SWOT Analysis of Marks & Spencer and Business Environment

The assignment requires students to conduct a SWOT analysis of Marks & Spencer, a British multinational retailer, and also explore the impact of external business environments on organizational performance in the food and beverage industry in Nigeria. The study aims to understand how businesses adapt to changing environmental conditions and develop strategies for success.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT...........................................................................................................................1
TASK 2............................................................................................................................................1
P3 Relationship between different organisational functions and link to organisational structure
and objectives..............................................................................................................................1
TASK 3............................................................................................................................................3
P4 Positive and negative impacts the macro environment on business operations.....................3
TASK 4............................................................................................................................................4
P5 Internal and external analysis in order to identify strengths and weaknesses........................4
P6 Strengths and weaknesses interrelate with external macro factors........................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
.......................................................................................................................................................10

INTRODUCTION
Business environment is determined as combination of internal as well as external factors
which impacts on profit level as well as performance of firm. It consists of people, entities and
some of the other aspects which impact on process of decision making of firm. An environment
has several forces that give share to segment of business along with the product line (Adeoye and
Elegunde, 2012). Under this, business environment is affected through different aspects and
influence whole effectiveness as well as performance of an organisation. Under this report, firm
that is referred to is Marks & Spencer and it deals in retail sector and also provide clothing, home
accessories and many other products around the globe. Under this report discuss about various
kinds of businesses and also purposes of firms like private, public and voluntary and also their
legal structures. In this also discuss regarding relationship among various functions of company
and they are related with organisational aims as well as their structure. In order to determine
weaknesses and strengths, firm conduct internal and external analysis of particular company will
be mention.
TASK 1
Covered in PPT
TASK 2
P3 Relationship between different organisational functions and link to organisational structure
and objectives
Marks & Spencer is large organisation and people are familiar with the functioning and
services of this company. This business conducts its business operations in many countries by
providing different varieties of products and services to people (Auzair, 2011). Its main motive is
to earn more profit through satisfying demands or needs of consumers by provide them products
at reasonable costs. Every and each business give their full dedication in fulfil basic needs of
consumers in an effective manner. Under Marks & Spencer, there are various departments which
are link to organisational objectives and structure:
Marketing department- It is fundamental department that help in provide wide range of
products and services at competitive market place. Its main motive is to fulfil needs of
consumers in an effective manner. It is helpful in give competitive advantage to firm by
1

achieving aims with in given period of time. It will be helpful in provide advantage to Marks &
Spencer firm at market place. For instance: Marketing function with M&S conducts market
research which helps in identification of customer preferences and market trends. The
information available could be provided to R&D department to develop products which can
accomplish the same. This strategy will be helpful in fulfilling business objectives in the form of
higher profitability.
Human Resource Department- The role of this department is to recruitment, selection,
performance appraisal, training and development, increase productivity of company and many
others (Avramenko, 2012). In addition to this, it is a responsibility of manager of this company is
recruit the capable candidates which can perform in well manner and also provide them training
so that they can deal with consumers and focus on perform their tasks and activities in well
manner.
Finance department- Main function of this department is to arrange and manage all the
monetary transactions so that all departments can perform their operations in better manner. It is
liable for align finds to the distinct firm for doing business activities with in set time period.
Allotment of right funds to various department such as marketing. Production, R&D will lead to
better performance in terms of functions.
Operation and Production department- This department is connect with produce
products and services according to demands and needs of consumers in an effective manner.
Their main work is to make quality of goods better so that people can attract towards form and
purchase products. The Marks & Spencer organisation produce various services and products
after examining main market which can help in fulfil needs of customers and attain objectives.
The production of better outputs will ensure improve profitability is achieved.
Research & Development- It is liable for conduct an investigation about market place,
customer needs, existing products, competitors at market place and many others (Bar-Isaac and
Shapiro, 2013). These all things are helpful in provide advantages to firm and on the basis of all
these data or information in proper manner. If an organisation will develop suitable products, it
will help them in achieving their goals of higher profits in market.
Division of Marks & Spencer organisation is fundamental and also related with process
of decision making of company which can help in deliver better practices. In addition to this, it is
2

necessary to manage environment and some various business operations to attain business
operations and get positive results.
Structure of Organisations
Organisational structure is used to explain hierarchy with in company. It is helpful in
determine each job, reports and also its functions. There are various organisational structure
given below as above:
Product based- It is organised through particular type. In this, every product group falls
with reporting structure of executive. It is helpful in organise products through categories but can
develop separate procedure.
Customer based structure- Certain sectors will organize through consumer type. It is
done an effort to assure particular expectations of consumers with the help of customized service
approach.
Divisional structure- Generally, it is used in large size organisations which operate their
business in geographic area or also have separate small size companies in order to cover various
kinds of services, products or the market areas (Boons and Lüdeke-Freund, 2013).
3

The organisational structure of Marks & Spencer is flat. There are limited management
levels among front- line staff members and administrative level. It is followed through Marks &
Spencer for encourage workers in process of decision making.
TASK 3
P4 Positive and negative impacts the macro environment on business operations
There are several factors in macro – environment and these direct affect on operations of
Marks & Spencer company. In external factors include political, economical, social,
technological, legal and envelopment (Cronan and et. al., 2011). These all factors have some
negative and positive impacts on business operations. Negative and positive impact on macro
factors given below as above:
Political factors: It consist government role and also impact of all business firms to
certain extent. It is related with role of national and international politics on organisational
activities.
Positive impact: Marks & Spencer is an international organisation and it conduct its
operations in different countries by following policies and government regulations.
Negative impact: If tax rate will be high than profits of a company will be less. (Burns
and Winter, 2011).
Economical factors: It determines an economic situation of nation in which Marks &
Spencer conduct it business. Different components which are included in this are deflation,
inflation, tax rates etc.
Positive impact: If income level of people will be high then their purchasing power will
be more and demand will also be enhanced. The rise in the economic growth will assure that a
business have a better future in the operating market. The stability in terms of exchange rate
assures higher international trade.
Negative impact: From reduce cash in economy, plan will be impacted. If taxation will is
high then there will be bigger decline in profit level of Marks & Spencer organisation.
Social factors: Under this include, lifestyle, age, occupation, population and many other
elements. Social environmental factors has direct affect on purchasing of individuals.
4

Positive impact: High education has positive affect on product sale and it is helpful to
company to use online mode for attract consumers. The social environment can be considered as
a major determinant to buying behaviour of people which can be taken into consideration.
Negative impact: Differences in culture in various nations pose a difficulty to an
organisation to fulfil their specified needs and expectations.
Technological factors: It includes technological advancement, up gradation etc. Rapid
modifying factors which influence company in various ways such as fast communication,
developed new materials, control and monitor quality etc.
Positive impact: Modifications in technology helpful in reduce work load and provide
better quality.
Negative impact: Obsolete technology develop negative on business. If firm will
frequently use changing technology then in this case cost will more invest.
Legal factors: It consists legislations which are developed through government and
requirement to follow through Marks & Spencer.
Positive impact: Follow all legislations are helpful in provide better performance to
business and achieve better results (Chow and et. al., 2011).
Negative impact:If in case firm will not follow all legislations then it will develop
negative affect on brand image.
Environmental factors: It consists water, land, weather and many other element. These
are necessary for individuals and also for companies. All firms depend on ethics and legislations
which are responsible to neglect water, pollution and weather.
In year 2017, Marks & Spencer launched Plan A to accelerate business transformation
with an aim of developing this company again by profitable development, sustainable that
deliver some value for consumers, communities, shareholders etc.
Positive impact: It is helpful in develop positive brand reputation and make positive
impact in mind of people.
Negative impact: It has an indirect affect on manufacturing cost and minimize profit
level.
5

TASK 4
P5 Internal and external analysis in order to identify strengths and weaknesses
SWOT analysis of Marks & Spencer given below:
Strengths
High Quality: Marks & Spencer is one among the successful brand, because of its high
quality products. Customers are well satisfied with rich quality of fresh vegetables and fruits
available in its store.
High recognised brand: It is highly recognised brand by customer point of view in high
street market of UK, which is known by footfall of consumers. It has maintained its quality
which gave another reason to recognise them at the time of shopping.
Diversified products: Marks & Spencer is one of the leading company in retail industry
with diversified products like apparel, more than 500 types fruits & vegetables which are sold in
supermarket where other retailers are unable to compete (Dahan and et.al., 2010).
Large no. of outlets & store: It has more than 600 outlets in UK & approx 300 in other
300 countries which are constantly increasing with every passing year as a part of their
expansion programme.
Famous designing brand: Due to its vast range of product the company has subdivided
its product with different brand name. This helps the company to manage its each brand
separately in the effective manner. Like it has subdivided Women brand in name of “Classic,
Limited collection, Portfolio, Indigo collection, Autograph etc.”.
Weakness
Negative publicity: Marks & Spencer is facing problems due to its negative assumption
among people, they believe that company is only focusing on the quality of the product they do
not bother about the trend or recent fashion. This decreased the customers ratio for the company.
Lack of new technology: Marks & Spencer is increasing its cost by not opting new
technology as old version involves huge manpower which increase expenses of the stores. By
using new technology it can increase its productivity with the other logistic words in less amount
of money (Fernando, 2011).
Waste store area: Stores of Marks & Spencer are not utilized properly as they have high
space in store which can be used for warehousing instead of being wasted. This is the strongest
weakness of the company.
6

Opportunities
Advance marketing strategies: Marks & Spencer have the opportunity in improving its
market image by adopting advance advertising strategies. Now a days, there are lots of new
techniques which are used by the companies to enhance their brand value. It will increase
customers ratio.
Internet technologies: Marks & Spencer should go for high technologies which are
available in the market like online selling of products, this will rise the demand of online
products. It will be more convenient for the customers to purchase the product rather than buying
them via visiting stores (Gebauer, Paiola and Edvardsson, 2010).
New Products: Marks & Spencer should launch new products for the health conscious
people with innovation in healthy products like vegetarian, organic food products etc.
Threats
Strong competitors: This company has strong competitors in clothing market as well as
in food market. In clothing Topshop, Gap, Next etc. provides the same kind of fashion in
different price segment with equal quality. Similarly in food market, supermarkets like Tesco,
Sainsbury and Asda is providing value product at affordable prices which has emerged to be a
major threat for this organisation.
New entrants: Marks & Spencer has major threat from the new entrant which enters in
this retail market with lots of planning & new technologies. They enters with the new innovative
ideas which might be proven heavy competition to Marks & Spencer as it is massively quality
oriented.
Modification in social environment: Marks & Spencer will also be affected by the social
environment as taste & requirement of the are changing every day. It can be changed
globalization, with the changing scenario people shifts from country to country which affects
their eating habits as well as dressing pattern. So social environment is also termed as threat for
this company.
P6 Strengths and weaknesses interrelate with external macro factors
Under this, it has been evaluated that situations of any business firm has an impact on
business of Marks & Spencer organisation (Commander and Svejnar, 2011). It is having some
shortcomings and also qualities which are necessary foe an administration to know. External
macro factors defined as factors such as regulatory and legal framework, policies of government
7

etc. which make affect on effectiveness as well as efficiency of whole firm. The main strength of
Marks & Spencer organisation to provide attractive products with the help of technological
development and also lead to gain better position with earn more profit in an organisation. In
addition to this, external macro factors such as revenue or tax management legislation s of
government leads to internal tax management effectiveness (Cronan and et. al., 2011).
Weaknesses and strengths interrelate with the external macro factors given below as above:
Political factor includes several policies, rules and regulations developed through
government. It is a responsibility of organisations to follow all regulations and rules of
government at the time of conduct or run business at national or global level. Modifications in
export and import policies develop negative affect on decision-making of Marks & Spencer
company.
Its Strength is that it has better management team so that they can follow all set rules of
government in an effective manner. It provides benefits to company in the form of stability in
operations. On the other hand its weakness is that Rules and regulations of every country are
different from the each other. It makes activities and business operations more difficult related to
fulfil all regulations and situations (Dahan and et. al., 2010).
Economic factor consists many components such as cash flow, income level, deflation
and inflation rates. In various countries, strength and weaknesses are based on condition. At the
time of conduct any business activity, it is a responsibility of manager to determine this factor in
better manner.
Its strength is that it is Having more operations in several countries whether they are
developed and developing to generate more profit level.
Its Weaknesses is complex to make changes in existing policies quickly. The frequent
changes in the taxation policies emerge as weakness for the company.
Social factor involves taste and needs of consumers are changing in short time period.
So, it is necessary for firm to produce services and products on the basis of demands of
consumers and provide them at reasonable cost.
Strength is that it helps in attract large number of consumers and make change sin its
products according to their reviews.
Weaknesses is Difficult to change in existing products rapidly (Fernando, 2011).
8

Technological advancement provide more advantage to firm. It is necessary for Marks
& Spencer organisation to use the update technology in business.
Strength is that Through advance technology, company can produce better quality of
products and that too at minimal costs
Weakness is that Obsolete technology can develop negative impact on business.
Legal factor include Government of United Kingdom formulate some legislations which
need to be followed through company.
Strength is that it helps in protect rights of staff members. The avoidance of legal trouble
assures that productive business environment is formed.
Weakness It is complex to understand some legislations and also new strategies
frequently.
Environment factor is related to Provide activities for save an environment of society.
Strength of environmental factors assure that a favourable perception of the brand is
developed in the market.
Weakness of this factor is that unexpected changing in environment affect major projects
undertaken by company.
CONCLUSION
It has been concluded from the above given report that business environment is necessary
business component that is necessary to be included through them in better manner through using
better resources. It keeps on modification and also it is necessary for them to include thus factors
and also introduce new alterations in existing services and products. In this report studied about
scope and size of range of various kinds of organisations. Positive and negative affects macro
environment has on business operations and they link to organisational objectives and also
structure has been also studied under mention report.
9

REFERENCES
Books & Journals
Adeoye, A. O. and Elegunde, A. F., 2012. Impacts of external business environment on
organisational performance in the food and beverage industry in Nigeria. British Journal
of Arts and Social Sciences. 6(2). pp.56-65.
Agarwal, R., Grassl, W. and Pahl, J., 2012. Meta-SWOT: introducing a new strategic planning
tool. Journal of Business Strategy. 33(2). pp.12-21.
Aterido, R., Hallward-Driemeier, M. and Pagés, C., 2011. Big constraints to small firms’
growth? Business environment and employment growth across firms. Economic
Development and Cultural Change. 59(3). pp.609-647.
Auzair, S., 2011. The effect of business strategy and external environment on management
control systems: a study of Malaysian hotels. International Journal of Business and
Social Science. 2(13).
Avramenko, A., 2012. Enhancing students' employability through business simulation.
Education+ Training. 54(5). pp.355-367.
Bar-Isaac, H. and Shapiro, J., 2013. Ratings quality over the business cycle. Journal of Financial
Economics. 108(1). pp.62-78.
Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-
the-art and steps towards a research agenda. Journal of Cleaner Production. 45. pp.9-
19.
Burns, C. and Winter, S., 2011. Introduction. Australian Farm Business Management
Journal. 8(2). p.iv.
Chow, A. T. and et. al., 2011. Broadband network with enterprise wireless communication
system for residential and business environment. U.S. Patent 7.944,948.
Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance. The Review of Economics and Statistics. 93(1). pp.309-337.
Cronan, T. P. and et. al., 2011. Decision making in an integrated business process context:
Learning using an ERP simulation game. Decision Sciences Journal of Innovative
Education. 9(2). pp.227-234.
Dahan, N. M. and et.al., 2010. Corporate-NGO collaboration: Co-creating new business models
for developing markets. Long range planning. 43(2). pp.326-342.
Fernando, A.C., 2011. Business environment. Pearson Education India.
Gebauer, H., Paiola, M. and Edvardsson, B., 2010. Service business development in small and
medium capital goods manufacturing companies. Managing Service Quality: An
International Journal. 20(2). pp.123-139.
Halbert, T. and Ingulli, E., 2011.Law and ethics in the business environment. Cengage Learning.'
Hamilton, L. and Webster, P., 2015.The international business environment. Oxford University
Press, USA.
Online
SWOT Analysis of Marks & Spencer, 2017. [Online]. Available
through:<https://businessteacher.org.uk/swot/marks-and-spencer.php>.
10

11