This report discusses the different types and purposes of organizations, the size and scope of organizations, the relationship between organizational functions, the impacts of the macro environment on business operations, and conducts internal and external analysis of a specific organization to identify strengths and weaknesses.
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BUSINESS AND BUSINESS ENVIRONMENT
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Contents INTRODUCTION...........................................................................................................................................4 MAIN BODY..................................................................................................................................................5 P1 Explain different types and purposes of organizations; public, private and voluntary sectors and legal structures.......................................................................................................................................5 P2 Explain the size and scope of a range of different types of organizations..........................................6 P3 Explain the relationship between different organizational functions and how they link to organizational objectives and structure..................................................................................................7 P4 Identify the positive and negative impacts the macro environment has upon business operations, supported by specific examples...............................................................................................................8 P5 Conduct internal and external analysis of specific organization in order to identify strengths and weaknesses.............................................................................................................................................9 P6 Explain how strengths and weaknesses interrelate with external macro factors.............................13 CONCLUSION.............................................................................................................................................16 REFERENCES..............................................................................................................................................18
INTRODUCTION Business environment can be defined as the sum total of all the factors which includes the internal as well as external factors that have an impact on the business. These business environment often help in analyzing the feasibility of the business means that if any company starts there business then if or not it would be successful in achievement of their goals. These are very important factors which the companies must consider for the long term achievement of the organization. Mark and Spenser group plc is a retail business which operates in the clothing industry, with its head office in London. The company was founded by Michael Marks with his partner Thomas Spenser in the year 1884. The company has more than 900 stores operating in United Kingdom. The company has reported a revenue of Euro10377 million and there operating income is Euro 601 million for the year 2019. The company has been profit making for several years. Recently when the company started facing some problems they confirmed that around 100 stores of Mark and Spenser will be closed by the year 2022. In this reportMark and Spenserbusiness environment is being discussed and how the company structure is being operated. (Yang and Gabrielsson, 2017)
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MAIN BODY P1Explain different types and purposes of organizations; public, private and voluntary sectors and legal structures. There are varieties of business organization which are doing business in the current environment. Some of these are explained below. Public sector: These are those organizations which operates for the public services and there welfare. The company operating in this sector has the main purpose of public welfare and not of making profit. This sector include the goods such as the military services, legal system, infrastructural development like roads, tunnels, electricity, telecommunications etc., the services is used by all the people of the country as they are benefit which the government provide to the public. For example the services like road lights are used by all the persons walking in the street. These organizations are generally financed by the government of the country which finance them through the public taxes collected. These organizations must have to follow the rules and regulation which are being formed by the government when they are operating. Some of the organization may have a specific code of conduct set by the government such as a doctor in a hospital has to follow some specific codes in order to treat the patient. Private sector: These are the organization being operated by the private individuals of the country. These sector operates with the main objective of making as many profits as they can. This sector is funded by the private individual of the country. This organization serve there customers generally in exchange for money. The company Mark and Spenser is an example of the private sectors of money. This sector follows the basic laws and regulation which are there in the country for the smooth functioning of the organization. The report of 2019 shows that the company employs around 90% of the population in most of the country. So this sector affects the employment of different countries to a great extent. As the population all over the globe is increasing the company in the private sector have a lot of employees to choose from. So they can manipulates the employment so this must be taken care of. Voluntary sectors:
This sector is there in the economy so that they can work on the social causes of the country. These are generally funded through charity of different individuals. The company operates in such sector so that the poor population of the country can also get the basic needs such as basic health care services. The main problem faced in this sector is that they ar often short funded as they are only operating through the charities. So now there are organizations which are operating at international level so that they are not short funded. The American Red Cross is an example of a company that is operating in the voluntary sector. Since they are operating at such level they generally don’t find these problems as there are large number of individual all over the world who provide funds to these type of organization. Other examples of company operating in this sector is Community Sector Coalition, National Council for Voluntary Organization. P2Explain the size and scope of a range of different types of organizations Public sector: The main vision of the public sector is that they aim to provide the best public services they can with the tax collected by them. The government generally draft a blueprint at the start of the year for the budget in order to allocate the funds to the different public services. The mission of the public sector is of optimum utilization of the resources available in the economy, these mission are formed in such a way that they can deal with the changing environment. The goals are then perused to achieve the maximization of public welfare including the development of the infrastructure of the country, provide facilities like public washrooms etc. Private sector: The mission and vision of the company operating in private sector is generally to make as much profit as they can. They do this by forming strategies which target there customer base in thee short term and they long term. Their goal is to gain as much market share as they can and continue to maintain the competitive edge in the market. The mission of Mark and Spenser is provide standardized product to their customer so that they are being satisfied with the company and they want to be a benchmark so that the companies in the same sector can be measured against their product, there mission is that they should continuously introduce new products so that the consumer are not bored with the same product because they are operating in fashion
to make the decision in the best interest of the organization. The challenges being faced by Mark and Spenser is that these employees must be continuously trained in order to make efficient decision for the welfare of the organization. Mark and Spenser recruits there managers on the basis of the experience they holds and according to that they are assigned there position. Each of the manager recruited by Mark and Spenser must have a proper degree in management like MBA, they must have leadership skills, financial skills etc. by following such a structure the company have been achieving there objectives and all the functions at all the levels are being managed effectively and efficiently. P4Identify the positive and negative impacts the macro environment has upon business operations, supported by specific examples. The micro and macro both factors have an impact on the working of Mark and Spenser as the micro environmental factors can affects the short term and the macro environment can affect the long term goals of the organization. The company Mark and Spenser should always remain updated with these factors in order to survive in the market. There is a critical analysis of some of these factors explained below.(Fabus, 2018) Micro environmental factors Supplies- if the suppliers of Mark and Spenser have a strong power than they can charge more for providing the products. So the company must maintain good relation with their suppliers in order for proper quality of supply at the right time. These suppliers may poses some problems if they are not delivering the product at the right time. Customers- the customer requirement must be satisfied and especially for companies like Mark and Spenser where is change in the trend of the products is so frequent the company must always be updated with the needs of the customer. If the customer are not happy with the products of the company then they will soon switch to the substitute available so Mark and Spenser should keep focus on the innovative factors. Competition- the competitor poses a threat to Mark and Spenser as if they lower their price then Mark and Spenser has to reduce their price as well and if they don’t then they will lose their market share. If Mark and Spenser can differentiate their products from their competitors the they will be able to charge extra premium for their products.
General public- Mark and Spenser must also keep in mind that their action does not affect the general public as the general public may not have power individually but they can influence the working of Mark and Spenser collectively.(Quinlan, 2019) Macro environmental factors PESTLE analysis-the companies generally use this analysis so to analyze the macro environmental factors. This analysis help the companies like that of Mark and Spenser so that they can know the feasibility of diversifying there business in a particular region. These are the factors which can’t be controlled by the firm so they must see that these factors does not affect the organizations function in such a way that it becomes impossible to carry out the business in the organization. This analysis helps Mark and Spenser save a great amount of cost as if the company enters into a region without proper knowledge then they might have to suffer large losses. SWOT analysis- Mark and Spenser can use this model too for the analysis of the macro environmental factors. This will also include the analysis of some internal factors of the company. This analysis will help gain such knowledge with the company can gain competitive advantage over there competitor. SWOT analysis is the analysis of the organization’s strengths, weaknesses, opportunities and threats.(Alsaad, Mohamad and Ismail, 2017) Porter 5 forces- this analysis is used so that the powers of different stakeholders of the company can be known in order to keep these stakeholders satisfied. The main factor here too is the competitive rivalry in the market which affects the functions of Mark and Spenser. Other factors which are included are threat of new entrant into the market which will decrease the market share of Mark and Spenser, the power of the supplier and customer etc. P5Conduct internal and external analysis of specific organization in order to identify strengths and weaknesses. PESTLE ANALYSIS
POLITICAL FACTORS:This is all about how and upto what degree or level of interference faced by the government in the economy. This includes government policy, political stability or instability in overseas markets, foreign trade policy, tax policy, labour law, environmental law, trade restrictions and so on.It is clear from the above list that the political factors have a deep impact on Mark and Spencer in the way in which the operate their business organization. Mark and Spencer need to be able to respond to the current and anticipated future legislation and adjust their marketing policies as per the requirements.(Prajogo, 2016) ECONOMIC FACTORS:Economic factors also have a significant impact on how Mark and Spencer do business and also affects their profitability. These factors include economic growth, interest rates, exchange rates, inflation, disposable income of consumers and businesses and so on. These factors can be further broken into macro-economical and micro-economical factors. Macro-economical factors deal with the management of demand given in an economy such as taxation policy, interest rate control etc. whereas Micro-Economical factors is all about people spending their income and has a huge impact on Mark and Spencer as there isn’t much income left within the economy.(Evans, 2017) SOCIAL FACTORS:These factors are also known as Socio-cultural factors and are those regions which involve the shared belief and attitude of the population. These factors include– population growth, age distribution, health consciousness, career attitudes and so on. Social factors are of specific interest as they have a direct effect on how the marketers understand customer and what drives them.(Oriesek and Schwarz, 2016) TECHNOLOGICAL FACTORS: As we all know how fast the technological landscapes changes and how this impacts the way we market our products. Technological factors affect the marketing and the management by three unique or distinct ways: New ways of producing goods and services
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ď‚·New ways if distributing goods and services ď‚·New ways of communicating with the target market ENVIRONMENTAL FACTORS: Environmental factors in Mark and Spencer had been arouse forefront in the last fifteen years or so and have become one of the most important factor due to the increasing scarcity of raw material, pollution targets , doing business as an ethical and sustainable company, carbon footprints which are well defined the government for the betterment of the economy. Mark and Spencer had been performing up to required standard or level which must be done for the economy keeping in min =d the importance of environmental factors and the betterment of the society.(Stott, Stone and Fae, 2016) LEGAL FACTORS: Legal factors include health and safety, equal opportunities, advertising standards, consumers rights and laws, product safety. Mark and Spencer have a clear mindset that what a company must know what is legal and what is illegal in order to trade successfully and remain in economy for a longer period of time. As we are a global organization so this becomes a very tricky area as it is important for us to get right of each and every country before trading as each and every country have their own sets of rules and regulations. And this is one of the foremost important factor as without keeping in mind these rules and regulations it will be very difficult for us to establish ourselves in other countries. Porter five forces analysis Barriers to entry There is existence of higher level of barrier in retail sector as it required greater level of investmentsalong with development of huge market. This is creating a positive impact on
companyinordertohaveachievementofcost-effectivenessandeconomizesofscale development. As is its is not possible for peer competitors to achieve cost effective and brand loyalist. Threat of substitute The company pays major level of implication over the keeping up of significant brand position along with remain to be distinctive in order to have meet up of day today demands in respective manner. On positive way company is majorly focusing on major development of retail in acceptance to have clear advantage development. Bargaining Powers of buyers The bargaining power of customer is considered to be significant as the existence of brand sensitivity related to price can have the major level of forces over retailer. The company tends to build up significant level of loyalty by offering customers the values which are unmatched and having significant convenience. Bargaining Powers of suppliers The company is having major level of competitive forces which is making M&S to have outsourcing in order top reduced the cost and weakening the power of suppliers at existing level. More over switching of cost for the companies suppliers is having major resemblanceof suppliers which is considered to be low. Intensity of competitive rivalry There is existence of strong level of competition in retail sector have the amplification of the supermarket chain development of the fashion products the development of online shopping as the major level of experience of more reduced cost. M&s is enabling to have building of online stores in order to gain more market. VALUE CHAINS ANALYSIS
Marks And Spencer Group Plc must not take it as a rigid, standalone framework by assigning the equal importance to all activities. The value chasing analysis have the importance of activities along role with regard to product development. Primary activities Inbound logistics is important to develop the relationship within suppliers to have Providence of support in receiving, storing and distribution of product. Operations are important to have proper processing of raw materialist into final one. Marketing and Sales have differentiation of points which is majorly offering the customer aging their respective competitors. Thehigh quality product at affordable costs and distinctive features create value for M & S. Secondary Activities Firm infrastructure have activities such as the quality management, legal matters along with accounting and strategic planning managements in order to have strategy over competitive positioning. Human resource management is been evaluated in company differnet aspects n different aspects by evaluating different HR aspects, including- recruiting, selecting, training, rewarding, performance management and other personnel management activities Technology development is almost had all activities of value chain which needs to have technological development P6Explain how strengths and weaknesses interrelate with external macro factors. SWOT ANALYSIS
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Strengths: Mark and Spencer has a variety of strengths starting from brand value to the large variety of products. Being a clothing enterprise, it provides large variety of products in different-different size and colours. As being one the leading market demand settler it have governed the market demands due to its quality. Mark and Spencer also have people to have easy access of its produce as the have their outlets in almost every country and this help the company to grow its business in other countries as well. Its demand keep increasing due to its quality. As being one of the most known brand around the globe, the brand value is also high as the customers who go to buy quality product prefer Mark and Spencer over other brands. Mark and Spencer have a variety of products in every store which helps the customers to choose the best product. Mark and Spencer has wide range of products in men’s and women’s wear which helps them to attract a large amount of customers. It has size and designs for all shapes and body fit. As it provides large number of products, Mark and Spencer has build firm or strong roots in business and are one of the most preferred brand around the globe.(Aithal, 2016) Weakness: Mark and Spencer have somewhat drawbacks which has been affecting its market condition. It has a draw back in the market due to its somewhat old-fashioned and non-trendy products even though it has a large variety of products available for the buyers but it is still considered providing somewhat products which have lost their trend. Mark and Spencer had lost its buyers as the buyers have a gained a wrong assumption that the brand has been providing or displaying non-trendy products which are said to old-fashioned.
The main buyers of Mark and Spencer are the teenagers who give priority to the fashionable or trendy product. Mark and Spencer provide trendy and fashionable products up to its standard but the wrong assumption of providing old-fashioned clothes has reached the minds of teenagers so it has lowered its business profitability. One of the main weakness of Mark and Spencer is that its price is little high as compared to the other products provided by the other brands. So due to this reason the brand has faced somewhat a downfall in its market demand. Opportunities: Mark and Spencer has a global popularity by which it has created a lot of new opportunities arund the globe. As it has outlet in almost every country, so it has been receiving lot of new opportunities in building its market demand up to new standard as each country has their own sense of dressing knowledge which might help the Mark and Spencer governing the demands of that country. The company has faced relatively very less risk while establishing itself in other country. In the beginning the company faced somewhat low market demand as it was not so popular but after a while it gained a lot of popularity which result in new getting new opportunities Threats: These are the threats which are being faced by the Mark and Spencer. Due to the increasing competition all around world, it has faced the threat of losing its scope or can be said as popularity in the business market due to the competitive market and establishment of more new and new brands year after year. Due to its price and old-fashioned and non-trendy products it has started losing its popularity among the customers and which has reduced its profit margin. So Mark and Spencer need to make changes in its production as they might create its demand back in the market.(Wood and Logsdon, 2017)
TOWS STRENGTHWEAKNESS OpportunitiesStrong brand name and reputation Large employee base and are network for development. Target marketing along with operational creativity to younger one. Increase level of focus of market research and development threatLong standing relationship used for cheaper products comparable quality. Improve customer satisfactions an increases level of online shopping Increase the international expansion in UK market. Engage in R&D in more way of offering and keeping the currents trends and fashion analysis. CONCLUSION From this report we have come to a conclusion that for effectively operating in the business environment any sector must consider the internal as well as the external factors which can affect the working of the organization. This report has been divided into 6 parts which includes the discussion of different types of organization, the vision, mission and goals of each type of organization, the organizational structure of Mark and Spenser. Then there are analysis of external environment which included PESTLE and SWOT analysis of Mark and Spenser. So comprehensively it can be told that the company is performing well in all the factors but there is more scope for enhancing their technology and eliminating their weaknesses, other than this the company is seeing to grow and diverse in the near future.
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REFERENCES Books and journals Aithal, P.S., 2016. Study on ABCD analysis technique for business models, business strategies, operating concepts & business systems.International Journal in Management and Social Science.4(1). Quinlan, C., and et.al., 2019.Business research methods. South Western Cengage. Saleem, M.A., 2017. The impact of socio-economic factors on small business success.Geografia-Malaysian Journal of society and space,8(1). Evans, S., and et.al., 2017. Business model innovation for sustainability: Towards a unified perspective for creation of sustainable business models.Business Strategy and the Environment.26(5). pp.597-608. Oriesek, D.F. and Schwarz, J.O., 2016.Business wargaming: securing corporate value. Routledge. Yang, M. and Gabrielsson, P., 2017. Entrepreneurial marketing of international high-tech business-to-business new ventures: A decision-making process perspective.Industrial Marketing Management.64. pp.147-160. Alsaad, A., Mohamad, R. and Ismail, N.A., 2017. The moderating role of trust in business to business electronic commerce (B2B EC) adoption.Computers in Human Behavior.68. pp.157-169.