Business Environment Analysis and Company Overview

This assignment involves analyzing the business environment, including internal and external factors that affect the working of businesses. The report outlines the characteristics of public, private, and voluntary companies, as well as their strengths and weaknesses. It also discusses the advantages and disadvantages of interrelationships between organizational functions. The study is supported by references to relevant research papers and books.

Business and Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. Different types of organisation ...............................................................................................1
2. Explanation of above all type of organisational - ..................................................................2
3. Organisational chart of marks and Spencer and relationship between various organisational
functions......................................................................................................................................4
TASK 2............................................................................................................................................6
1. Pestle analysis of marks & Spencer........................................................................................6
2. SWOT ANALYSIS OF THE MARKS AND SPENCER......................................................7
3. Reflection of key findings.......................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business is an organization where people work together on a specific objective. Business
is also the organized efforts and activities of individuals to produce and sell goods and services
for profit. Business environment is the combination of internal and external factor which
influence the organization operating system (Schaltegger, Hansen and Lüdeke-Freund, 2016).
Present study is based on “Marks and Spencer” which is a multinational retailer company
founded on 1884 in United Kingdom. M&S currently has 979 stores across the UK including 615
which only sell food products. Study lays emphasis on the public, private and voluntary sectors
and legal structure help to growth in international market. Report will highlight the functions of
interrelationship of organization and how link to organizational structure. In this study we will
also discuss on various macro environment factors and their affects on organization. Study will
also highlight the strength and weakness of business and their interrelationship with macro
factors.
TASK 1
1. Different types of organisation
There are mainly three type of organisation which are as follows -
Private organisation
This refers to a business which is owned by the individual or company rather than
government. (Laudon and Traver, 2016.). The main objective of this type company is to achieve
the maximum profit. The profit is only restricted to some number of the owners of enterprise and
the stakeholder who have invested in the organisation. For example, Marks and Spencer is
working as private firm, its first objective is to attain the maximum profitability and to improve
the leadership in the clothing as well as in the food. The mission of the M&S is to delivering the
high quality product.
The international expansion of the Marks and Spencer Company as follows-
M&S enterprise opened first Asian store in the Afghanistan in 1960 after this company expanded
across the world countries like Canada, Paris, France and also sell through the European
marketplace sites such German, French and Austrian.
Public organisation
1

Public sector organisation is maintained and owned by the central or state government.
The fund required by the enterprise is given by the government. The aim of the company is to
provide the services and goods in better quality to the large number of societies in terms of the
society welfare. For example, the National Health Service was created for providing the good
healthcare to the public, regardless of wealth. The NHS provides the services to keep people
healthy and decrease the inequalities in access to health care (Kljucnikov and et.al., 2016). The
mission of NHS is to provide the good health of public with individually focused initiative and
also provide the quality of care to every person every day.
The international expansion of the National Health Service
The NHS is incredibly powerful overseas. The NHS expand globally because of their
increasing demand from government and organisation of abroad to share knowledge and provide
services. It is publicly founded National healthcare service for each considers country of the
United Kingdom such as London, England and Scotland. (Bocken, Rana and Short, 2015)
Voluntary organisation
The voluntary organisation plays a significant role in the socialistic, democratic and the
society welfare. They perform the various functions for the welfare of people who are affected
by conflict and armed violence and promoting the rules of war. For example, the Red Cross
international company's objective is to prevent and reduce the human suffering and secure the
life & health of the peoples who get affected the arm problems through providing voluntary
business partnership. The vision of Red cross is to promote and facilitate the all form of
humanitarian activities by national societies with a view to protecting the human suffering.
(Trevino and Nelson, 2016).
International expansion of the Red cross
The international committee of the Red Cross Headquarter in the Swiss city of Geneva
and it includes the 190 countries across the world. It is the oldest and most recognized
organisation in the world. The committee conduct on regular basis and responsible for defining
aims and guidelines for mentoring the financial matters of the assembly. The committee involves
the membership of maximum of twenty-five Swiss citizens (Wheelen and et.al., 2017).
2

2. Explanation of above all type of organisational -
Basis Marks and Spencer
(Private)
NHS (Public) Red cross (Voluntary)
Background
information
It was founded in 1984
by the Michael Marks
and Thomas Spencer
It was launched in
1948 by the health
secretary, Aneurin
Bevan, at park hospital
in Manchester.
It was started in 1863
and was inspired by
the Swiss businessman
Henry Dunant.
Product and services It specialises in selling
clothing, top quality
food, home made
products and financial
services.
It provides the better
health services which
includes the treatments
provided to patients
with rare cancers,
genetic disorders and
also provide the
emergency medical
help.
It provides the shelter,
food, health and
mental health service
and social services
which protect the lives
and dignity of victims
of armed conflicts.
Size and Scope
Number of branches
and employees
This company
expanded across the
world countries like
Canada, Paris and
France. It has 84393
total number of
employees across the
world.
NHS employs more
than 1.5 million
people, putting it in
top five of the world's
largest workforces.
It is the worldwide
company having
16800 employees in
over 80 countries. The
international Red cross
is an international
movement
humanitarian with
approximately 17
million volunteers,
member and staff
worldwide.
3

Values M&S values the
loyalty and confidence
of the customers.
Delivering the good
health for our
communities through
individually focussed
initiatives (Aithal,
2016).
To prevent and reduce
human suffering in the
face of emergencies,
wherever it may be
occurring.
Objective To build a sustainable
business through
consistent, profitable
growth and
development.
Its aim to maximise
the health and well-
being means trying to
keep people well.
Its objective is to
protect the life and
health and to also
ensure the respect of
the human being.
Organisational
structure
It follows a flat
organisational
structure which
includes the limited
level of management
between
administrative level
and front-line
employees.
The organisation
structure of the NHS is
divided accordingly to
the various department
like clinical director,
head of mental
services and the
medicine department.
The organisational
structure of the Red
cross involves the
various level from top
to bottom such as state
level, branch level, on
a level of city of scope
and on a local level.
Legal structure In this the
participation of
government in the
share of company is
more than the 50
percent. It is run by
the board of director
on behalf of the
shareholder who are
invested in the
In this company is run
by the board of
director who are
elected by the
shareholder and each
of one has the liability
towards the debts.
It is an association of
individuals generally
there will be between 2
to 20 partners who
have the separate roles
and responsibilities
towards the aim of the
enterprise. Generally
run for the benefit of
the community.
4

company (Schaltegger,
Hansen and Lüdeke-
Freund, 2016).
Stakeholders Owners, Customers,
suppliers, employees,
government and
general public.
Service user and
member of local
communities who are
invested in the NHS.
Corporate donors, Care
users, government
body's and volunteers
3. Organisational chart of Marks and Spencer and relationship between various organisational
functions
M&S follow the flat organisation structure. This type of organisation has the limited level
of management between the administrative level and front-line employees. The aim of this type
structure is to encourage the employees in decision making process (Schaltegger, Hansen, and
Lüdeke-Freund. 2016).
Functions of Marks and Spencer
The functional area of the M&S includes the Human resource, marketing, finance, sales,
production, quality control and accounting departments. Each department carries out the task that
relates to its particular department towards the attainment of the organisational goals. The
functions of firm are based on integrity, everyday working, responsible approach, innovation and
inspiration.
Relationship between human resource and marketing department
With the help of flat organisation, The Human resource and the marketing department run
together because hr department have the consistent and capable hr director who provide the
strategic human resource to the organisation to achieve the organisational objective effectively
and marketing department of M&S also play the important role in the attainment of
organisational objective by providing the information of products to the consumers through the
workforce which is hired by the hr department. This strong relationship helps business in gaining
success in the market (Wheelen and et.al., 2017).
Relationship between Finance and production department
5

This both departments are interrelated due to the flat organisation structure of M&S
because Finance department provide the funds directly to the production department for
purchasing raw material and produce the high productivity in the organisation for the
accomplishment of the organisational objective effectively. If the finance department not provide
the appropriate finance or resource to the production department, they cannot run effectively it
will affect the Marks and Spencer in terms of law productivity (Aithal. 2016).
Relationship between sales and quality control department
Product quality is major strategic instrument of organisation which influence the sales
department at very highly effective manner. Thus, the flat organisation structure of M&S also
affected because when quality of production is law then sale of production is also less and this
will decrease the profitability of the organisation and reduce the interest of the consumers
towards the enterprise.
Relationship between accounting and finance department
Accounting and finance both are different concept yet inter-related. Accounting involves
the bookkeeping and maintaining as well as calculating the financial aspects of the company. It
also makes the financial statement of the enterprise and the financial department create the all
those calculations that would be enable the business to make the decision regarding the future
operations of the company this helps the enterprise to make the effective decision in terms of the
development of the organisation (Ji-fan Ren and et.al., 2017). So overall, both departments are
concerned with the calculation and maintenance of the finance related aspects which is the
crucial part of the company.
The organisational structure of the Marks and Spencer company is flat which shows that
every employee are free to talk with his superior and subordinates and through this decision are
taken smoothly in the organisation because flat organisation structure increase the involvement
of employee's in the decision making. It includes the various functions which are inter-related
and work together effectively because each one of the functions perform the task separately
towards the accomplishment of the organisation. This all procedure helps to improve the overall
growth and development of the organisation (Cumming and Zahra. 2016).
6

TASK 2
1. Pestle analysis of Marks & Spencer
Pestle analysis is an evaluation of different macro environment factors that influence
company. Different factors are political, economic, social, technological, legal and
environmental factors. These all factors influence business in positive and negative manner.
Following are Details of pestle analysis of Marks & Spencer:Political factors: Company
follow policy of goods and service tax. Government change rules and regulation. M&S is a
multinational company and operating its business in global level. If import and export tax rate is
increased by government, then company have to pay extra rates on export and import. In that
case company net profit affected. Its positive effect, if Govt. stable their rules and regulation for
long time, then company not do change their policies. CSR also put effect on organisation.
Because due to lack of clarity on schemes like energy efficiency the initiative of firm are
negatively influenced. On the other hand free trade agreement has supported M&S as it has
decreased the sourcing cost of firm (Cumming and Zahra, 2016).Economic factors: -
Economic factors like labour rates, demand and supply, inflation is a major thing for retailers. If
govt increase labour rates then company suffer. Meanwhile, labour rate reduces by govt . so
M&S have to give less salary to all employees and they invest their saved amount in other
scheme and get interest . Demand and supply also effecting to organisation because inflation
create in market only through demand & supply. If demand is more than supply so inflation
increase and if demand is less than supply so inflations not create in market. Social factors: -
M&S retailer is affected by social factor because society is continually changing. Continually
changing in customer behaviour, fashion, etc time to time. Its also influence through change in
culture. Because due to change in culture and trend. If M&S not update their product according
to culture so its affect negatively to organisation. Because competition increasing day by day so
for beat to other competitors M&S have to update. and achieve organisational goal.
Technological factors: - Technology increasing day by day. Most of the customers are like
to do online shopping. M&S can attract customer through mobile, web & net which helps in
easy customer interaction which support boost in sales. Nowadays mostly consumer do online
payment by card swipe, etc and save expenses of rent. This enhances customer satisfaction in
business (Trevino and Nelson, 2016). Thus, it also gives negative impact on company because
7

day by day technology increases. Company have to install the latest technology and then suffer
heavy expenditure. Due to competition in market entity has burden of advertisement expenditure.
Company suffer heavy expenses of advertisement only for attract customer and increase sales
level of company (Wheelen and et.al., 2017). Legal factors: - This factor is root of pestle
because company have to take permission legally from Govt. for set up their retail business.
Many formalities have to complete by legal entity in establish business like documentation,
license etc. That increases burden on the firm when it plans to enter into new country. But legal
factor has also positive effect because law make rules of health and safety law for employee’s
health and safety. Its positive effect That makes the employees satisfied and they like to work in
the firm for longer duration. And increasing in overall production. Because by this law
organisation reduce risk and injury from work place.(Schaltegger, Hansen and Lüdeke-Freund,
2016). Environmental factor: - M&S also affected environmental factor like climate
change, pollution, environmental policies etc. Because customer needs change with climate. And
M&S have to change in their product for attract and satisfied their needs. if M&S not change that
product according to climate so they can't achieve their goal. Policies also effected to
organisation because Govt make policy regarding poly bags so if organisation follow this policy.
Pollution reduce and customer follow their rule also. So its that positive effect. By this policy
social development programme. This raises its brand image but if entity fails to fulfil its
corporate responsibility then it will hamper its reputation in the market(Bocken, Rana and
Short.2015).
2. SWOT ANALYSIS OF THE MARKS AND SPENCER
STRENGTH
 High recognition of the brand.
 Wide variety of the products.
 Large number of stores and outlets
 Popular designer brands
WEAKNESS
 Stock control
 waste store spaces
 Bad publicity as non-trendy products.
 Poor investment strategy
OPPORTUNITIES
 Online presence to bolster its market
position.
THREATS
 Increased competition in all area of
business.
8

 Market extending.
 Reshaping clothing segment.
 Simplifying operating model
 Changing trends in clothing space
 Governmental retail stores.
 Chemical pollution.
Interrelationship with the external macro factors
Company provides wide range of products to its consumers that are the biggest strength
of business. It is interrelated with social macro element. As needs of people gets changed with
age, income, life style etc. As M&S offers traditional and trendy both types of cloths thus, by
having variety of items it becomes able to meet t with the needs of different consumers. This aids
business in raising demand and enhancing satisfaction level of consumers. (Wheelen and et.al.,
2017).
M&S has large number of stores and operate globally. It is another strong point of
company. It is highly interrelated with economic factor. Entity is able to generate huge demand
in various countries thus, if economic crises occur in particular nation then also M&S can earn
profit from other nations. Its global presence has made its financial strong brand and the leading
firm in retail industry. Marks and Spencer has strong financial condition that supports the firm in
sustaining in market if there is poor economic condition of economy.
The Weakness includes the stock of control., this weakness is related with technological
factor. Entity still uses traditional methods of accounting that is why it is unable to keep proper
records of stock. That creates difficulty for the business .If firm implements latest accounting
software then it would be easy for firm to manage unnecessary cost that would give positive
result to business unit (Ji-fan Ren and et.al., 2017).
Poor investment strategy is another weakness of Marks and Spencer. Thus, sometimes entity
faces issues of high competition. This is highly interrelated with technological factor, as it
sometimes fails to implement latest technology that creates difficulty for the firm and affect its
revenue as well (Trevino and Nelson. 2016).
Comparison of strength and weakness of M&S with ZARA
Comparison M&S ZARA
Strength  1000 stores across the
world
 It has own branded
labels
 It offers trendy
products to consumers
and its delivery
9

 Popular designer
brands (Marks and
Spencer SWOT
Analysis, Competitors
& USP, 2018)
process is very fast.
 Global brand presence
 |More than 2000 retail
stores across the globe
 It offers handbags,
shows apart from
clothes
 Investment in
technology and
innovation
Weakness  Poor investment in
technology
 Poor investment
strategy
 Limited marketing
 High brand switching
3. Reflection of key findings
Key finding which includes economic factor with the help of this factor company can
take better decision in terms of finance because when M&S has the good economic condition, it
can produce more attractive goods and services to the customer. This retain the consumers
interest towards the enterprise and also with the financial department company can take the good
decision regarding the future operation because this department find out the future required
finance in various operations (Wheelen and et.al., 2017).
Political factor influences the company policies because when the government is not
stable their rules and regulations are also changed with government and company have to change
their policies accordingly. If Govt. is stable with their rules and regulation for long time then
company not do any changes in their policies. Increase in tax is an example of political factor
which influence the companies' profitability(Schaltegger, Hansen and Lüdeke-Freund.2016)..
Social factor reflects the strength with high recognition of M&S brand because the
company focuses on fulfilling various requirement of the consumers according to their changing
demands. Company take better decision in terms of better and attractive production for
consumers through the research of the marketing departments because they can find out the
10

changing trends of production and also determine which type of product demand is more than
other products in the market (Cumming and Zahra, 2016).
Technological factor reflects the decision of the company in terms of availability of stock
on the online distribution sites of the organisation because in present time consumers buy the
production more from the online sites of the company called as e-commerce. The information
technology shows the current stock to the company for taking the decision regarding the
production and facilitate to consumers the availability of the products for purchasing
CONCLUSION
From the above study it had been concluded that the business environment involves
internal and external environment. This have great impact on the working of business. It also
leads to failure or success of firm. Report has outlined size, scope, mission, vision, values,
objectives, etc. of public, private and voluntary companies. Above study company analysis the
advantages and disadvantages of the interrelationship between organizational functions..
.
11

REFERENCES
Books and Journals
Aithal, P.S., 2016. Study on ABCD analysis technique for business models, business strategies,
operating concepts & business systems.
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.
Chang, J. F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
Cumming, D.J. and Zahra, S.A., 2016. International business and entrepreneurship implications
of Brexit. British Journal of Management. 27(4). pp.687-692.
Ji-fan Ren, S. and et.al., 2017. Modelling quality dynamics, business value and firm performance
in a big data analytics environment. International Journal of Production Research. 55(17).
pp.5011-5026.
Kljucnikov, A. and et.al., 2016. The entreprenurial perception of SME business environment
quality in the Czech Republic. Journal of Competitiveness. 8(1).
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Laudon, K. C. and Traver, C. G., 2016. E-commerce: business, technology, society.
Schaltegger, S. and Wagner, M., 2017. Managing the business case for sustainability: The
integration of social, environmental and economic performance. Routledge.
Schaltegger, S., Hansen, E.G. and Lüdeke-Freund, F., 2016. Business models for sustainability:
Origins, present research, and future avenues.
Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to do
it right. John Wiley & Sons.
Wheelen, T. and et.al., 2017. Strategic management and business policy. Pearson.
Online
12

Marks and Spencer SWOT Analysis, Competitors & USP. 2018. [Online]. Available through
<https://www.mbaskool.com/brandguide/lifestyle-and-retail/5219-marks-and-
spencer.html>
13