Analysis of Business Environment and Competitive Position

The provided document is a solved assignment that delves into the analysis of the business environment and competitive position. It utilizes Porter's five forces model to examine the competitive position, including the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products, and rivalry among existing competitors. Additionally, it discusses the value chain model, highlighting its significance in strategic management. The document is likely from a business or management course, where students are expected to apply theoretical concepts to real-world scenarios.

BUSINESS ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
a) Porter's 5 force model for apparel sub sector of M&S............................................................2
b) Value chain model to identify the impact of internal business environment..........................4
c) Appropriate adaptions of the organisational activities to mitigate the risk factors related to
external environmental factors.....................................................................................................7
CONCLUSION................................................................................................................................9
...................................................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Business environment are the factors which influence business activity and operation of
an organisation. Maintaining a proper business environment is an effective action plan which is
carried out within a business activity or operation. Looking at the conditions that prevail in the
environment, various strategies are been set that helps the organisation to improve the
effectiveness of business products and services to a greater level. The present assessment covers
the business environment details of Marks and Spencer. It is a UK based retail entity that
operates in Apparel sub sector. The report will cover the details of assessment laid by Porter 5
force model and identify the current environmental conditions prevailing within the market.
Value chain analysis is been performed to carry out the internal business environment. Adaptions
made by firm in response to external environment is been presented with analysis of Porter 5
force model is been presented with its potential limitations.
MAIN BODY
‘Industry analysis and possible adaptations’
The retail apparel market is booming up with effective growth rate that will help the firm
to improve the proper assessment of business actions and activities. As the clothing sectors see
effective and consistent changes, organisation operating in this sector is required to look after the
proper management of needs and demands of a customer or buyer (Client) of an organisation.
The retail operators like Marks and Spencer are required to look after the proper assessment of
business operations to a greater level (Teece, 2016). As to meet the global competition, retail
enterprises some time either launch their own fashion based products or collaborate with other
big fashion brands that will impact the sales and operations. This will help the firm to improve
their performance to a higher level.
M&S will see through the management of its apparel related operations and meeting
needs of customers to a higher extent. Thus, will lead the firm to improve the quality of services
and hence lead the organisation to improve the quality of business operations and activities in
much effective way. Being a leading retail enterprise on the global market level, it is required to
present a specific and effective assessment of business operations and action plans which will
help in developing an apparel product range that will help in proper assessment of business
activities and operations related to clothing business.
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Porter's 5 force model for apparel sub sector of M&S
It can strongly felt that the apparel sector and its operations are deeply influenced by the
external environment forces that impact the growth and development of business operations in
much suitable way (Holubčík, 2015). It is believed that Porter 5 force model will influence the
sales of apparels and will have the following implications which impact the proper growth and
development of apparel related business operations as follows:
Threat of new Entrants; the entry of many new retail firms and lack of effective
management of these threat factors will have a negative influence on the operations of retail
apparel enterprises. M&S will have to look after the proper planning of strategies to meet the risk
factors associated with it (Chang, 2016). It can be strongly believe that as M&S is a well rooted
enterprise in retail sector, it will be moderately impacted by the new entrants. However, the
difference of pricing and quality may affect its market share. The variation in the product pricing
in M&S and Tesco Plc. will influence its market share, further affecting its profitability.
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Illustration 1: Porter 5 force model
[Source: Porter’s Five Forces of Competitive Position Analysis, 2018]

Marks and Spencer is also affected by the force of new entrants into the marketplace. It required
the less money and time for competitors to enter in the organizations market. It is an effective for
organisation to maintain their position in marketplace. It is to be consider that how easy and
difficult for competitor to join the market in the industry being examined. Marks and Spencer
face barriers regarding the entry in market such as access to input, economies scale and cost
advantages etc.
Threat of substitution; Clothing or fashion industry is deeply susceptible to get replaced
with a new trend. Hence, the selected organisation will look after the effective management of
activities in much suitable manner. It can be said that these firms say that M&S can improve
offering of its services after the development and production of apparel goods as per present
trends in order to avoid any sort of negative operations and activities effectively. It is provided
that how easy for consumer to switch from one business to another. It depends on the quality of
product and service in marketplace (Christian and et.al., 2018). It looks at large number of
competitors so that it easy for people to compare the quality and cost. It can be determined that
how much profit those competitors of marks and Spencer are earning. The threat of substitutes is
informed by long term, switching cost and change of buyer inclination.
Bargaining power of suppliers; M&S is required to effectively look after the proper
bargaining along with suppliers for managing their supplies of raw materials and its proper
storage with safety to develop high quality products and services and thus will lead the firm to
improve the quality of business activities of selected retail firm (Bagautdinova and et. al., 2014).
It can be said that the proper negotiation with suppliers is important in order to maintain the sales
and operations to a greater level. It can improve sales and operational conditioning of the
selected retail firm. This force is addressed that how the supplier can drive up the price or cost of
good and services. It is directly affected the organization by various type of key aspects of good
and service. It would cost an organization to switch from one suppler to another. Marks and
Spencer is also depended on the supplier that's why, it needed for organisation to maintain the
power supplier. It affected the micro environment of organisation.
Bargaining power of buyers; it is also a very important and crucial factor that will help
in improving the sales and thus, impacts the sales of business enterprise to carry out the business
operations in much suitable way. It can be said that as consumers are the biggest source of
income for the firm, their retention and sustainability should be termed as a major priority of
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selected retail apparel organisation. They negotiate with the retailer or will see through similar
product on a cheaper cost. If the consumer fined the price of an apparel product (say it a T-shirt)
to be highly priced, he would defiantly negotiate with firm or gradually move to a cheaper
variant. This force is specially deals with the ability of buyers have to drive the price down. It is
directly affected that the buyer capability and performance (Gellweiler, 2018). It is needed for
Marks and spender to maintain their buyer power to provide the best quality of product at low
price. It is based on the cost effective because many buyers can switch to another organization.
Competitive rivalry; This is a major factor, which is required to look after by the M&S
which will help in proper assessment of the business operations and hence, M&S will look after
the proper management of this environmental condition (Trad, 2015). Handling of the excessive
competition and planning accordingly will reduce their profitability. The organisation will look
after to improve the overall performance and thus will lead the organisation see through good
sales and revenue generation for organisation. This is a key driving factors of operations and thus
will lead M&S to improve the overall growth of the firm. I firmly consider it as a crucial and key
driving factor of sustaining in apparel sub sector. The main driver is the capability and various
number of competitors in marketplace. Many other competitors offering various type of good
and service to customer. It is also undifferentiated product and service on the basis of quality and
cost. In this way, it will reduce the market attraction of customer.
Looking at the present condition of the environment will look after the proper
management of operations and thus will lead the enterprise to have a suitable impact laid on
functionality of a business enterprise. His will also assist a proper growth of an entity to greater
level. Improving the sales is the major impact of the operations which is been carried out by
selected retail enterprise. Some major business environment factors are:
Socio- Political factors; this is a major factor that will impact the sales and revenue generation
of the business enterprise to a greater extent. Selling out of certain apparels is been prohibited by
some political or social groups may hamper the purchase module and trend of certain clothing.
Such factors are required to be taken in consideration by M&S.
Environmental factors; the environmental implication of producing certain apparels are the
major concern related to the placing of the apparel sales of the organisation. Hence, I'll suggest
M&S to make suitable strategies which will improve the firm’s condition and hence will lead the
organisation to lay a proper impact on sales of the organisation.
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Economic factors; financial conditions and purchasing capacity of buyers are a major
environmental force that will influence the sales of apparels by the business enterprise and thus
will lead the organisation to a greater level (Langfield-Smith and et. al., 2017). As M&S is
known to offer luxurious and high ended products, the pricing and customer base is required to
be set accordingly. Other than this, the firm is required to provide their mid-range customers
with a better value for money.
Value chain model to identify the impact of internal business environment
Value chain model is basically the high level model that developed by Michael porter
used to explain the process by which how business receive raw materials, and add to the material
in different process such as sell product to client, finished product etc. Marks and Spencer
conduct value chain analysis by looking at every steps of production which required to create
item or determine the best way to increase the performance and efficiency of chain
(HacklinBjörkdahl and Wallin, 2018). The overall goal of marks and Spencer is to deliver the
high value for the possible maximum cost and create the competitive advantages.
The proper assessment of Value chain model can be carried out for the identification of
internal environmental factors impacting the sales of the Marks and Spencer. This will help in
proper management of operations and thus will lead the firm to carry out effective evaluation of
business activities. The Value chain model for M&S to manage the performance of its apparel
sector is as follows:
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In bound logistics involves the receiving of raw material, their proper storage and
effective distribution that has been carried out within the organisation which will improve
performance of selected apparel manufacturer. It is strongly felt that M&S has to effectively look
after inbound logistics for having a good management of operations and improve the sales of
business activities in much suitable way. It will help in appropriate value creation. Suppliers or
raw material providers are the key player in this factor. Marks and Spencer always maintain the
good relationship with the supplier because it helps for maintaining the brand image in the
marketplace. Supplier can use innovative idea to perform different functions to store, receive and
disseminate the inputs. These are various process that involved internal distribution of raw
material and other ingredients which require for product development. In this way, supplier will
create value in the market to increase the productivity and profitability.
In Production, Once the raw material is gathered and is significantly distribution to
apparel department, the related production activities are been initiated that will impact the sales
of their clothing based products (Virglerová Dobeš and Vojtovič, 2016). I can firmly say that the
production or manufacturing activities which are been taken in consideration by selected
business entity needs evaluation. This can be said that M&S is required to analyse the buyer’s
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Illustration 2: Value Chain Model
[Source: Vliet, 2018]

needs and ongoing market and fashion trends to be on front with high quality, latest and
consumer friendly products. In Marks and Spencer, the production is main part of organization to
develop the efficient quality of product and service. The production department is performed
different activities to convert the raw material into the finished products. Operations system also
providing the guidance to create values.
Outbound logistics involves the external operations such as warehousing the finished
good, their proper allocations or supplying to dealers or customers and transportation process
covered within the organisation. Thus, M&S is required to manage this factor in order to have a
proper assessment and good growth of the apparel sector within the organisation. Hence, the firm
is required to maintain the customer connectivity and ensures a good sales margin. Apart from
this, it also assists selected organisation to lay a good impact on profitability of firm. The proper
distribution and selling by the M&S outlets or retail stores will support in gaining a good amount
of profit for the firm (Ibrahim and et.al., 2018). Outbound logistics is the third activity in the
value chain and occurs after all operations and functions. It is required to deliver the product to
the end users which are considered to be outbound logistics. This is important step of marks and
Spencer to perform different activities that help for delivered the product and service to the
consumers. It involves storage, transport, instance and distribution etc.
Marketing and Sales is a vital factor that is required to maintained by M&S to promote
the sales of its apparel based products (Kljucnikov and et. al., 2016). I find the marketing and
sales activities to be a proper and suitable measure for improving the connectivity with buyers of
apparels and thus, will lead the organisation to improve their sales and draft a plan or strategy to
lay a good emphasis on customer needs and demands. It will assist M&S to promote and develop
a market curiosity for the organisation and hence, will improve the demand of their apparels to a
new extent. Besides this, it supports building of a strong customer enterprise relationship and
communication channel.
Services have a vital role on the operations of the organisation in its apparel based sub
sector. I can suggest M&S to work upon its after sales services which are not up to the mark as
per some customer reviews. The proper procurement of various products and services will help
the firm to improve their customer satisfaction level in much suitable and effective way. Marks
and Spencer is required to include all the activities that keep product and service working in
proper manner. In this way, the buyer can use this purchasing power to identify the best product
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in terms of quality and cost. Improving services will also promote a better improvement in brand
equity and furthermore the market share of M&S is improved. The services of the apparel sub
sector of M&S will include clothing of men women and kids with other accessories, the positive
impact of this will be that the buyers will get a good range of apparel based products under one
roof. However, on critical side, change of fashion trends frequently and less accessibility may
have negative impact on operations of the firm .
Besides this, the infrastructural facilities, HR, technical factors and procurement facilities
plays a very deep role in the business operations and thus will impact the sales of apparel based
products for the organisation. The proper maintenance and handling of this procedure is very
important for the organisation as it will help in proper management of business activities and
thus will lead the firm to carry out the market research process in much effective way.
Appropriate adaptions of the organisational activities to mitigate the risk factors related to
external environmental factors
A wide range of the organisational activities and measures are taken in consideration by
M&S that will help the firm to improve the sales of the organisation that will help in proper
assessment of which will help in proper assessment of the business activities and operations and
hence will lead the organisation to improve its performance and hence will lead the enterprise to
have a good performance and setting up its name as a major service provider to its customer in
the apparel sub sector (Epifanova and et.al., 2015). As from the above assessment, this can be
said that the external environmental factors are required to be taken in consideration by the firm
that will help in proper growth of the apparel based operations of the organisation and thus will
help in effective placing of the operations laid by the M&S to mitigate the risk factors associated
with the management of business activities and thus will help in proper assessment of business
activities and operations to a greater extent. The risk factors involve change in fashion trends and
customer’s needs, environmental factors (internal and external), absence of transportation etc.
Some vital operations that are been adapted or chosen are the major factors of the operations that
will help in effective growth and development of the firm are as follows:
Conducting appropriate market research; an effective market research is been taken
in consideration is been taken in effect that will impact the overall sales and thus will impact the
overall sales and development of the business activities (Belás and et.al., 2015). This will impact
the overall production and meeting of business operations in much effective way. The
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assessment of the market trends will help the organisation to improve the sales and thus will help
the organisation to place a proper and effective market operations. Other than this, it supports the
organisation to place the business activities and hence place the organisation to improve the
apparel business activities related to operations to have a good customer satisfaction level.
Besides this, I believe that this approach will support avoidance of any issue caused due to
political, social, environmental and legal factors.
Developing the products as per the trends; This measure is very viable and effective
for the organisation as it will help the selected apparel manufacturing firm to produce the
appropriate goods and service i.e. high quality clothing that will help in proper development of
business activities and operations (Deasy and et.al., 2015). As M&S will develop the products or
apparels as per the ongoing market and fashion trends and the customers or buyer’s needs, will
assist in improving the sell outs and help organisation to carry out their business activities and
operations in much suitable way. The product development is required to be timely and
effectively carried out by M&S for a better productivity.
Improving the distribution and communication channel; At present, the distribution
channel and product or raw material allocation activity is not up to the market that will help to
cater the growing and expanding needs of their buyers or customers. This will help in proper
assessment of the business activities and thus will lead the proper improvement of distribution
channel (Botha, Kourie and Snyman, 2014). Developing separate section or dedicated floor for
the apparel can be few of the measures which can be taken in consideration by M&S for a proper
and effective growth and development. Apart from this, a good and effective communication
channel will assist the organisation to promote its products and services to a greater level,
making the organisation effective to meet customer’s needs.
Having a skilled and knowledgeable work force; Having a good and effective
manpower will improve the overall achievement of business operations and hence, handle the
risk factors associated with functionality of organisation in an easy and effective way. Handling
such risk factors is a major concern for apparel management firm (Deasy and et.al. 2016). It is
believed that an effective and skilled labour will help the firm to maintain the business activities
and quality standard, for sustaining the loyal customers and quality standards of the organisation
to a higher level. Managing such operations by a skilled labour will assist the firm to maintain
the quality of business activities to a greater level.
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Effectiveness of Porter 5 force model and its potential limitations
The Porter five force model as described above will help in proper assessment of business
activities and hence, will lead the organisation to carry out the operations of selected apparel
enterprise in much suitable manner. I can effectively say that this analysis will assist the
organisation to carry out the business operations and activities in much suitable way. The
assessment measures that are been taken in consideration by business entity will lead the firm to
carry out operations in much suitable way. Some major advantages of Porter five force model are
as follows:
Competitive rivalry; I find it as a major key driving factor to improve the performance
of an organisation to a greater level. This will support the organisation to make the suitable
strategies and action plans which will improve the overall performance of selected organisation.
Besides this, it will assist a fir to find its loop holes and work on them for a proper growth.
Bargaining power of buyers; I believe that this will help the organisation to have a good
communication with customers and develop a proper work strategy which will help the firm to
carry out the proper strategy that will improve the quality of business operations and action plans
in much suitable way. This will help in improving the sales of the organisation to a greater level.
A good customer satisfaction level will help in proper rise in carrying out the business operations
in much suitable way.
Bargaining power of suppliers; as per my assessment, it will help in proper
management of supplies in the organisation to a greater level. It will help the selected apparel
manufacturing enterprise to get the best output using the high quality raw material and thus will
improve the overall performance of firm.
Threat of new Entrants; it is useful to ensure a firm foothold in the market and thus will
improve the performance of the M&S in effective manner.
Threat of substitution; this is a meagre factor but will encourage the organisation to
sustain its productivity.
However, these factors have the limitation that their assessment is a quite tedious process
and hence will lead the firm to cost some time and resources for the assessment. These
limitations are required to manage out in much effective way as it will help in effective
assessment and hence, plan the business operations related to apparel firm. Also, the competitive
rivalry and entry of new apparel entities can't be restricted but their influence can be controlled
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by M&S tops some extent. Also, the bargaining power with customers and suppliers has some
limits and required to be managed within that restriction only. Management of these limitations
of Porter 5 force model will help in drafting a good strategy and improve productivity.
CONCLUSION
On the basis of the above assessment, it can be said that management of business
environment will help in proper management of operations. The Porter 5 force model and
external environment assessment will help me to develop a proper strategy to management
apparel related assessment. Besides this, the value chain model and measure to mitigate the risk
is been analysed. Other than this, a reflective assessment is presented that showcases the risk
factors associated with the Porter five force model and thus will help in proper management of
the business environment by evaluation of their effectiveness.
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Online
Vliet, V., 2018. Porter’s Value Chain Analysis. [online] Available Through : <
https://www.toolshero.com/management/value-chain-analysis-porter/>
Porter’s Five Forces of Competitive Position Analysis, 2013. [online] Available
Through :<https://www.cgma.org/resources/tools/essential-tools/porters-five-forces.html>
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