Marks and Spencer: Evaluating Business Environment and Performance

This report provides a comprehensive analysis of the business environment surrounding Marks and Spencer, a UK-based retail company. It explores the interplay between the external environment, encompassing social, ethical, political, and economic factors, and the internal environment, including employees, stakeholders, and management. The report examines various organizational structures, highlighting the importance of balancing internal and external factors to enhance organizational performance. It delves into the different organizational functions such as finance, marketing, operations, and human resources, and their contribution to the company's growth. Furthermore, the report assesses the impact of the macro environment on Marks and Spencer, considering political, economic, and social factors. A SWOT analysis is conducted to evaluate the company's strengths and weaknesses, relating them to external macro factors. The report concludes by emphasizing the significance of interdepartmental coordination and communication in achieving organizational goals and maintaining a competitive edge in the market. Desklib offers a variety of similar solved assignments and resources for students.

BUSINESS AND BUSINESS ENVIRONMENT

Executive Summary:
The following report is surfaced on the topic “business and business environment”. Business
environment plays the key role in an organisation. The external environment includes social,
ethical, political and economical aspects that affect the business. On the other hand the internal
environment includes the employees of the company, its stakeholders and management. A
balancer must be created between the external and internal environment of an organisation in
order to increase the overall output of the organisation. This report is dealt with a UK based retail
company known as Marks and Spencer. In the chosen company it has been seen that the
departments are interred linked with each other in order to achieve the goal of the organisation.
After completing the SWOT analysis on the strength and weakness of the company it has be
found that in 2017 the company has earned 115.7 million profit and is functioning worldwide.

Table of Contents
Introduction......................................................................................................................................4
P1. Types of organization and their structure..................................................................................4
P2. Size and scope of the organisations:..........................................................................................5
P3. Different Organisational function of an organisation and how, it enhance the growth of the
organisation......................................................................................................................................6
P4. Impacts of macro environment on an organisation:..................................................................8
P5. Internal and External analysis of strengths and weaknesses:..................................................11
P6. Relation of strengths and weaknesses with external macro factors:.......................................14
Conclusion:....................................................................................................................................14
References:....................................................................................................................................15

Introduction
The internal and external factor that affects the business organization is known as business
environment. The factors of external environment are political, social, technical and ethical
issues. The factors that is included in the organization’s internal environment arte employees,
management, working atmosphere, etc. There must be proper balance between the external and
the internal environment of an organization to enhance the performance of the organization.
Recently Marks and Spencer has overcome a great economic turmoil because of the sound
balance created between the external and the internal environment. In the assignment the
business environment of Marks and Spencer will be discussed.
P1. Types of organization and their structure
In the market there are various types of organizations based on their structure, Size and market
share. The organizations are explained below:
Private organization:
Private organization is a type of organization which, is owned by an individual. The main motive
of the private organization is to earn maximum profit. The private sectors are short lived in the
economy because any time an individual can close the organization if it does not earn any profit.
The rate of unemployment is very high in private sectors because the level of job satisfaction is
too low. Private organization often neglects the employees well being because their main motive
is to earn profit. The market share of the private organization is low compared to the public
sector. Private organization often compromise with the quality of the product in order to earn
maximum profit. Private organization follow single line structure that is the structure is based on
hierarchy.
Private sectors are ruled by the state legislature. All the activities of the private sectors are
intervened by the state legislature of the concerned area. Sometimes multinational corporations
are also involved to check the workings of the private sector. It has been often seen that the state
legislation perform evil practices with a particular company. Sometimes the owner of the private
organization choosers self rule so, that there is no external intervention in the organization.
Public organization:
A public organization is run by group of individuals having same business motive. A public
sector organization has two fold objectives it looks after the wellbeing of the employees as well
as the profit of the organisation. Job security in the public sector is much more than a private

sector. The market share of the public sector organisation is much more compared to the private
sector. Government sectors are based on the rules and regulations made by the government of the
concerned geographical area.
The organisational structure of the public sector is explained below:
Vertical; Structure: Most of the government organisation follows this structure. In this structure
the concentration of employees remain less at the top and more at the middle and base.
Horizontal Structure: In this structure the concentration of employees increases down the row. In
this structure the number of supervisors is less compared to general employees.
Divisional Structure: To enhance the efficiency of the employees government sectors divide the
employees according to their responsibilities.
Voluntary Organisation:
Voluntary organization is a type of an organisation run by group of individuals who have some
common economic interest. Voluntary organisation is divided into various sectors like charity
sector, the third sector and non profit sector. Voluntary organisation falls in between private and
public sector. They address the issues that are not taken care by the private and public sector.
Voluntary organisations are partially ruled by the charities they are registered.
Organisational structures have some complexities that are needed to be overcome by the
organisation to increase the productivity of the organisation. The complexities of the
organisational structure are explained below:
In private sectors the employees are often dominated by their superiors and their well being is
also neglected as they follow a hierarchy organisational structure. On the other hand public
sectors follow a structural flowchart. The structure of public sector organisations is horizontal
structure where, minimum employees are present at the top of the organisation and maximum in
the ground level of the organisation. Then comes the vertical structure where, employees of the
organisation are placed horizontally. Lastly comes the divisional structure where the employees
are divided according to their skills and responsibilities in order to enhance the productivity of
the organisation.
P2. Size and scope of the organisations:

In the market there are various types of organisations which, differs from one another in their
size, structure and market shares. Different types of organisations explained below:
Scope and Size of Mark & Spencer:
Mark and Spencer is the first corporate retail of UK. It has earned a profit of one billion in its
initial days. Presently it earns 115.7 million profits. It operations worldwide. Mark and Spencer
have 979 stores in UK and in India it has 58 stores. Internationally nit has 454 stores. It operates
in Spain, Turkey, Poland,etc. Beside clothing now they sell food product.
It has hospitality and home store outlets also. In Order to enhance the overall productivity of the
company it has also initiated online marketing. In order to functions globally the company has
launched various social media campaign.
Scope and size of BBC:
British Broadcasting Corporation is the world’s oldest broadcasting house with it’s
headquartering at London. It has engaged more than 20 thousand employee worldwide. It
provides worldwide service. Presently, BBC has launched online website to provide service
worldwide. It earns the revenue of 4.963 billion and it is considered as the most trusted media
organisation in the world. In order to increase the overall viewer ship they are going to launch
online video streaming software so that broadcast live videos (Bharadwa et al. 2013, p.540).
Oxfam International:
Oxfam International is a non profitable organisation which assesses the working of various
voluntary organisations of UK. It is divided into various committees to perform social activities
like eradicating poverty, illiteracy and health related issues. The organisation has launched their
website so, that people can come to know about them globally. It functions in various regions
like Belgium, France, Germany and India.
P3. Different Organisational function of an organisation and how, it enhance the growth of
the organisation.
All Organisations are divided into various departments who perform different activities to
enhance the overall productivity of the organisation. The functions of the organisation are
marketing, finance, operations and HR. The organisational functions of Marks and Spencer are
as follows:
Finance: This is one of the major departments of the concerned organisation. Finance
department of an organisation looks after the budgeting of the organisation. The finance

department of Marks and Spencer maintains the budget of the organisation b reducing the
company’s unnecessary expenditure. By retaining the amount of the profit the organisation
provides best priced to the customers.
Marketing: The marketing department of an organisation performs the promotional activities. It
helps the company to reach to its targeted audience so, that it can earn profit. The marketing
team of the company enhances the overall productivity.
The marketing team of Marks & Spencer attracts customers and retain the old customers. The
marketing team of the organisation has launched website of the company so, that it can reach to
its targeted audience within no time. Various marketing campaigns are launched by the
marketing department so, that the overall output of the organisation (Werbach and Hunter, 2012,
p.548).
Operations: The buying and selling activities of the company are looked by the operation
department of the company. The supply strategy of the company ( Marks and Spencer) has been
revised by the operation department to reduces unnecessary supply expenditure.
Human resource: The human Resource department of the organisation looks after the training,
selection and recruiting process of an organisation. In Marks and Spencer the HR department
provides periodical training to the employees so, that they can enhance their skills. So, that the
overall productivity of the organisation increases (Boons and Lüdeke, 2013, p.304).
In an organization the departments are interrelated with each other to enhance the overall output
of the organisation. Interrelation and coordination among various depart also improves the
overall working environment of the organisation. It also creates job satisfaction among the
employees of the organisation because the work pressure gets divided among the departments.
The divisions of an organisation increase the efficiency of the workers. Lastly inter relation
between the department enhances the overall communication process of an organisation.
In Marks and Spencer inter relation among the departments benefits the stakeholders of the
company because they get a chance to earn a huge amount of profit. The inter relation between
the department of the company has increased the sale of the company and has made the company
world’s leading retail (Weiss, 2014, p. 504).
Advantages, disadvantages and impact of inter relation of departments in an organisation:
Department inter relation has several merits and demerits that affects the company’s growth in
the market. The merits and the demerits are explained below:

Increases efficiency: inter relation between the departments of the organisation increases the
efficiency of the employees as they need to do only some specific job (Prajogo, 2016, p.23).
Variety of Job: According to Wild (2014, p. 504) in an organisation employees are often shifted
from one department to another department therefore the employees get various work to do in
order to increase their efficiency.
Communication process: Inter relation between the departments help to enhance the
communication process among the workers of the organisation.
Work diversity; Interrelation among the employee’s increases the diversity of the work place.
Disadvantages of Inter relation among the department are as follows:
Work becomes difficult: Inter relation among the department increases the work pressure among
the workers.
Dissatisfaction among the workers; Sometimes inter relation of the department creates
dissatisfaction among the workers because they might need to works in which they are not
skilled.
Improper distribution of work: interrelation among the department’s leads to improper
distribution of work among the workers.
Impact of Inter Relation on an organisation:
Inter relation among the department increases the overall output of the company in the
competitive market. It also increases the efficiency among the workers of the organisation and
also promotes diversity in the workplace along with effective communication.
P4. Impacts of macro environment on an organisation:
Political factors · ECs free trade permission which has
helped it immensely.
· Brexit related issues will be
impacting the business of M&S in terms of
import and export.
· UK legislations related to energy

efficiency is tight the business and
operations of M&S is being affected.
Economic factors · UK economy is decreasing and was
1.8% in the year 2016.
· The August inflation rate of UK has
scaled to 2.9%.
Social factors · The demographic complexities of the
UK have mixed impact over the business
scenario.
· The decrease in the number of young
population has affected the clothing b
business of the UK.
· The diverse religious trend of UK
has diversified the taste of the customers
and thus has presented larger opportunity in
front of M&S.
Technological factors · The advancement in the
technological aspects in the UK market has
influenced the business of M&S largely.
· The advent of online shopping will
enhance the customer connection of the
entity and thus create loyal customer base
for it.
Legal factors · Being in the retail sector and being
largely depended on the services of the
employees for productivity, the
employment related legislations such as
minimum working hour act and leave

related acts influences the business.
Environmental factors · The increasing environmental
awareness among the consumers has forced
the entity to adopt environment friendly
approach.
· In this regard, eco-friendly clothing
and organically grown foods are being
promoted by the company.
Impacts:
Political: According to Carroll et al. (2014, p. 60) the political aspects like EC permission and
others have impacted the M&S business in dual way. The permission has helped the organisation
to operate in all over Europe simultaneously. On the contrary, Brexit has forced the organisation
make changes in its source of goods procurement and labour market.
Economic: Economic perspective like developed economy has assisted the organisation in
keeping the product prices in a set standard. On the other hand, aspects like inflation and
negative growth of economy have posed threats to the market growth of the company.
Social: The increasing demographical diversification in the nation has helped the organisation in
devising different taste in terms of cloths and foods. It has also helped in product diversification.
On the other hand, decrease in the young population has surfaced to be a potential alarm for the
progressive clothing business of the company (Drucker, 2017, p. 300).
Technological: The advent of technological advancement has impacted positively on the growth
of the organisation. It has helped the organisation to promote the products and services in an
easier way and in less time. But the [potential negative impacts include enhanced security issues.
Customers are to some extent less attracted towards these technologies as they offer minimum
privacy (Ebert et al. 2016, p. 20).
Legal: Different laws regarding both employees and the employer have been blissful for the
company to create the brand image. On the contrary, employment related laws has restricted the

power of the organisation in different functional regards and has thus exercised negative impact
on the entity.
Environmental: Environmental concern has become one of the governing aspects of business
environment now a day. The organisation M&S has been impacted in both negative and positive
ways from this. An Eco-friendly operation has earned the company fame in the niche market. On
the other hand, this has increased the operation cost of the organisation which can be deemed as
a financial burden for the entity.
P5. Internal and External analysis of strengths and weaknesses:
Marks and Spencer is a multi chain international retail company based in the UK. They are
providing high quality value products to millions of customers around the globe through their
wholly owned or partially owned franchise stores. However the assurance of quality to customers
has become much important. Since it is a supply chain process there are many factors that affect
the company’s sustainability in the market. These factors cause hindrance in the growth process
both internally and externally.
External analysis
Political Due to its higher cost structure M&S faces disadvantages in the international
backdrop. Though the company has been able to lower its sourcing costs due
to trade agreements but lack of clarity in UK’s efficiency scheme causes
hindrance in fulfilling initiatives. As per Boons and Lüdeke (2019, p9), also
there are environmental and safety policies issued by the UK government
which has affected the company in the past. Tax and inflation rates being
higher in the UK during recent times has also affected international
customers.
Economic M&S focuses on higher quality which makes it a high cost structure brand
and thus it incurs short term losses. Customers nowadays are attracted to
value for money products both online and offline. So M&S has many
competitors in the market who offer products at discounted prices.

Social M&S needs to be more dynamic in the approach and newer initiatives are to
be taken. Bovée and Thill (2014, p15), states knowledge about the
surrounding community backdrop before product planning is essential.
Technological Customers nowadays focus on online retail and commerce.According to
Schneider and Spieth (2013, p134), M&S already has a strong presence both
online and offline.Building and developing its digital presence can increase
chances of future growth for the brand.
Legal Legal factors imply that the products manufactured by the brand assures
customer health and safety standards. Hence the brand has to undertake such
strategies and use resources so that customer safety standards are maintained.
Environmenta
l
UK government’s environmental policies have affected retail business from
time to time, With increased pressure on natural resources it becomes difficult
to maintain their sustainability. Naturally these factors tend to affect retail
brands like M&S.
Internal analysis
Strengths
 The brand assures a wide
array of high quality products.
 The brand has a global
presence
 The brand has high level of
customer loyalty
Weaknesses
 The brand faces a high level of competition
from other retail brands
 The brand being a popular label has chances of
fake products being issued in the market
 It is a high cost structure brand
 It does not emphasize on segmentation of
clothing
Opportunities Threats