How changes in external environment affected Marks and Spencer in last three years

This essay discusses the impact of external environment on Marks and Spencer in the last three years and how the company adapted to these changes. It covers political, economic, social, technological, legal and environmental factors that influenced the company's performance. The essay also suggests ways to adapt to these changes.

Changes in External Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
ESSAY.............................................................................................................................................3
Changes in external environment over last three years affected the company...........................3
Ways to adapt the changes..........................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The essay is based on the external environment factors that influenced the performance
and profitability of business. It determines how changes in its external environment over the last
three years have affected the growth and productivity of company. Essay also cover the ways
which company have adapted to deal with the changes. The chosen company for completing this
essay is Marks and Spencer, it is multinational retailer firm that deals in home products, food
products and selling clothes. Organisation was founded by Thomas Spencer and Michael Marks
in 1884. Marks and Spencer also formed a joint venture with Ocado in order offer online food
delivery service to its customer.
ESSAY
Changes in external environment over last three years affected the company and ways to adapt
the changes
External environment generally includes the factors which are outside of organisation and
affect its performance and profitability. For running the business in smooth and effective
manner, it is important to analyse the external factors that could influence the company's
operation (Shahid and et. al., 2017). The few external environmental factors that creates a huge
impact on the business are political, economic, social, technological, legal and environmental
factors. In order to identify the external environmental factors, Marks and Spencer can use pestle
analysis as it helps to understand the market dynamics and also focus on improving the business
performance.
Political factors mainly include the factors which are changed, run and made by
authorities. The few political factors which influence the operational activities of business are
political stability, legal framework for contract enforcement, environmental regulations, tariffs
and trade restriction. Marks and Spencer operates their business in dozens of countries due to
which they have to deal with different types of political system risks and political environment.
Each country has its own rules and regulations regarding the health and safety, risk management,
risk control and planning for hazard identification which company have to follow. In last three
years, Brexit has created a huge impact on the performance of Marks and Spencer as it was
unclear where UK will stand in terms of trade regulations and tariffs. The separation between
UK and European Union results in loss of numerous free trade policies which impacts Marks and

Spencer as the cost of product gets higher (Wang, 2019). Changing government and taxation
policy is another factor which influence the operational activities of Marks and Spencer as they
face huge loss if new taxation policy gets implemented in different countries.
Economic factors include the determiners of economy's public presentation that
influence the organisation and creates a long term effects on business. The few economic factors
are inflation rate, interest rate, economic cycle, savings rate and foreign exchange rate. In the last
three years, the current trends in UK get shifted, consumers are mainly focusing on small retail
stores for fulfilling their needs and requirements. Abu-Shamaa, Al-Rabayah and Khasawneh,
2015). The smaller retailer stores provide products at lower mark-up which influence the
performance of Marks and Spencer. Company also faced the conflicts with small retailers over
product price rise at the time of Brexit. Due to COVID 19, Marks and Spencer has faced severe
loss which influence the performance of company. For example, during COVID 19 M&S shut
their many stores that creates a negative impact on their performance.
Social factors cannot control directly but it creates a huge impact on the market
strategies and business. Marks and Spencer has faced various criticism in the last few years due
to its non-trendy clothes. The youth of UK thinks that company offers less trendy clothes and
focuses on elderly people more. In order to attract more and more customer, Marks and Spencer
has paired up with Ocado for delivering the food to consumers. They also focuses on ready meal
sector as it brings advancement in food technology. Marks and Spencer is one of the top
providers of ready meals in UK.
Technological Factors is another factor which must be focused by company in order to
run the business in smooth manner. Marks and Spencer has implemented various new
technologies in order to survive in competitive environment for long run. In last years, they have
announced technology transformation programme that helps company to become digital business
and offer diversified customer experience (Cook, 2017). Marks and Spencer also implemented
self check-out technology which helps to save money and offer check-out experience to
customers. Company have strong online presence due to which they deliver goods and services
to its customer in smooth and effective manner. Through online mechanism, Marks and Spencer
is able to offer its food items to consumers by ensuring that they must remain disease free.
Legal Factors is also a factor which influence the performance and growth of business.
The laws and legislation of every country changes, it is important for Marks and Spencer to stay

updated with the current laws and legislation. Marks and Spencer comes under various legal
disputes in last years, the recent dispute was with Frascati landlord. Company also become
involved in major financial dispute with the landlord of Frascati. Marks and Spencer also comes
under public scrutiny as they fail to protect their employees from potential risk of exposure to
asbestos.
Environmental Factors also influence the business performance and goals. Marks and
Spencer is one of the retailer in UK that sources its fresh milk from RSPCA assured dairy farms.
The logo of RSPCA will be seen on every fresh milk packaging of Marks and Spencer. Company
also ensures that milk must be sold by procuring from farms with highest animal welfare
standards. These standards focus on encouraging cow welfare such as accommodation, feed, calf
rearing, health planning and grazing. Marks and Spencer has developed its own Green policy
which is known as Plan A. Through these policy, firm brings positive impact on the
communities, well being and planet. Marks and Spencer worked with Better Cotton Initiatives so
that they can develop practices that support sustainable practices for processing and procurement
of cotton (Zeitun and Saleh, 2015).
In order to adapt the changes, it is important for the company to conduct market analysis
for availing the information of political stability, tariffs, trade regulation and other factors that
affect the business performance. Company is focusing on improving customer experience by
reducing the delivering time so that they can have their meal on accurate time without facing any
delay. Marks and Spencer also implemented checkout system for customers so that they can
place their order without facing any difficulty. Organisation has faced many challenges in
COVID 19 situation, in order to deal with the situation company paired up with online food
shopping firm Ocado. The food items of Marks and Spencer is delivered by Deliveroo in COVID
19 by ensuring the safety and health of consumers. Therefore, Marks and Spencer ensures that
their consumers must get product with safety precaution and maintaining social distancing.
Company faced criticism as they are not able to appeal to any generation, makes bad decision
and doesn't listen to customer. Marks and Spencer is accused for selling clothes which are
conservative and boring. Recently, they have implemented Kate Middleton's amazing style in
order to attract more and more customer towards the brand.
For grabbing the attention of maximum customer, Marks and Spencer has changed its
designer so that they can attract youth by offering them pleasant and attractive clothes. Company

ensures that they can satisfy the needs and demand of consumers by offering them product and
services according to their taste and preferences (Swink and Schoenherr, 2015). To deal with the
impact of Brexit, Marks and Spencer focused to protect UK employer brand and following the
rules regarding the governing trade so that they can easily flow the movement of goods, capital
and services across UK. Company also involve employees in change process so that they can
gain knowledge regarding the change which they are going to implement by conducting
meetings and open discussions with staff. In order to attract maximum number of customer
towards the brand, Marks and Spencer has provided training and development opportunities to
their employees so that they can deal with the customer in effective and efficient manner (Arrfelt
and et. al., 2015). The training programs which must be used by Marks and Spencer are effective
communication, leadership training, time management, diversity training, etc.
CONCLUSION
From the above information it is being concluded that there are various external factors
that could influence the performance and productivity of business. It is necessary for Marks and
Spencer to identify the external factors that influence the business operation so that they can
survive for long run in Market. External environmental factors can be identified through
conducting pestle analysis. It is one of the tool of strategic management which helps in
understanding the wider business environment and also help to anticipate future business threats
so that company can avoid and minimise the impact of external environment. The external
environment has direct and indirect effects on the personnel, revenue and operational activities of
business. These forces influence the plans, activities, objectives, procedures and results of the
organisation.

REFERENCES
Books and Journals
Abu-Shamaa, R., Al-Rabayah, W. A. and Khasawneh, R. T., 2015. The effect of job satisfaction
and work engagement on organizational commitment. IUP Journal of Organizational
Behavior. 14(4).
Arrfelt, M and et. al., 2015. Examining a key corporate role: The influence of capital allocation
competency on business unit performance. Strategic Management Journal. 36(7).
pp.1017-1034.
Cook, S., 2017. Measuring customer service effectiveness. Routledge.
Shahid, S. S and et. al., 2017, October. The human factors affecting the acceptance of business
intelligence us behavioral ing the behavioral model of reasoned action theory. In 2017
9th International Conference on Information and Knowledge Technology (IKT) (pp. 62-
70). IEEE.
Swink, M. and Schoenherr, T., 2015. The effects of cross‐functional integration on profitability,
process efficiency, and asset productivity. Journal of Business Logistics. 36(1). pp.69-
87.
Wang, W., 2019. Identification of Factors Affecting Business Process and Business Rule
Integration. In Integrating Business Process Models and Rules (pp. 60-72). Springer,
Cham.
Zeitun, R. and Saleh, A. S., 2015. Dynamic performance, financial leverage and financial crisis:
evidence from GCC countries. EuroMed Journal of Business.