Internal and External Analysis of Marks & Spencer

The assignment is based on the background, products, services, size, scope, vision, mission, business objectives, organisational structure, and legal structure of Marks & Spencer. It also includes a PESTEL analysis to identify macro environmental factors affecting the company. The internal and external analysis is used to identify strengths and weaknesses that influence decision-making.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................2
Explanation of different types of organisations and the growth of the international business
environment............................................................................................................................2
Explanation of chosen organisation........................................................................................4
LO2..................................................................................................................................................5
Functions of organisations, using organisation chart to show interrelate and link to
organisational objectives and structure..................................................................................5
LO3..................................................................................................................................................6
PESTLE analysis on business operations and highlighting impacts......................................6
LO4..................................................................................................................................................8
Internal and external analysis for organisation which influence decision making process....8
Strengths and weaknesses interrelationships with external macro factors..........................10
CONCLUSION..............................................................................................................................11
REFERENCES .............................................................................................................................12

INTRODUCTION
Business environment is the internal and external factors which influence company
function with customers, management, employees, supply and demand, and regulations. It is
affected by various factors from surrounding. All the changing wants and needs of consumers
and innovations took place in market which is part of environment business. The chosen
company is Marks and Spencer which was established in 1884 at City of Westminster, London.
It is multinational British retailer producing and selling home products, luxury food and clothing
items. Here will discuss about different types of organisations with background , scope and their
growth at international level. Also discussion is about organisation chart of M&S and PESTEL
analysis with positive and negative impacts on industry (Andersson, Forsgren and Holm, 2015).
The strength and weakness is find through internal and external analysis and applying those to
analyses interrelationship with external factors.
Particulars Marks & Spencer National Health
Service (NHS)
Oxfam
Background of
company
Marks & Spencer is also
called M&S or MS which
is British multinational
company established in
1884 at Westminster,
London. It was founded
by Michael Marks and
Thomas Spencer in Leeds.
It is retailer industry
selling luxurious food
products, clothing and
home goods. It has 979
stores across UK out of
which only 615 sells food
products.
NHS was formed in
1948 at United
kingdom for providing
free services to the
people or exempt
prescription charges.
It is charitable with 20
independent people
founded in 1942.
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Staffing It has around 84939
staff.
It has around 1.4
million staffs.
It has 20 independent
members.
Objectives The objective of M&S
is to create sustainable
business with
profitable growth,
consistent and meeting
needs of shareholders
and stakeholders.
The business objective
is to provide health
facility to the needy
and poor people of
society.
Its objectives are:
poverty eradication,
disaster relief and
equality between man
and women.
Vision The vision of M&S is
to become standard
against in which others
measured.
The vision of NHS is
to improve health care,
preventing illness,
keeping people
healthy, reduction of
hospital service and
improving chronic
conditions.
The vision is to
become a world
without poverty.
Revenues £10.622 billion £123.82 £1040.7 million
LO1
Explanation of different types of organisations and the growth of the international business
environment
It is defined as the combination of internal and external aspects which affecting functions
of company with their management, customers, employees, demand & supply and regulations. It
is marketing word which affect ability of firm and relationship with customers. The organisations
run in micro and macro environment. Business environment means surrounding on which
organisation is running.
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Organisation is the entity consists of multiple people, institution or association having
particular purpose (Boons and Lüdeke-Freund, 2013). There are different types of organisations
which are described below:
Public Organisation
It is also called state which is economy part composing both public services and
enterprises. It includes government services such as police,water supply, telecommunications etc.
They belongs to public ownership that provide goods and services to private for sale and
operating at commercial basis. The example is National Health Service (NHS) which is public
funded health system in England and constituent at United Kingdom one out of four. It is the one
of largest healthcare with single payer in the world. It provides services to the people at low cost
with good equipments. Only prescription charges is to be paid by patients.
As NHS is healthcare unit so it can provide services to overall part of UK which helps in
providing medicine to other countries at low cost. This increases better relationship with other
countries and increases goodwill of the corporation. Thus this promote health services too in the
international market and sustainability exist (Charter, 2017). It has done expansion in terms of
employees increment and providing health care facilities.
Private Organisation
It is the firm run by companies and individuals which is part of country's economic
process. It is not controlled by government. The main motive of such business is profit earning.
It is formed by privatizing public or forming new enterprises. All activities guided for earning
money in this sector. There are different types of private undertaking including: sole
proprietorship, large corporations, partnerships, trade unions. There are large number of private
body in UK because of few rules and regulation of incorporation. The example of such
corporation is M&S which is retail industry at UK.
M&S has located in many places for the people welfare. All the food products are
produced by it. Thus because of large expansion at international business environment it earns
huge profits and sales volume is large. It helps in global market and is consumer oriented. It also
provides job employment to the people which decrease unemployment in UK. It has planned to
expand 90 new food shop.
Voluntary Organisation
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It is the individual group enters into agreement as volunteers for purpose
accomplishment. It is also called voluntary group or union, common interest association or
society. It includes trade unions, environmental groups, learned societies, professional
associations. It provide services to poor, down trodden, sick, neglected and old aged people. It is
an approach and technique. It focus mainly on service providing rather than profit earning. The
example of such organisation is Oxfam which is charitable firm founded in 1942. It focus on
removing poverty , pro migration, disaster relief.
This provide service worldwide with the mission and values for helping people. This
helps in international business organisation by providing assistance to globally individuals which
improves country's condition (Chen, Chiang and Storey, 2012). There are 20 independent
working together for society and people benefits. It has done expansion in promoting equitable
businesses.
Explanation of chosen organisation
Here, the chosen organisations are Marks & Spencer (M&S), National Health Service
(NHS) and Oxfam which is described below:
Sole traders
It is enterprise which is run and owned by individual or one person where there is no
distinction between business entity and owner. All the management and control is done by
owner.
The advantage of this organisation are: registration is not complicated, easy to take quick
decision and run firm. Similarly, disadvantages is unlimited liability, one man management
which is difficult in managing all activities.
Partnership
It is an enterprise in which two or more person join together to run business. The
agreement is made between partners.
The pros of this firm are large amount of capital, limited external regulation and large
borrowing capacity. Similarly, cons are: risk of disagreement, all partners are liable for actions of
others, conflict.
Franchising
It is marketing concept adopted by business for expansion. It is the agreement between
franchisor and franchisee for carrying out expansion. Here, franchisor provide right to use
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property for certain period of time to franchisee and the user pay some fixed amount of money to
provider. Here, many UK company has franchise in different parts of country for service and
goods providing.
Joint Venture
It is the agreement of more than two people or company working together for specified
project or purpose. The share of every member is different because of profit or loss level. Here
all the chosen organisation work together for achieving goals and objectives.
LO2
Functions of organisations, using organisation chart to show interrelate and link to organisational
objectives and structure
Organisation Structure
It is the system through which goals, objectives and activities of an organisations are
achieved through proper outline. The activities can be responsibilities, rules and role. It also
includes flowing of information from one level to next. It also includes task allocation,
supervision and coordination for achievement of business aims. Here, M&S follow flat
organisational structure which had few management levels between employees and
administrative. It helps in motivating staffs and involvement in decision making process.
Here, M&S follows departmentalisation structure. It means division of organisation into
various departments and performing task according to divided sectors. It is found in both private
and public firms.
There are many functions in an organisation for carrying out activities and work. All the
functions are very important for business for sustainability and profitability (Gupta, 2013). Thus,
these helps in achieving result for business. As per context of M&S following activities are
described below:
Research and Development
It is the most important department of M&S. Here research should be done on the basis
of market and its competitors. In order to survive in environment research and development
should be conducted on frequent basis for achieving goals and objectives. As need and taste of
consumers change so each and every aspect should be analysed. Thus, M&S has invested large
amount of money for adopting new technology and in R&D department.
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Marketing and Sales
The product manufactured need to be marketed. So marketing helps in creating
awareness to consumer through using advertisement, newspaper, social media. Through those
channels consumer became aware and purchase products. Every business need to do proper
marketing and which creates sales (Hair Jr and et. al., 2015). Thus, M&S use various tool for
promotion of goods for survival.
Finance Department
This is the most needed department in mall types of business. All the work depends upon
money factors. The finance manager of company makes proper budgeting and planning for all
departments in order to increase maximize profit and minimize cost. Today M&S has reach at
highest peak because of effective budgeting for all work at firm. All the aspects, factors depends
upon this department (Hamilton and Webster, 2015).
Production Department
Production means the manufacturing of goods and providing of services. It is
manufactured as per the needs and demands of customers. This department is important to meet
consumer needs and demands and customized. Here M&S produces clothes, luxury items
according to requirement. Thus through production profit maximizes and achievement of goals.
LO3
PESTLE analysis on business operations and highlighting impacts
Macro is the environment which exist in economy rather than particular region and
sector. The uncontrollable factors that influence decision making which affects strategies and
performance (Macro Environment. 2018). The factors are: economic, legal, social,
demographics, natural and technological. The example of such environment are: competitors,
government regulations, interest rate. Inflation. The macro of M&S is PESTEL which is
described below:
Political
The factors run, made and changed by government. It shows anticipation level of
business and trades by executive. It includes trade policy, political stability, restrictions. These
are governed by administrative and changed by them (Hilton and Platt, 2013). Every company
need to follow set rules of health and safety, risk control and management, hazard planning of
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materials. M&S should analyse political factors very effectively and efficiently for survival. In
terms of M&S the impacts are:
Positive Impact Negative Impact
Follows agreement of free trade which decline
sourcing cost.
Higher cost in international market.
Economic
The performance of economy which impacts company and have effect for long term. It
changes purchasing power and demand & supply curve. It includes economic growth, inflation,
foreign exchange, interest. It is the purchasing power of people in society. The impacts of M&S
in environment are:
Positive Impacts Negative Impacts
It focus on higher quality goods despite of
increasing price.
It is affected by discounted pricing of
competitors.
Social
These are not controllable but affect marketing and business strategy. It focus on people
and consumers including age, culture, gender. Such factors arises from society or cultural of
people. Due to change in these factors it change demand and supply. Here M&S produces
produces product as per customer needs and demand. M&S has face following impact from
socio-cultural:
Positive Impact Negative Impact
It has produce product from baby to
generation.
It has lower price for products for customer
convenience.
The purchasing power of consumer decline
here .
Technological
The invention of new and latest update is technological factors. It helps in operating
business effectively and efficiently in competitive market by increasing productivity and
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lowering cost (Prajogo, 2016). The business should make planning according to latest
technology. If business apply latest and updated equipment then sustainability is easy. The
impact of this factor in M&S is described below:
Positive Impact Negative Impact
Through the help of new technology capital
avenue increases and focus on green practices.
It requires strict standards to be followed for
protecting environment.
Environmental
As business runs in environment so it need to follow rules and regulation. The activities
should be according to the surrounding on which firm exist. The environment is dynamic which
changes frequently so firm should be able to adopt those changes. The impacts of M&S are as
follows:
Positive Impact Negative Impact
With the help of sustainable practices, M&S
has improved energy efficiency.
Due to globalisation, change in temperature the
manufactured products needs to be sold at
discount.
Legal
The acts related with health safety, environmental, consumer right is called legal factors.
These are very important for every organisation to follow and work as per rules. These are made
by government for protecting employer and employer at workplace. All the rights need to be
followed. The impacts in context of M&S are:
Positive Impact Negative Impact
It has provide home delivery service and store
pickup.
It has fined for not complying laws for
protecting customer and staff.
It was involved in unethical practices.
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LO4
Internal and external analysis for organisation which influence decision making process
The SWOT analysis influences internal and external factors. It covers the strength and
weakness which in internal analysis and opportunities and threat including external analysis. It
holds 17% market share of UK in clothing business. The SWOT of M&S is described below:
Strengths Weaknesses
 It is powerful retail business in UK for
providing of products such as :
clothing, home and luxury.
 It values money and provide good
quality services and products.
 It owns number of brands across UK
market.
 It business is expanded in 40 countries
with 1000+ stores and more than 8000+
employees work.
 It provides shopping environment to the
customers.
 It also give training to employees for
betterment.
 They have to protect brand from
misuse.
 There is stock control or out of control
during peak time.
 It has problem in store space for
keeping clothes (Savrul, Incekara and
Sener, 2014).
Opportunities Threats
 It can develop website for enhancing
market and customer.
 They have opportunities to expand
brand in China and India where
population is high which leads
maximum sales.
 It can introduce new segment of market
rather than offering profit.
 The competitors of M&S are: Aldi,
Farmfoods, Centra, Asda, Centra.
 The biggest threat is changes need of
society people.
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 It can increase market in health eating
sector for customer. As people prefer
more healthy food.
Influence of SWOT analysis in decision making process
The decision making is influence by internal and external environment which is SWOT
analysis. Each and every factors should be studied properly before finding conclusion. As
strength and weakness are internal element of business. These helps in knowing capabilities of
firm which influence decision making process. Similarly weakness lies within itself so it should
be evaluated. M&S has strength of providing high quality products which increases productivity
and profitability in decisions. Similarly, weakness is brand misuse, stock control and space
problem which can be solve out by firm itself. If it is able to handle situation then decisions can
be taken better (Sekaran and Bougie, 2016).
The opportunities and threat are external analysis of business which can change decision
making power of firm. The opportunities means chance taking from surrounding, so it is in hand
of employer to grab more and good moments for influencing decision capabilities. Threat is the
most danger factor for M&S which can be its competitors. According to that, the proper and
good decisions should be made by corporation for survival. Thus after analysing SWOT business
makes decision which leads them to profitability (Smith, 2016).
Strengths and weaknesses interrelationships with external macro factors
Macro environment includes factors which are associated with external environment.
There are some strength and weakness which assist in business operations. There are some
changes which has to made by managers of M&S in order to compete. The Strength and
weakness are interrelated with external factors which are discussed as under:
Political factor
Political factors means governmental policies. This factor is strength and weakness for
M&S is described below: Strength- When M&S pays tax on time, then there is less political interference. This is
beneficial for growth and development of organisation.
 Weakness- Due to change in political factors, managers of M&A has to alter their
business operations for survival (Andersson, Forsgren and Holm, 2015).
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 Opportunities- It can expand business in other countries.
 Threats- The sustainability is difficult in new countries because of political factors.
Economical Factor
Economical factors includes tax policies, interest rates, inflation of country. This is
important for M&S for surviving in market. Strength- This factors helps managers of M&A to maintain proper books of accounts so
they can provide actual information regarding economic aspect.
 Weakness- When there is increment in tax rate of loan, then it is tough to raise loans from
external source.
 Opportunities- The company can predict rates from past and can charge on products.
 Weaknesses- Sometimes it can lead heavy loss to firm because of changing rates as
products are already manufactured.
Social factors
Social factors includes ethical, cultural values of organisation. This is relevant because
this can be strength and weakness for M&A Strength- If M&A provides high quality good and services to consumer according to
norms, then it leads beneficial for growth and development of association.
 Weakness- If cultural values and social factors does not remain in mind, then this affects
brand image and goodwill of industry which reduces sales and profit.
 Opportunities- The firm should grab opportunity in terms of producing products as per
customer demand.
 Threats- The threats can be in terms of size, brand and colour of product which might
not be liked by customers.
Technological factors
This factors includes latest up gradation of technology. For M&A technological changes
means up-gradation of software, change in technology, etc. which can be strength and weakness: Strength- Use of updated technology helps employees to be in organisation for longer
period of time. This improves quality of product and services and hence customer
satisfaction can be achieved through new creativity and ideas.
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 Weakness- The training cost is fixed in M&A. Sometime this technology are not
preferred by employees as they don't feel comfortable in working under latest techniques
(Boons and Lüdeke-Freund, 2013).
 Opportunities- M&S can develop different websites for promoting goods and services.
 Threats- It is not easy to adopt latest technology within few times. As competitors easily
use those updation in their work and product which is threat.
CONCLUSION
From this assignment it is concluded that there are different types of organisations
including public, private and voluntary. Here the report is based on Marks and Spencer (M&S)
which has described its background, products & services, size & scope, vision, mission, business
objectives, organisational & legal structure and information of stakeholder. The functions of
M&S are described and their interrelation with objectives and structure is described. Through the
use of PESTEL analysis which is macro environmental factors is discussed with their positive
and negative impacts. The internal and external analysis of M&S has done to identify strength
and weakness which influence decision making process. The described internal factors are linked
with macro factors.
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REFERENCES
Books and Journal
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Charter, M., 2017. Greener marketing: A responsible approach to business. Routledge.
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Gupta, A., 2013. Environment & PEST analysis: an approach to external business environment.
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Press, USA.
Hilton, R. W. and Platt, D. E., 2013. Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
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Online
Macro Environment. 2018. [Online]. Available through:
<https://www.investopedia.com/terms/m/macro-environment.asp>.
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