Business Environment Analysis and Strategic Decision Making

The assignment discusses the importance of being prepared to face challenges in the complex business environment. It highlights the need for effective strategies and business decisions to deal with influencing factors. PESTLE and SWOT analysis are presented as useful tools for analyzing the environment and organizational capabilities, respectively. The document concludes by emphasizing the importance of considering all factors and aspects to sustain in a competitive market for a longer period.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT.......................................................................................................................1
TASK 2............................................................................................................................................1
P3: Relationship between different organisational functions and their link to organisational
objectives and structure..........................................................................................................1
TASK 3............................................................................................................................................3
P4: PESTLE model to determine positive and negative impact of macro-environment........3
TASK 4............................................................................................................................................5
P5: Internal and external analysis of M&S company with other similar organisation...........5
P6: Interrelation of strengths and weaknesses with external macro factors...........................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business Environment refers to the sum total of all factors which includes internal and
external which may affects and influences the business decision making process and pre-
determined plans in order to cope up with their impacts in an effective and efficient manner so
that an organisation can achieve its desired goals and objectives. Internal factors includes
employee's behaviour, organisational culture, Communication channel etc. whereas external
factors includes political, economical, social, technological etc. which directs management to
make changes in their existing plans and policies. Marks & Spencer, UK-based company which
deals in manufacturing clothing products along with luxurious food and home products is chosen
for the purpose of preparing this report. The project also includes different types, size, purpose
and scope of organisation along with its structure and functions. PESTLE analysis and SWOT
analysis also summarised under this report for the purpose of analysing the factors of business
environment (Aula, 2010). The project also explains the interrelation of strengths and
weaknesses with external macro factors so as to identify whether such external factors makes
negative or positive impact on the business operations. All other aspects as well covered under
this report with the context of Marks & Spencer (M&S).
TASK 1
Covered in PPT
TASK 2
P3: Relationship between different organisational functions and their link to organisational
objectives and structure
Marks & Spencer (M&S) is popular UK retailer which offers different products across
worldwide due to earning maximum profits in order to attain brand image in market at global
level. In order to achieve growth and success within limited period of time, there are various
departments which gives enough support in assisting organisation to offer quality products and
services. Such department includes production, marketing, operation, human resource and
finance department which has performed to achieve common goals i.e. organisational objectives.
There are different roles and responsibilities which performed by different departments with the
help of direction given by the management of respective departments. In M&S, all such
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departments performed collectively to achieve common organisational goals and objectives.
There are suitable organisational structure which must required to be followed by company
through which all level of management can easily communicate with each other (Chavis,
Klapper and Love, 2011). The functions performed by different departments in M&S are briefly
described as below:
Human resource management department: Such department play an important role in
growth and success of an organisation through performing various roles and responsibilities.
Such roles includes recruitment, selection, performance appraisal, rewards, training and
development programs etc. due to which the business operations of M&S cannot be interrupted
and disturbed. Employees are an asset of company whose efforts and contribution decides the
sustainability and growth of business organisation therefore recruiting skilled and knowledgeable
candidates and enhance their performance level with the purpose of getting adequate support
from them in achieving desired goals and objectives. Conducting training and development
programs foe the employees on regular basis will encourages employees in performing roles and
responsibilities in an effective and efficient manner thus makes positive impact on the overall
performance of M&S.
Finance department: Such department is considered as the backbone of the company
which gives adequate support in operating business activities of other department from
background. Funds are the main aspect on the basis of which all business activities are properly
executed due to which M&S can easily achieve its desired goals and objectives. The finance
managers are required to allocate funds to each departments on the basis of their requirements so
that each department contribute maximum support to achieve organisational objectives
(Commander and Svejnar, 2011).
Marketing department: Such department is responsible to reach information about company's
products and services to the targeted customers through adopting an effective tools and
techniques such as online marketing, TV advertisement, Social media etc. Due to this, research
shall be conducted first so as to identify the needs and requirements of market according to
which an effective strategies and plans has to be formulated. M&S as deals in multiple number
of products essentially required to adopt marketing tools and techniques in order to inform about
quality, price and features of products and services so as to attract their interest and buying
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behaviour of customers. Through this, the company can easily achieve huge profitability and
revenue which is main objective of M&S.
Production department: Marks and Spencer deals in manufacturing quality products and services
across worldwide which includes luxurious food, home and clothing products. Therefore, such
department are held responsible to focus on reducing wastage during production process so as to
achieve optimum quality product at minimum cost. For this, it is important to have skilled and
knowledgable employees who knows the important of resources due to which they contributes
maximum efforts in proper utilisation of resources so as to achieve better possible outcomes.
Organisation structure:
Function based: Such structure is formed according to the different functions performed
by different departments of M&S. Such departments includes finance, human resource,
marketing etc. are main division basis.
Geography based: Such structure is formed according to the locations at which M&S
gets maximum crowd for their products and services (Griffin and Pustay, 2012).
Consumer based: Such structure is formed according to the behaviour, culture and
preferences of consumers in order to fulfil their requirements and maximise their satisfaction
level through providing desired products and services.
Product based: Such structure is formed according to the products which are more in
demand due to which the company should give more efforts in producing such products so as to
capture large market share.
TASK 3
P4: PESTLE model to determine positive and negative impact of macro-environment
Marks and Spencer (M&S) operated its business operations in multiple number of
countries due to which the chances of getting affected from several factors of macro-
environment which includes political, economical, social, technological etc. Therefore, the
managers of M&S should required to determine all such factors and accordingly make an
effective plans and policies in order to accept favourable changes and eliminate negative
impacts. Thus, it is important for management to conduct PESTLE analysis in order analyse and
examine each positive and negative impact of each factors so as to resolve them as quickly as
possible. These are further discussed as under:
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Political factors: It is related with such factors which determines the impact of political
conditions exist in different countries. M&S deals in multiple number of countries due to which
they are hugely affected from political conditions if changes in respective country where it has
been operated its business (Halbert and Ingulli, 2011). Positive impact: Decrease in taxation rate due to changing taxation policy by new
government of UK help M&S in providing their quality products in reducing amount thus
can increase its sales figure and generate huge revenues.
 Negative impact: It tax law is unfavourable to the company may increases the price of
products which results in decreasing loyal customers and sales figure of company.
Economical factors: It includes the factors such as inflations, economic conditions, pay
level etc. which affects the business operations either in negative and positive manner. Positive impact: If the economy of particular country where M&S operated its business
operations for example UK has increased then the purchasing power of their people also
goes high due to which they are purchasing more products and services which results in
increasing sales of company (Klapper, Lewin and Delgado, 2011).
 Negative impact: During inflation, the disposable income of an individual is low due to
which they are willing less to spend income on company's products and services thus
makes negative impact on sales figure of M&S.
Social factors: It includes factors which is related with culture, behaviour and level of education
etc. which makes huge impact on the decisions making process and pre-determined plans. Positive impact: If the country has more educated people then they mainly prefer to use
online technology which help an organisation to increase the sales figure by operating
their transaction online also. Further, if the behaviour of customer are not changes
frequently then it comes easy for company to fulfil their preferences and needs.
 Negative impact: Due to charging high prices as compared to their rivals, the behaviour
of customers may comes in negative due to which the company may lose its loyal
customers.
Technological factors: Technologies are an important factors which always brings
positive outcome to company but involves high cost due to which the firm may fail to adopt
advanced technologies in their business operations (Ullah and Lai, 2011).
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 Positive impact: Using online technology in order to provide quality products and
services to their loyal customers at their door step will help in grabbing an attentions of
large number of customers across worldwide.
 Negative impact: Due to financial position, the company may fail to adopt advanced and
updated technology which increases their production cost as well.
Legal factors: It includes legal laws and legislations formulated by government which
affects the existence and sustainability of an organisation. Positive impact: Complying with legal laws and regulations will strong the sustainability
of company due to which it has been attained good brand image in market.
 Negative impact: Failing to understand laws and legislation of government of respective
country will bring the existence into danger.
Environmental factors: It includes the factors which may related with pollution,
hazardous etc. Positive impact: If all the environmental regulations are followed by M&S help them in
achieving good image and reputation in market.
 Negative impact: If company failed to understand knowledge about the environment laws
and increase different kind of pollution then the company may faces criticism (Xue, Shen
and Ren, 2010).
TASK 4
P5: Internal and external analysis of M&S company with other similar organisation
An organisation can survive in competitive market when the management successfully
identifying their actual strengths and weaknesses so that further actions and strategies shall be
taken in order to desired goals and objectives. SWOT analysis shall be conducted to analyse
internally whereas porter five forces are used to analyse externally.
SWOT Analysis:
Strengths Weaknesses
 Strong offering with latest industry.
 Engaged in multiple number of
corporate social responsibilities due to
which the company have attained
 Weak financial position of company.
 Weak presence of firm in China.
 Rely on UK market which makes It
vulnerable to market situations in local
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strong image and brand image in
market.
 Strongly focuses on enhancing the
customer experience.
country.
 The chances of returning products by
customers brings lack of confidence.
Opportunities Threats
 Expand business to Indian market.
 Engaged in producing clothing
products which are more in trend.
 Simplification of their operating model.
 Changing needs and preferences of
customers.
 Brexit situations may also brings lots of
threat to company.
 High competition in clothing and food
sector.
Porter's five forces model:
Bargaining power of suppliers: The bargaining power of suppliers are low due to having
large number of suppliers in market therefore if the suppliers are not lowering their prices then
the company may shift to other suppliers (Zeng, Li and Duan, 20126).
Bargaining power of buyers: The bargaining power of buyers are also strong due to
which their interest and preferences may influences the decisions and pre-determined plans in
order to fulfil the needs and requirements of customers. There are large number of clothing
companies in market due to the customers have lots of options therefore in order to attract them,
M&S should required to focus on quality and price.
Threat of new entrants: Due to high competition in supermarket of UK, it becomes
difficult for new companies to survive in competitive market thus the threats of new entrant for
existing companies are very low. As entering into food and clothing sector requires huge
investment due to which less companies show their interest in entering into such market.
Threat of substitutes: There are number of substitutes products which are available in
market at reasonable prices due to which it becomes difficult for M&S to sell their luxurious
clothing and food products at higher prices. Due to this, it becomes difficult for company to stop
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loyal customers to shift to other brand. Through this, the company must required to focus on
quality due to which they can easily attract customers (Business Environment, 2018).
Rivalry among competitors: Intensity of rivalry in supermarket retail sector is high due
to having large number of competitors in market. Along with the large companies, there are
small retailers as well which are located nearby to the customers due to which M&S may find
difficulties in increasing their sales figure and revenue. Therefore, M&S should required to
formulate an effective plans and policies in order to attain strong position in market.
P6: Interrelation of strengths and weaknesses with external macro factors
Macro-factors includes political, economical, social and technological which either
makes positive or negative impact on the business operations. Therefore, it is essential for the
management of M&S to analyse such factors along with their benefits and drawbacks. These are
further described as under:
Political: It includes all laws and regulations formulated by government related with
taxation policy which may change due to fluctuation in political conditions. Thus, it makes huge
impact o the business operations of M&S. Strength: Changing in taxation policy in the favour of food and clothing products will
help M&S in maximising their revenue due to increase in sales figure.
 Weakness: If taxation rate on clothing product increase then the buyer may show less
willingness to buy their products and services which results in decreasing sales figure.
Economical: Interest rates, GDP etc. are some factors that influences the business
operations of an organisation. Strength: Good economy of country increases the income of people due to which they
spend more on purchasing products and services of M&S. Thus, it increases revenue of
company.
 Weakness: In case of inflation, the buying behaviour of customers may affected in
adverse manner due to which it becomes difficult for M&S to attract them towards their
products and services (What SWOT Analysis is in simple words, 2011).
Social: It is related with factors includes behaviour, culture and attitude of people live in
society which need to be considered by M&S in order to increase their revenue and profits. Strength: Producing quality products and services enhances the standard of living of
people due to which it increase the brand image of company.
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 Weakness: As M&S deals in providing old fashioned clothing products which attracts
less customers due to which their revenue may affected.
Technological: Adoption of technology play an important role in achieving growth and
success of an organisation thus influences the business operations. Strength: Implementation of advanced and updated technology decreases the cost of
production due to which M&S can able to provide quality products at an affordable
prices.
 Weakness: Giving less importance to advanced technology due to high implementation
cost may bring negative outcome to company.
CONCLUSION
It has been concluded from the above project report that an organisation should always
ready to face challenges and problems that may occurred due to complexity of business
environment. For this, an effective strategies and business decisions shall required to be
formulated in order to deal with influencing factors in more effective and efficient manner.
PESTLE and SWOT analysis are an effective tool to analyse environment as well as organisation
capability respectively. All these factors and influencing aspect should required to be considered
by all types of organisation in order to sustain in competitive market for longer period of time.
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REFERENCES
Books and Journals
Aula, P., 2010. Social media, reputation risk and ambient publicity management. Strategy &
Leadership. 38(6). pp.43-49.
Cassell, M. A. and Blake, R. J., 2012. Analysis of Hofstede's 5-D model: the implications of
conducting business in Saudi Arabia. International Journal of Management &
Information Systems (Online). 16(2). p.151.
Chavis, L. W., Klapper, L. F. and Love, I., 2011. The impact of the business environment on
young firm financing. The world bank economic review. 25(3). pp.486-507.
Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance.The Review of Economics and Statistics. 93(1). pp.309-337.
Griffin, R. W. and Pustay, M. W., 2012. International business. Pearson Higher Ed.
Halbert, T. and Ingulli, E., 2011.Law and ethics in the business environment. Cengage
Learning.'Oh, S., 2010. New role-based access control in ubiquitous e-business
environment. Journal of Intelligent Manufacturing. 21(5). pp.607-612.
Klapper, L., Lewin, A. and Delgado, J. M. Q., 2011. The impact of the business environment on
the business creation process. In Entrepreneurship and Economic Development (pp.
108-123). Palgrave Macmillan UK.
Ullah, A. and Lai, R., 2011. Modeling business goal for business/it alignment using requirements
engineering. Journal of Computer Information Systems. 51(3). pp.21-28.
Xue, X., Shen, Q. and Ren, Z., 2010. Critical review of collaborative working in construction
projects: business environment and human behaviors. Journal of Management in
Engineering. 26(4). pp.196-208.
Zeng, L., Li, L. and Duan, L., 2012. Business intelligence in enterprise computing
environment.Information Technology and Management. 13(4). pp.297-310.
Online:
Business Environment. 2018. [Online]. Available
through:<https://www.slideshare.net/NikhilSoares/business-environment-
featuresmeaningimportanceobjectives-porters-model>
What SWOT Analysis is in simple words. 2016. [Online]. Available through:
<http://pestleanalysis.com/swot-analysis-examples/>.
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