Context of Business: SWOT and PESTLE Analysis of Marks and Spencer

This report covers the SWOT and PESTLE analysis of Marks and Spencer, a multinational retailer dealing in clothes, accessories, home, and food products. It also evaluates the pestle factors influencing opportunities and threats within the business. The report recommends a leadership style to meet the objectives of the organisation and explains CSR. The report also suggests strengths used by Marks and Spencer to overcome weaknesses and threats.

Context of business

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................4
TASK 3............................................................................................................................................8
TASK 4............................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The context of business covers an understanding of factors that impacts the operations of
business from several aspects such as process of decision-making and business objectives. This
is an approach of human-centred strategy and is designed to make solutions that will be needed
while facing the complexities within the business. Business context helps in analysing the
business environment and also facilitates in gaining the competitive advantage (Żytniewski,
2017) . It allows business to analyse the strengths as well as weaknesses along with opportunities
and threats of a particular organisation. Business is an enterprise or an organisation that is
engaged in dealing with industrial, commercial or professional activities to earn and maximise
the level of profits. It not only includes profit organisations but also involves non-profit
organisations. Within the present report, Marks and Spencer is taken into consideration as a
business entity which is multinational retailer and deals in offering clothes and accessories, home
as well as food products (Haasis, Liefner and Garg, 2018). This portfolio includes SWOT and
PESTLE analysis of Marks and Spencer along with the evaluation of pestle factors influencing
opportunities and threats within the business. In this report, leadership style will be
recommended to company that facilitates it in meeting the objectives of the organisation.
Furthermore, critical explanation of CSR is also going to be considered within the portfolio.
MAIN BODY
TASK 1
SWOT and PESTLE Analysis for Marks and Spencer:
SWOT Analysis is a tool that is used by an organisation to analyse internal strengths as
well as weaknesses of company along with external factors like opportunities and threats that
impacts operations of business. The respective company is using this analysis because it helps in
taking better business decisions that provides assistance in accomplishing the targets in a more
effective manner. Swot analysis of Marks and Spencer is explained as under:
Strengths Weaknesses
Brand value: Marks and Spencer is a well-
known brand that provides quality of products
to customers in the market (Yen and Lin,
Reduction in sales: After pandemic situation
of COVID-19, sales of company in some of the
stores get declined due to non-availability of
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2020). Brand image of the company helps in
capturing more of its target-base and hence,
expand the sales of respective organisation.
Updated technology: The company is using
highly updated technologies that helps it in
innovating and developing the products as well
as services of company like clothes, food and
many more (Szelagowski and Berniak-Woźny,
2019). It also facilitates managers of
organisation in reducing the cost of business
and save their time. Because of its innovative
products, the company is gaining competitive
advantage over its competitors like Lawson,
Debenhams, etc.
products and poor supply chain system. At that
time, Marks and Spencer was not able to meet
the demand of its potential customers in
offering the products as per their preferences
and taste and was negatively impacting its
image within the market.
Higher costs: Because of heavy dependency
on manual operations in various processes, the
cost of the business goes higher and also
consuming more time. This becomes the major
weakness within company and hampers the
level of profitability of respective organisation.
Opportunities Threats
E-commerce Stores: Customers are more
concerned about their lifestyles and usually
avoid crowded areas. It is the opportunity for
Marks and Spencer to concentrate on the sub-
markets and provide services to them through
online mode where it is not physically
available to sell its products and services.
Segmentation of markets: Market
segmentation is the opportunity for respective
company to expand its market that helps the
business in earning and maximising the level
of profits within the company. Marks and
Spencer should introduce new market
segments such as furniture which will
facilitates it in capturing more customer-base.
High level of competition: There are various
competitors of Marks and Spencer such as
Lawson, Asda, Debenhams, Morrisons, etc.
Hence, it will be difficult for the company to
gain competitive advantage over these
competitors. For this, the company should use
different strategies which will help it in
meeting its objectives effectively and
efficiently.
Changing trends: It has been analysed that the
fashion industry is taking changes frequently
which is a threat for Marks and Spencer
(Suszyński, 2020). As taste and preferences of
consumer are changing rapidly and they need
some new taste in clothing that have unique
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designs and making their appearance
differentiated among their friends and relatives.
PESTLE Analysis is a framework that is used to analyse the impact of macro-
environmental factors which influences functioning of industry. There are six factors within the
framework and they are political, economic, social, technological, legal and environmental
factors. Managers of Marks and Spencer use this tool to observe and analyse trade dynamics
which will further helps them in upgrading their business (Susomrith and Suseno, 2017). Each
factor of this model leaves impact on operations of Marks and Spencer in following ways:
Political factors: These factors are associated with the guidelines and polices of government that
influence operations of a business. These type of factors involve taxation policy, trade
restrictions, tariffs etc. In context to Brexit, decision taken by UK to leave the European Union
impacts functioning of Marks and Spencer. As company has to face trade regulations imposed by
the European Union while trading in Europe. In context to COVID 19, government of UK has
made guidelines regarding social distancing, sanitizing that also influences the operations of
business. As company has to follow lockdown policy of the government and because of which
sales volume of company got declined and impacts the functioning of company in a negative
way.
Economic factors: These factors are those elements which influence the performance of
economy which directly affects business of a company. Economic factors include inflation,
employment rate, growth rate, etc. Marks and Spencer is primarily operated in UK where
economy is stable and market-oriented (Halliday, Paustian-Underdahl and Fainshmidt, 2021).
The enterprise has brand value in its country and has a larger number of customer-base. But due
to pandemic situation in 2020, economic lockdown influenced business operations of the
company in a negative way because at that time sales of the enterprise got declined. It hampers
profitability of the business and bring negative impact on company.
Social factors: These type of factors are useful within the organisation to formulate a better
strategic plan as per the changing as well as trending patterns of the customers in the market.
Social factors involve taste and preferences, literacy rate, population growth rates, health
consciousness, etc (Ntarlas and Karayanni, 2020). Marks and Spencer concentrates on clothing
of people who are above teenager's age but now trends within the market are changing at a rapid
3

rate. Youth prefers to buy those clothes that are trendy as well as fashionable. It positively
impacts operations of company as the respective organisation is offering products and services
such as trendy and fashionable clothes by knowing and understanding the perceptions of
audiences in market-place.
Technological factors: Nowadays, latest and updated technologies are used at an increasing
rate and favourably influences operations of Marks and Spencer. Technological factors involve
machine learning, artificial intelligence, etc (Mustafina, 2019). The company is using highly
technically developed machines that helps it in making more clothes and food of higher quality
within a shorter period of time and at less cost. It captures more of its customers and provides
assistance to company in increasing the level of profits and brings positive impact on the
organisation.
Legal factors: Factors that are associated with jurisdictional legislations and laws are defined as
legal factors. These type of factors include discrimination law, health and safety law,
employment law and many more (Rialp-Criado and Komochkova, 2017). The government of UK
has made certain laws as well as legislations like trademarks, consumer law, employment
legislation, etc. Administration of Marks and Spencer follows all laws and legislations which are
created by the government of its country and works ethically within the business. It helps in
building their brand image and brings positive impact on operations of company.
Environmental factors: These factors are concerned with the effects of the surroundings in the
environment that can affect the ecological aspects for the business organisations. These type of
factors include sustainable development, environmental protection laws, legislations regarding
waste development etc (Miles, 2017). Within the company, electric vehicles are used for
delivering its products and services such food, clothes, etc. door to door. These types of vehicles
cause less pollution in environment. It positively impacts brand image of the company as
customers are more attracted towards services that are offered by company.
TASK 2
Evaluation of PESTLE factors influencing opportunities and threats within the business
organisation along with addressing the strengths to negate weaknesses and threats
influencing opportunities
Changes in factors of Pestle Analysis
Factors Change in factor Opportunity Threats
4

Political factors Brexit The factor of Brexit
allowed the Marks and
Spencer to expand its
business beyond the
European union. It is
the opportunity for the
respective organisation
to enhance its market-
share across the world
(Massaro, 2019).
The trade restrictions
was also becoming a
threat for Marks and
Spencer because
excise duty as well as
imports were
increasing that results
in expanding the cost
of products and
business as a whole. It
negatively impacts the
functioning of business
and influence its brand
image in an adverse
way.
Economic factors Inflation rate After Brexit,
increasing prices of
products such as
clothes, food, etc.
created the
opportunities for
Marks and Spencer to
expand the level of its
profitability.
When respective
company increased the
price of its products,
Marks and Spencer
had lost a large
number of its
customers as people
were not having that
much of income and
some became
unemployed at that
time (Marić, 2020).
Social factors Change in lifestyle Earlier, Marks and
Spencer was not
At the same time it
was also a threat for
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offering the clothings
for the teenagers as
well as youngsters.
Hence, after observing
the changing and
trending pattern of
customers, the
company analysed that
the audiences are
demanding for trendy
and fashionable
clothes (Johan and
Valenzuela, 2021).
So, it starts offering
those products and
services which are in
need of its potential
customers.
respective company
because it has a large
number of competitors
such as Asda,
Morrisons, etc. who
were also offering their
services through
unique and innovative
methods. It was
difficult for the
company to launch
new products and
services as per
customer's perceptions.
Technological factors Machinery By using highly
technically developed
machines, the
company is having
opportunity to expand
its market-share
through providing
differentiated and
unique designs of
clothes. This strategy
will help Marks and
Spencer in capturing
more of its target-base
As more and more
technologies are
involved within the
respective business, it
becomes difficult for
the organisation for
managing its financial
resources because the
increment in
production cost will
results in loosing the
market-share
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and enhance brand
value also.
(Glebovskiy, 2019).
Legal factors Employment laws It helps in generating
the opportunities
within the business to
capture more
targeted-audience
because Marks and
Spencer can provide
benefits to human
resources by taking
necessary precautions
and adhering the rules
and regulations that
are created by the
government of the
country related to
safety of employees.
If existing company
does not adhere safety
measures towards its
workforce then it can
be a threat to Marks
and Spencer for
bearing a large amount
of loss (Gajdzik,
2020). As while using
machines they can
cause harm to
themselves like short
circuits, wiring issues,
etc. hence, it is
necessary to take
precautions towards
them.
Environmental
factors
Sustainable
development
It is an opportunity for
company to look on
sustainable
development for
environment that
facilitates the company
in creating a positive
brand image. This will
also provides
assistance to Marks
and Spencer in
The manufacturing
process of company
can be harmful for
environment as
factories emit pollution
and the waste which is
generated from these
factories are directly
dumped into the river.
It can hampers the
brand image of
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extending its
customer-base as well
as creates customer-
loyalty.
company.
Strengths used by Marks and Spencer to overcome from weaknesses and threats:
The existing company has several strengths like offering better quality of goods and
services to audience in market. Marks and Spencer has its brand value in UK and it is a strength
for organisation and because of which company is having opportunity to expand its business in
those areas where is not able to focus on. This will assists the business in overcoming from its
weakness like reduction in sales (de D’Amico, 2019). This was due to the poor supply chain
system in the organisation. Hence, in this case, company can use new technologies to improve its
supply chain and makes proper availability of products in each stores across the world. Also,
company has better financial resources so it can use new strategies, methods and machineries for
production process and create unique and innovative designs that will attract new customers. The
major threat for company is its competitors such as Morrisons, Asda, etc. However, Marks and
Spencer need not to worry about its business as it is well known for its goods and services. Also
the organisation can use several other platforms like it can expand online business through more
website in order to capture more audiences in the market-place.
TASK 3
Leadership style to meet business objectives:
A leader is a person who is clear with the goals of organisation that are to be achieved
and motivates its subordinates so that they can do more hard work and attain organisational goals
in an effective and efficient way. Leadership is a process of instructing, guiding, motivating and
inspiring the members of team to achieve objectives of business effectively (Srinivasan, 2020).
Leadership style refers to a behavioural pattern of characteristics of a leader while leading,
motivating and managing the group members.
Participative leadership style: It is related to those style of leadership under which the
leaders enables their subordinates to actively participated in the decision making process of the
organisation. It is one of the most attractive and valuable style of leadership because it motivates
the employees towards the achievement of organisational goals and objectives (Davis, 2017). In
8

this type of leadership style the managers of the organisation provides many instructions to their
employees so that they complete the assigned task and responsibilities effectively and efficiently.
Transformational leadership style: It is related to those style of leadership under which
the leader convey the vision of the company in their subordinates and motivates them to work
according to these vision of the company. Under this style of leadership the managers of the
organisation helps their subordinates to understand the mission ans vision of the companny and
achieve the goals and objectives of the business. It enabels the leaders to become the role model
for their subordinates.
It is recommended that the Marks and Spencer can apply the participative leadership style in
order to achieve the goals of the organisation. The leader can allow its subordinates in the
decision making. Marks and spencers is a multinational organisation and their business
operations are performed in many countries of the world (Breivold and Rizvanovic, 2018).
There are large number of stores which the company has to operates in different countries of the
world. This operation of the business contains large number of employees which required a
effective leader. Company uses participative style of leadership in their management and
motivates their employees to achieve the goals of the organisation. Under this style the leaders of
the company provides an opportunities to their subordinated to express their ideas and
suggestions in their decision making process which enables the use of creative thinking in
business.
TASK 4
Corporate Social Responsibility (CSR):
Corporate social responsibility is refers to those activities of a business under which
following social responsibilities are performed (Weber, Hiller and Lasi, 2019). The general
meaning of this concept is the company is required to spend the specific amount of their profit in
the social activities and upliftment of weaker section of the society. This responsibility are
compulsory in many countries by their respected governments and the non fulfilment of this
activity makes liable company for many restrictions and penalties.
Why should companies implement CSR:
CSR stands for Corporate Social Responsibility and is an integral as well as significant
part of the organisation. Because it is believed that market-share are likely to deal with those
9

brands which are working in an ethical environment (BĂTUȘARU, 2019). The practices of CSR
are essential component in managing the corporate public relation for business.
Practices taken by Marks and Spencer:
The responsibilities within Marks and Spencer towards its targeted-audience, employees,
suppliers as well as stakeholders are taken seriously because it offers quality of service to its
customer-base. The responsibilities within the n business organisation underpins the values of
services, quality, trust and innovation. The human resources within Marks and Spencer perform
their responsibilities as well as manage social, ethical and environmental issues across the
business (Ali and Garg, 2017). Nowadays organisation is seriously taking care of each delicate
issue of society such as issues related to climate, charity for society, management of industrial
waste and sustainable raw material, ethical trade and health of the people.
CONCLUSION
From above explanation, it is concluded that business plan is required to conduct business
activities that includes business strategic planning and several actions that are required to
perform. It is also used to design the clear objectives of the organisation that are needed to be
attained. Business plan helps administration of organisation in analysing the internal and external
factors as well as macro-environment factors that influence operations of business. Within the
report, SWOT and PESTLE analysis is conducted to analyse the influence of these factors . It
helps the business in taking correct business decisions and maintaining business growth. In this
present report, SWOT analysis is used to analyse internal as well as external factors such as
strengths, weaknesses, opportunities and threats while for analysing impact of macro-
environmental factors, PESTLE analysis is conducted. For smooth functioning of business,
leadership style is used within the organisation so that business decisions can be taken in an
effective as well as efficient manner. The company also practices corporate social responsibility
towards business environment that helps in creating a brand value of the organisation within the
market.
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