Business Environment of Marks & Spencer

This article analyzes the impact of Brexit on Marks & Spencer, including PESTLE & SWOT analysis. It discusses the strengths, weaknesses, opportunities, and threats of the organization in relation to the external macro environment factors. The article also includes a reflective statement from the business development manager of Marks & Spencer.

Business Environment of Marks & Spencer 0
Title: Business Environment of Marks & Spencer
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Business Environment of Marks & Spencer 1
Executive Summary
The business environment of an organization keeps changing due to the various factors
which cause some changes in the organization internally or externally. The United Kingdom is
going to witness a very big change due to the implementation of Brexit. The Brexit has been
formed from the words Britain and Exit, indicating the exit of the United Kingdom from the
European Union. The same thing which happened in Greece too and it was known as Grexit. In
this assignment, as the business development manager at Marks & Spencer, the analysis and
impact of Brexit on the organization is conducted to analyze the positive and the negative effects.

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Contents
1. Introduction..............................................................................................................................2
2. The Impact of Business Environment Factors on Business Operations...................................4
3. PESTLE & SWOT Analysis of Marks & Spencer...................................................................8
3.1 PESTLE Analysis..................................................................................................................8
3.2 SWOT Analysis...................................................................................................................10
4. The Relationship between the Strengths & Weaknesses with the External Macro
Environment Factors......................................................................................................................11
5. Reflective Statement...............................................................................................................12
6. Conclusion..............................................................................................................................14
7. References..............................................................................................................................14

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1. Introduction
The business environment of an organization is determined through the various internal and
external factors that are affecting the business objectives by influencing the organizational
functions of the employees, management, customers, business regulations and also the supply
and demand aspect. With the application of Brexit in 29th March 2019, there are some changes
which have already taken place in the working of many organizations, these are the micro and
the macro environmental factors which are affecting the business environment of the
organization. In this assignment, an analysis is conducted on the current business environment of
Marks & Spencer and the impact of Brexit on the organization. Brexit is the decision of the
United Kingdom to leave the European Union and this decision was taken through a poll in
which the people of the United Kingdom gave a verdict of leaving the European Union, with
51.9% people voted in the favor to leave.
Image source: (blog.politics.ox)

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2. The Impact of Business Environment Factors on Business Operations
The business environment has two main factors which are internal environment and external
environment, that is, micro environment and macro environment. With the occurrence of Brexit
all these environmental factors will witness a change that will have a positive and a negative
impact on the organization’s operations (Bakker, 2017). The micro environment factors affecting
the factors which are closer to the organization which directly affects the abilities to fulfill the
customers need. The macro environment factors affect the micro environment and also the
factors which are outside the organization, but still matters a lot to the organization (Bogdanor,
2018).

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The effect of all micro environmental factors are not the same. They have both the
positive and negative impact on the organization. Some of them are-
 Supplier
The suppliers have different approach towards a small organization and a big
organization. Marks and Spencer is a huge organization with more than thousand outlets
all over the world. The suppliers offer them raw materials at a relatively lower price than
the small organization (Chalmers, 2017).

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 Competitors
The competitors have different approach of dealing with their competition,
depending upon the size of the organization. Marks & Spencer are being a global
organization also has many competitors, but its competitors will never start a price war
who have the knowledge that the organization has the capabilities to retaliating to them.
With the application of Brexit the biggest impact that will happen in the organization’s
micro environmental factors is the suppliers, competitors and the public. The Brexit has
already started affecting the confidence of the customers which have affected the sales at
the Marks & Spencer outlets (Dallago, 2016).
The positive and negative impact of macro environment factors on the business operations,
though the macro environment is severely affected by the Brexit, thus showing will less positive
impact. The impact on-
 Political Environment
The political factor affects the working of the Marks & Spencer. The investors
will be affected by the new changes which will occur due to Brexit and many would like
to withdraw from the organization due to the effect on the profits of the organization. The
decision making of the organization is also affected due to the new regulations which will
be implemented after the withdrawal from the European Union (de Witte, 2017).
 Economic Environment
The negative impact that will take place on Marks & Spencer due to the changes
in the abilities to spend on international and national land due to the Brexit (Ewing,
2017).
 Social Environment

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The connection with the European Union has helped the Marks & Spencer to get
access to a bigger market and the leaving of this market will affect the overall functioning
of the organization (Finck, 2017).
 Technological Environment
With the growth of the e-commerce there is a large growth that has been achieved
by many organizations. The Brexit will affect the e-commerce profits of Marks &
Spencer, with the change in the preference of the customers. The customers will shift
their focus from Marks & Spencer to another organization (Herbert, 2017).
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3. PESTLE & SWOT Analysis of Marks & Spencer
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3.1 PESTLE Analysis
The external environment of the organization is made up of several components that
determine the essential elements which the organization need to fight in their respective
organization (Koch, 2017). The PESTLE analysis helps in examining the factors which will
affect the business operations at Marks & Spencer-
 Political
Till now the organization has the chance of investing in the European market
through the European Union and the Free Trade agreements, providing the organization
with numerous opportunities. The M&S has suffered with the industrial relationships and
the labor law. With the implementation of the Brexit, there will be more infringement
which the organization has to deal with due to the labor laws (Kundera, 2017).
 Economic

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The retail sector of the UK is very recession prawn and have a sensitive nature
towards the changing rates of interest. With the application of the Brexit, the economic
factor of the retail sector will be massively affected, bringing the profits even more down
for Marks & Spencer (Martonyi, 2017).
 Social
The organization Marks & Spencer has continuously struggled with the issues of
gaining a big market share of its customers. With the leaving of the European Union there
is a huge change which the organization will witness in the market share of M&S (Ohr,
2017).
 Technological
The internet has become a huge part of many organizations over the years. This
has helped in the expansion of Marks & Spencer too. The e-commerce will be affected
the least by the Brexit (Titmarsh, 2017).
 Legal
The legal restriction that has been imposed on the organizations for the health
safety of consumer rights and also for the generation of natural renewable energy, have a
strict observation of the activities of all the organizations. With the application of Brexit,
this is going to get even more severe for M&S (De Vries, 2017).
 Environmental
Marks & Spencer have already struggled a lot to maintain their market share and
with the use of environmental friendly resources for production the company is having
even greater struggles. With the implementation of Brexit, the organization has to be
even more careful with the use of raw materials and fabrics.

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3.2 SWOT Analysis
The SWOT analysis of M&S-
Strengths
 A wide range of products like food, furniture, financial products, clothing, home and
wine.
 One of the largest retails in UK by sales.
 Have a position of strong flow of cash.
 Increase in trading profits and turnover.
 Have a huge brand awareness (Ellison, 2016).
Weaknesses
 The growing customer disinterest
 The low share of market
 Assumption of high prices
 Substitute products
 Environmental issues like renewable energy (Farrand, 2017).
Opportunities
 Innovation for new products.
 Alliances in UK & European market.
 The changes in the demand of customers with value for money products.
 A new and better supply chain overseas (Howarth and Quaglia, 2017).
Threats

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 Volatility in the raw materials prices.
 New legislations.
 More competition in UK.
 The low cost of retails (Priest, 2017).
4. The Relationship between the Strengths & Weaknesses with the
External Macro Environment Factors
The above analysis, which shows an impact on the Marks & Spencer organization due to the
Brexit. Also, the strengths and weaknesses identified has a connection with the external macro
factors, as the changes which will be incurred on them will result in many strengths and
weaknesses.
 The strength of the Marks & Spencer of being the largest retail organization of sales, will
be affected by the political factors which will change after Brexit, helping the
organization to build more dominant in the UK market due to a more focused approach
(Saraceni, 2017).
 The strength of the Marks & Spencer brand awareness in the market will get better after
the political changes as the customers knows the high credibility of the organization.
 The weakness of the Marks & Spencer is directly related to the political changes which
have affected the interest of the people in many organizations. The customers have lost
interest and confidence in making purchases from even the most prominent brands.
 The main weakness of Marks & Spencer that is affected even more due to the Brexit is
the lowest share of the market that will further increase due to the legal and social factor
of the macro environment.

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5. Reflective Statement
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Being the Business Development Manager in one of the most renowned organizations in
the United Kingdom, there are numerous responsibilities that are imposed on me. The Brexit will
be implemented by 29th March 2019, and as the development manager there is an emergence for
developing strategies to deal with the changes which will occur in the internal environment and
the external environment of the organization. The changes which will happen due to leaving the
European market hints on implementing approaches which will help in dealing with the losses
and also in controlling the losses. The European market has helped the Marks & Spencer by
offering them raw materials and resources for clothing. There will be a loss of a number of
suppliers that will affect the production of products. The personal alliances can be used by the
legal and political changes will make the changes difficult to keep a smooth and strong alliance
(Smales, 2016). The competitors in the United Kingdom market will increase and the fight to

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stay ahead will intensify due to the strong dominance of Marks & Spencer in the market along
with some bigger organization too. There will be political instability which will affect the
stakeholders and the investors who are a huge part of the organization. As the development
manager it is the duty of mine to make plans to keep the stakeholders in the organization and also
try attracting new ones, to deal with the growing competition. The Brexit will also introduce new
laws and as a struggling organization with labor law, this is going to impact the organization
immensely. Labor law infringements that will be introduced will affect the local operations by
the labor of the organization. The loss of resources by the organization of the European market
will get more affected by the Brexit in the application of renewable energy and the handling of
raw materials for the manufacturing, this will also affect the brand image, if the situation is not
handled logically and effectively. I have to display an image of the organization in the market
who is concerned with the preservation of the environment and the organization’s strictness
towards following laws about the environment and other aspects. There will be changes in the
tax policies, the reducing rate of the currency and many other which will affect the economy of
the United Kingdom. As the biggest organization in the United Kingdom there is a need for
dealing with such matters for the overall functioning of the organization and decision making
power of the organization. The need to plan out strategies to take the implementation of the
Brexit with a positive approach should be the main aim of the organization as this will help in
planning out approaches that will be focused more on utilizing the strengths and also converting
the weaknesses into opportunities and strengths. There is a direct link between the environmental
factors and the strengths, threats, weaknesses and opportunities, which as a manager I have to
utilize to the full of my abilities in dealing with the changes due to Brexit and adapting to those
changes with a positive mindset.

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6. Conclusion
After the overall analysis on the impact of Brexit on the organization Marks & Spencer,
this can be concluded that there are a number of changes which will happen in the organization
impacting the profits and the resources which the organization used to easily gain from the
European market. But there are many potential of creating a strong market hold in the United
Kingdom which will even get bigger with the application of Brexit. Also, after the
implementation the customers will slowly adapt to the changes which have reduced the interest
of the customers in the organization and will get the confidence back to make purchases but the
organization Marks & Spencer have to indulge in a number of activities that will help in
encouraging the customers and getting back their support to the organization.

Business Environment of Marks & Spencer 15
7. References
Bakker, M. (2017). Brexit-Court of Brexit-Kamer?. Advocatenblad, 97(5), pp.45-45.
Bogdanor, V. (2018). Brexit and British politics; Brexit and beyond: rethinking the futures of
Europe. International Affairs, 94(3), pp.674-675.
Chalmers, D. (2017). LSE Law Brexit Special #4: Trade after Brexit. SSRN Electronic Journal.
Dallago, B. (2016). The future of European integration and Brexit: Is Brexit only Brexit?. Acta
Oeconomica, 66(s1), pp.111-136.
Dallago, B. (2016). The future of European integration and Brexit: Is Brexit only Brexit?. Acta
Oeconomica, 66(s1), pp.111-136.
De Vries, C. (2017). Benchmarking Brexit: How the British Decision to Leave Shapes EU Public
Opinion. JCMS: Journal of Common Market Studies, 55(1), pp.38-53.
de Witte, F. (2017). LSE Law Brexit Special #1: Negotiating Brexit. SSRN Electronic Journal.
Ellison, R. (2016). Brexit triggers uncertainty over future of research in UK. Prescriber, 27(7),
pp.14-15.
Ewing, K. (2017). Brexit and Parliamentary Sovereignty. The Modern Law Review, 80(4),
pp.711-726.
Farrand, B. (2017). Bold and newly Independent, or Isolated and Cast Adrift? The Implications
of Brexit for Intellectual Property Law and Policy. JCMS: Journal of Common Market Studies,
55(6), pp.1306-1321.

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Finck, M. (2017). LSE Law Brexit Special #3: Brexit and the European Institutions. SSRN
Electronic Journal.
Herbert, A. (2017). Brexit should not mean Brexit for cytopathology. Cytopathology, 28(4),
pp.337-338.
Howarth, D. and Quaglia, L. (2017). Brexit and the Single European Financial Market. JCMS:
Journal of Common Market Studies, 55(1), pp.149-164.
Koch, I. (2017). What's in a vote? Brexit beyond culture wars. American Ethnologist, 44(2),
pp.225-230.
Kundera, J. (2017). BREXIT. Ekonomia XXI Wieku, 2(14), pp.56-72.
Martonyi, J. (2017). Brexit. Brexit?. European View, 16(1), pp.173-173.
Ohr, R. (2017). Brexit, Brexit, EU-Exit?. WiSt - Wirtschaftswissenschaftliches Studium, 46(6),
pp.1-1.
Priest, J. (2017). Why the post-Brexit UK market research industry needs to consolidate.
Research World, 2017(67), pp.33-35.
Saraceni, M. (2017). Post-Brexit English: A post-national perspective. World Englishes, 36(3),
pp.350-352.
Smales, L. (2016). “Brexit”: A Case Study in the Relationship Between Political and Financial
Market Uncertainty. International Review of Finance, 17(3), pp.451-459.
Titmarsh, S. (2017). Brexit means Brexit, but what of pharmacovigilance?. Prescriber, 28(8),
pp.27-29.

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