Business Environment

This document provides an overview of the business environment, focusing on the interrelation between company structure and functions. It explores the internal and external factors affecting Marks and Spencer, including the strengths, weaknesses, opportunities, and threats faced by the company.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT.......................................................................................................................1
TASK 2............................................................................................................................................1
P3............................................................................................................................................1
TASK 3............................................................................................................................................3
P4............................................................................................................................................3
TASK 4............................................................................................................................................6
P5............................................................................................................................................6
P6............................................................................................................................................7

INTRODUCTION
In the environment of business, there are various kind of combinations within companies
along with mixture of number of factors in order to make the company operate its functions in
better and effective manner. Within marketplace, there are various kind of companies who deals
and thus have their process along with number of operations which are being conducted
(Agarwal, Grassl and Pahl, 2012). In the environment of business , majorly there are two factors
which plays essential roles and those are internal and external. Company taken for this kind of
report is Marks and Spencer which is a multinational company who deals in retail sector since
the year of 1884 across the globe. There are number of legal structures as per the size and scope
of the company which are highlighted in this report. Along with this, there are number of
interrelation among the functions of company and thus their linkage with business objectives
within the business which is being explained. Along with this, positive and negative aspects are
present within the macro environment which are being discussed.
TASK 1
Covered in PPT
TASK 2
P3
Within every kind of business, there is huge differentiation among the scope and motives.
So it becomes highly essential for the company to have effective structure as per the goals and
objectives of the company which in turn can be affected in better and effective manner. M&S is a
public limited company which encompass of about 85000 employees. There are various kind of
segments in which this multinational company works like food, clothes and many more. There is
high need of having huge amount of funds so that operations can be conducted in smooth and
effective manner (Aterido, Hallward-Driemeier and Pagés, 2011).
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Illustration 1: Structure of company
(Source: Framework of company, 2018)
There is the flat structure of company which has been observed within Marks and
Spencer. Within the structure of company, there is establishment of effective communication
funnel in order to share the crucial data among each other along with all three level of
management, that is, Top, Middle and Lower level of management. As this participative
organisational structure, M&S can provide to its employees in order to take participation in
decision making process, so that plans and strategies can be formulated for company. And
employee can execute those plans and strategies in very effective and efficient manner. (Auzair,
2011). There are huge number of employees who are working within the structure of company
and thus they are being needed to make the decisions with time.
Company like Marks and Spencer have various kind of functions which can be performed
like HRM, Research and development, accounting, finance, sales, purchase and many more. As
company can be a market leader if, they perform all the functions in a very effective way. To
achieve the goal of company in efficient way, work should be done according to structure of the
company.
Hence, structure of company is highly interrelated with function followed by the company which
are as follows:
 Marketing Department– As marketing is key function for every organisation and it
needs to be performed within the Marks and Spencer also. It is highly essential for the
products which needs to be marketed so that they can reach to the customers
(Avramenko, 2012). By this kind of sector, competitive advantage can be attained by the
company within the market share. This kind of factor is highly essential for the M&S to
make an effective team for marketing as this is the only way by which high market share
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can be obtained. This function is interrelated with other function of the company and
support them in accomplishing their set business objectives and aims.
 Human Resource Department– This kind of factor plays effective role in human
resource sector within the company as they have the duty of recruiting the employees for
the company. This kind of sector is highly related to every kind of department within the
company as they are the performing various roles for bringing cooperation along with
coordination among all kind of team members. In this function marketing department
assist HR function with its promotional too when the HR manager provide notifications
regarding recruitment and selection process.
 Production and Operations– This can be stated as the essential element or the function
of company which is being performed at the initial stages. This can be stated as one of
the reason due to which every kind of company is highly linked with the structure of
company. There are various kind of goods and services which will be sold by Marks and
Spencer within the outlets. Company should manufacture those goods and deliver those
services, which are highly demanded by customers.
 Accounting and Finance– There are n number of functions, which are linked with the
monetary transactions, and they are recurring also. The various kind of funds which are
being allocated to number of activities (Adeoye and Elegunde, 2012). This mainly
includes the number of assets which are being conducted along with conducting the
surveys on daily basis and many more.
 Research and development – By the help of this kind of sector, company like Marks
and Spencer manufacture the goods and services after analysing the situation of market
along with actual needs and wants of the customers. Apart from this, this department
mainly looks out for other external factors which can make impact on the production
along with profitability ratios. With this marketing function affiliated by making help by
providing information regarding market needs and requirements with its promotional
tools, feedback from company websites and others.
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TASK 3
P4
There are internal and external factors which have impact on company's working style.
There are many external and internal factor in organization which have negative and positive
impact in working which are being done by company. These factors have effects on company's
rules and policies also, which are formulated by higher authorities for employees. Every
organization have their own rules and regulations which they follow, like Mark and Spencer is
also following their rules and regulations, which help the company to achieve its goals. As there
are some of the external factors, which could have adverse effect on growth of the company, So
to know those factors, PESTAL analysis of Mark and Spencer is structured as follow:
 Political Factors-Every company is influenced by some political factors. These factors
include monetary and fiscal policies, social laws and regulations, government relationship
with industries. These factors is influenced by reduction in sourcing costs due to free
trade policy. In this all policies are made by government to provide benefits to company
(Bar-Isaac and Shapiro, 2013). If government formulate new policies and law for
manufacturing of goods and services, as M&S also gets affected, because it also
providing services to its customers. Marks and Spencer is also affected by these external
factors, because company is also in the field of manufacturing of goods and services for
customers. So if any kind of changes made in rules and regulations, then it will have
weather positive or negative impact on it.
Positive effects- As these policies and rules regulations can have the positive effect also, like
free trade policy and tax systems which can help company to reduce its sourcing costs.
Negative effects-If government introduced new taxes then this company is also affected by
changing in tax rates. It increases the cost of their products as well as sale because normal people
are not able to purchase their products.
So, if this company make better relationship with government then they take more
benefits of these factors in effective manner.
 Economic Factors- There are factors like labour cost, inflation rate, Govt. policies and
tax rates, which have influence on company's overall performance. As all these factors
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occurs outside business, but still they heavily influence the value of investments in future.
These factors are different in every country as this company also focus on so many
countries. M&S need to focus more in fashion area for younger people because they
spend more income on clothing. So, management of this company is required to follow
all changes happening in economy.
Positive effect-If there is inflation in the economy then there is rise in prices. At this time those
people purchase the products of company which is beneficial for them.
Negative effect-If there is recession in economy then there is high unemployment, falling
average incomes, increased inequality due to which there is conflict between small retailer over
increase in product due to change in currency.
 Social factors- The social aspect focuses on forces within society, Family, friends,
colleagues, neighbours and the media are social factors. These factors can affect our
attitudes, opinions and interests. So, it can impact sales of product and revenues earned.
As this company is also focusing on social factors, they can fulfil the need of consumers
according to trends (Burns and Winter, 2011). Consumer buying habit are influenced by
cultural, social, personal things.
Positive effects-The positive factors which is related with these factors it that Mark and Spencer
improve the communication with more people in economy so that they are able to attract more
customers.
Negative Effects-This happen in case of chain of products if this company is not providing
better quality products to its customer then there is negative trends in their results.
 Technological Factor- As in this dynamic world, technologies are changing day by day
Since M&S has strong media and online presence in market because many consumers are
taking use of online and mobile commerce. This company is make better presence in the
digital system to take full benefit of electronic system.
Positive effects-If M&S will take use of technology in its system then they will able to complete
their all tasks on time and which help in achieve their goals and increase company productivity.
Negative effects -In implementation of new technology in company more funds is required and
more highly skilled labour is needed to handle the system.
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 Legal Factors -Laws are always changing by the government which every company has
to follow. This company is always keep up to date with new laws or legislations. They
always focus on issues regarding health and safety because this company want that their
legal system is always updated.
Positive effects -If laws and rules are followed by this company then it is possible that their
work will be conducted in legal system.
Negative effects -If the company is always followed by laws imposed by government then their
own policies are neglected by them and they are not able to concentrate on their on work.
 Environmental factor- Environmental factors are relating to environmental aspects,
which can affect the demand for a company's products. Environmental factors include,
environmental rules, ecological regulations and impact of adverse weather etc. are the
issues which comes under this. As company now days using eco-friendly techniques to
manufacture the goods and services, due to government rules and regulations and it also
helps in achieving target efficiently.
Positive effects-These factors help to reduce red tapism to avoid delay and extra paper work due
to which results of company are carried out more effectively.
Negative effects- M&S have to decrease their paper work due to which they are using taking
help of internet through which they are able to complete their work on time.
TASK 4
P5
Marks and Spencer is largest multinational retailer company, which deals in home appliances,
clothing and FMCG. As company started to sell the branded products also like Kellogg's corn
flakes. Its stores are available in many countries like Canada, France, Kabul etc. Marks and
Spencer listed on London stock exchange (Boons and Lüdeke-Freund, 2013). This company has
consistently been rated as Britain “most favoured company”. It has 480 locations in 60 countries
where its departmental stores sell apparel, food and household stuff under private label.
SWOT ANAYLSIS helps in determine company internal as well as external factors. Such
essential is important to determine company's strategies position and options it faces in terms of
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opportunities and threat as well as strength and weakness which affecting its future decision
(SWOT Analysis of Marks & Spencer.2017).
Strength-
This company providing high quality product to its customers due to which its productivity is
increase. It is important strength which makes M&S prosperous. People always find high quality
products like food item, vegetables, and superior goods. And other products like women cloths,
baby products etc. This provide better customer service to its regular customers so that they
make good relationship with them. If any women want any clothes from the stores than the shop
assistants will help them to provide better quality products. Due to its better shopping
environment customers feel more convenient and comfortable. One of best strength is to provide
excellent manager training system. Every manager is familiar with duty of every post.
Weakness-
Its weak point is related to lack of clothing division. Sometimes, especially ladies outwear, is
antique design and cut. Due to which some younger consumers prefer to purchasing brand-
labels. Stock control is other weakness due to non-performance of delivery of product at the time
of weddings. As company is lacking on the part of online shopping. And unable to deliver its
services online effectively. As it seems company has weak information technology system which
causes the mismatching in stocks.
Opportunities-
Online shopping continues to increase in different market of countries which help in increase
revenues of company. Due to fast internet technology it provides a better opportunity to increase
demand for online products (Chow and et. al., 2011). Because now a day’s people prefer more
online shopping to save their time. This company provide a healthy eating products to its
customers which is free from fat which its competitors are not aware from of it because people
are more conscious about their health.
Threats-
M&S have threats from its competitors. There is strong competition in market for example there
are many food supermarkets in countries from which customers shift to those which provide
quality good at low prices (Cronan and et. al., 2011). As changing in social environment could
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have major threat for company. Because if people lifestyle, taste and trends changes then
company have to produce the goods and services according to need of consumers.
P6
M&S, have some special qualities and some shortcomings too. As outside factors sare
affecting on the development of this company. M&S has huge market in UK, and they are
earning good revenue from UK market. As exit of Britain from European union could limit the
expansion of this company. This outer factor will make more difficulties for M&S in
forthcoming time since they need to invest more cash and energy, post Brexit, for satisfying
different sort of obligations. Brand value of M&S is extremely solid (Commander and Svejnar,
2011). M&S have solid brand image in the clothing section. As India is a developing nation so
everyone wants to enter in the growing market, so same with M&S as they have entered in
developing country like India. India has most noteworthy and growing economy and it acquires
energy of individuals in a positive way to expand the organisation. Frail coordination is
considered as key shortcoming for M&S. As innovation is key to success in today's environment
and this company can use this innovation whether in the process or in product to get success in
new markets. As company has doing its business globally, so they can assess the each market
and can create products according to customers need. And through this company can get good
benefit out of it.
2.CONCLUSION
As in conclusion it can be said, that business environment is important this help in
proper interaction with strengthening business firm and which provide optimum utilisation of
resources. In this report it is seeing that environment factors are complex, multifaceted and
dynamic in nature which help to increase company growth and survival. With the help of
PESTLE and SWOT analysis in which company will be able to determine strength, weakness,
opportunities and threats which give proper direction for growth and help the firm to analysis
competitors strategies and formulate their own plan.
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REFERENCES
Books and Journals
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Online
SWOT Analysis of Marks & Spencer .2017.[Online].Available
through:<https://businessteacher.org.uk/swot/marks-and-spencer.php >.
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