External Business Analysis of Marks and Spencer PLC

This report evaluates the external business environment of Marks and Spencer PLC through STEEPLE analysis. It also discusses the microeconomic factors affecting the demand of goods, determinants of supply, and competitiveness of the UK market. The report concludes by outlining examples of random shocks and business problems faced by the organization.

Individual Coursework
Instruction

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Identifying industry and choosing the UK Public Limited Company.........................................3
Structure of the organization........................................................................................................3
Business organization and nature of organization.......................................................................3
Examining external business analysis..........................................................................................4
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
The environment refers to the surroundings that used to affect the human being and helps
them to survive. The current assignment is based on the Marks and Spencer PLC which is the big
multinational retailer having its headquarter in London, England. The report will outline the
business organization structure and meaning of business organization. Further it will outline
about the STEEPLE analysis in order to analyse the external business environment of company.
This report will also outline the microeconomic factors that used to affect the demand of goods.
Moreover, this report will also outline the determinants of supply and the competitiveness of UK
At last this report will outline the examples of random shocks and discussing the problems the
organization will face.
MAIN BODY
Identifying industry and choosing the UK Public Limited Company
The current standard classification is used in order to classify the business establishments
and several other statistical units in the economic activity they are working. This helps the
different industry to work with different rules and regulations (Okur and Ercan, 2022). The
industry chosen is the retail industry which helps the customers to have the easy availability of
the products in the market. Marks and Spencer is the British multinational retailer having its
headquartered in the London. This is the Public Limited Company, specializes its selling in
clothing, food and home products.
Structure of the organization
The structure of the organization used to play an important role in the market, as it helps
the company to grow and earn good profitability. M&S is used to follow the flat organizational
structure (Kearney, 2022). This is the type of structure which is limited in the levels of the
management between the top-level and front line employees. This type of structure is followed
by the organization in order to have the god decisions-making process.
Business organization and nature of organization
Business organization is the entity that is formed in order to carry on the commercial
enterprise. This also used to describe the structure of the company in order to produce the goods
and services to satisfy the needs of the customers (Han and et.al., 2019). This business
organization is made for the two purpose that is to generate the profit or to improve the society
(not for profit). As the cited organization is retail industry so the aim and nature of the company

is to generate the profit. The retail organizations used to rely on the organizational structure that
used to focus on three areas that is centralized, store operations and regional operations. By
following this structure it helps the company to have the proper planning of the productivity and
serve best to the customers.
Examining external business analysis
Social factor: This is the most important factor that the company must focus on in order
to survive in the market. Many years back the Chief executive of M&S wants to expand the
company name in order to change with the changing trends in the market. By bringing the new
trends and fashion will attract the customers to buy more products. As from the last 5-7 years the
company is very focused towards the trend and do changes with the change in the market. The
brand has gained its name in the market by providing the best services to the customers. By this
there was rise in the consumption of the ready products in the market of UK and in the world as
well. The organization is one of the top providers in the ready products in the market of UK.
They used to have full focus on the customers changing trends which helps them to grow in the
market.
Technological factor: The present day retail stores used to change their technology by
adopting the new. This helps the company to have the faster production which makes them to
earn the good profitability in the market. From the last few years the company has established
the E-commerce store that helps them to have the effective selling in the markets of UK (What is
STEEPLE analysis?, 2021). All the goods of the cited organization is available on the websites
and by this people can do shopping without visiting stores. By adopting this technology from the
last few years helps the company to increase in the productivity and profitability. This also
makes the company to have the stronger presence in the global market. The company is usually
focused around the creation of the new technology model, which helps the company in adoption
of the industry agile methods. By having the better understanding about the role of technology in
the successful operations and its importance in having the customer focused products. If the
company does not follow the political factors it will be difficult for the company to survive in the
market.
Environmental factor: This is also the another factor that helps the company to grow in
the market. The M&S used to promote them by having the luxury brand and they are highly
concerned with the environmental effects. The company has promoted the concept of the

sustainable retail industry by having the careful production without affecting the market. As with
the happening of the COVID the company ahas affected a lot which used to decrease in the
profitability. The stores and online deliveries were closed in the market which affected the
annual selling. The cited organization used to sell the fair trade products that helps the company
to have less production cost and make environment friendly products. M&S used to work with
the BCI which helps them to develop the sustainable products in the market. The company used
to link in order to reduce the disparities in society.
Political factor: The company may affected by the changes in the policies of the
government. As the cited organization is having its presence in the various countries this factors
affects a lot. The change in the pricing regulations will affect the company pricing policy and
affects the profitability (How STEEP and STEEPLE Analysis Help in Business, 2022). There are
two main factors that used to affect the company's political stability and taxes. If the government
used to increase in the taxes than the company has to increase its prices of the product. The
company used to believe that they must have their business operations by having the focus on the
government policies. By this the government used to have the support in order to explore its
business in the global market.
Legal factor: There are various legal factors that may affect the organization to work in
the global market. As the legislation is used to change on the rapid basis which is very complex
for the company to grow in the market. The cited organization must conduct the training session
in order to update their with the laws and regulations. In order to operate in the global market it
helps the company to follow the laws and policies of the different countries. As the company has
not followed the Health and Safety Act, 1974 for which the company has to pay 500,000 pounds
for each offence. This has affected the lot to the company and this lead to decrease in the profits
of the company.
Ethical factor: This factor includes the ethics and principles, codes of conduct that used
to conduct the fundamental behaviours of the humans (Hofmann and Rutschmann, 2018). By
analysing this factor it helps the company to have the good accountability, communication and
responsibility towards the working. The employees of the organization must follow the personal
code of ethics, government rules and regulations and ethical codes of the company. This will
make them to have the good productivity by following ethics of the company and external

market as well. By this it will help the company to have good profitability and productivity in the
market.
Economic factor: The economic factors affecting the company is as described below:
Microeconomic factors affect demand of goods: There are various microeconomic
factors that used to affect the demand of the products of the company. This includes the price of
the commodities, prices of the related goods, taste and preferences of the customers, income of
the consumers and the expectation of change in the price. As there is always inverse relation
between the demand and supply of the products. The customers wants to but more product at the
low rate which used to affect the demand of the products (Zhu and Gao, 2019). M&S may face
the problems related to such factors in the market. The company is the retail industry, so they
must update its products with the change in the taste and preferences of the customers. As in the
below diagram it is also shown that increase in prices of the commodities will lead to decrease in
the demand of the products.
Determinants of supply and its affects: There are various determinants of the supply
which includes the price of the commodity, prices of other goods, change in technology, changes
in government polices, entry of new firms, etc. From this the change in technology and
government policies may affect the supply of the products of the company (Kamble and et.al.,
2019). As the company used to operate in the global market so these are the main determinants
that may affect the supply of the organization. The change in the fashion trend will lead to
decrease in the supply of the thus will lead to decrease in the profitability.

Competitiveness of UK market and impact on business: The competitiveness of the
UK was expected to reach up to 11.00 at the end of 2020. The market competitiveness is
basically the extent of the competitiveness of operating in the external environment in which the
firms operate (Vaikunthavasan, Velnampy and Rajumesh, 2019). There are various firms in the
market of UK which may affect the profitability of the M&S. There is the great competition in
the retail market of the UK which makes have the negative impact on the business. There are
many sellers and buyers in the market so it will be difficult for the company to have good
profitability in the market.
Examples of random shock helps in evaluating UK fiscal policy: The random shocks
is defined as the unpredictable and unexpected change that used to affect the fundamental factors
of production. For example, the sudden change in the prices and policies in order to trade in the
global market. Fiscal policies refers to the use of the government in spending and taxation which
used to influence the economy (Viriyasitavat, Anuphaptrirong and Hoonsopon, 2019). This is the
main problem that may affect the fiscal policies of the UK. As by increase in the prices and trade
restrictions which may affect the financials of the UK market. The rise in the prices of the taxes
will be having the great impact on the UK's economy and will also affect the company.
Business problems and criticizing external effect of business decision: There are
various business problems and challenges that affects the profitability of the organization. As the
company may face the problems related to the uncertainty about future and changes in trends and
technology (Rahman, Ullah and Thompson, 2018). As the company used to operate in the global
market, so they face the problem related to the complying of the rules and regulations of the
different countries. The change in technology, political changes, social changes affect the
decision-making of the company. By this the organization may face the issue in order to increase

the profitability in the global market. In order to make the good decision the company must
follow the market trend and adopt the new technology for having the faster production in the
market.
CONCLUSION
From the above analysis it is concluded about the business organization structure and
meaning of business organization. Further this report has evaluated about the STEEPLE analysis
in order to analyse the external business environment of company. This report has also described
about the microeconomic factors that used to affect the demand of goods. Moreover, this report
has also evaluated the determinants of supply and the competitiveness of UK. At last this report
has described the examples of random shocks and discussing the problems the organization will
face.

REFERENCES
Books and journals
Han, Z. and et.al., 2019. Identifying spatial patterns of retail stores in road network
structure. Sustainability. 11(17). p.4539.
Hofmann, E. and Rutschmann, E., 2018. Big data analytics and demand forecasting in supply
chains: a conceptual analysis. The International Journal of Logistics Management.
Kamble, S. S. and et.al., 2019. Modeling the internet of things adoption barriers in food retail
supply chains. Journal of Retailing and Consumer Services. 48. pp.154-168.
Kearney, S. A., 2022. M&S Highlight—Hansen (1986), Physical structure of hardened cement
paste. A classical approach. Materials and Structures. 55(2). pp.1-3.
Okur, N. and Ercan, T., 2022. Evaluating retail efficiency using DEA and AHP: a case in the
Turkish apparel retail industry. Journal of Fashion Marketing and Management: An
International Journal.
Rahman, M. Z., Ullah, F. and Thompson, P., 2018. Challenges and issues facing ethnic minority
small business owners: The Scottish experience. The International Journal of
Entrepreneurship and Innovation. 19(3). pp.177-193.
Vaikunthavasan, S., Velnampy, T. and Rajumesh, S., 2019. Exploring the problems and
challenges of micro small and medium enterprises in Northern Province. Business and
Management Horizons. 7(1). pp.89-104.
Viriyasitavat, W., Anuphaptrirong, T. and Hoonsopon, D., 2019. When blockchain meets
Internet of Things: Characteristics, challenges, and business opportunities. Journal of
industrial information integration. 15. pp.21-28.
Zhu, G. and Gao, X., 2019. Precision retail marketing strategy based on digital marketing
model. Science Journal of Business and Management. 7(1). pp.33-37.
Online
How STEEP and STEEPLE Analysis Help in Business. 2022. [Online]. Available
through:<https://pestleanalysis.com/steep-and-steeple-analysis/>
What is STEEPLE analysis?. 2021. [Online]. Available
through:<https://planningtank.com/market-research/steeple-analysis>