition in better
way. Retail store has vast scope if they use technology and environment in perfect manner too.
Using various ideas and planning for entity helps to make them stable in various countries of
globe. Retail stores can expand them in perfect manner and they can attract as many stakeholders
for their firm. The company M&S is already in many countries and they use available resources
in perfect manner to make every customers satisfied and companies do take scope as
opportunities and use technology in correct manner to cover the large market.

The public company is NHS which is a health service of England. This firm is publicly
funded national healthcare system, and this is among the best four national health services of
UK. This entity was founded in year around 1948 by ANEURIN BEVAN. Number of employees
is working with the health care service it is approximately 1,400,000. The public funded
healthcare deals with any kind of patient, firm do not charge anything from patient but the
charges from prescription dental treatment and optical care, but in this it also a range of
exemptions from all such charges taken from patient.
The voluntary company is a group of individuals who enter into an agreement, usually as
volunteers to from a body to accomplish the task or purpose. Some of the common voluntary
associations are (trade associations, trade unions and professional associations). Such voluntary
may be incorporated or unincorporated. These are being incorporated for their own sake of good.
Voluntary firms are very different from public and private company. They are formed for good
purposes and they are working for the individuals working in organizations and they do support
the labor union of firms and they become one when they perform in correct manner.
P3 Relationship between function within M&S for achieving company objectives and mission
In every organization it is required to have a great relation among the various function of
business. The M&S firm is having a finest relation among different function of their entity. If
company is not having a relation among various departments and levels than the company cannot
attain its goals and objectives. Various function of business is as follows:
Production function: This function of business should be done in right manner, because
every customer wants to have a quality product. Production is the creation of goods and services
within the organization. The production of different things is depends on the man, material,
money etc. for a smooth functioning by company. M&S is having a great relation with its
production team and the company is having a different policy for its production department.
Marketing function: This function should be done in correct manner as because this the
thing which attracts the many new consumers to use the products and services of M&S.
marketing is a process of communicating about new product into market to large population
through various ways like advertisement, personal selling and public relation etc. Marketing is

that which helps in organization to achieve their goals and objectives within the time period
stated.
Finance function: Finance is that thing which is required by every business to make they
stable in market. This function of business is required to work and to move further the other
departments in a smoother way. Finance is required by every department of organization because
with this they can purchase their raw material and can work further. Finance is the function that
brings coordination among various levels and departments of company to work effectively.
Human resource: Human is the base of any company, employees are the one that makes
a company in effective way to get stable in market, the firm cannot work efficiently without the
human or employees in organization. People of company should be motivated on time to time so
that they can work properly and in right direction. Employees are having responsibility to greet
every customer who is coming to purchase anything from the retailors shop; this kind of
behavior attracts the person to come again and to receive the services of company.
Management information system: It is related to managing the information for the
organization. Such data or information helps in making strategy and decision within company.
Thus all other departments of company require information of market so that they can work
according to all those. Information does helps in creating effectives ways of achieving objectives
and goals by the organization.
Research and development: This team has the responsibility to research in effective and
to provide the information or data to senior manager so that they can make an effective decision
of efficient working by every department and levels. The team come into market and takes every
knowledge about area and creates information which helps company M&S to work effectively
and attain its goals and objectives.
P4 Positive and negative impact macro environment is having on M&S.
Thus every company faces a positive or negative impact of macro environment, though
macro environment always affects the companies and it is on firms that how they perceive this.
Macro environment is biggest concept to understand. Generally macro environment deals with

PESTLE which affects the operation of business in various ways. The positive and negative
impact of macro environment is as follows:
Political: The positive impact of environment on company is that EC’s free trade
agreements have been led to decrease the source cost. Firm has a great CSR (customer service
relationship). Negative point is that entity has a higher cost structure disadvantage in
international market and it is affected by lack of UK government energy saving efficiency
scheme.
Economical: Positive side is company only focuses on quality products and its values,
consumers are rationale they need satisfaction from the product for which they are paying
money. Negative side is that the competitors of company has led down there prices in
comparison to entity which is attracting the consumers of M&S. now customers look for online
and offline value deals.
Social: Positive impact is that image of M&S in eyes of people is good. They have a
belief that the company is going to provide quality product to consumers at reasonable rate. The
Company performs everything to make them feel special and surprising. Negative impact is they
different people from various culture are having unusual preferences and wants which is need to
be carried forward or fulfilled by companies, is not fulfilled than they will shift to any other
brand products. Company has to change themselves according to market.
Technological: Entity is with social media and online presence is also there. Consumers
are now more technological focused and prefer to buy things online only. Firm with CRM is on
success and works effectively to satisfy the customers are the positive impact. Negative would be
that technology changes according to time to time and it is required by firm to adapt the changes
and work efficiently, it becomes harder to adapt new technology every time because the
employees does not get familiar with all those.
Environmental: Strict regulations on environment and increased pressure of ethical
green, M&S has a poised advantage from the development and its already has been showing
concern for environment refers to positive impact. The negative impact is that competitive firms
also going to take advantage of such regulations which will create a rivalry in between M&S and
other companies in great manner.

Legal: The M&S provides a home delivery as well from its channel of distribution i.e.
Omni channel. Decision by the company to exit EU along with other UK retail or ad legal action
has to be placed on place.
P5 Internal and external analysis of M&S through PESTLE and SWOT.
It is required by every company to the PESTLE and SWOT of their company so that if
any change needed than easily can be made. These both analysis impacts the environment of
company in great manner. But through the help of pestle a PESTLE a firm can make themselves
strong and stable in market.
The SWOT of M&S are as follows:
Strength:
 High and effective corporate social
responsibility.
 Always introduces new trends in
market.
 Having global expansion and it has
already reduced the competition in UK
market.
Weakness:
 Poor financial performance of
company.
 Too much dependence on UK market.
 Not using technology according to
requirement.
Opportunities:
 Working on their clothing segment.
 Coming online to boost the company in
right way.
 Firm is simplifying their operating
model to work effectively
Threat:
 Changes in preferences of customers
makes companies to change their trends
in clothing sector
 There is a great competition in UIK
regarding to food sector.
The firm is having a great strength like they produce products according to the
requirement of customers and they believe in satisfying the people coming fir purchasing in
correct way. M&S is serving globally with their products to large market. Company is having a
perfect corporate social responsibility and provides surprises and quality to customers.

Weakness the company is having that firm is having a poor financial condition from last
so many years, because of competition and other companies are providing similar products at
reasonable prices lower then M&S and company depends on quality items and uses less
technology to market their goods. Organization is totally dependent on UK market to earn
revenue on higher notes.
The PESTLE analysis of M&S is as follows:
Political:
 There is reduction in the cost trade
policies.
Economical:
 The conflict between companies has
arisen due to rise in prices.
 Company serves quality items and
services because they know customers
are rationale in nature.
Social:
 Company is supporting the
communities with they are surrounded
and somewhere this is helping in
cutting down the prices. M&S are
taking new initiatives for society.
Technology:
 Company is having a partnership with
Surecloud and firm is having less trust
on technology.
Environmental:
 Energy saving denims is there in
market.
 Provides the fresh milk.
Legal:
 Company has a financial dispute with
the Frascati landlord in UK only.
Somehow the PESTLE helps in analyzing the outer market, this helps in getting the
knowledge of macro environment. Pestle can be a perfect thing which can help in getting
information about the company or firm can know about market.

P6 Using M&S as example and interrelate strength and weakness with external macro factors.
The M&S is a leading firm of UK in clothing and food products. There are many strength
and weaknesses of this firm which is being interrelated with macro environment. The external
environment always affects large companies in great manner, so it is required by firms to see the
large market and to work accordingly to that. The strength and weakness is interrelated with
external factors are as follows:
Strength: The company has many strength like firm is having a most powerful retail
brand in UK only, M&S is having its own brand labels. The entity is having more than 1000
stores present in more than 40 countries, and somewhere the number of employees working with
firm is around 80,000. the industry is having a motto of providing quality to customers through
their value of money just because company knows that consumers are rationale in nature they
need quality products for their money and they require to satisfy their needs and wants in right
manner. The external environment does affect the company because the needs and preferences of
customers changes with time. So it is required by firm to update the technology and to work
according to the market to achieve its goals and objectives.
Weaknesses: The company has to work over that just because retail sector has a great
competition in market as the market is limited in retail sector, being a popular brand, they need
to protect their brand from the misuse of imitation of their brands. The company has to work
according the external environment; firm has to make researches on regular basis to overcome
the weaknesses they have and to perform accordingly. Weakness are those who bring companies
in competition and make in line, somehow poor advertising and poor financial condition is
making M&S in line and making other companies to come on top. Company is having trust on
their quality that people will purchase because of their reasonable prices. A firm is required to
work over their weaknesses so that they can fight the competition in right manner.
Conclusion
The report tells about the company M&S who is serving millions of people with their
products and services, firm is many products like clothing, food and milk products too. They
serve quality based products to people of UK and even the human or people of globe. Firm is

having a thought of satisfying customers in various ways, entity make every moment special for
their consumers. Company provides only quality products to customers as because the human
and people are having a nature and behavior of being rationale they wants those items and
services which can satisfy their needs and wants in perfect manner. Firm is finding competition
in market with many other industries who are selling their products of same nature. The thing
covered with this report is, those criteria which affects the company’s performance in market.
External and internal factors affect the organization operation. Their relationship in various
levels of function, though positive and negative impact a macro environment is having on
company.
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