Business Environment and Strategy Analysis

This assignment delves into the concept of the business environment, exploring its various dimensions and their impact on organizations. It utilizes analytical tools such as SWOT analysis and Porter's Five Forces model to assess internal strengths and weaknesses, external opportunities and threats, and the competitive landscape. The assignment also discusses strategic considerations for businesses operating within a dynamic environment, emphasizing the importance of adapting to change and leveraging available resources for sustainable success.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................1
P1. Types, Purpose and Legal structure of different Organisations.......................................1
P2 Size and scope of the organisations...................................................................................3
P3 Organisation structures and functions...............................................................................4
SECTION 2......................................................................................................................................5
P4. Positive and Negative impact of Macro Environment Factor over Business Operations 5
P5. SWOT analysis of Mark and Spencer..............................................................................7
P6 Impact of macro and micro environmental factors on business objectives and decision
making....................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business can be defined as an activity of individual which is performed for earning
profitability or money. In addition, business is an economic system where goods and services are
exchanged for money. Whereas, business environment is a combination of internal and external
factors which can affect the profitability or productivity of firm in positive or negative manner.
Chosen firm for taken this report is Marks and Spencer which is a multinational retailer and was
founded in 1884 along with headquarters in London, UK. In current scenario, company is
operating its functions across the world. This assignment is divided in two parts in which first
one will discuss about several kinds of organisations with their purposes, legal structure, size and
scope. Apart from that, second part of report will includes PESTLE, SWOT and porter’s five
force model.
TASK1
P1. Types, Purpose and Legal structure of different Organisations
Business environment is refers to a sum of all factors that have ability to control or affect the
business activity or operations. Various organisations are existing in marketplace in which some
of them offers products and services to customers so as to earning money. Whereas, a few of
them performs their duties without make focusing on profitability. These businesses are varying
in terms of size and purposes as well as services provided to customers along with this, vision
and purposes of them are also varied between each other. There are mainly three kinds of
organisations such as profit, Not for Profit and Non-governmental organisations (NGO). The
profit organisations are developed for earning profitability or money in marketplace. Marks and
Spencer is the taken organisation for this kind which is a private company and deals in clothing
and food sector. Major Purpose of M&S is to earning maximum profitability along with serving
needs of customers in effective manner (Avramenko, 2012). M&S offers several kinds of
products like home, food and clothing across the world they have also implemented flat
organisational structure in their workplace so that their objectives can be achieved with support
of employees in a specific time-frame. Company have 1463 stores across the world along with
300 websites. Management have also employed approx. 80000 employees in their stores so as to
achieving high profitability in their operations. Along with this, company have covered most of
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big markets across the world. Therefore, it can be said that size and scope of M&S is very
dynamic in market. Mission of M&S is to manufacture products along with effective quality and
deliver it into marketplace so that strong customer base can be maintained at marketplace.
Whereas, vision of firm is to develop an effective standard in offerings so that unbelievable
competitive advantage can be gained in marketplace. Major objective of firm is to establish
themselves as sustainable business firm in market. Public firms are those which are controlled or
regulated by governmental authorities. Taken firm for this kind is National Audit Office which
was incorporated in 1983 at UK. This is an audit department which oversees supervising audits
and revenues of each organisations of UK. Main objective of this firm is to making strong socio
economic infrastructure of UK nation in the world. They use all these received amount of audits
in wealth and improving economic structure of nation. Firm uses hierarchical structure in their
workplace in which general auditor i.e. Amyas Morse have right to take overall decisions for
firm. Company offers services of auditing across the UK nation and make audits of financial
statements of all governmental departments (Raina, 2016). As company is governmental
authority then scope and size of it, is very high as compared to other private firms. There are 798
employees are working in it who understands their duties and performed as well so as to
developing economic infrastructure of Nation. Main mission of organisation is to providing all
the inspected documents to National assembly so that proper records of financial statements can
be provided to governmental authorities. Vision of firm is to making economic development of
UK nation.
Non-governmental organisation (NGO) is a group of individuals who mutually consent
for performing objectives without earning any personal profits. Chosen firm for this type is
Cancer Research institute which was founded in 2002 along with located in UK. Main purpose
of this firm is to conducting research for diagnosing, treating and preventing diseases along with
reducing number of deaths from Cancer. Whereas, main services of firm which are provided by
it, are to make diagnosis and treating the cancer diseases. Approx. 3960 employees and 40000
volunteers are working in it along with company provides its services in several nations like
England, Ireland, Poland etc. Apart from that, company is a charitable firm which is situated in
London along with main focus of firm is to making an environment without any diseases.
Mission of firm is to preventing cancer through diagnosing its caused elements. Company
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performs its service as non-profitable organisation along with this, they uses hierarchical
organisational structure in their workplace.
P2 Size and scope of the organisations
Organisations are mainly divided into three kinds on the basis of size and scope such as micro,
small, medium-size and large associations. Micro firms are those which are establish with the
investments of around € 1million. Approx. 5 to 10 employees are working in it along with this,
Net revenue of these firms are around € 0.5 million. Scope of such firms is narrow because they
offer products and services to the customers so that they can earn money for living their
livelihood. Example of these kind are Grocery shops, Casamis etc. While Small are those in
which around 50 employees are working their duties and these firms are started with an
investment of €2 million. Scope of these firms is narrow because they are also operating their
operations at small scale. These firms are started through partnerships or sole proprietorship.
These firms are generally performs their business functions at lower scale and earn lower
profitability because of operating at niche market. However, these firms have ability to gain
higher profitability if innovative ideas are developed by them. In establishment of these firms
more than €1 million of funds are required. Main examples of these types are Electrotech
limited, Clarasys etc. Medium firms are those which are formed with an amount of €10 million
to €50 million along with this, around 250 employees are working in it. Revenue of these firms
are more than €50 million. These firms operate their business functions at more than one location
due to which scope and size of these firms are wide in nature. Such firms takes a huge time
period in gaining sustainability in marketplace. However, these organisations are also surviving
in the market on the basis of introducing innovative products and services over a time period.
Example of these firms are Rowlinson, Dwells furniture etc. Market share and profitability of
these ventures are varies based on market and industry in which they are performing their
business operations (Cavalcante and Ulhøi, 2011).
Whereas, large firms are those who having more than 1000 employees in it. Annual
revenue of these firms are more than €1 billion. Size and scope of these organisations are very
wide because of its operating at large level and in several nations. These kind of associations
offers products and services to large number of customers so as to earning higher profitability
and revenue figures. Main example of these firms includes M&S, Morrisons, ALDI etc. these are
those firms who operates their business operations in several nations along with UK. Such
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business are setup with a specific mission and objective and cover high market areas due to
which their brand image is built in mind-set of their customers.
P3 Organisation structures and functions
Complexities between transnational, international and global organisational are that,
transnational are those who have invested in foreign operations and have provided authorities to
their each division heads. Whereas, international are those who does not make investments in
other nations while, global organisations operates their functions at international level but overall
strategies are formed by headquarters only. Organisational structure of the organisations differs
with each other. The M&S is following flat organisational structure in their business operations.
This structure is used for segmenting the workforce in some department which are led by the
managers. There are various departments in the M&S which are performing their work for
achieving the desired organisational goals. Through the support from these departments,
company can achieve new heights. These departments work together for performing their work
effectively (Hair, 2015). The interrelation is as follows:
Advertising and sales: advertising and income branch also desires to coordinate with
each other for determining the correct channels through which the sales may be stepped forward.
Advertising department offer the right channel for gathering the potential consumer and
advertising and marketing department target this consumer for attracting them toward the
services of company. However, this coordination must be monitored by means of managers with
a purpose to remove the challenges of operating together such conflicts among departments
(Forsgren and Johanson, 2014). This will assist the organisational structure as those departments
can offer their effective contribution in success and boom of company
Finance and advertising: marketing branch of M&S is accountable for selling the
emblem image and products of the business enterprise. This is achieved by using the assist from
finance branch which provide the cash for getting the extraordinary equipment’s and gear
required for the advertising and marketing of merchandise. Via this coordination, both
departments can carry out the work successfully as advertising branch can help the finance in
figuring out the suitable sources for collecting the budget (Holcombe and Ipate, 2012). However,
without this coordination, both departments can fails in acting their role which could impact the
income and earnings. This coordination is likewise useful in helping the organisational structure
of firm as the sales and tradition of corporation can enhance.
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SECTION 2
P4. Positive and Negative impact of Macro Environment Factor over Business Operations
PESTLE analysis can be defined as a strategic tool that is used by firms for scanning
external factors. In addition, this is used for analysing current position of firm in market or
determining the external factors which are influencing the profitability of firm in negative or
positive manner. Such factors comprises of political, economical, social, legal, technological or
environmental. This is very essential for Marks and Spencer and its manager to identify these
elements along with their adverse and favourable impact. These factors are given as below:
Political - Growth and success of organisation is very much depends on imposed different
policies and rules of government which can affect the brand image of any firm in negative
manner. Policies of government have influences deep impact on the performance of M&S.
 Positive- Sourcing cost is reducing in European nations which can leads the M&S
towards competitive edge in market.
 Negative- Free trade policies have finished barriers in European nations due to which cut
and throat competition is prevailing in marketplace. Therefore, without identifying the
position of market management can’t take any decision for expansion in these countries.
Economical
This factor comprises of per capital income, GDP, discount rates etc. which can influence
organisational activities of M&S in positive or negative manner (Hamilton, 2015).
 Positive- Marks and Spencer should increase their dependency on online sector because
it will reduce the cost and time of business operations.
 Negative- Company’s sales figures and revenue is highly affected by several competitors
and their cashback and discount pricing etc. which have affected the profitability of firm
in negative manner.
Social
It comprises of culture, norms and beliefs of societal individuals that can affect the profitability
and productivity of Marks and Spencer in positive or negative manner which are given as below:
 Positive- Company should analyse market trends and provide products accordingly so
that profitability can be maintained at marketplace.
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 Negative- M&S gave quality products to their customers with fair price policy. But over
dependency on single brand gave negative impact on organisation. Because their
challengers are giving various options in product line for attract their customers.
Technological
This element is related with advanced technology of an organisation which leads it
towards improved productivity in marketplace. This is very important because without upgraded
technology M&S can’t take competitive edge in marketplace. Positive or negative impact of this
factor is given as below:
 Positive- Company should use online and digital marketing in order to attracting
customers which will leads them towards high productivity and profitability.
 Negative- Several competitors of M&S like Tesco, ASDA are using very advanced
technology and paper less functions in their workplace that can influence the brand image
of firm in negative manner.
Environmental
It consists of the cultural duty of a organisation to keep natural sources and highest
quality utilisation of available assets (Trevino and Nelson, 2016). M&S requires to compliance
with all the environmental legal guidelines and use such machineries in production tactics that do
not pollute environment (Karagiorgos, 2011).
 Positive- Company should use eco-friendly raw material products in their production
process so that good brand image of firm can be maintained in market place.
 Negative- Ineffective system of supply and distribution can increases delays in delivery
due to which sales figures can get influenced in negative manner.
Legal
This factor consists of laws and regulation which must be followed by way of each
enterprise together with purchaser safety act, employment law and so on. Marks and Spencer
requires to comply with all the legal guidelines and policies made by way of authorities in an
effort to run its operations easily.
 Positive- Company should follow rules and regulations made by government carefully
due to which good brand image can be built in marketplace.
 Negative- If Company will not consider these laws and legislations of government then
they have to pay penalties or fines which will decrease the brand value of firm in market.
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P5. SWOT analysis of Mark and Spencer
SWOT analysis is used by the companies for determining their internal strengths and
weakness as well as external threats and opportunities. Through this model, M&S can evaluate
their competencies in order to get competitive advantage. The SWOT analysis of M&S is as
follows:
Source: SWOT analysis, 2017
Strengths Weakness
 M&S is a big firm having huge Brand
value and customer base as company is
offering good quality products.
 Company is heavily spending their
money in R&D activities for innovating
new products.
 The company is facing issues due to the
brexit in terms of loss and reduced
revenue.
 Company is utilising the old technology
in their stores due to which customers
are facing issues.
Threats Opportunities
 Firms such as Tesco are providing
tough competition to the M&S due to
heavy investing in R&D activities.
 UK government is changing their
policies due to which company is
 Asian countries has opportunities for
M&S due to having large number of
population.
 Fashion products are rapidly changing
due to which company has
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Illustration 1: swot analysis

facing issues in stabilising. opportunities in this segment to expand
the product range.
Porter’s five forces analysis
Porter five forces model is used by the organisations for identifying the forces of the
market so that company can achieve higher competitive edge over the competitors (Pikka, 2011).
Five force model for the M&S is as follows:
Source: Porter five forces model, 2013
Threats of New Entrants: New players in retail industry brings innovation and higher
strategies that may effect the M&S operations. those improvements can be in form of lower
pricing method, reducing costs, etc. which should be considered by the management of M&S.
The threat from new entrants in retail industry is relatively low as large sum of money and
funding is wanted in conjunction with the time for purchasing the achievement. however, M&S
is taking appropriate measures that allows you to cast off this threat which is accomplished by
doing innovation in products as well as by using constructing economies of scale if you want to
decorate the profit and lower the constant value according to unit.
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Illustration 2: Porter five forces model

Bargaining Power of Suppliers: This pressure exist whilst there are few or dominant
providers in marketplace that can lower the margins of M&S. This pressure is excessive in retail
sector because of much less availability of suppliers and excessive range of corporations. M&S
is handling this by using constructing a group of suppliers. If any dealer increase their prices then
M&S switches to some other for getting rid of the impact. Business enterprise is also building
green supply chain with multiple providers.
Bargaining Power of Buyers: Bargaining strength of customers could be very high
inside the retail market of uk as there are a huge variety of companies supplying the same
products to customers compared to M&S that is impacting the profitability of M&S in the long
run. For dealing with this mission, M&S is building a large number of consumer base through
offering them price with the products. additionally the organisation is making an investment
within the innovation for growing the goods in step with call for and need of customers that's
critical for preserving them for a long time period (Pulver, 2012).
Threats of Substitute Products or Services: Threats of substitutes merchandise is
likewise excessive in retail industry of united kingdom as corporations are focused on growing
similar merchandise which could impact the sales of the products furnished by way of M&S.
M&S is dealing with this case by using being carrier oriented as opposed to simply product
oriented and determines the desires of clients for supplying them products for that reason.
employer is also the usage of innovation for enhancing their existing merchandise so that
competition won't copy them. corporation has ties up with TCS for improvements in
merchandise.
Rivalry among the Existing Competitors: Competition most of the retail zone is
excessive because of availability of more than one companies. those players are competing with
each different if you want to draw close more market percentage. M&S is dealing with this
pressure by constructing a sustainable differentiation as well as by using building scale in order
that it can compete better with different corporations. also the company is coordinating with
other firms to for greedy extra marketplace percentage and profitability (Schneider and Spieth,
2013).
P6 Impact of macro and micro environmental factors on business objectives and decision making
M&S is a huge organisation having a wide range of operations which are providing their
products and services to the customers through their stores. The company is operating their
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business operations for grasping the maximum market share in the retail industry. It is highly
essential for the M&S to determine their macro and micro environmental factors which are
capable of influencing the performance and productivity in order to achieve their vision. Through
this, the company can estimate the relationship among them so that their impact can be reduced
when taking the decisions for the company. For example: M&S can determine the way for
providing the product to the customers by determining the social and economic factors along
with the weakness and threats. Also by determining the technological and environmental factors
and their relationship with the opportunities, M&S can understand the factors or aspects through
which objectives can be met. Such factors also influences the judgements taken by the
management of M&S as considering these factors can leads to implementation of proper decision
whereas without considering these factors in decision making will result in failure of
implementation of decisions (Trevino, 2016).
CONCLUSION
From the above discussed report, It has been concluded that the organisations varies
based on their size and scope as well as purpose. There are various departments which works for
achieving the organisational goals. These departments need to coordinate with each other in
order to get the desired results. Also the companies can use the SWOT analysis for determining
the internal capabilities and threats as well as PESTLE analysis for determining the macro and
micro environmental factors. Organisations also use the porter five forces model in order to
determine their effectiveness in the industry in which the business operations of the companies
are being performed.
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Online
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Business Environment. 2017. [Online]. Available
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