Context of Business: SWOT and PESTEL analysis of Marks & Spencer

This report analyzes the business context of Marks & Spencer through SWOT and PESTEL analysis. It identifies the strengths, weaknesses, opportunities, and threats of the company and evaluates the impact of political, economic, social, technological, environmental, and legal factors on its operations. The report also recommends a suitable leadership style for today's business environment and critically comments on corporate social responsibilities. Course code, course name, and college/university are not mentioned.

Context of Business
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY .................................................................................................................................3
SWOT and PESTEL analysis in context to Marks & Spencer...................................................3
Analysis of Pestel and Swot models...........................................................................................7
Recommendation of a suitable leadership style for today's business environment in context to
Marks & Spencer........................................................................................................................8
Critically comment on Corporate Social Responsibilities in the processes using evidence
from your research in context to mark and Spencer:................................................................10
CONCLUSION ............................................................................................................................11
REFERENCES..............................................................................................................................12
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INTRODUCTION
The business context relates to the analysis and evaluation of numerous components
affecting the course of a business. A business operates in a dynamic environment and is likely to
influence from different factors. It attempts to gain understanding of implications of business
aspects and helps in formulation of effective strategies. The business context is being analysed
by IT department to determine viability of an organisation and for potential strategical
development. The following report will conduct theoretical analysis in context of an
organisation. The chosen company for this study is Marks & Spencer, which is a UK based
popular clothing brand operating worldwide. This report will discuss changes occurring in
business and their impact on the future progress of the company. It includes identification of
requirements to maintain sustainability and ethical behaviour in relation to social, cultural,
economic and environmental issues. In addition to this, it determine the importance of leadership
and development of appropriate strategies in order to meet interest of stakeholders.
MAIN BODY
SWOT and PESTEL analysis in context to Marks & Spencer
About the company
Marks & Spencer is one of the leading retail brand which is headquartered in London
which deals in clothing, selling home and food products. It was founded in 1884 by Michael
Marks and Thomas Spencer which is currently carrying its operations globally that shows it has
high market presence. The company owns 1,037 stores situated in United kingdom and
remarkable due to huge base of loyal customers.
SWOT
SWOT is a strategic business tool which is used to determine strengths and weaknesses
in internal environment as well as opportunities and threats in external environment of a
business entity(Dimanche, 2018). It is helpful in gaining understanding about the position of an
organisation in the market. Swot analysis in context to Marks & Spencer is conducted and
explained below.
Strengths
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 High market presence: M&S owns numerous stores globally and performs their
operations in UK to a large extent. The company owns 17% share of UK market in
clothing sector denoting high market presence. Brand value: The company is a remarkable UK brand which is highly popular
worldwide and it is known for their quality in products. The company has established
their brand relevance and is renowned for providing great value to customers. Wide range of products: The brand offers a wide range of products including clothing
material, home appliances, skincare essentials, lingerie and other consumer goods. The
brand satisfy requirements and wants of the audience through making availability of
varieties of products.
 Strong financial position: The company has ample of funds and capital resources due to
their high profitability margins. Due to its strong financial position, creditors and
stakeholders trust the company because they offer high creditability. The company
maintains potential amount of reserve capital which ensures its sustenance during
vulnerable times(Padash and Ghatari, 2020).
Weaknesses Supply chain scalability: The low supply chain scalability declines the company
performance by facing shortage of products during vulnerable times. Effective scalability
refers to the ability of logistics departments to perform according to the demand and thus
helps in management of cost.
 Product recalls: Product recalls refers to the process of obliged sales return through
vendor due to safety issues in equipments. Frequent product recalls reduce customer
satisfaction and create doubts due to lack of trust in the brand.
Opportunities Simplification of processes:. The procedure from manufacturing to delivery of products
to customers includes various steps which could be tiresome and time taking. The
company can widen its scope of dimensions to a whole another level by ensuring more
simplified processes of transactions(NANDA, 2020).
 Online presence: The tendency of online shopping through customers is immensely
increased specially during the pandemic. Online purchasing is highly preferred to
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customers due to its convenience and ease. Therefore through promoting more online
marketing and operations, the company will grow towards success.
Threats Variations in trends: The major threat posed to the company is the continuous change of
styles and preferences of audience in clothing sector. Post-Brexit threats: The company is forced to shut down 11 of their stores due to the
implications caused since Brexit. The company's food standards is impacted negatively
and it seems difficult and time taking for the company to recover.
 Disapproval of certain practices through society: The company suffer from the
challenges of gaining appreciation and encouragement of practices through society. A
business is obliged to fulfil certain responsibilities to ensure compliance with societal
expectations(DiVenti, 2018). The manufacturing of the products offered by the company
promotes wastage of valuable resources including gallons of water and electricity to a
major extent.
PESTEL
PESTEL is a strategic framework which assess the factors which directly or indirectly
affect the business operational activities. It is used by organisations to analyse current situations
of external environment and evaluate impact of multiple factors on the business. PESTEL
analysis in context of Marks & Spencer is conducted and explained below. Political factors: These factors relates to the government policies and standards that
defines a code of conduct in which a business should operate. It includes factors like
trade policies, taxation laws, export-import laws, subsidies etc. which serves either
favourable or cause disruption in the course of business. In context of M&S, the company
operates in UK and is influenced by the factor of political stability which helps in proper
functioning of the organisation(Cohan, 2020). Along with that, it face consequences
driven through increase in taxation policies which further increase the prices offered to
customers. The increase in prices results in decline of customer demands and thus affects
revenue generation capacity of the company. Economic factors: These factors relates to the role of economy in the activities of
business like unemployment, income level of customers, rate of interest, demand-supply
models and other factors. These factors have direct or indirect influence over business
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decisions and the patterns it follows. In context to Marks & Spencer, UK's current
financial crisis has put negative impact it has forced the company to discontinue jobs of
2% of their staff which accounts for approximately 70,000 employees. Fashion industry
is highly influenced by economic factors like rate of inflation and recession which
determines the condition of economy(Chemlal and El Haddadi, 2021). During
recession, consumers tend to prioritize their needs and restricts their spending on
luxurious goods and fashion accessories as well as trending styles and vice versa. Social factors: These factors lay emphasis on the cultural trends and demographical
aspects of the society like age, gender role, health preferences, purchasing patterns and
other social elements. These elements impact upon business functions due to the
differences of perception and culture of customers as they belong to different
backgrounds. In context of Marks and Spencer, consumers are becoming brand conscious
and paying much attention on their looks and grooming. This implies the boom of
clothing sector and buying patterns of consumers shows great rate of purchasing clothing
items. Technological factors: These factors influence the business entities due to technological
changes and variations in methods adopted by enterprises. The techniques and methods
adopted in an organisation could become obsolete or expensive due to its increased
significance. Thus, these factors could impact production processes or cost statements of
an enterprise. In context to Marks & Spencer, the retail industry is showing intensified
significance due to the advancements of modern technologies. Digitalised platforms and
practices facilitate the transaction processes through online payments, digital display of
marketing content, online billing system and other modernised functions. Environmental factors: These factors affect businesses in multiple ways due to global
implications of environmental damage. A business is likely to receive appreciation or
hatred depending on the consequences of their activities on the environment. In context
to Marks and Spencer, the fashion industry is hugely contributing in the harmful carbon
emissions(Ren, 2021). The production processes includes wastage of water resources and
is responsible for water pollution due to dumping of industrial wastages. Moreover, 85%
of textiles is being wasted and dumped into garbage. Beside this, clothing industry
increase the concentration of micro-plastics into water bodies.
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 Legal factors: These factors refers to the laws and compliance with legal forces in order
to avoid any troubles that could disrupt the flow of business operations. An organisation
could be sued or face serious complexes in case of any misconduct or avoidance of
ethical obligations. In context of Marks & Spencer, it complies with consumer protection
laws and ensure that their customers are not exploited.
Analysis of Pestel and Swot models
From the evaluation of above strategic business models, some conclusions can be drawn
to understand the relation between Pestel factors and Swot model. The factors which affects
external environment of a business directly or indirectly determine the strengths and weaknesses
of an organisation. Also, changes in Pestel factors decides the scope of exploring opportunities
and helps in identifying risks associated with variations in external environment. The concepts of
Pestel and Swot model are different concepts but they are interlinked context of their
implications(Dimitrova, 2021). The impact of Pestel factors helps in determining what
conditions are serving favourable for the company or which external factors are posing as
threats. Likewise, the analysis of strengths, weaknesses, opportunities and threats decides how
unfavourable circumstances can be controlled.
 The economic factors like financial crisis or decline of economy during pandemic
resulted in undesirable outcomes. During the times of recession, consumer's lack of
interest in purchasing fashionable products declines the sales turnover of the company.
Adverse economical factors like poor economic growth indicates slow development of
the brand. These unfavourable economic factors could be overcame through lowering the
prices during the times of crisis. Due to the high brand value and loyal customer base
possessed by the company, it will be able to earn revenues even with lower price
margins.
 The social factors of the company shows the inclination of customers to the brand
products which decides the scope of their profitability margins. People are getting self-
conscious nowadays and tend to spend a major amount of their earnings on trending
styles and fashion accessories(Saiz-Alvarez, 2021). Despite the fact that variations in
trends is very frequent with changing preferences of customers and due to the new
emerging patterns in clothing sector. The company can quickly shift to current or
emerging trends due to the availability of funds and more capital resources.
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 The technological factors has remarkably changed the ways of operational activities of
the organisation. The modern techniques and digitalised patterns implemented in the
course of business has simplified the process of transactions. The technological
advancements has made the production process efficient and enhanced innovation in
product development. The favourable technological factors could help in supply chain
management through ensuring fast production.
 The environmental factors which leads to damage and contributes in climate change
could be improved with the adoption of sustainable practices within the organisation.
Sustainable practices like discouragement of plastic packaging and replacing them with
environmental friendly materials could be helpful in overcoming risks associated with
society disapproval(Kreutzer, 2019). Encouragement of practices like recycling of
wastage obtained in the process and avoiding production of plastic related products could
be proved beneficial for the company.
Recommendation of a suitable leadership style for today's business environment in context to
Marks & Spencer
Leadership style: The term leadership refers to directing a group of people in order to
achieve common goals of the organisation. The leader is responsible for integrating different
ideas of team with common organisational objectives (Chukwusa, J., 2018). In the year 2000,
Daniel Goleman introduced six leadership styles for management in order to meet their goals
effectively and efficiently. The following six leadership styles are discussed below:
 Coercive leadership style: The leader who leads like a dictator often comes in this style
of leadership. A leader takes strong initiatives and posses a great enthusiasm towards
achieving company's goals and objectives. On the contrary, this style does not motivate
employees to take actions and restrict them to be in part of decision making process
which negatively impact their motivation to work optimally within the organisation.
 Authoritative style: A leader who believe in taking actions collectively with workers
falls under this type of leadership. In this, manager ensures collective participation of
employees in decision making process to attain organisation goals in appropriate manner.
Moreover, This style is concerned with inspiring workers to innovate and take calculated
risks.
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 Affiliative style: The leaders in this style respect the sentiments of their team members
by building strong emotional bond with them. A leader tries to improve creativity level of
their workers by allowing them to adopt the strategy of their choice. Moreover, manager
lays its focus on building harmonious work culture within company in order to enhance
the performance of organisation.
 Democratic style: In this style, a leader motivates employees to flexibly take part in
decision making process which is necessary for constructing goals and objectives of
company. It also motivate them to know and utilize their creativity which helps in turning
organisational goals into reality(Lee, J.Y., 2021).
 Pacesetting leadership style:The leaders of this style are highly competent and possess
strong sense of initiative in their day to day actions which helps in influencing the growth
of the company. However, this often causes toxic work environment in terms of high
pressure in meeting deadlines which can also negatively impact health of employees.
 Coaching leadership style: The leaders in this style are more like mentor than leader. A
leader focuses on developing the skills of their team members which can help them to
improve their performance and productivity. In relation to it, manager helps the
employees to develop their own competences which can support the company to achieve
its goals and objectives on timely manner(Sharma, E., 2019).
By systemically analysing the above leadership styles and focusing on trends relating to
present business environment, it has been recommended that Mark Spencer, which is the largest
retail company based in UK should practice democratic leadership style in its day to day
operations. In today's business environment, it can provide emotional and financial support to
employees by enhancing their creativity level. As using this leadership style provides equal
opportunity for workers to deliver their view points freely and engage in company's decision
making process which helps employee to develop their own competences and self esteem.
Moreover, the employees can develop required skills which is necessary for their survival in
today's business environment which directly help the organisation to increase it potential growth.
Hence, deployment of democratic leadership style in management can help the company to gain
competitive edge in today's business environment.
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Critically comment on Corporate Social Responsibilities in the processes using evidence from
your research in context to mark and Spencer:
Corporate social responsibility: The company needs to be responsible and accountable
to the society in which they are operating their business activities. It allows firm to review and
analyse the positive or negative impact on all the aspects of society like economic,social and
environmental factors. In order to engage in CSR, the organisation must operate in a way that
enhances the well being of all the aspects of society(Xie and et.al., 2018). Furthermore, A
socially responsible corporate firms enjoy positive brand image and goodwill in the market. In
context to marks and Spencer, firm knows the importance of social responsibility as the
company launched its “Plan-A” which is a massive effort in order to restructure its operation in
the most sustainable manner and become world's most sustainable retailer in coming years. The
firm has put a great focus on developing economic and social strategies for the betterment of
society. In relation to it, the economic strategies includes providing skill development sessions to
unemployed,economical empowerment and programs related to the empowerment of particular
group of community like:woman, homeless etc. The company ensures that it run its operation in
an ethical manner and in accordance with law. Moreover, the organisation believes that success
of business is dependent on how well company is serving society and taking necessary actions
for the upliftment of the society. The company enacted various policies like : eliminating usage
of trans fats in making ready meals which helps in improving health of the population. In
relation to it, the firm has also launched it social responsibility program called as “Ready for
work” which focused on providing business management based knowledge to aspiring
entrepreneurs in order to assist them in setting of new start-ups. This program also have the
following goals for achieving corporate social responsibility such as:
 Enhancing the overall economic well being of society
 Providing and adopting measures for protecting the environment
 ensuring a positive connection between company and operating environment.
The company lays its focus on environment- friendly production guidelines which
facilitates the preservation of environment that leads to sustainable competitive growth of
company(Yunarsih and et.al., 2020). Furthermore, other charity programs that firm has engaged
includes: the building of medical centres and hospitals to giving scholarships to financially
weaker students. Hence, the initiatives taken by marks and Spencer firm has assisted it to gain
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customer loyalty , enhancing the environment and successfully increased its reputation in the
society. Moreover, it also helped the weaker sections of society to take advantage of basic
amenities like food and shelter.
CONCLUSION
As per the view of respective report, it has been concluded that Pestel and Swot analysis
are two most effective models which helps organisation in examining their viability in the
business environment. Using effective theoretical approaches like Pestel and Swot models helps
in identifying risks and factors which could hamper the operational activities of an organisation.
External factors included in Pestel model helps in determining the implications that these factors
posed on the activities of an organisation. In context Marks & Spencer, these models helps in the
process of constructive strategical development. In addition to this, it has been concluded that
democratic style of leadership is effective for the potential performance of Marks & Spencer. It
has been observed that corporate social responsibility helps in the upliftment of the weaker
sections of the society. Complying with CSR helps the organisation in gaining customer loyalty
and appreciation from the society.
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REFERENCES
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Management (pp. 89-142). Springer, Cham.
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