Business Environment Analysis

The assignment provided requires students to analyze the business environment and its impact on the retail sector. It involves researching and discussing various factors that affect the sector's success, such as technological advancements, social networking sites, and political connections. The student is also expected to provide references from books and journals, online resources, and patents related to the topic.

Business and the Business
Environment

Table of Contents
INTRODUCTION................................................................................................................................3
Lo1........................................................................................................................................................3
P2 The size and scope of a range of different types of organisation...............................................4
LO2.......................................................................................................................................................5
P3 The relationship between different organisational functions and their impact on organisation 5
LO3.......................................................................................................................................................7
P4 positive and negative impacts the macro environment has upon business operations,..............7
LO4.......................................................................................................................................................8
P5 Internal and external analysis of Marks and Spencer.................................................................8
P6 Strengths and weaknesses interrelate with external macro factors...........................................10
CONCLUSION..................................................................................................................................10
REFERENCES ..................................................................................................................................11

INTRODUCTION
Business and Business environment both are different. Business environment refers to the
whole environment through which an organisation influence too much. It might be external factors
or internal factors. Internal factors like employees, growth rate, relations and external factors like
political, legal, economical etc. They all affect the environment of business in different ways.
Marks and Spencer is public organisation and it is has high retail market in united kingdom. It
founded in 1884 and this company includes things like food products, home and kitchen appliance,
clothing items many small products. This report will include different types of organisation and
their purpose and legal structure of them. Size and scope of the organisation, relation between
different type of organisation and their functions, positive and negative impacts of macro
environment on the business. Internal and external impact upon the organisation and strengths and
weaknesses interrelate with external macro factors. Comparison of different type of company and
their different role and structure within and outside the organisation(Zhang, 2018).
Lo1
P1 Different types and purposes of organisation; public, private and voluntary sectors and legal
structure.
Public Company
A public company is a company whose shares are open for public for trading on any
recognized stock exchanges. Shares of public company are issued through Initial Public
Offer(IPO).The main purpose of any public corporation is to maximize shareholders wealth.
Sainsbury plc and Marks & Spencer is a public traded company that is listed on London Stock
exchange.
Legal structure : A public company must be registered with companies houser of the UK. It
requires minimum of two directors and one secretary to form a public company. It should have
minimum allotted capital of 50000 pounds out which 12500 pounds must be paid up capital(Akaeze
and Akaeze,2017). A public company can issue ordinary, preference, redeemable or cumulative
preference shares. It must have following documents:
Memorandum of Articles, Memorandum of Association, Form 1 and 12.It should have a registered
office where the company will carry out its operations and where all the records are kept. Shares are
transferable by mere delivery. It has to compulsorily hold an AGM in an accounting year.
Private Company
A private company whose shares are not open for public to trade. The shares are privately
sold to the members or shareholders. The size of the company is smaller than the public company

and the legal requirements also fewer. It may or may not list on stock exchanges but share are not
freely traded there. The main purpose of forming a private company is maximization of profits. The
other objectives are more control over the management, transparency in operations, and more
privacy in day to day operations. Brake Bros is a British privately held company and voluntarily
listed on LSE. It has five directors and a chairman(Álvarez and et.al., 2014).
Legal structure: A private company must have one director and who is a natural person. It
must be registered with companies house. Memorandum of Articles and Association are the
necessary documents that are to be filed while making registration. Shares are non-transferable.
They are not legally bind to hold the AGMs.
Voluntary Company
A Voluntary organisation is a non profit organisation. It is also known as third sector. They
undertake social activities focusing mainly on education, environment betterment and other ignored
social requirements. They attract minimum government restrictions.
The main aim of third sector is to provide social services for the betterment of the society,
rather than focusing on profit motive. American Red Cross is an organisation established in
Washing D.C. 1881, provides emergency help, reliefs in natural disasters and education regarding
overcoming those disasters(Stecke, Yin and Kaku,2014). It is segregated into five sections; blood,
disaster, international, training services and arms forces services.
Legal structure: These organisations have to comply charity laws and the company laws.
They are governed since they are formed for the protection of public(Springer and Miler, 2018 ).
They have to mandatorily take license from the government and convince them that the
organisation is formed only for the purpose of social benefits.
Difference
Profit organisations are those which are formed for the purpose of carrying a business with
motive of earning profits, they only focus on earning more income than its expenses like Coca cola
whereas non governmental organisation also called as NGO focuses mainly on social causes, often
funded by the government, but remains non government entity with no government's direct
intervention such as Transparent Hands(Stouse and et.al., 2017). Lastly not for profit organisation is
an organisation whose motive is not to earn profits rather using business revenues for the particular
cause for which it was formed and enjoys various tax exemptions such as cooperatives, charitable
trust .
P2 The size and scope of a range of different types of organisation
Base Public company Private company Voluntary company
Name of company M&S Brake Bros American Red Cross

objectives It focuses on quality
product.
It focuses on earning
profitability.
It focuses on build up
caring community.
Profit share and
market share
M&S company make
profit form taxes, penalty,
duty etc. number of
employees in 2018 is
186900.
Brake Bros make their
profit from shares and
debentures.
This company use
shares and debentures
as well as taxes. It is for
emergency cases like
flood.
Range provide its product in 60
countries
It also served its product
worldwide
It is only in US
scope It has limited scope
because of rules and
regulations and too much
interference of
government.
It has no prohibitions
because no more
limitations and Govt.
interfere in it.
Voluntary company are
also in prohibition
because some of Govt.
interference with lot of
legal activities.
Difference between micro, small, medium and large enterprises
BASE MICRO SMALL MEDIUM LARGE
definition it exists nearby to
everyone like
small shops
it has number of
employees and
profit is few.
it has number of
employees under
250
It exists on big
scale
investment scale up to 25 million more than 25
million and less
than 5 billion
more than 5
million and less
than 10 billion
above 10 billion
growth rate no growth rate small growth rate medium growth
rate
high growth rate

LO2
P3 The relationship between different organisational functions and their impact on organisation
There are three type of organisation first one is public second is private and third is
voluntary. Every organisation has common functions like production, marketing, finance, human
resource, sales, billing and all kind of other functions which interrelate with each other but the
structure of an organisation is different with the functions of the organisation and they do not
correlate each other. Most of the functions depend on the type of organisation because productivity
depends on it that which kind of business runs by them(Springer and Miler, 2018).
Relation among Sales, marketing, production and planning department
Co-relation between different function make an organisation profitable and gain outcome
with efficiency. In Marks and Spencer different department co-relate with each other and help them
to achieve their goal. Sales is important for the organisation to build their growth and sales
department plays main role in the organisation because every organisation runs with sale and the
correction between sales and marketing department is necessary because they are appointed for
different purpose but with the same objectives and same goal.
Marketing department works for advertisement and promotion and branding of the
organisation so if they help the sales department to select the target area in which they have already
performed the advertisement through any audio conference and through video campaign then it
helps to the sales department to plan for the next area and planning department can also help to the
both of the department by telling their plan to them because if they tell their plan and objectives to
the marketing department and marketing department tell that plan to the sales department ten it
makes an organisation profitable and also create relationship between them with goof coordination.
They can also include the production department into it(Springer and Miler, 2018).
Assume sales department is ready for sale and cover most of the area then they tell this thing
to marketing department to cover next areas and demand for product to the production department
and also include planning department to target the next goal and make new objectives so it is the
best coordination among them and to follow this process Marks and Spencer can achieve their goal
easily and they have a big market for many of the things like food and glossary, clothes, home
appliances and many of other items. They all department link to the objectives, structure and goals
of the organisation(Gomes and et.al., 2018).
There is not a big role of management department because that all department manage

themselves in a good way and their work is different from each other but their objective are same.
Marks and Spencer follow the flat organisational structure in which an employee feel satisfy
because in this structure if any employee have a complaint against anything and have any problem
in the organisation then they directly connect with the superiors. No need to follow the other people
for surviving in the organisation and in this structure lower level employee directly talk to the high
level employee and high level employee also talks to the lower level. So it makes a good relation
between them and it helps to build the organisation and help to achieve their goal with help of that
all departments(Manthou, Stefanou and Tigka, 2016).
LO3
P4 positive and negative impacts the macro environment has upon business operations,
Every business affected by the macro environment in form of political, economical, social,
technological, environmental, legal.
PESTLE analysis of retail sector -
Political- Political factors influence the business environment in both positive and negative way.
Positive impact of political inter-fare- Many of the positive impact on the organisation through the
political inter fare. Increase in educational level, decrease in corruption level. They have to follow
the employment law, labour law(Gomes and et.al., 2018). It also helps to protect the data of
companies in retail sector, health and safety of the employees etc.
Negative impact of political inter-fare- Retail sector have to follow many of the rules and
regulations of government and their high tax policies. The lows like competition regulations make
impact on the organisation.
Economical- Economic factors also include positive and negative impact on the retail sector and
they are following.
Positive impact – Economical factor include supply and demand which affect positively on the
organisation under retail sector because demand helps to understand satisfaction level of the people
and through which its easy to supply and high supply make them profitable.
Negative impact- There are many negative impacts on the organisation through economic change.
Due to change in inflation rate the organisation affect heavily. Change in tax rates and import export
rates also change the physical economy and environment of the organisation and disturb their
financial condition(Gomes and et.al., 2018).

Social- Influence of social factor on retail industry are following (Business Environment, 2018).
Positive impact- Social factor affect positively on the organisation. Population growth helps retail
sector to achieve their goal by purchasing their product. They product in normal cost which also
affordable by the middle class families so it increases the credibility.
Negative impact- Many of negative impacts of the social factors like taste and preferences change
day by day, attitude toward family size and income, saving habits, religion, age and sex distribution
that all things are critically and make bad impact on retail industry.
Technological – Technology is hard thing to understand it can impact on organisation in following
ways-
Positive impact- Technology make changes. A new idea and a innovation can change the
organisation because technology is demanded by people and they can switch rapidly toward the new
idea so it will make Marks and Spencer profitable(Mahmood Chung and Mitchell, 2017).
Negative impact - New technology like robot can replace the employees and create unemployment.
Create a big loss for other competitors. Dissatisfaction regarding the privacy because all
information keep record by the organisation.
Environmental -
Positive impact- Environment impact positively on retail sector. If an employee is safe, healthy and
happy then they work better in the organisation. It is also affected by weather and positive for the
organisation which makes lot of things(Ellahi, 2018).
Negative impact- If an employee is unhealthy and the organisation include with pollution then it
makes bad impact on the organisation. Changing in environment also affect price of products and
price effect purchasing power of customers.
Legal factor-
Positive impact- It makes an opportunity for the people to get involve with the organisation in term
of employment law. Fraud law helps the organisation to decrease in fraud rate.
Negative impact- Many of the legal formalities and prohibitions or restriction according to supply
and product manufacturing can make impact on the organisation in negative way(Business
Environment. 2018).

LO4
P5 Internal and external analysis of Marks and Spencer
For internal and external analysis of Marks and Spencer at first have to do SWOT analysis
which consider strength and weakness in internal factor and opportunity and threats in external
analysis.
SWOT analysis of Marks and Spencer – It is the analysis of an organisation that what actual the
organisation is and what is the current situation of the organisation in the market(Ellahi, 2018).
Strength- Marks and Spencer known by the people of UK in a wide range. They have positioning
of their product regarding this brand. Marks and Spencer delivered large number of products with
the best quality and it has many of stores in UK. It is known by its quality products.
Weakness- Main weakness of Marks and Spencer is that they are non trendy and not running with
the fashion. Authority failed to attract customers toward Marks and Spencer. They also not follows
new techniques and idea and struggling with the old technology and its make bad impact in term of
increase in cost and time.
Opportunities- They can adopt the techniques of market segmentation and reach to the every
customer. They have to know about the problems of customer and their need and want from the
organisation. They have to increase their business with increasing stores on every place. They can
use the small market for their growth and to invest in new ideas and technologies (Krammer,
Strange and Lashitew, 2018).
Threats- Threat of losing the market due to heavy competition. Financial lose due to the different
rules and legislation of other country. Growing of other small retailers also been a threat for Marks
and Spencer.
Porter’s five forces analysis to Marks and Spencer
1. Threat of new entrants- Barrier of new entrants due to the competition market is threat for
Marks and Spencer. It has low market share in small market and the new entrant make
opportunities to themselves. Marks and Spencer make quality products and it is the strength
of it.
2. Threat of substitute product- Marks and Spencer have threat of substitute product because
they are not running with the technologies and applying the old one. Many of the copied
clothes are available in the market and customers are attracted towards that product. Food
industry already taken by many of the big organisations so the profit is already distributed
among them.

3. Bargaining power of buyer- Customers are more sensitive about the price of the product
and they have many alternatives to switch the brand so here Marks and Spencer have to
move toward customer satisfaction with the affordable price and make good relation with
the customers(Ichihara and Nizam,2018).
4. Bargaining power of supplier- There are many suppliers available in the market with raw
materials. Supplier is expert in increasing raw material price and decrease in product quality.
If buyer is not understood about the product then supplier use their power with price.
5. Rivalry among the existing competitors- In the age of competition it is critical to struggle
in same market with same products. Marks and Spencer can target the small market to
achieve their goal or it can also tie ups with other normal brand to make stable in the market.
P6 Strengths and weaknesses interrelate with external macro factors
Quality product and social factor -Strength which interrelate with the external factor is quality
product and it can be replaced with social factors because many of the people exist in the market
who want to purchase the product with the best quality and they are also priced conscious but if
product quality is good then they are not hesitated to pay the price and no matter what the price is.
They are not much affected by the social factors because they want quality product(Barnawi and
et.al., 2015).
This company known from their product quality and they use more new innovations to increase sell
of their products. They can make something different from another product with understand the
customer power and use technology to sell their product.
Unfocused segmentation of clothing ranges, weak online presence is the biggest weakness
of the organisation and this relates to the technological factor and it has to use technology to
the organisation in respect of clothing range and make online presence of the company
because most of the people want online market of the company.
CONCLUSION
From the above study it has been summarised that public, private and voluntary companies
have their own rules and regulations with different legal structure, size and scope of different
organisations. described the interrelation between strength and weakness to the macro factor and
found that strength interrelate with social factor and weakness of online trend is relates with the
technological factor. From the study it also described that macro environment made impact on the
retail sector both in positive and negative way. From this it has known that marks and Spencer has

to follow more technology to make its presence.

REFERENCES
Books and Journals
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Ellahi, A., 2018. Social Networking Sites as Formal Learning Environments in Business
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Gomes, E and et.al., 2018. Testing the self-selection theory in high corruption environments:
evidence from African SMEs. International Marketing Review.35(5). pp.733-759.
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Stecke, K. E., Yin, Y. and Kaku, I., 2014. Seru production: an extension of just-in-time approach for
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