Business Environment in Marks and Spencer Assignment

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Explain different types and purpose of organisation with legal structure.............................1
P2 Size and scope of different type of organisation....................................................................3
TASK 2............................................................................................................................................4
P3 The relationship between different organisational function and their link with
organisational objectives and structure.......................................................................................4
TASK 3............................................................................................................................................6
P4 Identify the positive and negative impact which macro environment has upon the business
operations....................................................................................................................................6
P5 Conduct internal and external analysis in order to identify the strength and weaknesses.....9
TASK 4..........................................................................................................................................10
P6 Interrelation of strength and weaknesses with external environmental factors...................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment refers to the sum total of all the internal and external environment
that affect the functioning of company (Business Environment, 2019). It plays an important role
in an organisation as it helps in identifying the opportunities of business, helps in improving the
overall business as well as assist in improving its profitability. In order to study this report Marks
and Spencer, a multinational retail company is taken. It was founded by Michael Marks and
Thomas Spencer in the year 1884 and is having its headquarter in London, UK. This report will
cover different type different type of company, size, scope with their legal structure. In addition
to this it will also discuss the interrelationship with various function and their link with objective
and structure. At last internal strengths and weaknesses of the company and their link with the
macro environmental factors will be discussed.
TASK 1
P1 Explain different types and purpose of organisation with legal structure
There are different types of organisation with different legal structure which are
mentioned below:
 Private sector organisation: It refers to the type of organisation which is run by the
individual and group whose main purpose is profit generation (Andersson, Forsgren and
Holm, 2015). The organisation which is used here is Marks and Spencer.
 Purpose: The main purpose of company is to provide high quality of clothing, home
ware and food products to the customers. Its main objective is to increase the sales of the
company which results in improving profitability.
Type of private organisation:
 Sole proprietorship: It is the type of organisation which is controlled by individual
entrepreneur. The individual is the only one who is responsible for taking all decisions of
the company.
 Partnership: It is the type of private sector organisation which is controlled by two or
more people with the main motive of earning profit. The partners can be individuals,
governments or combination. The decision lies in the hand of all the partners.
 Company: It refers to a organisation whose main purpose is earning profitability. Here
the members are unlimited with their unlimited liability.
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Legal structure: In order to work properly Marks and Spencer is required to use the
legal structure of public sector company.
Public sector organisation: It refers to the type of organisation which is owned and
controlled by the government. It consist up of national, local government and their agencies. The
main purpose of such type of company is not profit earning (Apăvăloaie, 2014). These
organisation raise fund by the means of collecting the taxes, fees or with the help of other
financial transfers. In order to study the assignment, BBC (British Broadcasting Corporation) is
taken.
Purpose: The main purpose of BBC is to provide news and information to the people in
such a way that they are able to understand what is happening in the world.
Types of public sector organisation:
 Central government: It refers to the political authority that governs the entire nation. It
is the one who is responsible for formation of rules and regulations of the country.
 State government: It refers to the political authority or unit of government which is
responsible for formation of the laws for a state. It is responsible for fulfilling the local
needs of people of a particular state.
Legal structure: The legal structure of BBC involve the following of legislations Video
recording act, 1984 and Films Act 1985.
Voluntary sector organisation: It refers to such type of the organisation whose main
purpose is society upliftment. There is no or little involvement of the government. Some of the
example of such type of organisation are trustees, charities etc. In the following assignment, save
the children is taken.
Purpose: The main purpose of Save the children is to provide healthy lives to the
children with the best education, health care and emerging aid at the time of any conflicts,
disaster etc. The main objective of Save the children is to remove poverty from the nation so that
every individual is able to fulfil the basic need for survival. Main objective of Save the Children
is to improve live of children by offer them better education, economic and healthcare facilities.
Further, company offer them services in emergency cases also.
Types of voluntary sector organisation:
 Trust: It refers to an arrangement where a person holds property as the owner for the
benefit of a third party.
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 Charity: It refers to a non profit organisation whose main purpose is raising the money
in order to help the local people.
Legal Structure:
The structure followed by save the children is Charity legal structure.
P2 Size and scope of different type of organisation
Private organisation: Marks and Spencer
Background details: It is a British multinational retailer founded by Michael Marks and Thomus
Spencer in the year 1884 and is having the headquarter in London.
Product: It deals in product segment like clothing, home products and food products.
Size: The store is having 1463 stores all over the world and the range of revenue £
10,337 million.
Scope: The company along with UK is operating all over the world.
Mission and Vision: The mission of M&S is to develop such a inspirational quality
which can be easily accessible to all. Its vision is to gain a place in the market by satisfying the
needs of all the people.
Objective: The main objective of the company is to maximise the profit so in order to
achieve success for the long run.
Organisational structure: The structure followed by M&S is flat organisational
structure. Such type of organisation has limited involvement of management. This organisation is
adopted by M&S in order to involve every person in the decision making process.
Stakeholders: This includes board of director, employees, management and many more.
Public organisation: British Broadcasting Corporation
Background details: BBC is world oldest national broadcasting system which was
developed in the year 1922 by John Reith.
Product: It provides international 24 hours English language news through BBC world
news, BBC.com and BBC Global News ltd.
Size: The number of employees in BBC is around 20,916 according to the data of 2015-
16 which means size of the organisation is very large.
Scope: It is operated through out the world.
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Mission and Vision: The vision of BBC is to provide such a world where people live
healthy inclusive of any community people are belonging. There mission is to reach large
number of people through the media and creative communication ideas.
Objective: The main objective of BBC is to maximise the profit so that sustainability can
be achieved and company can easily survive in the long run.
Organisational structure: The structure of BBC consist up of Executive Board, Creative
Board, Board of the governor, Journalism Board and commercial board.
Stakeholders: Directors, employees and many more.
Voluntary organisation: Save the children
Background details: It was founded in the year 1919 by Eglantyne Jebb and Dorothy
Buxton and is having the headquarter in UK.
Product: it works toward better education, health care and emergency aid.
Size: The size of save the children is large as it is involving 29 other nations who are
together working for the project.
Scope: At present the company is operating the operations in more than 120 countries.
Mission and Vision: The vision of Save the children is to build the world in such a kind
so that every children can easily survive and protect themselves. The mission of the company of
is to treat every children special and contribute something in a way so that their lives can be
changed.
Objective:The main objective of the Save the child is to build a better world.
Organisational structure: It includes Board of directors, executive director, HR admin
and Head of programs and finance.
Stakeholders: It includes schools, governments, children, donors, supporter and many
more.
TASK 2
P3 The relationship between different organisational function and their link with organisational
objectives and structure
The organisation has several department which are interlinked with each other in one form or
other. M&S is a private multinational retailer having large number of employees which are
working in the different departments. A company cannot survive with a single department so
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there is need to know the relationship between various department. The interrelations between
the various department are mentioned below:
 Marketing and production department: Both these department of M&S are interlinked
with each other as the work of marketing department involves pricing, packaging and
informing the customers about the product of the company (Botha, Kourie and Snyman,
2014). It is the work of this department to discover the need of every customers. Once the
needs are analysed they are send to the production department for manufacturing the
product as per the customers requirement.
 Sales department and finance department: Both these department of M&S are
interlinked with each other as the work of sales department is to sale the products of the
company to the desired customers. Through selling company earn some of the profit in
the monetary terms which are then transferred to the finance or accounts department of
the company (Cavusgil and et. al., 2014). It is the work of finance department to
distribute the funds among the department in such a way that resources can easily be
attained among all the departments. Such funds will help in functioning of every
department.
 Finance department and production department: It is the work of finance department
to handle every monetary functions of the business during the whole year. This
department is only responsible for making the financial statement, cash flow statements
and balance sheet of the company. Production department in order to manufacture any
product of the company require some of the funds which are provided by the finance
department. In this way both the department of Marks and Spencer are interlinked with
each other.
Thus from the above discussion it can be concluded that there exist a relationship
between different department of Marks and Spencer and interrelationship plays a great role. For
achieving the success it is very important for the department to proper coordination and
cooperate with each other. Effective coordination is must for the organisation otherwise would
led to the failure of the company.
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TASK 3
P4 Identify the positive and negative impact which macro environment has upon the business
operations
Macro environment refers to the factors that exist outside the organisation and has a
impact of functioning of an enterprise. Both M&S and BBC in order to identify the impact of
macro environmental factors conduct PESTEL analysis. Below is the PESTEL analysis of
M&S :
Political factors: The factors include here are government policies, foreign trade policy,
labour law and so on (Cairncross, 2014). These factors have a impact upon the change policy of
the government which has some impact in favour or against the company.
Impact on M&S:
Positive impact: Due to the political stability of country, M&S is able to formulate
suitable policies for the working of the company. Moreover with the free trade agreements the
company is able to decreased its sourcing cost.
Negative impact: If the company is not able to follow the rules and regulations of the
government it would have to give fines and many also be forced to close down their operations.
Impact on BBC
Positive impact: BBC is following all the rules and regulations of the government very
efficiently which is positive for the company.
Negative impact: Laws of government keep changing which become difficult for BBC
to follow every time and has a negative impact over its working.
Economical factors: The factors include here are interest rates, inflation rate, GDP and
many more. Such type of factors have a impact on the working of organisation.
Impact on M&S
Positive impact: In case if the interest rate declines it could have a positive impact on
M&S as then the company is able to provide high quality of products at low rate.
Negative impact: Due to the financial crisis, the purchasing power of customers declined
and they are not able to spent cash on luxurious item which has a negative impact on the sales of
the company.
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Social factors: The factors which include here are population growth, age distribution,
change in taste and preference of the customers and this factors has a direct impact on the
working of an organisation (Cohen and Kietzmann, 2014).
Impact on M&S
Positive impact: M&S is developing the products in favour of taste and preference of the
customers which has a positive impact on the organisation.
Negative impact: As there are so many different culture of people available in the
market. It is not always possible to analyse the need of every customers which can turn to be a
negative point for M&S.
Impact on BBC
Positive impact: The BBC is able to effectively understand every social concept of the
society and are giving result in favour of them is thus a positive impact on the company.
Negative impact: Both social media and traditional media are growing at a fast pace and
it is not always possible to manage both together thus has a negative impact for BBC.
Technological factors: The factors include here are technological changes, level of
innovations which every organisation need to adopt in order to get success.
Impact on M&S
Positive impact: With the help of technology, M&S is able to improve the sales of the
company (Charter, 2017). As with use social media M&S is able to make their customer aware
about new products and also able to get feedback which helps the company to make changes
where required.
Negative impact: Though social media proves to have a significant advantage but
improper use of such tool can have a negative impact on the company as now customers are very
conscious about each and everything.
Impact on BBC
Positive impact: Due to the technology innovation BBC is able to provide fast
information to its channel partner which in turn led to increase the profit of the company and has
a positive impact on the organisation.
Negative impact: It is not always possible for the BBC to compete with the changing
technology and thus would sometimes led to the failure and has a negative impact on the
organisation.
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Environmental Factors: Such type of factors are related to ecology which consist up of
climatic change, weather and has a impact on the growth of the company (Wheelen and et. al.,
2017).
Impact on M&S
Positive impact: M&S aims to reduce the energy emission by 20%b till the year 2020.
Apart from this company is minimising the use of plastic bags and this has a positive impact on
the organisation.
Negative impact: Some of the strict regulations were imposed on M&S regarding to the
environment which creates a pressure over the company to follow the green ethical practices.
Abiding by such rules in a less time has a negative impact on operations of M&S.
Impact on BBC
Positive impact: BBC is effectively making the use of proper renewable technology
which has a positive impact on the working of an organisation.
Negative impact: Due to the uncertain weather condition, BBC has to add to the cost of
operation and should also need to invest some of the amount in the supply chain. Thus has a
negative impact on the organisation.
Legal Factors: In order to trade company must know about what is legal and illegal for it
(Dima, Grabara and Modrak, 2014). The factors include here are consumer rights, health and
safety rights etc.
Impact on M&S
Positive impact:The company is lawfully following all the rules and regulations related
to health and safety as work, compensation which led to increase the trust of employees among
the company and thus has a positive impact on the M&S.
Negative impact: Company earlier was involved in the scandals in which they were not
paying fair wages to the employees and are discriminating between them which turns to have a
negative impact on the image of the company.
Impact on BBC:
Positive impact: BBC before entering into the market has followed all the rules and
regulation properly which thus has a positive impact on the organisation.
Negative impact:If BBC is unable to fulfil the discrimination law, environment law,
copyright law then it would impact negatively on the image of the company.
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P5 Conduct internal and external analysis in order to identify the strength and weaknesses
In order to analyse the internal and external factors SWOT analysis is done by the company. It is
tool which helps the company to identify the strength, weakness, threat and opportunities. SWOT
analysis of M&S and BCC is mentioned below:
SWOT analysis of M&S
Strength
 M&S is one of the strongest brand of
UK which deals in wide range of
products like home ware products, food
products and clothing (Erasmus,
Strydom and Rudansky-Kloppers,
2016).
 The company has their own brand level
which helps in building the customers
loyalty.
Weakness
 M&S is facing a strong competition
from other retail brand like Tesco, Asda
and many more (Shenkar, Luo and
Chi, 2014) .
 The company has great presence in
Europe, UK but has failed to
successfully operate in Asia and other
region and for this they are forced
down to close the shops.
Opportunities
 M&S has the opportunity to expand its
product segment under the ethnic
section (Saleem, S., 2015).
 Due to less barrier and trade policy,
M&S have the opportunity to expand
its operation in other countries.
Threat
 Company is unable to met with the
latest trend of the customers in the
clothing sections (Georgescu and
Popescul, 2015).
 Some of the competitors like Zara,
Uniqlo is providing tough competition
to M&S.
SWOT analysis of BBC
Strength
 The people have gain faith in BBC as it
is the oldest and largest broadcasting
company which is employing around
23000 employees.
Weaknesses
 The company is incurring high
operating cost as compared to other
broadcasting companies (Glova, Sabol
and Vajda, 2014).
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 The company deals in large number of
products like radios, television, web
portal etc.
 The products which are sold by BBC
has many gap among the rage of
product. This results in lack of choice
among the customers to buy the
product.
Opportunities
 As BBC is known by the name of
News, by stepping into other
entertainment zone will help the
company to become trendy among all.
 The BBC can also organise some of the
events internationally to strengthen the
brand of BBC.
Threat
 The BBC is facing strong competition
with the news channel like BBC, CNN
etc.
 Rise in the price of raw material
hampers the profitability of BBC.
TASK 4
P6 Interrelation of strength and weaknesses with external environmental factors
The interrelation of strength and weakness with external factors are mentioned below:
Political factors: These factor includes the interference of government in functioning of
the business (Kolk, 2016).
Strength: The economic stability of UK is the biggest strength for M&S as it is properly
following the rules and regulations set by the government thus has a strength for the company.
Weakness: It is not always possible for the company to change with the change in
international policies and thus impact on the functioning of M&S and is consider as weakness for
the company (Schaltegger, Hansen and Lüdeke-Freund, 2016).
Social factors:It includes factors like age group, health and safety, taste and preference
etc that affect the operation of the company.
Strength: The products provided by M&S are of high quality and also able to satisfy the
need of every age group of the people. Thus it is a strength for M&S.
Weaknesses: The taste and preference of people keep on changing and it is not always
possible to amend it so rapidly (Quinlan and et. al., 2019). By selling of the outdated products
turns to have weakness for the company.
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CONCLUSION
As per the above discussion it can be concluded that the difference normally arise with
the scope, size and type of the organisation. Organisation has various department which has
different function and are interlinked with each other. The smooth functioning can only be
possible if there is effective coordination and communication among the department. With the
help of internal and external analysis company is able to frame some of the strategies that helps
in smooth functioning of an organisation and also help managers to deal in most difficult
situations.
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REFERENCES
Books and Journals
Andersson, U., Forsgren, M. and Holm, U., 2015. Balancing subsidiary influence in the
federative MNC: A business network view. In Knowledge, Networks and Power (pp.
393-420). Palgrave Macmillan, London.
Apăvăloaie, E. I., 2014. The impact of the internet on the business environment. Procedia
Economics and finance. 15. pp.951-958.
Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business
environment: Knowledge management and knowledge management technology.
Elsevier.
Cairncross, F., 2014. Green Inc.: guide to business and the environment. Routledge.
Cavusgil, S. T. And et. al., 2014. International business. Pearson Australia.
Charter, M., 2017. Greener marketing: A responsible approach to business. Routledge.
Cohen, B. and Kietzmann, J., 2014. Ride on! Mobility business models for the sharing
economy. Organization & Environment, 27(3), pp.279-296.
Dima, I. C., Grabara, J. and Modrak, V., 2014. Sustainable logistics and business
competitiveness. International Letters of Social and Humanistic Sciences. 1I5 (2).
pp.148-156.
Erasmus, B., Strydom, J. W. and Rudansky-Kloppers, S. eds., 2016. Introduction to business
management. Oxford University Press Southern Africa.
Georgescu, M. and Popescul, D., 2015. Social Media–the new paradigm of collaboration and
communication for business environment. Procedia Economics and Finance. 20.
pp.277-282.
Glova, J., Sabol, T. and Vajda, V., 2014. Business models for the internet of things
environment. Procedia Economics and Finance. 15. pp.1122-1129.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Quinlan, C. and et. al., 2019. Business research methods. South Western Cengage.
Saleem, S., 2015. BUSINESS ENVIRONMENT, 3/e. Pearson Education India.
Schaltegger, S., Hansen, E. G. and Lüdeke-Freund, F., 2016. Business models for sustainability:
Origins, present research, and future avenues.
Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.
Wheelen, T. L. and et. al., 2017. Strategic management and business policy (p. 55). Boston:
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Online
Business Environment. 2019. [Online] Available
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