Business Environment Analysis and Report

The assignment requires a thorough analysis of the business environment, including external micro and macro factors. This involves identifying and discussing the impact of political, economic, social, technological, legal, and environmental (PESTLE) factors on an organization. Additionally, Porter's Five Forces model is applied to analyze the competitive forces in the market. The report should provide a comprehensive understanding of the business environment and its implications for organizations.

Business and Business
Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Different types of organisations and growth of international business environment.........1
2. Detailed explanation of all types of organisations.............................................................2
3. Relationship between different organisational functions and their organisational objectives
and structure...........................................................................................................................4
4. Impact of macro environment over business operations highlighting positive and negative
impacts....................................................................................................................................6
5. Internal and external analysis of M&S...............................................................................7
6. Identifying strength and weaknesses of organisation by applying TOWS and their
interrelation with external macro factors................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The term business environment affects employees, supply and demand aspects of
organisation. It consists of all internal and external factors that affect the business. Present study
is based on M&S which generates a revenue of about £10.622 billion, and its net income is of
about £115.7 million. It is a globally spread firm. Marks and Spencer (M&S) is a private retailing
company which actually deals in products like clothes, food items, etc. Assignment will include
the following brief about different types and purpose of organisation, scope and external factors
that affect any entity. It also gives detail about relationship with other entity. Report highlight
Pestle analysis of Marks and Spencer. Report discusses about impact of porters five forces.
MAIN BODY
1. Different types of organisations and growth of international business environment
There are three types of sectors i.e. public, private and voluntary. These can be defining
according to their purpose and legal structure.
Public organisation: this is also called as state sector. It is known for government
provided services to public. This is a part of economy, composed of both public services and
enterprises. This sector include public services like construction of bridges, tunnels making,
police, public education along with health care related issues (Nuroni, 2016). It not only focuses
over an individuals, it provides its services to the whole society. Public section is under control
by the government, so its basic objective is to serve for the citizens of the country and to provide
high quality products according to the customers demand. This sector raises its revenue by public
taxes, etc. Benefits in public section is that it provides job security as well as retirement perks
also. The main purpose of public sector is to provide these services to the people as well to earn
profits. For example: (TESCO) British multinational retailing organisation that works as public
organisation. The company aims to expand its business and earn more profit.
Private organisation: All the operations and activities are controlled or govern by the
owner only. Government doesn't play any role in this department .its main motto is to generate
more and more revenue from customers. And this can be done by research and development
plans by the organisation. Purpose of private firms is to generate more profit and expand
operations.
1

M&S is a private company which is operates in a multiple areas, specialized in whole
sales (beauty products, furniture, home, clothes). The main purpose of this organisation is to earn
profits which can be done by introducing new and different products in the market for customers
(Business environment, 2015). Through social media these brands can be established over a
wider range. Through this, more people will know about their products and buy them which will
results in a profitable market.
Voluntary organization: It is a non-profitable organisation, it is related to social
activities like charity, faith based organisation, health care programs (DeFusco and et.al., 2015).
Such firms generate funds in order to recover the cost and invest further for development. The
purpose of community sector is to give benefits as well as to solve conflicts of needy people
without mind-set of having profits only. For example: by using the charity funds, many
handicapped persons got a new life to live. For example: British Red Cross (BRC) is an entity
that works for human welfare, it has organised many campaigns for blood donations. In which
they provide information about blood infection there precautions and how to create awareness
about their health.
2. Detailed explanation of all types of organisations
CREITERIA PUBLIC PRIVATE VOLUNTARY
Size Tesco generates a
revenue of about £55.9
billion (2017) [1], its
net income is £
(54) million,
population of staff
working in this entity
is 476,000, it is
operating in 6,553
locations which proves
that it is widely
spread.
M&S has 84,939
number of employees
who are working in the
company, it generates
a revenue of about
£10.622 million, its
operating income is
£690.6 million, as it is
a widely spread and it
has its headquarters in
London, United
Kingdom. It already
has 979 stores which
British red cross
company which is
globally spread all
over the world and
also known to provide
its civil services for
the needy people, is
spread over a location
of about 900 it has a
staff of about
2,800 ,its income in
2017 was £284.5m
2

are opened at different
locations.
Scope The main scope of
TESCO is to make
their products known
by the public, to
provide appliances
according to clients’
needs and to get
connected with
different community’s
people which will
support it to spread
widely in different
regions. And also will
help in genre ting
revenue for the
organisation (Jinglei,
2015).
M&S is a retailing
organisation which
provides cloths and
food services .the
scope of this
organisation is that by
developing different
products for the
customers according to
their requirement.
It can gain more profit
in the market. So by
introducing new
techniques in there
company for making
fashionable wears, can
improve their
productivity. Which
will generate a high
revenue for their
entity. And by
advertising its
products on social
media will support it
to establish across the
world.
Scope of this BRC is
to provide multiple
numbers of facility to
the people so that
they can overcome
from there crisis. Like
by providing first aid
to the people in
disastrous time , by
organising projects
for health
awareness ,blood
donations
campaigns ,and by
serving them
education services
which will decrease
the unemployment
rates and will provide
income to the people
for their livelihood.
By giving their
services to the
common people it
will be able to
establish its more and
more branches at
different locations,
which in turn will
3

help the organisation
to communicate to
multiple numbers of
people.
Vision To expand over most
of the locations and
earn profit
To generate more and
more revenue with
good quality products.
To provide its
services to the needy
people
Mission and objectives To establish its entity
over a wider area
To promote its
company for profit
To communicate with
the people ,in order to
engage more clients
withi9n it
Legal structure
Organisation structure
Shareholders
It is run by the
government board of
directors, it can sell its
shares to the public.
This structure is quiet
complex in public
sector.
Do not include share
holders
It has a detached legal
identity, it is run by
the individuals and it
is not funded by
government. It cannot
sell its share to the
public
The structure here
includes all the
employees, board of
management and many
more.
Include shareholders
and decisions are
This type of
organisation is
favoured by small
groups, this is usually
operated by
constitution ,legal
documents which is
govern by the
association
The structure includes
all the members
working in
organisation.
Shareholders are the
main investors of
4

taken by them sector.
3. Relationship between different organisational functions and their organisational objectives and
structure
Illustration 1: Organisation chart of M&S
Source: (Business Environment Types External Micro and External Macro), 2017
An entity performs various functions in order to produce its goods and sale its products in
market. These are listed as below:
 Production and design
 Sales and marketing
 Research and developmentWith support of these functions, an organisation can target
over its goals and objectives.
5

Production: To produce good products or services to any entity will require to have a
combinations of labour, materials and information. These elements together affects the
organisation as well as their objectives also. Labour: employees plays a very significant role in an organisation. For example: they
need to take a valid decision for their products to increase their sales and productivity of
an organisation, what resources and deigns are good for their items, what new ideas are
need to be taken for these products so, that they can establish their brand in the market for
customers.Materials: now a days, customers are also curious about what they buy, its
coast, brand and materials. Employees has the responsibility to select that material for
their products which are affordable as well as easily available in the market.
 Information: there are expertise in an organisation who are involved in design making as
well as collect data from the market by researching over it,and then have processing of
their products according to that data(Fleisher and Bensoussan, 2015). .by this way they
get the surety of whatever items they are selling to their customers are of good quality
and the clients will be satisfied by their products.
M&S is a well-known retailing company which used to sell products like cloths,
furnishers, home appliance as well as food products (Business Environment Types (External
Micro and External Macro), 2017). So, with skilled employees, good material and with the
relevant information, M&S can produce their products according to customers need and want.
The leader will analyse material, market price as well as collect all data related to their items and
then will share its information with the employees so that they can make their products according
to given information and then sell it in the market. Organisational structure of M&S is a
decentralized company which means that whenever any design is made, it is taken according to
the staff as well as team leader. It is not just taken by the higher authority, all the employees are
included in design making, which always motivate the employees to work with a positive
thinking in their mind and support them to achieve their goals within the given deadline. By this,
productivity of company increases and their brand image is established in the market.
Sales and marketing: The marketing department will research over the latest trends and
patterns of cloths, customers demand according to their age and gender, it mainly focuses over
the type of consumers which make the market, their preferences .after investigating all the data
from the market ,they will set their products according to customers preferences and will design
6

there items, once the products has been designed by production department it will than given to
the marketing department (Kirton and Trebilcock, 2017). The main motive of this department is
to advertise and promote the product so that the customers will buy there items. By this, they
would have a profitable market. M&S by investigating the markets preferences can make
products according to customers need which will support entire organisation to increase its
productivity as well as to establish new items in the market which they are going to sell.
By promoting its clothing products online, it will be able to communicate with different
customers and to expand across the world. The organisational structure of M&S involve it’s all
employees in design making, the leader assign roles and responsibility according to the
capabilities of person, this reduces the burden of working in a company which increases the high
quality productivity of an entity. For example: the marketing department focuses over the
promotions and advertisement of the item to increase its sells and the production department
focuses over the material, quality, processing and cost of the product. Through this each of the
person is allotted with their individual work which decreases the mistakes in there alliances
Research and development: this department plays a very important role before
production of any product as the main process of an item start with this only (Brannen,Piekkari
and Tietze, 2017). The motto of this department is to research over the existing products, make it
more creative than others, produce new and latest items, improve production methods and create
innovative ideas for organisation to have a profit. The organizational structure of M&S will be
able to reduce its cost, increase its revenue and can always be on top rankings in the market. This
is how any organisational functions are related to objectives of any organisation. The main aim
of Marks and Spencer is to create more and more revenue for the company by offering good
quality products in the market which are designed according to the customer’s needs and
preferences.
7

4. Impact of macro environment over business operations highlighting positive and negative
impacts
Macro environment is the one which cannot controlled by the firm or any organisation.
These are the factors which affect any company are as follows:Political factor: these are the
components which cannot be controlled by the company. Government passes many laws and
rules, according to these rules and regulation, the organisation needs to work, if the entity
operates as per given rules by the government it will sustain and if not then it will decline soon
(Schaltegge, Lüdeke-Freund and Hansen, 2016). For example: M&S which is a retailing
company supply items like cloths, food products and furniture as well as beauty asseceries. If the
government has increased some of the prices of their products like food items then it is
responsibility of the entity to give discount on the prices of food appliances so that it is simpler
for the customers to buy them and through this clients have a satisfaction that increases the
productivity of the company.
Economical factor: this component is related with inflation, deflation, employment rate.
It has both positive as well as negative impact over M&S. For example: if there is high inflation
then consumers will not be able to buy products. Furthermore, it will create issue for M&S also
to make investment. This will impact negatively on business. On the other hand, if employment
rate is high and all consumers have adequate income sources then they will buy products easily
which may help in raising sales of organisation.
8
Illustration 2: Pestle analysis
Source: (Business Environment Types
External Micro and External Macro,2017)

Social factors: This has a great influence on M&S as it lays emphasis on culture, values
and beliefs of people. If not followed it can impact negatively.
Technological factors: As M&S is a merchandising company, in technical way, it has
both positive and negative impact over (Skrbinjek and Dermol, 2016). As the organisation
introduces new techniques in its operations ,it is little bit difficult for the company to implement
this suddenly ,so for their simplicity the leader ensures to conduct training for the employees so
that latest technique get a little bit familiar for employees to operate it and implement it with
their products for manufacturing goods. Its negative impact will be that if the company uses old
techniques then it will decreases the productiveness of it and this would affect its financial
position.
Legal factors: Company has to follow rules and regulations given by government in order to
build a good image. If not given than it can hamper there growth.
Environmental factors: Organisation must be involved in following practices that supports
clean and fresh environment. No pollution should be done by them.
5. Internal and external analysis of M&S
Internal analysis
SWOT analysis of M&S gives a brief description about the strengths, weaknesses,
opportunities and threats.
Strengths
 The strength of M&S is that it offers new trends, latest fashion deigns to the customers of
different age and variety and basically it is up to date with the current trends and fashion
in the market. This creates loyalty of clients.
 Its brand presence Skilled employees
Weaknesses
 But it has some of the weaknesses like it has low financial presentation. Poor online presence
Opportunities
9

 Technological development Globalisation
Threats
 High competition
 Changes in government policies
External analysis
Porter’s five forces helps to identify the strength and weakness of M&S this model is
required.
These are as follows:
1. threats of new entry
2. threats of substitutes
3. suppliers power
4. buyers power
5. competitive rivalry
Threats of new entry : As Marks and Spencer is a retail organisation, it has no threats
from the other organisation because it has already set its empire at higher position by offering
good quality products to the customers according to their demands which in turn creates a very
powerful image of the brands in the market, so if any other retailing company enters with another
products for customers for selling than it will be harder for them to establish organisation in the
market as M&S has already launched its good quality products for the customers so there is no
threat for the company to be worried about .
10
Illustration 3: Porters five forces
Source: (Business environment, 2015)

Threats of substitutes: M&S is a globally spread marketing organisation which has
many competitor with it as so ,the treats of substitutes for marks and Spencer is very high as
there are entities like TESCO, Sainsbury and ASDA which sells similar range of food products
in the market. So, there is a big competition between the organisations to make profit and set a
good brand image (Charter, 2017). Going forward M&S is trying to focuser over its food
products and are trying to apply more appliances to it so that they can improve its
productiveness.
Bargaining power of buyers: Customers bargaining power is important. As it is up to
the customers to buy what type and kind of material from an organisation with an affordable cost
which they can pay (Kolk, 2016). Clients have many options to buy different products from
different entity with a reasonable price which satisfy them. M&S has to develop its faithfulness
for the customers and offer multiple no of products with a reasonable rates according to client’s
satisfaction so that they can be loyal to the firm.
Bargaining power of suppliers: earlier the company M&S get suppliers from Britain
only which means it was having limited suppliers only, but due to strong competition in the
markets it has to take suppliers from outside the Britain which reduces the cost and weakens the
power of the suppliers now M&S does not depends upon the particular suppliers only as now it
has other means of sources for its supply.
Competitive rivalry: Retailing business has a very competitive environment within it.
There are many more retailing organisations which is giving a very tough competition to it had
implemented low cost strategies for clothing sections, but it resulted in declining of the
organisation as their strategies didn't work at all (Ramadani and et.al., 2015). So, instead of
selling clothing products, they are focusing over simply food items. To increase their profit rates.
6. Identifying strength and weaknesses of organisation by applying TOWS and their interrelation
with external macro factors
There is a very huge relationship between external macro factors and strength and
weaknesses.Company has its strength and weakness. M&S has some of the weak and strong
points (Jinglei, 2015). With the help of swot analysis company will identify strength and
weakness. These weakness and strength are related to external macro factors like political, social,
technological in following ways for example: M&S which is a globally merchandising
organisation is spread over most of the location but its online presence is very weak as compare
11

to the other entity, it has not established its products over social networking sites ,as now a days
customers used to shop online rather than visiting to the markets as they find it more easier
(Vargas-Hernández and Lerma, 2018). Due to its online absence its productivity decreases and
the organisation is not able to generate more revenue, this also results in lack of communication
to most of the societies and is not able to establish its brand in online marketing. They can
prevent this by promoting there items on social networking sites by advertisement and can gain
multiple numbers of clients attach to organisation.
According to technological factor, N&S is developing a lot as they are accepting latest
technology or their products which is increasing its revenue. There has been many changes in
technologies by the government, which M&S has taken it in a positive way (DeFusco and et. al.,
2015). The leaders of organisation had introduced this techniques to the employees by providing
them training regarding it, which has improved the quality as well as material of the products.
Due to this implementation, the company has increased their profits in the market and also
satisfy the needs of customers.
CONCLUSION
In the above study, it can be concluded that economic, technological, social and legal
factors impact on business unit to great extent. It is identified that there is a significant
relationship in between various organisational functions. If entity develops a strong coordination
among all departments then it will help in accomplishing its objectives. In order to gain
competitive advantage, M&S is required to make changes in its pricing strategies and has to
provide high quality products. This will help the organisation to sustain in market for longer
duration.
12

REFERENCES
Books and Journals
Brannen, M. Y., Piekkari, R. and Tietze, S., 2017. The multifaceted role of language in
international business: Unpacking the forms, functions and features of a critical challenge
to MNC theory and performance. In Language in International Business (pp. 139-162).
Palgrave Macmillan, Cham.
Charter, M., 2017. Greener marketing: A responsible approach to business. Routledge.
Dawson, C. J. and et.al., International Business Machines Corp, 2015. Dynamic provisioning of
resources within a cloud computing environment. U.S. Patent 9,009,294.
DeFusco, R. A. and et.al., 2015. Quantitative investment analysis. John Wiley & Sons.
Falkner, R., 2017. Business power and conflict in international environmental politics. Springer.
Fleisher, C. S. and Bensoussan, B. E., 2015. Business and competitive analysis: effective
application of new and classic methods. FT Press.
Jinglei, M. E. N. G., 2015. Implementation of Environmental Management Accounting in
Building an Environment-Friendly Society in Heilongjiang. Business Economy. 8. p.003.
Kirton, J. J. and Trebilcock, M. J., 2017. Hard choices, soft law: Voluntary standards in global
trade, environment and social governance. Routledge.
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.
Ning, Z. H. U. and Ji, M. A., 2014. Research on Development Countermeasures of Poultry
Excrement Biogas Power Generation Mode. Resource Development & Market. 1. p.011.
Nuroni, A. M., 2016. Pengaruh strategi pengembangan dan kualitas karyawan terhadap kinerja
karyawan pada pdam tirta intan garut garut. Jurnal Wacana Ekonomi. 16(1). pp.041-046.
Ramadani, V. and et.al, 2015. The context of Islamic entrepreneurship and business: Concept,
principles and perspectives. International Journal of Business and Globalisation. 15(3).
pp.244-261.
Ross, D. F., 2016. Introduction to e-supply chain management: engaging technology to build
market-winning business partnerships. CRC Press.
Schaltegger, S., Lüdeke-Freund, F. and Hansen, E. G., 2016. Business models for sustainability:
A co-evolutionary analysis of sustainable entrepreneurship, innovation, and
transformation. Organization & Environment. 29(3). pp.264-289.
13

Skrbinjek, V. and Dermol, V., 2016. Designing a Programme Profile: An Example of a Bachelor
Business Study Programme. International Journal of Management, Knowledge and
Learning. 5(1). pp.123-136.
Online
Business environment. 2015. [Online]. Available through: <https://www.google.comSearch?
client=ubuntu&channel=fs&q=business+enviorment&ie=utf-8&oe=utf-8>.
Business Environment Types (External Micro and External Macro). 2017. [Online]. Available
through: <http://www.economicsdiscussion.net/business-environment/business-
environment-types-external-micro-and-external-macro/10095>.
14