Marks & Spencer: A PESTLE and SWOT Analysis of Business Environment

This report examines the macro and micro environment of Marks & Spencer, a leading retailer, using PESTLE and SWOT analysis. It explores the positive and negative impacts of the macro environment on the business, analyzes internal and external factors, and evaluates the influence of both macro and micro factors on business objectives and decision-making. The report provides insights into the challenges and opportunities faced by Marks & Spencer in a dynamic business environment.

BUSINESS AND BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION................................................................................................................................2
TASK 3..............................................................................................................................................3
P4 POSITIVE AND NEGATIVE IMPACTS OF MACRO ENVIRONMENT ON BUSINESS....................3
M3 PESTLE MODEL......................................................................................................................5
TASK 4..............................................................................................................................................7
P5 INTERNAL AND EXTERNAL ANALYSIS OF MARKS & SPENCER................................................7
P6 STRENGTHS AND WEAKNESSES INTERRELATE WITH EXTERNAL MACRO FACTORS..............8
M4 SWOT ANALYSIS.....................................................................................................................9
D2 EVALUATE THE IMPACTS THAT BOTH MACRO AND MICRO FACTORS HAVE UPON
BUSINESS OBJECTIVES AND DECISION-MAKING.......................................................................11
CONCLUSION.................................................................................................................................12
REFERENCES...................................................................................................................................13
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INTRODUCTION
The success of an organization in the industry is dependent on the measures that are taken by
them for handling different issues and challenges. The business environment of an organization
relies on several elements of the micro and macro environment such that it is necessary for the
organization like Marks & Spencer to take essential steps for handling the situation effectively.
In this report, the internal and external analysis has been conducted in order to analyze the
macro and micro environment effectively (Babatunde and Adebisi, 2012). There are two
effective tools which are PESTLE and SWOT Analysis which are used for the analysis of the
environment. Moreover, the influence of macro and micro elements on business objectives and
decision-making is also assessed.
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TASK 3
P4 POSITIVE AND NEGATIVE IMPACTS OF MACRO ENVIRONMENT ON
BUSINESS
The business operations of Marks & Spencer have been influenced by the elements of the
macro environment at great extent. It has been observed that there are several positive and
negative impacts of the macro environment on the business operations of Marks & Spencer.
The macro environment of the organization comprised of various elements such as:
 Competitors
There are various competitors of Marks & Spencer in the market such as H&M, Aldi,
Asda, Centra, etc. The business of Marks & Spencer is influenced by the business
operation of competitors as they provide similar products in the market. The consumer
base gets diverted to the competitors through ineffective strategies (García-Morales, et
al. 2012). This aspect makes the organization to develop potential strategies and work
as per the market requirement.
 Customers
The consumer base of Marks & Spencer is huge and their requirement has been
changing with time. It is necessary for the organization to provide products in the
industry as per the need of the customers. When the customer needs are not fulfilled
then the business of organization will be affected.
 Human Resources
The employees are the essential element of the organization such that they work with
high efficiency and productivity in order to accomplish the organizational objectives.
When the efficiency of human resources deprived then the organization faces several
challenges and issues.
 Suppliers
The raw material and resources for the organization are gained through suppliers and it
is important for the organization to maintain the healthy relationship with them (Eva, et
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al. 2014). The high cost from the supplier affects their business operation which incurs
huge cost on the final products.
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M3 PESTLE MODEL
PESTLE Analysis is one of the beneficial tools that help in analyzing the macro environment
effectively. There are six elements on which the PESTLE framework is relied on such as political,
economic, social, technological, legal, and environmental. The macro environment could be
easily analyzed through the PESTLE framework (Gupta, 2013). This framework has been
explained in detail as follow:
 Political
Due to the European integration and free trade agreement, the investment in Europe by
the foreign organization has been increased. The business operation of Marks & Spencer
influenced the competition in the industry increases. There are industrial relations and
labour laws which also influenced the functioning. The trade policies from government
help in smooth operations of the organization.
 Economic
In the recent time, the economic balance has been observed in the market that results
in different changes on the business operations of Marks & Spencer. The major
challenges are the recession, high-interest rate, and inflation. Currently, the retail
market is in the stable position which provides several growth opportunities to Marks &
Spencer.
 Social
The customer perception has been changing with time regarding the products and
services such that the organization have an opportunity to gain effectiveness I the
market by fulfilling the requirements. The quality products and services from the Marks
& Spencer are available to the customers at affordable prices which attracts the huge
number of customers (Collins, 2010). Also, the organization understands the money
value which provides effectiveness in their products.
 Technological
The organization has been using advanced technology for their business operations
which provide effectiveness in the market. The customer service has been enhanced
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through the online feedback system. In addition, online shopping and home delivering
option help in gaining the attention of the customers. The advanced IT system helps in
gaining high productivity and maintaining their global presence on digital platforms.
 Legal
The business norms and policies have a great effect on the operations and functioning of
Marks & Spencer. They have followed the health and safety norms for the employees at
the workplace for providing adequate safety to them. Still, the governmental norms
have both positive and negative influence on the business. There are several training
programs conducted by the organization for their effectiveness of employees.
 Environmental
There are various CSR plans followed by Marks & Spencer and they also follow green
policies for their business operations which provide effectiveness and high efficiency to
them. The policies of Marks & Spencer show concern towards the environment which is
a beneficial influence on the business development. The organization also uses recycled
products and resources for their products.
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TASK 4
P5 INTERNAL AND EXTERNAL ANALYSIS OF MARKS & SPENCER
The most appropriate tool for conducting the internal and external analysis is SWOT Analysis.
This tool helps in analyzing the internal and external environment of the organization
effectively. Marks & Spencer is a huge brand in the industry and there are various aspects which
need to be considered by them for conducting the business operations. The SWOT Analysis
provides the knowledge of those areas effectively (Kew and Stredwick, 2017). It helps in
understanding the strengths and weaknesses along with the opportunities and threats. These
four aspects have been explained below:
STRENGTHS WEAKNESSES
 The business operations are
conducting in several countries
 Effectively follows and conduct the
green and CSR operations
 Various kinds of products with new
styles and trends are introduced
 The financial performance has been
low in the recent time
 The growth rate of business in China is
low
OPPORTUNITIES THREATS
 The digital platform is a huge platform
which provides various growth
opportunity to business
 Enhancement in the operational areas
 Business expansion in emerging
countries
 Various competitors in the market like
H&M, Aldi, GAP, etc.
 Consumer perception has been
changing
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P6 STRENGTHS AND WEAKNESSES INTERRELATE WITH EXTERNAL MACRO
FACTORS
The strengths and weakness of the Marks & Spencer are related to the external macro factors
to great extent. It has been evident that the macro factors have a great influence on the
business functioning. The major macro factors are the stakeholders such as employees,
suppliers, customers, and competitors. The influence of these macro factors on the strengths
and weaknesses of the organization could be observed easily. The major strength of Marks &
Spencer is their customers as they provide high-quality products in the market under affordable
rate which gains huge customer base (Kolios and Read, 2013). In addition, the healthy
relationships with the suppliers help in gaining quality raw material which further assists in
delivering quality products in the market.
The employees of the organization are prime key to success such that their efficient work lead
organization towards success but the inefficiency affects the business. Also, the competitors
lead to affect the business operations as they deliver similar products in the market. It has been
evaluated that the strengths and weaknesses of Marks & Spencer have been dependent on the
macro factors such that the effective handling of the macro factors helps in conducting the
business operations effectively.
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M4 SWOT ANALYSIS
The SWOT Analysis for Marks & Spencer has been explained in detail as follows:
STRENGTHS
 The business operations are conducting in several countries
The business expansion of Marks & Spencer provides strength to the business
functioning at great extent. In addition, they have invested in IT, systems, and logistics
for better functioning. They attract customers on the different platform like websites,
stores, application, etc.
 Effectively follows and conduct the green and CSR operations
The company works on the different green program that strengthens their work
towards the environment and develops an eco-friendly image in the market (Helms and
Nixon, 2010). It helps in gaining the huge customer base.
 Various kinds of products with new styles and trends are introduced
There is a different kind of products delivered by Marks & Spencer in the market such as
clothes, home, and food products. In addition, they use several platforms like the print
advertisement, TV, radio, etc. for effective marketing.
WEAKNESSES
 The financial performance has been low in the recent time
Cash flow of the organization is 5.6% and their capital investment is 3.25% that is lowest
in the recent time. Also, there are negative aspects which also affect their financial
growth.
 The growth rate of business in China is low
The brand awareness of Marks & Spencer in China is low which affect the business at
great extent (Yüksel, 2012). The rent for stores is high and product transportation
charges are also high which affects the operations.
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OPPORTUNITIES
 The digital platform is a huge platform which provides various growth opportunity to
business
The presence of Marks & Spencer on the digital platform should be increased as it helps
in gaining the huge customer base. It also helps in gaining effectiveness in the business.
 Enhancement in the operational areas
There are several operations which could be done by Marks & Spencer for development
in the market. They could conduct the promotional event, offers, and discounts for the
customers so the sales attain growth.
 Business expansion in emerging countries
The business of Marks & Spencer could be conducted in India with help of Reliance
Retail (Scott and Davis, 2015). It will help in strengthening their market share and
gaining huge profitability in the market.
THREATS
 Various competitors in the market like H&M, Aldi, GAP, etc.
There are several competitors of Marks & Spencer in the cloth, food, and other
segments which affect their business growth at some level. It is affecting the business
operations and customer base to great extent.
 Consumer perception has been changing
The perception and needs of the customer have been changing which affect the
decisions and strategies of the organization. It is necessary for the organization to work
on these areas for gaining effectiveness in the market.
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D2 EVALUATE THE IMPACTS THAT BOTH MACRO AND MICRO FACTORS HAVE
UPON BUSINESS OBJECTIVES AND DECISION-MAKING
It has been depicted from the aforementioned evidence that the macro and micro factors have
a great influence on the business objectives and decision-making of the organization. The major
macro factors which influence the business objectives of Marks & Spencer are customers,
competitors, and suppliers. The needs of the customer change regularly which influence the
business decisions and also the introduction of similar products by the competitors affects the
decision-making of Marks & Spencer. The business objectives of Marks & Spencer are to gain
huge profit in the market and deliver quality products to the customers (Kew and Stredwick,
2017). The micro factors such as weaknesses and threats of Marks & Spencer influences the
business objectives at huge level because it influences the business functioning and operations.
Moreover, the decision-making regarding the products is taken by considering the stakeholders
of Marks & Spencer like employees, customers, suppliers, etc. The regular change in the
requirement of customer affects the decision-making. In addition, the increased cost of the
supplier regarding the raw material also influenced the decision-making. Overall, it has been
evaluated that the organization has to take necessary action in order to manage the influence
of macro and micro factors effectively.
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CONCLUSION
It has been understood from the report that the macro and micro factors have a great influence
on the business functioning and operations of the organization. The report helps in
understanding the tools that could be used for analyzing the internal and external environment
of the business. In addition to this, the influence of macro and the micro environment is
observed on the decision-making and business objectives of the organization. The information
which has been gained will be used in future at the required area.
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