[SOLVED] Analysis of Business Environment Factors

This assignment requires analyzing various factors linked with business processes, including political, legal, social, economic, and technological aspects. It also involves identifying internal and external factors through SWOT analysis, highlighting their interrelations in creating an effective business environment for growth and prosperity.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1 ..............................................................................................................................................1
P1 Determining Purposes of different types of Organisations....................................................1
P2 Size and Scope of different types of organisation.................................................................2
Task 2...............................................................................................................................................4
P3 Explaining Relations among different organisational purpose, their link with structures and
objectives.....................................................................................................................................4
Task 3 ..............................................................................................................................................6
P4) Positive and negative impact of macro environment on business firm................................6
Task 4 ..............................................................................................................................................8
P5 Studying on Internal and External Analysis..........................................................................8
P6 Ways in which Strengths and Weaknesses interrelate with macro factors............................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................12

INTRODUCTION
Growth and success of an organisation are effected by two factors, Internal and External
factors which are embedded in Business environment. It is composed of two factors “Business”
which means activities which performed to earn money like production, sales or purchases.
Another is “Environment” which means the surrounding where activities takes place. There are
two factors which affect an organisation: External and Internal Environment. There are five Ms
which fall under internal environment like money, machinery, management, materials and man
power. On the other hand, external environment consists of political, social, government and
legal factors.
In this assignment company which has been chosen is Marks and Spencer (Abbreviated
as M&S) which is a British multinational company headquartered in London. It was established
in 1884 by MICHAEL MARKS and THOMAS SPENCER in Leeds . The company is
specialised in sales of clothing, home products and luxury food items. In current, it has approx
959 stores across UK in which 615 stores consists of only food products. There stores are opened
across the globe like they have 58 stores in India, 48 in Turkey, 37 in Russia and many more. In
recent years there clothing sales graph has fallen while their food sales graph is on increasing
rate.
Under this assignment, deep research will be conducted on some specific topics like
different types , sizes and scope of the M&S. Important factors of macro and micro environment
will be discussed in brief regarding M&S. SWOT and PESTLE analysis of the firm will be
conducted in order to determine the strengths and weakness of an organisation.
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Task 1
P1 Determining Purposes of different types of Organisations
In this competitive era, there are various types of organisation which perform to gain high
market growth and vitality in target market (Belás, and et. al. 2014). On the basis of their
operations, these business entities are divided into three categories, such are stated as under: -
Public sector, private Sector and voluntary sector organisations but there objects are
different from each other. Public sector is owned and run by the government for people. The
main objective on which the public sector work is development and various benefits of society.
There power source which is Finance comes from the people in form of tax and therefore used.
For example M&S being a public company with partnership nature works according to the legal
entities of the country yet Country's Govt (Boons and Lüdeke-Freund, 2013). does not interfere
in their business process. Making profit is their general objective and along with that expanding
business in global market , Increasing share in market and sales maximising are other factor on
which they work upon.
Private sector owned and run by private firms or we can say run by individuals. They can
be in form of partnership, sole proprietorship or it can be franchises. Although they are regulated
on the basis of rules and regulations formed by the Govt. yet they are not interfered by Govt.
bodies and enjoys freedom. For example: McDonald is private firm who is working globally. It
has various stores in different countries enjoys limited freedom and works according to its own
set of rules yet the major authority is under Govt. which only regulates the company policies and
their working procedure.
Voluntary sector is particularly not owned by any single body. However, some will be
responsible for ensuring that their aims and objectives should be set in an appropriate manner.
NGO (Oxfam) can be stated as example of voluntary sector as mostly of them are not owned by
any specific person but yet some people looks after the objectives of firms (Bryman and Bell,
2015). It is structured to help the people in need and not only people but animals as well. In most
instances they try to help particular types of living beings like stray dogs (providing them food
and shelter) or giving shelter to old people who lost their homes and many more. Break even is a
way by which survival can be done.
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You have written fairly well, explain the legal structure and purpose of private, public and
voluntary (charitable) organisation in terms of liability, finance and disclosing company
information etc.
P2 Size and Scope of different types of organisation
Every business has different criteria and structures for scope, size and operations by
which they intend to perform. To gain comfort environment, organisation needs to attain
particular level of performance. Size of an organisation depends on their working capability and
competencies market. Therefore, firms in economy are divided into Small, Micro and Medium
business entity.
Company Size of Business Scope of Business
Marks & Spencer They are largest food chain
retailing company. Their
operations are expanded across
the globe which made them
achieved most percentage of
the market and gaining share
in competencies market as
well.
Even after falling graph in
clothing sector, M&S have
increasing sales in food sector
and they are more focused on
increasing their food delivery
services offered to customers
so their scope of spreading
business activities are high.
With the help of increasing
consumers purchasing goods
and services, it can be easily
monitored regarding high
profit shares.
Starbucks It is the largest firm who have
their speciality and operations
in coffee products. Their taste
and quality of the products
made their services go across
global and now they are
present and leading company
Scope totally depends on the
performance of business
process and increment in graph
of sales. Scope increase when
number of clients or customers
increase and their satisfaction
level is also up to limit as
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of coffee in the international
market. At time intervals ,
Starbucks develop and changes
are made in the taste of
products offered and not only
taste, they offer new products
to join new and satisfy the
customers. On becoming part
of micro business they perform
outside UK as well.
increasing customers is a good
sign of expanding their
business activities in order to
attain high revenues and
profitability.
Rolex It is the leading company
across the globe in
manufacturing watches. They
are involved in voluntary
actions as well by donating
their part of revenue as charity.
Apart from that they have
large business and satisfactory
customers around the globe
which make them enter into
international market and
operates world wide.
Main and general aim of the
enterprise is to earn profit and
increase goodwill worldwide.
Goodwill can be obtained by
associating with NGOs and
increasing employability and
living standards of the people
living in the society.
Oxfam They are working as a
voluntary association whom
major work is just to enhance
society and its human being
standard in an appropriate
manner. They just work for
society not for generating
more and more revenue.
Scope of Voluntary association
is not so much high because
they are not able to generate
more and more profit for long
term business concern as only
government support them in an
appropriate manner.
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Task 2
P3 Explaining Relations among different organisational purpose, their link with structures and
objectives
Each and every business firm have different aims and objectives and structures to
perform their task and run operations (Cai and Yang, 2014). M&S is a limited company which
have operations in public sectors and have employees more than 120,000 who are involved in
food and clothing operations. They provide food items and others services in reasonable rate.
This is beneficial in getting growth in executing all their business activities in planned and
effective ways.
There are different number of functions are taking place in an association whom have
direct relationship with each other as well as their mission and objectives fulfilment get done
only on the basis of perfect relation between each other. Variety of functions whom are taking
place for Marks and Spencer are described as follow: Finance: This is one the most essential function whose major work is to provide
sufficient cash and inventory to all level of management. This function has to take place
in an appropriate and effective manner so that most number of targets get ascertain in an
effective manner. Finance is a major thing which required at every level and thus an
appropriate management have to take place. For ascertaining objectives and targets by
M&S, finance department have to adopt appropriate steps for that. Production: Production department enable an association to produce high quality
products. This department is completely linked with finance division because, managers
have to provide sufficient fund to other department and their workl is to produce high
quality products. This segment enables M&S to facilitate their business operations in an
appropriate manner.
 Sales: Finance department allocate appropriate money to sales department which they
really used in making advertisement and other options. This section includes sufficient
money to need invest because sales play an important role in interaction with number of
customers. Thus, Marks and Spencer have to utilise appropriate tool and technique in
order to deal with users.
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Each organisation executes their operations in a different manner and therefore plans and
objectives are decided in that perspective manner. Effective working structures should be
acquired so that effective and efficient results can be seen as outcome and thus targets can be
achieved in the time being (Craig and Campbell, 2012). Managers of M&S should ensure that
employees are adhering to rules and regulations in order to ensure effective results so that
business can achieve growth.
Different types of organisation are described as:
Organisation Objectives Structure
M&S Main aims of business are
associated with providing
satisfactory services to their
customers in order to increase
their profitability. Since 1884
this company has been
operating its business
activities. Main aim of firm is
to provide variety of luxury
food in good price and
maintain the services so that
any customer does not go
empty handed. Firm values on
the amount of money paid by
the customer and services
provided according to it so that
good mind set can be seen
among customers.
Structures can be called as
plans which are made to
maintain the productivity and
working environment in
workplace. M&S have
developed certain structures
which clears out every
employee’s duties towards
company so the work can be
executed and completed in an
effective manner.
ALDI Objectives are framed by firm
for short duration of time as
they believe in varieties of
strategy. They allot the short
ALDI is following quality
making relations with
customers so that they don't
have to compromise with the
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duration task among
employees which needs to be
completed under set time
frame. Firm focuses on
providing quality products and
services to customers without
any compromise being made.
product and quality. Managers
focuses on the quality of the
product to achieve the
objectives and maintain long
term relations with the
customers and other clients.
Task 3
P4) Positive and negative impact of macro environment on business firm.
There so many factors which are directly or indirectly impact on organisational overall
performance or environment. The most effective factors are classified among two major aspects
which includes macro and micro business environment (Drucker, 2017). Macro environment is
consist with various elements that are related to companies boundary and that may directly
impacted on overall business activities which are held in business firm. Micro environment can
be describe as the situation which are consist to firms internal operations, these have a vast
impact on firms each operation that are essential for growth and success (Hamilton and Webster,
2015). The proper analysis of macro environment can be done by PESTLE analysis in which
political, economic, legal, social, technological and environmental factors are involved. These all
are most essential element which may impacted on organisational overall performance, these are
describes as under: Political factors: The government of any country establishes some rule and legislations
in order to maintain the decorum of business activities which are very much important for
countries growth and success (Onetti and et. al. 2012). Mark and Spencer is the most
popular British multinational company who provides high quality goods and services to
their potential buyers in order to satisfying their needs and wants. Political factors, norms
and legislations may impacted on effective running of organisational activities. In retail
industry the sales and purchase of goods and services are most essential part and political
factors put a huge impact on new market trend through implementing change in
government policies. It is required for each company to to follow government rules in
order to carry out their business activities in most efficient manner.
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 Economic factors: It is essential for each firm to maintain their economic condition, so
that business activities will be performed in well planned manner. The growth and profit
of Mark and Spencer is based on the satisfaction level of customer who are willing to
taking advantage of offered services of firm (Schaltegger, Lüdeke-Freund and Hansen,
2012). In today's scenario firm faces so many issues and challenges that are related with
currency devaluations, unemployment, lake of customer credit, higher tax rate, debt level
of customers etc. there is a positive impact of economical factor is that domestic and
global growth of firm motivates and encourages the development of strategic thinking for
company, so that higher authority and manager can create an effective management plan
in order to attaining organisational goals and objectives. Social factors: These factors are related with market trend and lifestyle of people and it
has a vast impact on retailing, clothing and food industry. In today's market scenario
needs and wants of customers are changed quickly as per changes arises in market trend.
Mark and Spencer operates their business activities as per the local culture and
environment of country (Schneider and Spieth, 2013). Social factors may includes age,
income level, population growth, career attitudes and occupation, these all are having an
huge impact on customers choices and preferences. Legal factors: Several factors are presented which have affected the retail firms. Govt. of
UK has in applied several laws which inspect on illegal trafficking in retail market. To set
and maintain food standards UK Govt. enforced Food Safety Act in 1990 and in year
2000, there were Food Standards Agency which were developed to maintain regulations
and health of public by food safety. Therefore, M&S has been following these set of rules
and consumer protection laws for legal environment creation in organisation. Benefits of
legal factors are that it involves skills and expertise which can regulate ethical code of
conduct for business organisation (Sena Ferreira and et. al. 2012). If results are
misinterpreted organisation can suffer huge loss. Technological factors: In time, Innovation and technology has changed living standards
of people. Managers of M&S uses effective and efficient technological techniques which
makes their products unique, innovative and impressive. Technology plays a part in
developing websites and online selling. The positive thing about technology is that it
supplies a mechanism in which new opportunities can be found and grabbed by an
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organisation but it consumes time which is equal of consuming money. As it not possible
for every organisation to adopt new inventions and techniques to compete with large
businesses.
 Environmental Factors: They have to focus on producing ecological and economic
products which does not affect people in negative manner specially M&S'S food
products. They need to take care of employee's life and provide compensation if
something goes wrong. The positive effect of environmental factors is that it is helpful in
domestic growth of a business and moreover helps to reduce the effects and impact of
threats for M&S.
Task 4
P5 Studying on Internal and External Analysis
Managers of M&S conducts internal and external analysis in their organisation.
Inspecting analysis on internal and external factors allows company to gain knowledge about
their strength , weaknesses, opportunities and threats (Siewiorek and et. al. 2012). SWOT
analysis is essential for managers as major decisions when needs to be taken can be proved as
effective if analysation has been one before for the situation. SWOT analysation can be effective
to create a dynamic environment in the enterprise. Opportunities are considered under internal
analysis whereas Threats comes under external analysis. Below mentioned is SWOT analysis of
M&S:
Strengths  International market analysation and strategies of leadership.
 Money's value.
 Easy access to varieties of products in one place along with
cheap prices.
 Effective Demand supply chain.
 High profits via latest techniques.
 Experimenting with new innovations and technologies
 Effective cross docking and inventory management
Weaknesses  Being a huge business firm it still is not large in numbers as
some countries are still missing on their list and moreover
their market share outside UK is very low.
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 Company does not promote high wages to employees.
 Regarding quality sometimes they are not able to fulfil
customers needs.
 Their structure can be easily accessed and copied.
Opportunities  Quality standards can be improved according to the current
requirements.
 Countries which are still missing to touch can be a way to
expand business.
 Increasing salary and motivation among employees in human
source strategy.
 Online marketing can be expanded and health food items can
be promoted via online.
 Rising acceptance of own label products.
Threats  Competition increment in luxury food items.
 Online market fraud.
 Resistance increment in local commodities across globe.
 Have to update stock according to the place where store has
been set up.
Influence of SWOT analysis on decision making process:
 Observing competencies level and making or developing strategies in order to win the
competition level.
 It helps to realise the future goals and objectives and not only that it also creates a bridge
from current to future where the company wants to be.
 Enhancing internal and external factors which impacts company reputation. Motivation to upgrade to next level of business plan.
Recommendations: As per above research, it is clear that M&S has to use their strengths in order
to grab opportunities in international market. Standard of the quality in products and services in
order to satisfy customers and their requirements. Moreover, they has to expand in order to
improve their market share.
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P6 Ways in which Strengths and Weaknesses interrelate with macro factors
In a business process everything is inter related with each other. Macro environmental
factors directly affects the company's strength and weaknesses. Inspection of macro
environmental factors can be done through PESTLE Analysis (Welford, 2013). SWOT strategy
directly affects the competitive standing of a firm in the marketplace and along with this if
company is following all Govt. rules and regulations along with producing legal goods then their
way of achieving growth and success is far more easy then competitors. Apart from this, there
are various political factors which affect businesses process. For example, If UK Govt. reduces
tax rate and duties then it is good for M&S.
(Source: Interrelationship Between SWOT and PESTLE analysis, 2017)
Changes in economical conditions of company increases sales graph and boost up
company's standards. Technological development improves the chances of grabbing new
opportunities for an organisation so that product and service quality can be increased.
Techniques and technological inventions are very helpful in attracting customers but it can not be
applied onto every organisation as every firm can not imply it into their firm's environment.
Social factors plays vital role in performance of an organisation as taste changes according to
trend and environment and sometimes social development has positive impact over the
productivity of an organisation.
Therefore, macro environment has positive and negative effect as well on to strengths and
weaknesses. Sometimes, these effects can be seen as responsible for firm's growth and affect
market's image.
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Conclusion
From the above report , it can be stated that growth and success of an organisation totally
depends on business Environment. In most of the businesses, three types of profile can be found
in which a business firms works: Public Sector , Private sector and Voluntary sector.
Furthermore the report describes structure of M&S which states the ways in which organisational
functions are accessible in order to achieve goals and objectives. Apart from that, macro
environmental factors puts a huge impact on marketplace as there are several factors linked with
processes of business; Political, Legal, Social, Economical and technological factors. Internal as
well as external factors can be analysed through SWOT analysis. So with this interrelations it can
be stated that effective business environment can be obtained for growth and prosperity of a
Business.
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References
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[accessed on 13th october 2017].
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