Business Environment: Overview of Marks and Spencer

This document provides an overview of the business environment of Marks and Spencer, a British multinational retailer. It includes information on the organization's history, structure, and current operations. The document also discusses the importance of Pestle analysis in understanding the external factors that influence the company's performance. It explores the political, economic, social, technological, legal, and environmental factors that impact Marks and Spencer's business. The content is relevant for students studying business and management.

BUSINESS
ENVIRONMENT

Table of Content
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
(A) Overview of the organisation................................................................................................3
TASK 2............................................................................................................................................5
Importance of Pestle analysis for business..................................................................................5
TASK 3............................................................................................................................................6
(A) PESTLE framework..............................................................................................................6
(B) Impact on business................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Online........................................................................................................................................10

INTRODUCTION
Business environment traditionally consists of multiple factors, all of which tend to
influence the operations and functioning of a business or organisation in one way or other
(Schaltegger and Wagner, 2017). There exist factors which tend to directly influence the
operations, behaviour and functioning of a business organisation, on the other hand others
indirectly influence the business environment. Hence the business environment is highly
convoluted and complex multi-dimensional playground for businesses which is highly dependent
on multiple individual factors which decide the productivity and efficiency of the business
operating in the market (Hamilton and Webster, 2018). Here we evaluate the business
environment of Marks and Spencer, a British multinational retailer, situated in London, UK.
Having been in operations since 1884, for a whopping 136 years Marks and Spencer has been
able to expand its operations and business globally.
TASK 1
(A) Overview of the organisation
Marks and Spencer is a British multinational retailer located in London, UK. It has
continued its operations since its founding in 1884, running for a surprising 136 years as of now
and has expanded its operations, functions and customer base into various distinct markets for
example the food products, premium clothing and home utilities. Marks and Spencer functions
on a flat style of organizational structure as its management has evaluated that this style of
organizational structure to be best for their operations. As the flat organisational structure
provides finite levels of management to Marks and Spencer's administration and employees, it
effectively encourages the participation of Marks and Spencer's employees in contributing
towards the administration's decision making process (KHAN and et.al., 2017).
History: M&S was founded in 1884 when a Polish refugee Michael Marks opened a market stall
in Leeds in. Later in 1894 Marks started a partnership with Thomas Spencer which resulted in
opening of first M&S shop in 1904 (A Short History of Marks & Spencer, 2020). In the initial
years the revolutionary policy of organisation of purchasing directly from suppliers helped
organisation to soon become a public company and popular venture among people.
Present overview: By current data estimates, Marks and Spencer business operates close to 1043
individual distinct stores in the UK. Marks and Spencer organisation also operates 444 stores
internationally, expanding the organisations business into foreign markets. On the whole, Marks

and Spencer employs around 79,000 employees for conducting its operations amongst which
close to 71% of employees are female (Marks and Spencer - Statistics & Facts. 2019.). As of
2019, Marks and Spencer's administration has also noticed a marginal raise to its previous year's
profit which has resulted in an increase in the profits of Marks and Spencer before taxes of 84.6
million British Pounds (Marks and Spencer - Statistics & Facts. 2019.). As the details of the
exact changes to government rules and regulations post Brexit are still mercurial, Marks and
Spencer's administration has no choice but to wait for the government to notify the public of the
extent of the modifications being made to international trading laws etc. in order for the Marks
and Spencer's administration to develop an appropriate business strategy. Having been in
operation in the clothing market for more than 100 years, Marks and Spencer enjoys very high
brand value in the market when compared to its competitors. Through its efforts Marks and
Spencer has been able to identify and capture a large base of global customers who stay loyal to
Marks and Spencer because of their great brand perception in the market. Marks and Spencer
(B ) Governance in company
Board of directors
Board of directors are only applicable in case of management structure of business
organization. Board of directors are hired and elected individual or group of individuals who are
accountable to all the stakeholders. As these are the decision-making body of Marks and Spencer
and provide analyse market to grow business organization with higher profits and also satisfy
stakeholders simultaneously. There is annular general meeting and short interval meeting in
Marks and Spencer to evaluate the performance of company and review the performance of past
decisions on efficiency of activities to compete in market effectively. Board of directors also
provide better support to different operation department by solving all the internal issues and
maintain healthy working environment effectively (GOVERNANCE FRAMEWORK, 2020).
The company uses hierarchical structure to increase the potential effectively. The company have
8 different directors including one CEO and one chairman. There are 5 non-executive directors
in the board of directors of Marks and Spencer which provide effective decision-making.
Chairperson of Marks and Spencer
The chairperson of Marks and Spencer is Archie Norman, and he was appointed in
September 2017. Chairperson has large experience in retail business as he had successfully

transformed past business like Asda, Kingfisher and many more. He was also a member of
parliament of UK for eight years (Meet the M&S Leadership Team, 2020). Due to his experience
and knowledge Archie was appointed as Chairperson of Marks and Spencer to increase the
potential of the company and increase gain higher profits effectively.
CEO of Marks and Spencer
Steve Rowe is chief executive office of Marks and Spencer. As he joined the company in
1989 as executive in store management and progressed within the organization to different
department and has increased his experience. He was appointed as directors of retail in and
member of executives in 2008 which also increased his potential to take decision and improve
the performance of organization more effectively. In 2016, he was elected as chief executive
officer of the company.
Interrelationship between Board of Directors and Stakeholders of Marks and Spencer:
There has been a strong relationship between various stakeholders and board of directions
of organization. In order to make effective and appropriate organizational decisions it is
important Board of directors to maintain a healthy relation with the needs and requirements of
different stakeholders as well.
(A). Shareholder- Board of directors have the responsibility to communicate true and fair
financial position of the company to increase satisfaction of their shareholders and also attract
more shareholders to gain higher capital effectively (Hamilton and Webster, 2018).
(B). Employees- Board of directors have to resolve all the issues of employees to retain them by
making effective policies.
(C). Customers- Customers and board of directors had the relationship to increase the sales by
providing what customers expect from Marks and Spencer.
TASK 2
Importance of Pestle analysis for business
External environment analysis enables deep understanding on the various factors which
determine the parameters for company to grow in competitive business world and establish firm
place among customer’s market-share. The external environment factors are highly important for
company managers to consider while strategic decision-making and build innovative tools in
operational structure (KHAN and et.al., 2017). Pestle is the most innovative analytical
framework used by company managers to build expansion strategies in new countries and

harness new strategies to build new products and services. Business performance lays high
importance to the external competitive business world which enable organisations to gain
strengths and attributes which can deliver quality services and products to customers (Song,Sun
and Jin,2017).
 Political factors include tax policies, government regulations and the political stability
factor of a country where company wish to expand its business market share. For
diversification and expansion into untapped markets countries uses Pestle analysis as the
framework to determine political factors (Schaltegger and Wagner, 2017).
 Economic factors include economic growth indicators, employment rates and the
disposable income of customers in country along with fiscal rates and taxation policies.
Organisation lays high importance to economic stability in country where it plans to
expand its market share.
 Social factors determine the customer preferences, fashionable trends recently preferred
by customers in products and the parameters of services which are desired by people
living in economy and market share. Business must focus on addressing the social factors
with strong efficiency and bringing innovative products according to preferences of
customers (Schuetz,Mair and Schrefl, 2018).
 Technology factors analysis enables company to evaluate the new technology and
machinery production factors which company nee to upgrade for gaining high
benchmarks. Organisation must give priority in maintaining high technology standards
ion production and reach the set targets with high efficiency.
 Legal factors analysis enables deep understanding of tax laws and labour laws prominent
in economy which will enable company to establish firm goodwill and presentation in
market share (LOPEZDOMINGUEZ and LEVYA,2019).. By following the legal laws
can address the issues governing in current economy where brand plans to expand the
business operations.
 Environmental laws determine the company to analyse the data on environmental factors
and the scenario which can affect company performance levels in comparison with other
brand (Pan, Chen and Zhan, 2019). Businesses aims to focus on building strong brand
image by working towards social factors and environmental issues, by maintaining
minimum wastage of resources and performing CSR activities.

TASK 3
(A) PESTLE framework
Pestle analysis is crucial analytical process which enables company managers and leaders
to gain detailed knowledge of competitive business world and examine the scenario where
company can use the strengths and opportunities to enhance their weakness and threats. Pestle
factors determine the potentialities which company can develop and highly expand the market
share with large customers spread. Mangers and leaders can use the data to bring new business
decision strategies on board and motivate employees ethically to cultivate dynamic business
skills in production. The production techniques training sessions by leaders help employees to
remain motivated and retained in company for longer periods (LOPEZDOMINGUEZ and
LEVYA,2019).
Political factors: Political scenario of economy in which company wishes to expand its business
scale through diversification and reach new segments of customers highly affect the business
decisions (Prajogo, 2016).
 M &S to expand its business in European countries has to focus on maintaining balance
between the increased tariff barriers and the revenue profits from stores.
 European countries store have been facing large losses as there is high increase in tariff
barriers and tax rates. The company aims to maintain fair margin between tax rates
increase and the profitability margins. The political issues such as Brexit result in regular changes in government policies and
trade regulations.
 The political relationship between two countries can also affect the growth strategies of
M&S.
 Bureaucracy and corruption levels also plays great influence in investment and expansion
decisions of the organisation.
 Political instability can affect the purchasing behaviour and operational continuity of
M&S and thus this factor must be taken into account.
Economic factors:

 Economic scenario and disposable income of customers are highly important paradigms
to establish new business in an untapped market as long term stability is highly dependent
on the customers (Pan, Chen and Zhan, 2019). M &S company lays high importance to inflation rates varying in economy, consumer
confidence and the rates with which their shopping pattern varies. The brand aims to
establish strong parameters of growth in economic factors which will enable company to
gain high strength and positional value in market share.
 Employment rate influences the buying power and decisions of customers.
 Downfall in economy affect the operational expenses of the organisation.
 Gross domestic product (GDP) of the nation can also influence the resource availability
and supply chain network of the organisation.
 Economic factors such as per capita income of the population also contributes in decision
making related to pricing and human resource management strategies.
Social factors:
 Social scenario of economy where company wishes to expand its business is highly
important for M&S as the launching of products and services highly depend on these
factors.
 The preferences of customers are dynamically changing where M&s S needs to focus on
by bringing innovative clothing patterns, new technology equipment and machinery for
high quality production (Prajogo, 2016). The brand needs to produce more attractive
price strategies and promotion activities through online networks and shopping platforms.
 The product and pricing rang of organization also influenced by education level and
buying habits of its targeted customers.
 The religion and cultural aspects in operational strategies affect the brand value of
company.
 The increase in health consciousness among social groups leads to increasing demand of
more innovative and sustainable products.
 Economic inequalities in social groups is also one of the major factor which affect the
segmentation and targeted audience of M&S,
Technology factors:

 Technology scenario is the most vital area where company needs to focus on for building
benchmarks of competitive growth and reach high standards of production in comparison
with other brands.
 M&S needs to invest in providing training of new technology in companies and high
machinery usage to harness cost-effectiveness in resources.
 Technology factors imply the growth factors which will enable company management to
get optimistic growth and build new arenas of development (Azoulay and Al-
Maghribi,2019).
 With regular upgradation in technology M&S is required to pay strong emphasis on
maintenance of its IT services so that safe services can be provided to its customers.
 Increasing cyber and technology based crimes create a significant challenge for
organisation to ensure privacy and integrity of its data.
 As per current requirements organisation is required to invest heavily on online retailing,
digital marketing and other social media platforms for long term success.
Legal factors:
 Legal scenario fulfilment includes taxation laws and the regulations, compliance of
labour laws which are imperatively important for company to develop the strategies on.
 The labour laws compliance improves brand image largely in global level which helps to
gain competitive place in industry and harness goodwill among customers in market
share (Schaltegger and Wagner, 2017).
 Legal factors imply the regulations which M&S as a responsible global brand immensely
focuses on and it helps company to reach out to customers with more ethicalness.
 Organisation has to follow safety and health regulations for its employees which demands
for additional resources as well as training requirements.
 With increasing use of technology M&S is also bounded to follow data privacy
regulations.
 To ensure the continuity in operational activities M&S must also follow all trade
regulations which vary from one country to other.
Environmental factors:

 Environmental scenario includes the availability of natural resources, climate factors in
which company wishes to expand the business scale and also CSR activities which
company formulates.
 M&S highly focuses on keeping the impact of environmental factors positive for
company brand value, where it has taken initiatives to build strong CSR activities in
society.
 The company uses reusable products in stores and showrooms for stationery purposes and
maintains ethical business practises which positively influences the brand image on
global level (Paul,2020).
 The environmental and health epidemics such as Corona outbreaks or floods can restrict
the regular delivery of services of organisation.
 Climate regulations and code of conduct during environmental emergencies bring
significant downfall in the operational efficiency and profitability of the organisation.
 Natural or environmental availability of raw material or resources influences costing of
services and goods.
(B) Impact on business
Impact of business decisions by mangers through Pestle analysis at M&S company can
be understood through various examples and parameter which check the growth of company
business scale. This can be understood through various examples:
 Social factors such as increasing preferences of customers in dynamic business world has
impacted M&S business decisions to upgrade the innovation in machinery for producing
fashionable clothing according to trends in market. The company maintains strong
research paradigms to introduce high quality products and services to customers in stores
and online shopping platforms (Ioan, 2016).
 The company has invested heavily in bringing new shopping networks for customers
worldwide with easy access through internet portals where they directly contact with
customers in solving their grievances and issues (Prajogo, 2016). Social factors
implementation helps company to reach new customers in market with strong
competitiveness and high quality standards.

 Technology factors has enabled company to gain knowledge on competitiveness among
new brands and companies which has impacted production revenues. There is high
competitive culture among clothing brands in retail industry where M&S needs to gain
technology edge by investing funds in company production areas. The technology
implementation will enable top management and leaders to supervise subordinates and
team members with high efficiency along with training sessions which will contribute
cost effective production (Loddo,Yurdakal and Parrino, 2020).
 Environment factors lays high stress on company performance levels in society and on
world level where it can gain as strong brand equity which follows the environmental
laws and work with charitable organizations. M&S company has positioned itself as
strong brand who has been strongly active in social services and CSR activities. The
company has partnerships with many charitable organizations where the extra clothes
produced are given to them directly (Pan, Chen and Zhan, 2019).
 The company also uses renewable energy and maintains greenery neat production areas
of factory to maintain ethical business practises.
 Economic factors analysis enables M&S to introduce innovative products in countries
where the market is still untapped. This factor helps company to restructure the business
practises competitively and gain new segments of customers largely in market share.
M&S aims to deliver high quality products to all customers in moderate price range
which allows company to reach high positional market share and strong customer
satisfaction services has also impacted the company brand value highly positively
(Zorpas, 2020).
CONCLUSION
This report concludes that it is very essential for business organization to define effective
board of director and effective organizational structure. As it would help business to gain
effective decision in improving financial position in market and increasing higher profits
effectively. Report discussed the importance of external business environmental factors which
helped to increase the potential of business organization. It helped to analyse the market
opportunities and formulate effective market share. Pestle analysis is external analytical to
determine effective strategies and compete in market effectively.

REFERENCES
Books and Journals
Azoulay, R. and Al-Maghribi, O., 2019. International Marketing in Morocco: Illustrative
Case. International Journal of Technology for Business. 1(2). pp.34-42.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
KHAN, Y. and et.al., 2017. Knowledge Management, Flat Organizational Structure and
Employee Performance: Moderating Role of Transformational Leadership: A Study of
Banking Sector of Pakistan. Discourse. 3(01).
Loddo, V., Yurdakal, S. and Parrino, F., 2020. Economical aspects, toxicity, and environmental
fate of cerium oxide. In Cerium Oxide (CeO ): Synthesis, Properties and₂
Applications(pp. 359-373). Elsevier.
LOPEZDOMINGUEZ, S. D. and LEVYA, M., 2019. PEST analysis based on fuzzy decision
maps for food industry. Revista ESPACIOS, 40(03).
Paul, J., 2020. SCOPE framework for SMEs: A new theoretical lens for success and
internationalization. European Management Journal.
Schuetz, C. G., Mair, E. and Schrefl, M., 2018, October. PESTEL Modeler: Strategy analysis
using MetaEdit+, iStar 2.0, and semantic technologies. In 2018 IEEE 22nd International
Enterprise Distributed Object Computing Workshop (EDOCW) (pp. 216-219). IEEE.
Song, J., Sun, Y. and Jin, L., 2017. PESTEL analysis of the development of the waste-to-energy
incineration industry in China. Renewable and Sustainable Energy Reviews. 80. pp.276-
289.
Zorpas, A. A., 2020. Strategy development in the framework of waste management. Science of
The Total Environment. 716. p.137088.
Pan, W., Chen, L. and Zhan, W., 2019. PESTEL analysis of construction productivity
enhancement strategies: A case study of three economies. Journal of Management in
Engineering, 35(1), p.05018013.
Ioan, P.M., 2016. THE RELEVANCE OF ECONOMIC INFORMATION IN ANALYZING
THE ECONOMIC PERFORMANCE. Annals of'Constantin Brancusi'University of
Targu-Jiu. Economy Series.

Schaltegger, S. and Wagner, M. eds., 2017. Managing the business case for sustainability: The
integration of social, environmental and economic performance. Routledge.
Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International journal of production Economics, 171,
pp.241-249.
Online
Meet the M&S Leadership Team. 2020. Available Through:
<https://corporate.marksandspencer.com/aboutus/our-leadership-team>.
GOVERNANCE FRAMEWORK. 2020. Available Through:
<https://corporate.marksandspencer.com/investors/corporate-governance/governance-
framework>.
Marks and Spencer-Statistics & Facts. 2019. [ONLINE] available
through:https://www.statista.com/topics/3707/marks-and-spencer/
A Short History of Marks & Spencer. 2020. [Online]. Accessed through <
https://marksintime.marksandspencer.com/download?id=996 >