Environmental Factors and Business Strategies

This assignment emphasizes the significance of internal and external macro-environmental factors in guiding business strategies. It requires students to understand various tools like SWOT analysis, PESTLE analysis, and value mapping for sustainable business thinking. The provided references include books and journals that focus on entrepreneurship, electronic commerce, and small and medium-sized enterprises. Students are expected to analyze these resources to develop effective strategies for achieving business objectives.

Business and Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Different types of organisations along with purposes and legal structures.......................3
P2 & M1 Size and scope of different organisations...............................................................5
TASK 2............................................................................................................................................7
P3, M2 & D1 Relationship Between Different Organisational Situations and Link Between
Organisational and Objectives and Structure.........................................................................7
TASK 3............................................................................................................................................9
P4 & M3 Positive and negative impacts of the macro environment on business operations. 9
TASK 4..........................................................................................................................................12
P5, M5 & D2 SWOT analysis for determining the strengths and weaknesses....................12
P6 Interrelation of strengths and weaknesses with external macro factors..........................14
Impact of macro and micro environmental factors on business objectives and decision making
..............................................................................................................................................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business is an activity or a function in which goods and products are exchanged in return
of money or profit. Whereas, Business environment is refer to combination of all factors that are
related with business and can impact the business organisation and its profitability in positive or
negative manner. Chosen organisation for this report is Marks and Spencer which is a UK based
supermarket chain along with headquarters in Westminster, London. It was established in 1884
by two individuals i.e. Thomas Spencer and Michael Marks. Present assignment will be discuss
about the several kind and purpose of organisation along with legal structure, size, scope and
their stakeholders. Interrelation of organisational functions with objectives will be also discussed
under this report. PESTLE and SWOT analysis will also formed in this assignment which
defines sustainability of firm and impact of macro environmental elements on the growth of
business. At last, interrelation between strength and weakness of internal environment with
macro-environmental factors will be covered in this project.
TASK 1
P1 Different types of organisations along with purposes and legal structures
Several organisations like profit, not-for-profit, non-governmental organisations are exist
in marketplace whose purposes and legal structure are different in nature (Barringer, 2015).
Duties which are performed by these organisations are different in nature according to their
mission, vision and size which directly supports in their growth and development in international
business environment. Some kind of organisations along with their purposes are given as below:
Public sector company
These are those firms that are controlled or regulated by government of nation. Public
sector organisations performs their duties for the citizen of nations only. These organisations
offers services or products without focusing on earning profitability whereas, they performs their
functions for fulfilling needs and wants of citizens of nations. Organisations of these sector get
funding from taxes, subsidies from government etc. Taken firm for this kind is NHS which is a
public body and provides health services across the UK nation.

Purpose
Purpose of NHS is to provide better clinical and medical services to all citizens of the
country without making partiality on the basis of gender, age, race or religion. Most of the
services which are offered by NHS is free.
Legal structure
 Central government: At this level, Company have to form policies and strategies for
maintaining medical and healthcare services across the nation. So that inequalities from
medical services can be removed effectively(Bocken, Rana and Short, 2015).
 Council – In this kind of structure, two or more individual comes together for making
decisions. In NHS, several individuals like their BOD, managers, stakeholders, medical
representatives makes better decisions so that their main objective of removing
inequalities from health sector can be accomplish in easy manner.
 Local government – It is the lower phase of legal structure in which NHS have to
maintain healthcare policies within the boundaries of district or town.
Private organisations - Organisations in private sectors are run by a single or a group of
individuals whose main objectives are to earn profitability along with serving needs and wants of
customers. Chosen company for private sector is Marks and Spencer which is a multinational
supermarket chain and offers products and services across the world.
Purpose - Main purpose of M&S is to produce and offers quality clothing, home
accessories and food products to middle and lower class individuals. Whereas, objectives of
M&S is to gain competitiveness in marketplace along with satisfying needs of individuals.
Legal structure:
 Sole proprietorship – This kind of organisations are owned or controlled by single
individual in which whole decisions are made by them for its growth and profitability. It
is a simplest form of ownership and lower amount is needed for its establishment.
Grocery stores, carpenters are the main example of this kind of structure.
 Partnership – In it, two or more individuals comes together and provide mutually
consent for performing duties so that common objectives can be achieved. Along with
this, losses and profits are also divided in partners as per the agreements. Dr. Benne and
Belle which is a cosmetic industry is an example of partnership structure.

 Large corporation and multinational – Large and multinational corporations having
very complex structure in which authority is delegated in several parts so that functions
and activities can be performed effectively. These organisations having presence in more
than one nation. Such as, M&S is a multinational organisation that is operating its
functions across the world.
Voluntary sector company
These organisations are referred to legal entity which performs its duties for achieving a
specific aim or objective. In this kind of structure, two or more individuals comes together and
performs their duties for achieving a common objective. Taken organisation for this kind is
Oxfam which is a non-profitable organisation and work for welfare of society.
Purpose- Organisation is a part of global movement of change and purpose of it, is to
removing poorness from the world (Hillary, 2017).
Types of Voluntary organisation:
 Trustee: It can be defined as an entity or individual who have authority to control or
regulate the whole administration of particular sector.
 Charity: Charity can be defined as an organisation who raises funds for helping general
and local individuals of society.
P2 & M1 Size and scope of different organisations
As per the above discussion, there are mainly three kinds of firms such as public private
or voluntary whose size offerings, scope and various things are different with each other. Overall
description of these things are given as below:
Private organisation: Marks and Spencer
Background of organisation – Marks and Spencer was founded in 1884 and now
company operates its function at multinational level. It is known as seller of high quality
clothing, food and grocery products throughout the world.
Size: More than 1400 stores and 80000 employees defines its wide size across the world.
Scope: Due to wide presence of company in developing countries like China, India, UK
etc. defines large scope of firm as compare to its competitors.
Mission & vision - Mission of M&S is to produce quality products which can be
accessible by all individual with having different income level. Whereas, vision is to gain
competitiveness in global market through meeting with actual requirement of customers.

Legal structure- Management of M&S follows the legal structure which is applicable on
private limited company so that functions and operations can be performed effectively.
Organisational structure- Firm uses Matrix organisational structure so that each task
would be performed with better coordination and efforts of departments.
Objectives- M&S wants to become leader in retail sector through satisfying the needs
and wants of customers in across the world.
Products and Services – Company offers food, clothing, daily uses products to their
customers
Stakeholders- Customers, employees, board of directors are the main stakeholders of
M&S
Public limited company: National health services
Background and objective of company – Association was founded in 1984 for
providing health and medical care service across the UK but now it performs its duties in
England, Wales, Scotland, Ireland. Main objective of NHS is to provide high quality of medical
services to patients so that wellness can be maintained across the nation.
 Size and scope - Availability of NHS in almost every part of England in which company
is providing high quality medical services to their patients. Along with this, it is one of
the largest employer because more than 1.5 million employees are working in it which
defines wide size and scope of firm in marketplace.
 Products and services: NHS offers different kind of healthcare services like dental care,
eye test, surgery, operations etc. across the England.
 Vision and mission - Vision of NHS is to deliver better health and medical care to
patients whereas, mission of company is to improve quality of healthcare and removing
inequalities from medical services (Charter, 2017).
 Stakeholders: Governmental authorities, employees, patients are the main stakeholder of
NHS.
 Legal structure - NHS is a public body and operates its functions in entire nation due to
which they follows the legal structure which is applicable on public organisations.
 Organisational structure – Organisational structure of NHS is divided in three parts i.e.
central, state or local that is regulated or controlled by healthcare division of UK nation.
Voluntary organisation- Oxfam

Background information and objectives of firm – Oxfam was found in 1942 at Oxford,
England with an objective of eliminating poverty from the world.
 Size and Scope: 20 charitable trusts along with approx. 20000 volunteers are working
under the firm with emphasising on wellness of societal individuals instead of making
profits throughout the world.
 Products and services: Company provides necessary products like food, clothes and
roof to the needy individuals.
 Mission and Vision - Vision of Oxfam is to fulfilling basic needs of individuals so that
they can spend their live their life easily. Whereas, Mission of organisation is to make
positive changes in life of needy individuals so that poorness can be removed from the
world.
 Business Objectives: To raising the standard of societal individuals along with making a
world without poorness.
 Legal structure – Oxfam is following legal structure of charity as they raise funds for
fulfilling needs of needy individuals without making profits from these.
 Stakeholders: Trustees, volunteers, societal individuals are the main stakeholder of
Oxfam.
 Organisational structure – Oxfam follows hierarchical structure so as to performing
tasks as per the pre-determined objectives.
TASK 2
P3, M2 & D1 Relationship Between Different Organisational Situations and Link Between
Organisational and Objectives and Structure
Growth and success of organisation is based on efforts of employees who are working in
different divisions of firm. Therefore, it is very essential for management of M&S to make
interrelation between several departments effectively so that their maximum contribution can be
taken for achievement of organisational goals. Interrelation between different departments are
given as below:

Illustration 1: Matrix organisational structure
Marketing and Finance: In these departments relation is very high because marketing
department of M&S have duty to conduct promotional activities. So that large number of
customers get attracted towards offering of company. Whereas, finance department formulates
budget for each activity so that expenses and income can be measured effectively. For
performing these activities, high amount of funds are required by marketing department that are
fulfilled with the help of finance department. Therefore, it can be said that there is an
interrelation between these department which supports the organisation in achievement of its
preset goals and objectives (Iansiti,and Lakhani, 2014).
Human Resource & Production- HR department of M&S is responsible for fulfilling
the requirement of human resources in each division of organisation whereas production
department have duty to produce products as per the market trends and needs of customers. For
example – supervisors are required in production department for monitoring the activities so that
Head of department have responsibility to make a list of requirements which contains
qualifications, experience, skills etc. and provide it to HR managers. In return, HR managers of
M&S have duty to recruit eligible and experienced candidates as per the requirements of
production department. As a result of it, when knowledgeable candidates will be recruited in
production department then productivity of firm will automatically improved which will
beneficial for organisation in achievement of its preset goals and objectives.
Advantages
 Due to interrelation, moral and confidence of individuals are increased at workplace
which leads improved productivity and profitability of organisation.

 In interrelation, Work is segmented in several divisions of firm due to which chances of
gaining maximum contribution from departments are higher and work will be completed
within the given deadlines.
Disadvantages
 If one department is not doing its duties in well manner then it will affect the overall
performance of organisation in negative manner.
 Focusing on taking higher contribution from the employees can be proved risky as it will
exert pressure on the employees which will affect their performance and efficiency.
Impact of Interrelation on organisational structure- Organisational structure is refer
to a system which defines that how the functions will be performed by divisions and how the
goals will be achieved in pre-determined time-frame. Therefore, it is very important for
management of M&S to make interrelation between departments and effective organisational
structure at workplace because without it conflicts will be arise in working which indirectly
impact on the decision-making of managers. Whereas, Positive and healthy interrelationship at
workplace will support the management in making effective decisions for growth and success of
firm (Prajogo, 2016).
TASK 3
P4 & M3 Positive and negative impacts of the macro environment on business operations
In order to analyse macro-environmental factors, it is very important for each
organisation to conduct pestle analysis so that impact of external factors on their operations can
be identified easily. PESTLE analysis of M&S and NHS along with its positive and negative
impact are given as below:
Political – It includes several elements like tax policy, government policy, foreign trade
policy etc. which can affect the overall profitability and sales figures of organisation in positive
or negative manner. Positive and negative impact of this factor on operations of M&S and NHS
are given as below:
Particulars Marks and Spencer National health services
Positive European governments
reduces the tax duties due to
which company can import or
Organisation is a part of public
body due to which too much
support is provided by

export their products easily. government of UK.
Negative. Higher cost of production can
hinder the growth and
profitability of M&S in future
time.
Due to large in size, it is
difficult for NHS to change
their policies and structure as
per the ruling government.
Economical – These factors includes interest and inflation rates, GDP, per capital income
and many more factors which can affect the growth and profitability of organisation in positive
or negative way (Schaltegger and Hansen, 2016 ). That can be understood by as under:
Particulars Marks and Spencer National health services
Positive Inflation rate is decreasing
regularly such as present
inflation rate is 1.8 % which
was less than previous year
such as in 2018 this rate was
2.48% that defines positive
sign for sales figures of M&S
(Inflation rate from 2014 to
2024, 2019).
Budget of NHS is expected to
rise up-to 3 billion pound from
previous year so as to fulfilling
the health needs of individuals
which defines positiveness of
economic factor for NHS.
Negative. Due to unattractive pricing
strategies customer base is
decreasing and as a result of it,
company is facing the issue of
low profit and sales figures.
Due to bigger size of structure,
Cost of labour is increasing
regularly which can negatively
impact on the profitability of
firm.
Social - This factor includes taste, beliefs, preferences, of individuals which can affect
the growth and profitability of firm in positive or negative manner.
Particulars Marks and Spencer National health services
Positive Organisation is more
emphasising on making
modifications in their offerings
NHS is providing free of cost
healthcare services through
their dispensaries or stores

so that customer's needs can be
fulfilled in desired manner.
located nearby the localities.
Negative Due to more focusing on
traditional clothes, sales
figures of clothing products
are regularly decreasing which
is not beneficial for brand
image of firm.
Due to larger structure, large
number of patients can't get
expected healthcare services
from the organisation.
Technological - These are those elements which are related with advanced technology
and can impact the whole performance of organisation in positive or negative ways (Lüdeke-
(Freund, 2015).
Particulars Marks and Spencer National health services
Positive For improving sales figures,
M&S have implemented
advanced technological
systems in their production
department.
Several advanced technologies
are adopted by NHS like book
doctors appointments online,
video calls with practitioners
etc.
Negative Due to implementation of
advanced technological
systems in production heavy
amount of funds are invested
by firm that is a negative sign
for cash reserves of firm.
Organisation has not
implemented advanced
technologies in their surgical
equipments that can negatively
influences on the customer
base of organisation.
Legal - For carrying out the business operations effectively it is very important for
business organisations to follow regulations and legislations otherwise it will impact positively
or negatively on the overall profitability and growth of firm.
Particulars Marks and Spencer National health services
Positive M&S is an UK based
organisation which is
Quality in healthcare services
are maintained by NHS due to

following all legal frameworks
that are formed by government
so that good brand image can
be maintained in mindset of
customers.
which it is most trusted
healthcare organisation in the
mindset of UK individuals.
Negative If these regulations are not
followed by firm properly than
they have to pay fines or
penalties which is not
beneficial for brand image of
firm.
Due to Brexit, legal
compliances and employment
legislations are changed in
Wales and Scotland that can
negatively impact on the
working policies of NHS.
Environmental – These are the elements i.e. protection of natural resources reducing
carbon emission etc. which are related with environment and having influence in positive or
negative ways on business operations of each organisation (Shenkar, Luo and Chi, 2014).
Particulars Marks and Spencer National health services
Positive In year of 2012, M&S have
started to taking charge of
plastic bags so that positive
contribution can be provided
by firm for protecting
environment.
50 NHS trusts are working
under the organisation which
are regularly working for
protecting the environment and
natural sources of UK nation.
Negative Whereas, if company will not
conduct these initiatives and
produce carbon from their
production then it will
negatively impact on the brand
image of firm.
Non-Disposable surgical
equipments are used by
organisation which are
negatively impacting on the
environment of nation.

TASK 4
P5, M5 & D2 SWOT analysis for determining the strengths and weaknesses
This analysis is important which is used by organisations for identifying their internal
abilities for gaining success and profitability. SWOT of M&S and NHS is given as below:
Particulars Marks and Spencer National Health Services
Strength  Image of company is
very good in
marketplace that makes
strengthen of firm
across the world.
 Approx. 35000
products are offered by
company like clothing,
home accessories, food
etc. which are highly
satisfying customer's
needs.
 Highly trusted firm as
an medical care service
provider.
 More than one million
employees are working
under the organisation
which makes good
strength of firm.
Weaknesses  High dependency on
UK market is
impacting on the sales
figures of firm.
 Tax duties in a
particular nation can be
revised at anytime
which can affect the
sales figures of firm.
 Due to large structure,
employees can't get
promotions as per their
performance.
 No compensate is
given to employees on
their overtime.
Opportunities
 Due to less trade
barriers, Company can
expand its operations in
large developing
 Clear business strategy
can provide
opportunity of

nations like India,
China for increasing
profitability.
 Company can also
introduce new products
like traditional or
ethnic wear for
attracting large number
of customers.
expansion.
 Employee retention
rate is higher than the
other organisations
which can also
supports the firm in
grabbing opportunity of
enlarging their
organisational
structure.
Threats  Changes in the
demands and
preferences of
customers can become
threat for the
organisation in future.
 Giant players Tesco,
Aldi and their
strategies can become
threat for profitability
of company.
 Management structure
does not changes as per
the needs of patients
which can become
threat for policies and
strategies.
 Due to unbalanced
management structure
employees are not
getting rewards or
compensation as per
their working
performance.
Influence of internal and external factors in decision- making – From the above SWOT and
Pestle analysis, it can be said that managers of M&S should make effective analysis of these
factors so that any difficulties not be faced in decision-making or achieving desired targets. For
example- demands and needs of customers can be changed at any time due to which if any
effective measures can't be taken by organisation then it will directly affect on the profitability of
organisation. As less trade barriers in foreign nation like India can increase the market-share of
M&S but if effective sources like human, financial, technical etc. will be not managed then it

will directly directly impact negatively on decision-making. Therefore, considerations of these
factors are very necessary as it can negatively influences the growth and sustainability of M&S.
P6 Interrelation of strengths and weaknesses with external macro factors
Strength and weaknesses of M&S having an interrelationship with macro environmental
factors which is discussed as below:
 POLITICAL- These are related with tax duties and several policies of government that
can impact the overall performance of organisation. Company is operating its functions in
various nations due to which brand image of firm is high as compare to its competitors.
Whereas, tax duties can be revised in any nation at anytime that can impact the overall
profitability of firm in negative manner (Shenkar,Luo and Chi, 2014).
 ECONOMICAL- These factors includes tax, inflation, import-export duties etc. if there
any changes occur in these factors that can impact on overall profitability of firm. Around
35000 products are included in the portfolio of M&S which has increased overall
customer base of firm. Whereas, company's profitability is highly depends on UK
economy due to which it is not performing well in foreign countries.
 SOCIAL- Company makes modifications in its offering on regular basis due to which
high profitability and sales figures are attained by company. Whereas, demands and
needs of customers can be changed according to market trends that is impacting
negatively on the business performance and sales figures of firm.
 TECHNOLOGICAL- Management of M&S have implemented technically advanced
machinery in their production department so as to grabbing high customer base and sales
figures in marketplace. Whereas, huge investment is done by company for implementing
these machinery which have negatively impacted on cash reserves of firm.
Impact of macro and micro environmental factors on business objectives and decision making
Marks and Spencer is a big organisation whose main aim is to gain leadership in retail
sector along with making large customer base. These aims can be achieved by firm through
identifying micro and macro environmental factors. Such as, through analysing macro
environmental factors along with strength and weaknesses management of M&S will be able in
formulating effective decisions for growth and sustainability. In addition through analysing these
factors effectively, managers of M&S will be able in identifying those aspects through which
objectives will be achieved effectively.

CONCLUSION
From the above report, it has been concluded that size and scope of organisations are
different with each other due to which they also performs their duties in different ways for
achieving their objectives. In addition, determination of internal and external macro
environmental factors are also important because it guides the management in formulation of
effective strategies.

REFERENCES
Books and Journals
Barringer, B. R., 2015. Entrepreneurship: Successfully launching new ventures. Pearson
Education India.
Bocken, N. M. P., Rana, P. and Short, S. W., 2015. Value mapping for sustainable business
thinking. Journal of Industrial and Production Engineering. 32(1). pp.67-81.
Charter, M., 2017. Greener marketing: A responsible approach to business. Routledge.
Chesher, M. and Kaura, R., 2012. Electronic commerce and business communications. Springer
Science & Business Media.
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Iansiti, M. and Lakhani, K. R., 2014. Digital ubiquity: How connections, sensors, and data are
revolutionizing business.
Laudon, K. C. and Traver, C. G., 2016. E-commerce: business, technology, society.
Oriesek, D. F. and Schwarz, J. O., 2016. Business wargaming: securing corporate value.
Routledge.
Prajogo, D. I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics. 171.
pp.241-249.
Schaltegger, S., Hansen, E. G. and Lüdeke-Freund, F., 2016. Business models for sustainability:
Origins, present research, and future avenues.
Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.
Online
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<https://www.theguardian.com/sustainable-business/marks-and-spencer-supply-chain-
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