Business Organisations and Environments

This report examines the business environment in Portugal for Mark & Spencer, a multinational retailer, using PEST analysis and BCG matrix. It analyzes the company's background, target market, and financial performance, highlighting the opportunities and challenges of expanding into the Portuguese market. The report also includes data and charts to support the analysis and provides insights into the potential for success.

Business Organisations and
Environments in a Global
Context

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Background information of Mark and Spencer......................................................................1
Background Information on the Business Environment in Portugal......................................3
Application of an appropriate analytical model.....................................................................4
Data and charts to support business in Portugal.....................................................................6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business organisation can be defined as a corporation which uses a systematic approach
for achievement of goals. For success of business, it is essential for owners to set a proper
mission and vision statements. It provides a specific direction to people who are associated with
business operations and gains their cooperation for the same (Bansal and Hoffman, 2012). In
context with globalisation, in order to move business at international level, a company requires to
analyse factors like which impact on operations. This assignment deals with the concept of
interrelationship of business organisation and environment at global level. The company here
taken is M&S which deals in retail sector and offer a wide range of clothes and cosmetic related
items. Currently this organisation is going to launch its stores in Portugal for generating high
profitability. Thus, present report highlights different types of analytical approaches like PEST
analysis, segmentation and some other tools to understand the business environment in deep
manner.
MAIN BODY
Background information of Mark and Spencer
Business refers as a process where product and services are produce or manufacture and
that products or services sold to customers. The main motive of business is to earn profit and try
to create opportunities to grow or expand their business and when they get opportunities they
utilize it fully. Opportunities for a business can be in any form such as expansion of business in
same country or extend business in any other country.
The organisation selected for this assignment is Mark and Spencer, is a one of the major
multinational retail store, which was founded in 1884 and headquartered in the city of
Westminster, London. It is founded by Michael Mark and Thomas Spencer. The respective
company is specialises in selling of clothing, home products and luxury food products (Bocken
and et. al., 2013). Currently Mark and Spencer has 979 stores across the United Kingdom
including 615 stores that sell only food products. It has around 85,000 employees and it serve
their products and services worldwide.
Mission:- Mark and Spencer mission statement are to do inspirational quality accessible
to others.
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Vision:- The respective company vision is to be the criterion against which other are
measured- Benchmarking.
Values:- Mark and Spencer values are quality, service, innovation and trust.
Objective:- Mark and Spencer organizational objective is to regain its leadership in
clothing and speciality food. This objective is achieved by translating sales and authority into
superior values, quality and appeal. Sales Objective of respective company is to improve their
sales per foot (Brammer, Jackson and Matten, 2012). They seems return per foot as a key of
operational objective going forward. And employees objective is to develop a career path for
employees, the respective company attract, motivate and retain effective workforce for
transformation of business and performance.
Target Segmentation:- Mark and Spencer core target customers are under 25 to 55 age
group men and women, but per una range target customers are women aged between 25 to 35
and size of 8-18. Income and social class target by respective company is not so high, they meet
their expectation with providing appreciate practical, good products and value for reasonable
priced. Mark and Spencer target their potential audiences by using various channel of promotion
and advertising such as social media, TV and so on.
Mark and Spencer is offering most of the places in world and now they are planning to
expand their business in Portugal. Portugal is a country which is situated around west and south
west side of the Iberian Peninsula in South western Europe. The respective country have their
own culture which is slit different from other countries culture due to which Mark and Spencer is
can face some problems in conducting their operations in effective and efficient manner (Brown
and Osborne, 2012). So, Mark and Spencer do their planning and design strategy accordingly to
do operations in Portugal in appropriate manner for that they study and analysis culture, tradition
and business culture of receptive country. Mark and Spencer is providing quality products and
services to its customers all over the world and now try to expand their business in new culture
of Portugal and hoping that their new collection according to respective culture is like by
customer and they fell connected with Mark and Spencer.
Legal Structure:- Their is no separate legal business entity is created in Mark and
Spencer, this structure is simple and easy for respective company. Sole proprietor is beneficial
for the respective company in tax regulation and savings.
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Financial Performance:- The group revenue of Mark and Spencer is £10.7bn and cash
flow as per shareholder return is £417.5m and dividend per share of respective company is 18.7p
level.
Background Information on the Business Environment in Portugal
The business which is operating its business in dynamic environment get changed within
the time to time and a company design its plans and policies according to the environment. It is
important for a company to analysis the market area of new country or place where they going to
expand their operations so that they can get good overcome and achieve growth and development
in new market which will help business in gain better result in the future.
Mark and Spence is planning to expand their business operation in Portugal, that is
famous for its modern and flexible fashion market and other related products like luxury home
products, fashionable clothing and so on (Caligiuri and Tarique, 2012). Before expanding in
Portugal market Mark and Spencer evaluate and analysis their market by using BCG matrix
which is created by Bruce D. Henderson in 1970. BCG matrix is a strategic framework used by
the organisations to evaluate the attractiveness of organisational products against market growth
rate. It classifies the business portfolios into four categories based on industry attractiveness and
competitive position. Following is the description of BCG matrix in consideration with new area
of development and growth in respect to the Mark and Spencer in Portugal:-
Star:- It ascertains that company is having a high growth rate and high market share
along with this it is ascertained that profit will get maximised in future. Mark and Spencer is a
star in product service portfolios. The new website launched by the respective company has
shown great potential of growth .
Question Marks:- Mark and Spencer should divest into women wear and beauty
products as they both complement which is a cash cow in product portfolio. If two products
complement each other, deleting one product can negatively impact the marketing of other
product in product portfolio. Men wear and kids wear both generate reasonable revenues for
company so it would be good idea to continue investing in them.
Cash cows:- Mark and Spencer has food and lingerie as the products which represents the
backbone of the company. Fund generated from these cash cows can be channelled into stars and
promising question marks to develop them into cash cows.
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Dogs:- Premium priced clothing has been identified in dog category. With low share in
mature or declining market, Mark and Spencer should give strong consideration to divest this
product line and continue to drain its resources without desired levels of returns (Clark, 2012).
Mark and Spencer main backbone are clothing and food. If it doesn't balances these
products well in portfolio the company can be for trouble. Investment in fashionable clothing ,
tasty and healthy foods supported by increase in advertisement are the strategies that the
respective firm should pursue and takes actions.
Economy:- Economy factors include inflation rate, interest rate, GDP, unemployment
rate etc. In stability of political and social environment Portugal faces various changes such as
change in structured reform which aim is to liberalisation of economy. In respective country
development reform in fiscal policy and social security are included.
Cultural:- The culture of Portugal is different and complex from other religion or
country. According to products and services the values and beliefs of people are consist. It means
the socio-cultural of Portugal is sound and stable which help companies to expand its operations
because respective country people easily except the change.
Political:- For mixed economy political cultural are important because it effect
organisational working. It include several ideologies of government which influence the industry
operation in effective way. This factor generally influence and affect the business operation of
respective company in Portugal.
Legal:- When there is change in legal environment such as law and policies it will direct
affect the operations of an organisation. Legal factor affect performance of respective
organization directly because they have to do research and study about current laws such as
healthy and safety, environment law before they start their operations in Portugal.
Application of an appropriate analytical model
The analytical factor that is being implemented here is PEST Analysis. In PEST analysis
is factor that study about external factors that influence in every sphere in Marks & Spencer and
contributes in organisation development and enhancement. Marks & Spencer expand its product
and market in Portugal that opens the door for new opportunities.
Political factors:
Political factor is an important factor in mixed economy and it affects working of
organisations significantly in development and advancement (Cohen and Kietzmann, 2014). In
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political environment includes processes, parties and their ideologies, policies and bureaucratic
and red tap ism.
In Portugal relationship with other countries is very strong and assist a lot in effective
launch of new product in Portugal. Its tax system is fair and equitable in sharing power and
duties in right manner. The employment laws is fair in Portugal that helps in international labour
code that helps Marks & Spencer to establish in new market with new products. It has strong
environment laws that protect from abolition of environment in safe manner . It works to protect
environment that save the e co system.
Economic analysis:
Economic environment consist of aspect of business includes collection of business
through the aspects of’ various facilities and incentives, protecting local market to foreign
markets from terror of foreign competitors, taking direct role of promoting business
organizations, and purchasing from businesses. Government gives to all these in Portugal
economic system (Crane, Matten and Spence, 2013). It includes itself in providing various
facilities in the form of infrastructure - transport, electricity, banking and finance,
telecommunication to communicate markets for Marks & Spencer. Policies related to economics
is sound that supports to new entrants. It has sound infrastructure that help in settle new aspects.
Economy has stable in nature that protect from fluctuations and interest rates is stable that
protect from invaders to grab large market share in Marks & Spencer.
Social environment:
Social and cultural environment is comprehensive in nature due to some reasons it may
include social factors within which in firms operates. In fact, the political and legal environment
is closely intertwined with social and cultural milieu due to laws are passed as a result of social
pressures and troubles (Milne and Gray, 2013) . The socio-cultural environment consist of
attitudes, beliefs, desires, needs and wants, education and customs of the society at a given point
of time. Thus, social and cultural environment, in its broad sense. The level of social factor
influence to the economy of Marks & Spencer in effective manner (Ferraro and Briody, 2013). It
has sound system that enables to growth and prosperity of economy in suitable manner. It has
impacts in policies of organisation. Social beliefs are sound in Portugal that positively impacts
on organisation to achieve its goals.
Technological environment:
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Technological environment is essential for business as it influence the type of
conversion process that it may occurs for its purpose. The technological environment refers to
the sum total of knowledge providing ways to do things. It may include inventions and
techniques, which affect the ways of doing things, that is designing, producing, and distributing
products. In Portugal has sound technology that supports advance technology in Marks &
Spencer in to take technological competitiveness.
Data and charts to support business in Portugal
Marks & Spencer is considered as one of the biggest retailer company of UK that runs its
business in many countries. Using different approaches such as BCG matrix and PEST analysis,
managers of M&S can identify the new area of development and develop effective policies as
well. This would help in attaining set objectives and goals in predetermined period of time.
Economic Conditions :- This factor helps in evaluating the economical state of a country
or a particular region where a company wants to operate its business. Therefore, in context with
M&S, in order to open its business in Portugal, it is necessary for its managers to analyse the
economical condition. By analysing factors like microeconomics and macroeconomic that
includes exchange rate of currency, inflation and deflation period, fiscal policies etc., managers
of M&S, can develop effective strategies to gain profitability.
Technological environment :-
Technological environment is essential for business as it influence the type of
conversion process that it may occurs for its purpose. The technological environment refers to
the sum total of knowledge providing ways to do things. It may include inventions and
techniques, which affect the ways of doing things, that is designing, producing, and distributing
products. In Portugal has sound technology that supports advance technology in Marks &
Spencer in to take technological competitiveness.
International trade give advantages to both organisations and country in improving their
economical state. It triggers money into local economies and helps in producing more goods and
services for local markets. In context with the concept of global economy, it creates an amazing
impact on how a company operates its business (Lasserre, 2017). It gives tremendous
opportunities for expansion and growth of business into new markets. Therefore, before
launching business in Portugal, it is necessary for M&S to analyse the economical condition of
this nation.
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Interpretation:
It has interpreted from this above mentioned graph that from last five years economical
condition of Portugal, is increasing at high rate. The population rate is decreasing continuously
with increasing GDP rate. Along with this, policy interest and exchange rate versus USD,
unemployment etc. also reduces constantly. Furthermore, the main aspects which attract minds
of international organisations to conduct business over there, is industrial production rate. It was
0.5% in 2013 but now has raise to 3.9% of total economy. As per statistical analysis, it has
estimated that economy of Portugal will grow to near about 1.9% in 2019 (Portugal Economic
Outlook, 2018). Therefore, launching business in this country will be beneficial for M&S in
raising its profitability.
Reflection:
This project is related to understand business environment at international level. I was
working on this project and get effective opportunities for learn different kinds of information
regarding functions of business environment at national as well as international level. Later, I
recognized some issues related to my project. In my project, PESTLE is weak and there are some
of the other areas which need to be developed in a better manner. PESTLE analysis was not good
and my tutor was to make it better or done in a proper manner. On the other hand, I had not
consider information reading analytical tools which are needed to be executed under this report.
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After determining all issues, I decided to reduce my all mistakes from project and submit
the project. In my whole journey, I leant to do the proper analysis and take care that previous
problems should not be arise.
CONCLUSION
It has been summarised from this assignment that business environment impacts directly
on entire operational activities of a company. It affects decision making processes, strategies and
policies in adverse manner. Therefore, before expansion of business on global level, a company
needs to analyse factors which help in turning negative impact into positive. For this assistance,
management need to concern on Pestle analysis, BCG matrix, Porter's model and more. Along
with this, by analysing economical condition of those countries where a company wants to
expand business is also necessary to analyse. This would help in generating high profitability.
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REFERENCES
Books and Journals
Bansal, P. and Hoffman, A. J. eds., 2012. The Oxford handbook of business and the natural
environment. Oxford University Press.
Bocken, N., and et. al., 2013. A value mapping tool for sustainable business modelling.
Corporate Governance. 13(5). pp.482-497.
Brammer, S., Jackson, G. and Matten, D., 2012. Corporate social responsibility and institutional
theory: New perspectives on private governance. Socio-economic review. 10(1). pp.3-
28.
Brown, K. and Osborne, S. P., 2012. Managing change and innovation in public service
organizations. Routledge.
Caligiuri, P. and Tarique, I., 2012. Dynamic cross-cultural competencies and global leadership
effectiveness. Journal of World Business. 47(4). pp.612-622.
Clark, P., 2012. Organizations in action: Competition between contexts. Routledge.
Cohen, B. and Kietzmann, J., 2014. Ride on! Mobility business models for the sharing economy.
Organization & Environment. 27(3). pp.279-296.
Crane, A., Matten, D. and Spence, L., 2013. Corporate social responsibility in a global context.
Ferraro, G. P. and Briody, E. K., 2013. The cultural dimension of global business. Upper Saddle
River: Pearson.
Kirton, J. J. and Trebilcock, M. J., 2017. Hard choices, soft law: Voluntary standards in global
trade, environment and social governance. Routledge.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Milne, M. J. and Gray, R., 2013. W (h) ither ecology? The triple bottom line, the global
reporting initiative, and corporate sustainability reporting. Journal of business
ethics.118(1). pp.13-29.
Murray, A., Skene, K. and Haynes, K., 2017. The circular economy: An interdisciplinary
exploration of the concept and application in a global context. Journal of Business
Ethics.140(3). pp.369-380.
Nankervis, A. R., and et. al., 2016. Human resource management: strategy and practice.
Cengage AU.
Online
Portugal Economic Outlook. 2018. [Online] Available Through:<https://www.focus-
economics.com/countries/portugal>
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