Business and the Business Environment: A Comprehensive Analysis of Marks & Spencer

This assignment delves into the complexities of the business environment, examining the various types of organizations, their structures, and functions. Using Marks & Spencer as a case study, it explores the impact of macro-environmental factors through PESTEL analysis and analyzes the company's internal strengths and weaknesses using SWOT/TOWS and Porter's Five Forces model. The assignment concludes by highlighting the interrelationship between internal factors and external macro factors, demonstrating how companies like Marks & Spencer navigate the dynamic business landscape.

BUSINESS AND THE BUSINESS ENVIRONMENT

Table of Contents
LO1 and LO2.............................................................................................................................4
P1: Different types of organization............................................................................................4
Differences between profit, not for profit and non governmental organizations (NGOs).........4
Business purpose and supply of good and services...................................................................4
P3: Organizations structure and fuctions. (450).........................................................................9
Different kind of structures relating to size and scope of operations.........................................9
Complexities of transnational, international and global organizations structures.....................9
How functions relate overall organization mission and objectives............................................9
LO3 and LO4...........................................................................................................................11
P4: Using PESTEL model, identify the positive and negative impacts the macro environment
has upon the UK retail sector...................................................................................................11
P5: Conduct internal (SWOT/ TOWS) and external (5forces model) analysis of a UK super
market to indentify its strength and weaknesses......................................................................13
P6: Explain how strengths and weaknesses interrelate with external macro factors...............15
Conclusion................................................................................................................................17

Introduction
Business environment is the internal and external factors of an organization that affect the
business performances. Business environment is divided into two part that is Internal factors
and external factors. Internal factors are also known as primary factor because the company
itself controls it and it affects the organization growth directly. It includes man, material,
money, machine and management. External factors are beyond the control of business
enterprise. It is divided into two parts that is macro and micro environment, macro
environment includes economic factors, social/ cultural factors, demographic factors, political
factors, government factors and technological factors whereas micro environment includes
customers, suppliers and competitors. The company chosen here is Marks and Spencer,
therefore the assignment covers the study of different types of organization, size and scope of
organization, organization structure and function, PESTLE analysis, SWOT/TOWS and 5
forces model.

LO1 and LO2
P1: Different types of organization.
Differences between profit, not for profit and non governmental organizations (NGOs)
Business purpose and supply of good and services.
Private Sector organization (Vitalis,2015) is the type of organization where an individual or a
group of an individual owns the company and operates as well. In private sector company
they focuses on profit and the business run from its profit. Marks & Spencer comes under
private limited company. Mark & Spencer is a British multinational retail company. The
main focus of the company is food, home products and clothing. It was founded by Michael
marks and Thomas Spencer so that is why it is named as Marks & Spencer. This was the first
company in the retail sector of the country that had made more than $1 £1 billion of pre-tax
profit. More than 60 per cent of its turnover in the UK comes from its food sector, while the
other half comes from home and clothing sectors. The revenue of the entire group in 2016
was £10.6 billion and its profit before tax amounted to £10.6 billion. More than 84,900
employees are working for the company that aim at making every moment special for their
customers through innovation and by providing high quality products and a wide range of
choices.
Public Sector organization (Vitalis, 2015) it is the type of organization which is owned,
controlled and govern by the central or the local government of united kingdom. These
organization are more into defense, social, healthcare and education sector. This sector is
controlled by the government. The royal air force club is a public sector company and is
controlled by the government. In this type of company the employees get many benefits from
the organization.
The main three types of organization is profit, not for profit and governmental organizational.
Profit organization are those organization who are mainly focused on making money out of
their business, these type of organization are generally into private sectors. Not for profit
organization is into public sector, thus it includes tax, charities, funds etc. nongovernmental
organization is known as nonprofit organization because it is all related to social issues.

Therefore, the following are the differences between profit, not for profit and non-
governmental organization:
Profit organization Not for profit organization Nongovernmental
organization
 The main
objective of profit
organization is to
earn profit.
 Profit
organizations are
generally private
sector companies.
 Example: Marks
& Spencer
 It does not focus
on money.
 These
organizations are
public sector
companies.
 Example: The
royal air force
club
 NGO focuses
on the social
issues.
 NGO can be
public and
private both.
 Oxfam
Table 1: Difference between profit, not-for profit and nongovernmental
organizations
(Source: )
Business purpose and supply of good and services
As discussed above that not all the organization is profit oriented, there are different
types of organization and they have their own main objectives. Thus, the business
purpose are:
 For profit organization:- In this organization, the business purpose is to
generate revenue and earn money because profit is the main sole in this
organization and without it the company cannot run its business
 For not for profit organization: - In this organization, the business purpose is
to look for society benefits rather than focusing on an individual. It is the part
of the economy.

 For nongovernmental organization (Bryson, 2018):- In this organization, the
business purpose is to focus on educational, health care, public policy, human
rights etc.
Supply of goods and services of are as follows:-
For profit organization (marks & Spencer): - The supply chain is diverse, long
and complex. The finished goods go to the distributor and then from
distributor it is distributed in retails and from retail, it will reach to the
customer.
For not for profit organization (The royal air force club):- In this organization
the supply depends upon the hierarchy. It flows from top to bottom. Therefore,
the order comes from top hierarchy that needs to follow by the people.
For non-governmental organization (Oxfam):- In non-governmental
organization the supply chain is direct to its consumer.

P2: Size and scope of the organizations. (450)
 Differences between micro, small, medium size and large enterprises.
 Market share, profit share, growth and sustainability.
There are four different sizes of an organization that is micro, small, medium and
large. Micro enterprises (Min, 2015.) consists of less than 10employees and it helps
the business to add value in the economy. Therefore, it mostly found in developing
countries. Small enterprises (Yang, 2015) consist of less than 50 employees and this
type of business is generally find in every industry from convenience store to clothing
store and medium firm consist of less than 250 employees. These are the companies,
which normally grows from the small enterprise. By earning more revenue from the
business they grows their business as well and maintain the growth and gives a tough
competition to the large enterprises and large enterprise consists of more than 5000
and the company has a huge turnover.
There are different types of organizations that is micro, small, medium and large
Micro:- This type of business generally starts with minimal capital and less
employees. The number of micro entrepreneurs are high as the there is no proper
training or jobs available for them. Micro business helps to add value in the economy.
Therefore, it mostly found in developing countries.
Small: - This are limited in size and the employees are also limited, as it is self-owned
business, they are into sole proprietorship. This type of business generally can find in
every industry from convenience store to clothing store.
Medium:- These are the companies which normally grows from the small enterprise.
By earning more revenue from the business they grows their business as well and
maintain the growth and gives a tough competition to the large enterprises (Rachman,
2017).
Large: - In this enterprise, the employees are more than 5000 and the company has a
huge turnover.
Scope of the business:
Marks & Spencer is a multinational retail company. The scope for the company in
private sector is that the company can expand their business and generate more
revenue from that which will be profit for the company and this can bring more job
opportunities as well and it also help the company to grow and develop in future. The

scope for the company in public and non profit organization sector is that they can
provide a better services to the customer and make them more satisfied.
Legal structure of organization:-
 In sole proprietorship business, entrepreneur brings his own capital. As the
business is not so complicated so the organizer, operator, controller and
financer is the owner itself and thus he only bears all the loss and the profits.
 In partnership business, the member brings the divided capital and divided the
role and the work as accordingly.
 In joint stock company, the business tie ups with different companies. Thus,
this type of business is wide and very complicated.
 Market share, profit share, growth and sustainability.
As, know that the marks & Spencer is a leading multinational retail company. So, the
market share for this company is
Profit share and growth of marks & Spencer is rising as they are coming up with new
varieties in the market. There clothing department is doing very well, they were
concerned about the growth of food department but due to new company strategies they
come up with new stores and that results in good progress for the company and now the
food department is doing well. The company-targeted customers are youngster and
families. The impacts of social and environmental happens at every stage of every
product’s life cycle and about the sustainability, the company working on its product to
make it more sustainable because they want to lead in terms of consumption and
production by offering consumer a high quality goods and services and offering a good
value. To develop the product sustainability the company is taking different approaches
like working with others; they have worked with many partners like forum for the future
and the carbon trust.

P3: Organizations structure and fuctions. (450)
Different kind of structures relating to size and scope of operations.
Complexities of transnational, international and global organizations structures.
How functions relate overall organization mission and objectives.
As discussed in above portion the different kind of structure relating to size and scope
of operations that is micro, small, medium and large enterprise so, among all this
Marks & Spencer comes under the large enterprise as they are multinational company
and they are into many departments like clothing, foods and home products. The
company has a huge turnover ratio and the employees are more than 5000. This type
of enterprise is very complex.
Complexities of transnational, international and global organizations structures.
Transactional organization: This type of organization is very complex and they are
into R&D and marketing. They invest in foreign operations (Davidson, 2016).
International organization: They are importers and exporters; they do not invest
outside their home country (Barkin, 2015).

Global organization: They have one co-operate office that is responsible for global
strategy and is present in many countries (Ma, et al, 2018).
How functions relate overall organization mission and objectives.
Mission and objectives of mark & Spencer
 To provide new varieties of product in terms of food, clothing and home
products.
 To deliver the high quality of goods for the consumer.
 To offer affordable price.
 To make their customer satisfied.
Therefore, there are different departments of company human resource,
finance and marketing.
Human resource:
This department takes care of the employees who are working for the
organization. The main objective of this department is to take care of the
employees for the smooth functioning of the work (Baum, 2016).
Finance:
This department controls all the money related work of the organization and it
includes planning, organizing, auditing, accounting and controlling company
finances. It produces the company financial statement also (Spire, 2015).
Marketing:
It promotes the business and make aware of the product in the market. It is the
responsibilities of marketing department to reach the customer, prospects and investors
(Feng, H., Morgan, N.A. and Rego, L.L., 2015. Marketing department power and firm
performance. Journal of Marketing, 79(5), pp.1-20..

LO3 and LO4
P4: Using PESTEL model, identify the positive and negative impacts the macro
environment has upon the UK retail sector.
The different HRM practices are:
 Setting up both Mission and Vision
 Setting up a plan
 Manpower management
 Invigilating performance
 Training and Development
 Quality Development
Setting up the long-term (vision) and short-term (mission) goal is the first priority of an HR
manager. After assigning a team, a manager sets these goals to his team and briefs them about
the work that is to be done. The effectiveness of this practice leads to sound knowledge
amongst the team members who get to know what they are supposed to do and can work on
their assigned assignments (Anon, 2018).
Then comes the plan where an HR manager discusses the plan with the team. The discussion
includes bullet point discussion on how to build the project keeping in mind the requirement
for the task assigned to them. This phase is the most necessary when a development is next
since every requirement along with the specifications and limitations are to be sorted here and
it should be checked along with others’ input that shows how flawless the run could be for
the developed output. Then comes the implementation plan for the task assigned where it is
articulated with the most practical outlook from the members of the team and then a thorough
run over by the team members are done before going to the next step. Once all these plans are
clarified and cross checked, the HR then moves to the next step (Brewster, 2017).
Another very vital notation in this process is the manpower management. It is very
necessary for a HR manager to identify his team’s strengths and weaknesses and assign
project or work likewise. Manpower management talks about the process where a HR assigns
rightful task to the rightful person based on their qualification and skill set (Cannon and
Hillebrandt, 2016).

Invigilating every member’s performance is necessary from the workflow point of view.
To maintain a healthy workflow and constant work process, a manager needs to check his
team’s work time to time and correspond to them as or when necessary. Failure to this
particular part may lead to work completion but incomplete or incorrect which obviously
would not suffice to the requirements.
Performance management should also be done within a regular interval to maintain the
workflow. Team members should also feel content about their work and that comes only by
listening from the HR manager. Rewards are an important part of performance management
since it works as the motivation for the employees and team members. At the end of the day,
the company’s resources should feel important in the company (Cascio, 2018).
Only by proper evaluation of the performances by the team members, can it be identified that
who or what is the weak link in this entire chain. It is the HR’s duty to identify that and take
proper action by training and developing the skills of the employees that is necessary for the
work or in which they are a little bit weak.
After the successful completion of all these steps, one by one, the HR finally gets the product
and accordingly checks the quality. If anyhow it feels to reach the upper mark, the HR
ensures that the work is done properly and keeping in mind the exact requirements. While
redoing the work, the HR if necessary can also incorporate some new features or requirement
in the product in order to fit-in the now aroused requirements.
All these processes encapsulated as one determine a team’s credibility and skills in a
particular field. It also proves how efficient a HR is in his task and above all, ensures the
quality of the product they have worked upon.

P5: Conduct internal (SWOT/ TOWS) and external (5forces model) analysis of a UK
super market to indentify its strength and weaknesses.
SWOT analysis is a type of analytical practice that a company does on itself to understand
its internal strengths and weaknesses. It enlightens the external threats they can face and the
opportunities they actually have in the market.
Porter’s five forces analysis is a process that draws comparisons between two or more
organizations and helps in understanding the competition within an industry.
A company should have knowledge about its competitors in order to survive in a field. From
these two analyses a company gains an idea about their surroundings, and likewise works on
that. It helps a company to focus on their respective strengths, decrease the eminent threats
and utilize the opportunities available to them.
SWOT ANALYSIS of Mark and Spencer’s
Strength  84939 employees
 1200+ stores
 Spread across 50-55 countries
 Net income of 115 million pounds
 Has their own products and product labels
Weakness  Growing competitions all around
 Multiple growing ‘multinational retail chains’
 Plagiarism of original products with similar names
Opportunity  Reaching out in countries like India
 Involving more brands and products in the retails
 Huge amount of audience hides behind the digital platform
Threats  Better discounts by other retail chains
 Harsh government policies at certain countries or regions
Figure: SWOT Analysis of Mark and Spencer’s
(Source: Created by the Learner)

Figure: Porter’s Five Forces
(Source: Businessteacher.org.uk, 2018)
From the above two analytical studies, we came across the facts that with a certain good
employee strength and their spread globally, M&S have quite a strength in their hands.
Though a very good and critically acclaimed company, M&S possesses a very strong market
hold which fortunately works on their advantage. But, with the growing amount of
conglomerates and retail chains, they are facing certain competition which is somehow
weakening the organization as a brand. Added, pirated products with similar name or brand
but at a much cheaper cost are spoiling the company’s goodwill. With the help of these
analysis reports, the company can act accordingly and move towards a safer and sustaining
future with an increased productivity.

P6: Explain how strengths and weaknesses interrelate with external macro factors.
The external factors that affect a company’s decision making and growth are:
 Social
 Legal
 Economical
 Political
 Technological
 Environmental
Companies like Marks and Spencer’s conduct a SLEPT test sometimes to judge the external
macro factors according to their company’s profile.
Legal issues are perhaps the biggest since many region or countries cannot market or
manufacture their products if that certain product is barred from that particular region or
country. This acts as both strength and weakness for certain companies. When one company
is barred or restricted from a product, the other companies get to know that instantly and
likewise engineer their products which are able to mask that particular factor. Likewise, M&S
also has certain such restrictions which acts as a weakness for them since they cannot open
retail there, but other smaller companies that did not got barred are growing stronger in those
particular fields.
Social hurdles are kept from certain companies keeping in mind the social environment of a
particular region or country. Not every habitat is suitable for every sort of products, some
products or marketing strategy can hurt the emotions of the locals. Thus is the incorporation
of such rules. In a lot of countries, there are drug that cannot be marketed or sold in its raw
form. For example Aspirin is strictly banned in UK between the age group of 5 – 13 years.
Since M&S used to sell therapeutic drugs online for people of all age groups, selling of
Aspirin now is a problem for them and any other drugs that are derivatives of it. But as
company, Marks and Spencer’s has grown above them and has worked for the govt too in
spreading awareness against Aspirin.
Marks and Spencer’s was literally unknown in Germany since they were all caught up with
their own conglomerate, Edeka. But recently, Spencer’s has entered Germany in late 2010s to
2011 and are facing difficulty regarding setting up their business there. The foremost point in

their path is gaining trust of the German people and also setting up stores with reliable
employees.
Brexit has created a revolution, politically after its occurrence since there has been a
tremendous political unrest in the country affecting all the respective factors mentioned
above. By its happening, cost of frequently buyables have hiked. Fuel, food, electricity prices
hit the all time high and that was a problem for most of the UK people.
Climate, weather change and pollution are the main environmental factors with eco-
friendliness being the leader. A product that is being engineered or produced should be eco-
friendly to the maximum possible way. Product that are not bio degradable or eco-friendly,
tend not to pass the test when tested for these. Along with these, weather conditions play a
huge role as certain product should match up with the climate of the place.
Back in 2016, Marks and Spencer’s started providing exciting discounts for its entire
customer base, old and new. This was a terrific business idea back then as their sales per
capita hit an all time high in the last century. Economic issues were taken care for the natives
through their banking service, M&S Bank. Their bank also collected record revenue this
time and people knew that the organization is actually thinking about them. Also, M&S Bank
decreased the rate of interest for the people.
England remains at 13th place for the most technologically sound country in the world, but
has recently faced a ban on a video game named Omega Labyrinth Z. A strategy game,
Omega failed to reach out to people of UK for its explicit content and harsh visuals. Certain
visuals in the game were strictly not suitable for younger ones. M&S has always marketed
variety of games and other forms of technology so for them this was a minor setback but they
quickly recuperated due to their clean business policies. Technological issues have appeared
in UK before, but were resolved due to such company’s disciplined business environment.

Conclusion
The above assignment throws light on different aspects of HR management. It tells us loads
about how an HR manager manages a company and its resources and how they utilize those
resources in correct use. A product manufacturing has a lot of planning and sorting out
behind it and that’s what an HR does, along with his well-built team of employees. There are
laws, legislations and norms built around this subject which are followed thoroughly by the
organizations in order to keep a healthy running work environment. These laws have huge
impact in HR management and their respective decision making. Apart from that, the
recruitment scenario has been portrayed with a clearer view and evidently it has been shown
why the recruitment process stands so important for the growth and development of a
company. HRM is a fundamental process required for a company’s upliftment and this
assignment speaks tons about its application in the regular process of an organization. In
short, this assignment is a transparent view on Human Resource Management, and its several
tentacles.

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