Contemporary Business Environment Analysis of M&S Organization

This report provides an analysis of the business environment of M&S organization, including the impact of Internet of Things, evolving collaboration, networking, ecommerce, eBusiness and social technologies. It also discusses the challenges posed to leadership by contemporary global business models and the role and impact of digitalisation on business structure, operations and strategies. The report includes a Porter Five Forces analysis and an analysis of macroeconomic forces affecting M&S. The report is relevant for students studying business and management courses.

Contemporary Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
Effect of Internet of Things, evolving collaboration, networking, ecommerce, eBusiness and
Social technologies......................................................................................................................5
TASK 1............................................................................................................................................6
Business Environment Analysis of M&S organization...............................................................6
TASK 2............................................................................................................................................8
(a) Challenges posed to leadership by contemporary global business models............................8
(b) Understanding of interrelation between organizations, management and business
environment...............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
a.
The chosen organization for this assignment report is M&S which is popularly known as
the British multinational dealing in foot wear, luxury food, toiletries, home wear and clothing. It
is headquartered in London United Kingdom. The company have 959 stores in the single region
that is, in United Kingdom & with the help of advertising on television, the company attempts to
asserts the characteristics of its luxury products which includes foods & beverages. The legal
structure of the company is that it is a public limited company due to being financed through
public funding. Accordingly, it is traded publicly by being listed on London Stock exchange
along with being a constituent of FTSE 250 index (Thrassou and et.al., 2020).
With respect to the operations of the company, M&S is finding several ways through
which it can work third party brands which includes from wholesale – exclusive collaborations,
strategic acquisitions and investment. Also, exporting is done to the company’s “chain store
friends” across the globe that is, Australia, Canada, New Zealand, South Africa, Switzerland, etc.
The company have the tendency to operate through both online & offline modes along with
investing excessively further on localized fulfilment, increasing the presence through
marketplace like Zalando and the website launching across 46 markets. M&S is a multinational
retailer and accordingly sales products through its chain stores. The main purpose for which the
company is existing is that it is helping in playing a transformative role by enabling economies to
thrive, improving local environments along with building communities that are connected
socially. Accordingly, they aim to have helped approximately 1000 communities by 2025 in
terms of transforming themselves.
Main objectives of the company
 M&S wants to regain its leadership in specialty food and clothing through translating
their authority & scale into superior value, quality and appeal.
 Another objective of the company with respect to its sales is that the management
believes that there is a great scope for the improvements in sales of the company as the
company takes into account the return per foot while moving forward in terms of their
operational objectives.

Vision & mission of the company
The vision of M&S includes – “To become the standard of measurement for others.” Also, the
mission of M&S is to make products & services of quality aspired by communities along with
making it sure that it would be accessible to all.
The environmental pressures concerning M&S includes reducing the impact of its operation on
the environment. Also, the company is operating in several countries, therefore faced political
pressures in terms of keeping up with the pricing regulations, required to interact with
government to protect its legitimate interests. The stability and taxation policy of the company is
additionally posing environmental pressure over the company’s operations (Ștefănescu, 2018).
Financial crisis and the recent crisis resulting from pandemic affecting the economies of the
world has also affected M&S severely where it has forcefully announced job cut of 2% of its
staff leading to losing talented employees in the hands of its competitors. Also, the financial
crisis in many countries in the recent times has led to the reduction in the demand of company’s
luxury products. To cater to the requirements of reducing environmental impact, the company
has adopted “Green Policy” for ensuring positive impact over the wellbeing of communities and
planet as a whole.
M&S is operating in retail industry since 1884. The industry requires huge experience
and knowledge to be successful in the market along with the presence of major as well as
established brands leading to barriers of entering the global retail industry for new comers. The
market in which the company is operating is highly competitive where the threat of substitutes is
much high because of the existence of competitive brands such as Waitrose leading to high
competitive rivalry as well.
There are several challenges that M&S is facing in the era concerning post Covid – 19
which involves the inability to predict consumer demand because the pandemic has led to
psychological shifts in shopping and the company is not able to predict that whether this would
be continued in future or not. Another challenge concerning the post pandemic period involves a
digital shift where home based buying is excessively adopted by customers across the globe
resulting in greater sales generation through online platforms but with the opening of physical
outlets, there may be declination in the company’s sales performance.
The key stakeholders of M&S include government, suppliers, communities, customers
and employees (Domanović and Janjić, 2018).

Customers need quality products and greater value of money spent and have great influence over
the sales of the company and thus profitability of M&S as well. Policies made by government
influences the operations of M&S severely like Brexit has resulted in ceasing of freedom to trade
with EU nations. Employee’s motivational level and needs affects their productivity and thus the
overall performance of the organization gets affected.
With the help of the application of stakeholder mapping, M&S is able to carry out its
organizational responsibilities effectively because with mapping the stakeholders are classified
into four categories such as high power and interested people needs to be managed closely while
people with high power and less interest needs to kept satisfied always. For M&S, employees are
having greater influence over the retail sales, therefore, they must be kept satisfied always.
b.
Effect of Internet of Things, evolving collaboration, networking, ecommerce, eBusiness and
Social technologies
Internet of things: It has affected the operations in terms of speeding up of industries along with
the emergence of business models which have resulted in changes in the way people work like
work from home and integration of branches across the globe to facilitate better decision making.
All this led to rise in revenue generated by M&S.
Evolving collaboration: It leads to higher return on investment in a complex environment
through establishing interconnections between departmental teams (Nikitina and Lapiņa, 2019).
Accordingly, decisions are made considering the comprehensive view of inner and outer
organizational environment which is core for improving communication within the business
along with facilitating implementation of change.
Networking: With the help of networking, M&S is able to establish new client base along with
exploring potential customer group. It does networking through social media platforms.
Networking allows M&S in getting opinions and ideas from industry experts which in turn
facilitates better decision making. Through social media platforms, introduction of business and
promotion of new product become easier.
E commerce: Organizational performance gets improved as a result of ecommerce because of
higher customer satisfaction resulting from better job performance. It enhances the products &
services promotion through direct & attractive interaction with customers. Also, ecommerce

establishes better decision support system resulting in collection & analysis of creating
comprehensive view with respect to information concerning customers & competitors.
E-business: The global impact of e-business is that it helps business to expand its operation to all
over the world from its headquarter only. The e-business helps M&S to reach to large audience
and provide them 24/7 support service (Nikitina and Lapiņa, 2019).
Social technologies: The social technologies such as blogs, web conferencing helps the
management of M&S company to facilitates social interaction and communication. This also
help M&S to conduct conference with its business partners from anywhere and anytime during
the Covid-19 situation (Nikodijević, 2021). The social technology helps in operation of business
even during lockdown.
Role and impact of digitalisation on business structure, operations and strategies
Digitalization helps the company to improve its business efficiency and make automation
possible within the organization. The role of digitalization to help the employees to complete the
work quickly and easily with automation. It shapes the business structure from offline to online
mode. Not only that, with the help of digital system M&S company able to process the customer
order quickly at stores (Nikodijević, 2021). This also helps M&S to provide online delivery and
payment facility to its customer. In simple term, the digitalization helps M&S to attract more and
more customers through online marketing strategies on different social media platforms.
TASK 1
Business Environment Analysis of M&S organization
The analysis of business environment helps in identifying the both micro and macro-
economic factors or forces that affects the overall performance of business. Hence, to analyse
M&S internal business environment porter five forces model is used.
Porter Five Forces analysis: This analysis indicates the five forces which influence M&S
organization are as follows:
Threat of New entrant (strong): The threat of new entrant force is strong in retail industry
because of the freedom to enter the market. But to enter retail market, strong knowledge and

experience is required along with high investment (Nikitina and Lapiņa, 2019). The impact of
which M&S company is unable to protect its market share.
Threat of Substitute (strong): The number of business providing the same food products
as M&S is high in the market such as Waitrose, Sainsbury, Tesco etc. This means the threat of
substitute force is high in retail industry which influence M&S organization in negative way.
Bargaining Power of customer (strong): The bargaining power of customer force in retail
industry is high because of different alternative available to customer. The customer can access
to alternative which is available to them in both quality and affordable. This force can influence
M&S in term of loss of customer base (Domanović and Janjić, 2018).
Bargaining Power of supplier (low): The bargaining power of supplier force is low in
retail industry because of high number of supplier. The number of supplier from where M&S
company buy goods is high and easy to shift. Thus, this force is strength for company and
influence organization in positive way.
Competitive rivalry (high): The level of competition and number of competitors in retail
industry is high (Domanović and Janjić, 2018). This force influences the company in negative
way. Due to high competition, the company require to customize its product, launch loyalty
program to retain its customer which require high investment.
On the other hand, the various macroeconomics forces currently affecting M&S organization are
as follows:
Economic problem: Due to Covid-19 and Brexit, the economy of UK has been highly
affected such as high interest rates, inflation rate, change in consumer purchasing patter etc. This
economic problem has leads to poor sales and growth of M&S organization during pandemic
situation.
Supply and Demand: The supply and demand is also one of the significant
macroeconomic forces that affect M&S operation. For example, due to lack of supply of goods
during pandemic situation, the sales of company reduce (Thrassou and et.al., 2020).
Market Structures: The market structure such as oligopoly, perfect competition etc. also
has strong impact over the company. For example, the market structure of M&S is perfect
competition where the new comer has free entry and exit advantage. This affect M&S in term of
losing market share.

Circular flow of income: This macroeconomic force indicates flow of production of
goods, services, income and expenditure in an economy. The availability of land, labour, capital
within UK economy affect the daily operation of M&S organization.
Measure of macroeconomic activity: The measure of macroeconomic activity is gross
domestic product (GDP). As per 2022 report, the real GDP of UK is $3.752 trillion. This force
affects M&S business as well.
Fiscal and monetary policies: The fiscal and monetary policies influence the quality of
money and credit in the economy (Siriwardana and Dissanayake, 2018). The interest on reserves
is one of the example of monetary policy which influence the overall cash reserve management
of the company. This policy helps the company to make decision on whether to invest the
savings in market shares or bonds or reserve it in bank to earn interest on it.
TASK 2
(a) Challenges posed to leadership by contemporary global business models
Mark and Spenser is one of the leading multinational retailer of UK that have its operations
in all over the world. In order to successfully manage its international or global business, the
company have adopted different leadership theory. The modern leadership theory adopted by the
contemporary global business models pose challenge for the company. The various challenge
faced by M&S international business in relation to leadership are as follows:
 Delay in target completion: This is one of the top challenge that contemporary business
models faced during the present time. For example, M&S is a global business that uses
transformational leadership modern theory within the organization to engage their
employee in decision making process (Rosińska-Bukowska, 2019). This is implied by
M&S in order to improve the leadership and decision making habit of employees. But as
new and fresher’s are not that much capable that they make decision of their work on
their own basis which further leads to either delay in work completion, high error and
mistakes etc. Thus, it can be said that due to lack of employee capability to learn new and
extra, the company face leadership challenge for delay in target completion. Managing internal stakeholders and politics: This is also a challenge to leadership
which is faced by contemporary global business model in the current time. It is because

of the higher attention of manager towards internal stakeholder and politics management.
For example, M&S organization have its operation in various countries for which
management need to follow different countries politics rules and regulation (Ratten,
2020). The impact of which management do not get time to provide appropriate
motivation and encouragement to its employees using modern leadership theories
(Hamilton and Webster, 2018). This is one of the biggest challenge which affecting the
international business performance as employees started to quit their job and join local
SMEs. Inspiring other: The most common challenges posed to leadership is motivating and
inspiring employees of different culture, country working in multinational organizations.
For example, M&S organization have faced this challenge in its Singapore operation as
inspiring the people of that country is quite difficult. In this way, it can be said that
providing motivation to different culture people at workplace is biggest challenge for the
manager and leaders of M&S global business.
Importance of control in effective organizational performance:
Controlling within the organization ensure effective and efficient utilization of
organizational resources with the aim to achieve the planned goals and targets. For example, top
management and leadership team of M&S organization define its business objectives to its
employees so that they are focused on it. The current leadership style followed by M&S
organization is consultative where leaders before making any strategy first consult with its
leaders. The control measure taken by M&S involve training and development to its employees
to provide direction, motivation (Bahoo, Alon and Paltrinieri, 2020).
Importance of strategic management and scanning
Environmental scanning in strategic management helps the international business such as
M&S to make correct and appropriate use of resources such as capital, natural and human. The
strategic management is important for the company to identify and analyse the factors that will
affect the organization in the future. For example, strategy of M&S brand is to provide relevant
products and follow sustainable practices. For this, the management of M&S company has
invested in its guest brand “Nobody Child”. The company also donate funds to poor people to

provide education to children. In this way, the strategic management and environment scanning
helps the company to became top five retailer of UK.
Recommendation for improvement:
On the basis of the analysis of challenges, the following strategic action is recommended to
M&S for their leadership improvement:
 Communication vision: It is recommended to M&S that they should communicate its
vision with each employees of their international business and guide them with training
to how to achieve it together. It is because communication is the only way to solve the
issue of employees.
 Encourage recognition: The company’s leaders should also recommend to provide
recognition to its employees on the basis of their performance not jack or reference. It is
because reward keep the employees of international business encouraged.
 Conduct get-together for diversity inclusion: In order to include diversified culture at
workplace, it is recommended to leaders of M&S that they should conduct get-together of
employees so that they can understand other cultures, beliefs, attitude and preferences. It
helps the employee to build relation among themselves and leaders to solve issue of
inspiring others (Ratten, 2020).
(b) Understanding of interrelation between organizations, management and business environment
The interrelationship between organization, management and business environment is such
that understanding the business environment that surrounds and affect an organization is
important for the management of the company. It is because the responsibility of management of
organization is to achieve company vision and mission. For this, the management is requiring to
identify and analyse the internal and external business environment factors and its impact over
the performance and operation of organization (Sharma and et.al., 2020). In this way, the
organization, management and business environment are interlinked with each other. The
different real world example of this interrelation are as follows:
Example 1: The adoption of self-awareness, diversity and openness in the culture is the
socio-culture external business environment factor which affect the overall productivity of M&S
employees. Due to expansion of Mark and Spenser business all over the world, the diversity in

culture is the environment factor which is affecting business more. Hence, in order to grasp this
factor as an opportunity, the management and leadership team of M&S including CEO has
conducted formal parties, get together, organize different culture festival at its each and every
premise or stores all over the world (Nieri and Giuliani, 2018). The aim of management of M&S
behind this action is to enhance the feeling of inclusion among the employees. It helps the
management of M&S company to build a diversified and strong multicultural workforce 78000
in the year 2022.
Example 2: Another example to understand the interrelation between business environment,
management and organizations is business ethics. It means the ethics is the factor of business
environment that every national or international organization have to consider for the purpose of
organization goal achievement. Here, the business ethics is a business environmental factor
which force company to follow ethics while operating business all over the world. M&S
organization management have grasp this factor as an opportunity. The management of company
have implement CSR (corporate social responsibility) practices and guide employee to follow the
same in order to protect environment, society, planet. M&S scored ethical consumer best rating
in the respect of environmental policy which indicate that how the management have adopted
business ethics for organization performance improvement (Ratten, 2020).
Example 3: Covid-19 as a global issue have caused various changes to M&S company in the
current situation where lack of employee motivation is one of them. The employees are unable to
concentrate on their work during work from home period. So, after analysing this factor, the
management of M&S have provided virtual training to its employees regarding work
management at home (Hamilton and Webster, 2018). This has helped the employee to put their
attention on work and manage both work and personal life at home.

REFERENCES
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