Context of Business: SWOT and PESTEL Analysis, Leadership Styles, and Corporate Social Responsibility of Marks and Spencer

This report evaluates the business context of Marks and Spencer through SWOT and PESTEL analysis, recommends leadership styles, and evaluates its corporate social responsibility. It includes an introduction to business context, performing SWOT and PESTEL analysis, evaluating changes in PESTEL factors, recommending leadership styles, and evaluating corporate social responsibility of Marks and Spencer.

Context of business

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Performing SWOT and PESTEL analysis........................................................................1
P2 Evaluating changes in PESTEL factors that influence the opportunities and threats of
Marks and Spencer.................................................................................................................4
P3 Evaluation and recommending leadership styles for Marks and Spencer.........................5
P4 Evaluation corporate social responsibility of Marks and Spencer....................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business context encircle an understanding of various factors that impact business in various
orientations. It comprises of how decisions are made and what an organisation is ultimately
trying to achieve. It is crucial in order to track and monitor organisation objectives and create a
purpose-driven approach. Marks and Spence has been taken into consideration to further
understand business context. Marks and Spence is a major British multinational retailer, founded
in year 1884 and headquartered in London, UK. It has over 1000 establishments across UK.
Moreover, they have reputed global brand image. Marks and Spencer has been taken into
consideration for the following report. The report will evaluate environment of business by
conducting SWOT and PESTEL analysis. Moreover, various business leadership styles will be
elaborated to understand its impact on an organisation
P1 Performing SWOT and PESTEL analysis.
It is a strategic planning technique that enable an organisation to identify its overall
strengthen and opportunities. Moreover, it provides companies with in-depth information
regarding there weakness and threats (Alpaslan ., 2018). It assist an organisation to reduce its
risk and address segments that they lack in. Furthermore, it helps in identifying competitive
market for companies and provide assistance in drawing future strategic plans. In context to
Marks and Spencer, management utilize this analysis in order to understand their competitive
market and evaluate micro factors that affect overall operations of their business. It enables them
get visibility on their weakness and potential areas of improvement and help develop future
strategic plan to mitigate hindrances which ensure long term growth. The SWOT analysis of the
respective company is elaborated below:
Strengths:
These are described as what an organisation excels at and creates a differentiation factor
in relation to their competitors. These are internal, positive attributes such as strong brand image,
loyal customer base, etc. and provide an organisation with a competitive advantage in market
(Booth ., 2018). In context to Marks and Spencer, it has a huge market presence through their
vast line of products and years of experience in the established market. Moreover, it has a
reputable brand image combined with a loyal customer base that they are able to acquire through
their impressive marketing and research and development department.
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Weaknesses:
These stop an organisation to perform its organisational operation at optimum level. They
are areas where a company lacks and needs to improve in order to be competitive in
market(Castillo-Vergara, Alvarez-Marin and Placencio-Hidalgo ., 2018). It includes factors such
as weak brand image, inadequate supply chain, etc. In context to Marks and Spencer, it heavily
relies on manual operations which is result in increased cost and is time consuming. It suffers
from a poor supply chain system which results in non-availability of products leading to
increased loses.
Opportunities:
These refer to favourable factors that can help an organisation grow and develop. It is
crucial to grab potential opportunities in order to gain competitive advantage in market
(Deshpande ., 2019). In context to Marks and Spencer, the company should enhance its online
presence in order to compete with leading online retail competitors. Moreover, management
should pay emphasis on market segmentation in order to understand customer needs and increase
their profitability.
Threats:
These refer to factors that have potential to harm an organisation and hamper its
performance. In context to Marks and Spencer, company has faced financial issues post Brexit
due to instability in economy. Furthermore, it is facing stiff competition from the food sector. It
can also face threat from the shift in clothing trend in market.
PESTEL analysis:
It is a framework that focuses on the macro factors which affect the functioning of an
organisation. It examines the Political, Economic, Social, Technological, Environmental, and
Legal factors in the external environment (Dupire and M’Zali ., 2018). In context to Marks and
Spencer, the management utilize this framework to understand external factors that could impact
decision making within their organisation. By gaining in-depth knowledge of these factors
management is able to develop suitable strategic plans. PESTEL analysis for Marks and Spencer
is mentioned below:
Political:
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This includes factors such as government policies, tax policy and regulations and de-
regulation trends that affect the functioning of an organisation and can hinder its overall a
production (Farooq and et. al., 2020). In context to Marks and Spencer, they have incurred
unnecessary loses due to Brexit which has also impacted their sourcing cost. Moreover, changes
in taxation policies have also had a negative impact on its operations.
Economical:
It includes factors such as economic growth, inflation, unemployment and interest rates
that impact the overall business operations and cannot be controlled by an organisation. In
context to Marks and Spencer, the impact of Brexit combined with COVID- 19 pandemic has
forced management to increase it product price due to instability of currency. This has created
conflict between company and customers.
Social:
These include factors such as demographics, consumer attitude, opinions and socio-
cultural changes that affect the operations and production of a company if an can reduce its
efficiency in the long run (GANJRE and Vyas ., 2018). In context to Marks and Spencer,
company has faced back lash from customers due to excessive chain of product recalls.
Moreover the company is not able to stay trendy in market and identity needs of customers.
Technological:
It includes new ways of producing products and services, identifying effective
distributing and communication channels that can enhance functioning of an organisation in its
business operations. In context to Marks and Spencer, its management can identify a suitable
technology partner in order to strengthen its online presence and automate their production to
save cost.
Environmental:
These focus on factors related to ethics and sustainability of a company in relation to
environment. It focuses on increased scarcity of raw materials and high pollution rates. In
context to Marks and Spencer, company can expand into environment friendly products that
would boost their brand image and increase their customer base.
Legal:
It involves health and safety, equal opportunities, consumer rights and laws that an
organisation should follow in order to avoid any legal repercussions form the concerned
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authorities (Giri ., 2018). In context to Marks and Spencer, company has faced issues due to
changes in Britain’s trade laws post Brexit which has affected its supply chain negatively.
Moreover, it has forced the company to reduce it production level resulting in reduced sales.
P2 Evaluating changes in PESTEL factors that influence the opportunities and threats of Marks
and Spencer.
From the above PESTEL analysis it is observed that there are various factors that impact
the overall organisation performance of Marks and Spencer and effect their potential
opportunities and increase their threats. This has resulted in company not being able to perform
optimal which has reduced their profitability and market share. The various factors that impact
Marks and Spence are elaborated below:
Political:
The company faced various issues post Brexit such as disruption of their supply chain
and increase in their over all production cost which have negatively impacted its operations.
These factors have can hinder the opportunity for Marks and Spencer to expand its market
segment and its overall presence in UK. This has resulted in company not being able to use the
opportunity to diversify and increase its customer base. Moreover, it has made their sales and
market growth stagnant, this has reduced its profitably and market competitiveness. In order to
combat these issue, the company should utilize its great market presence and reputation
combined with years of experience to attract customers by offering various offers and discount.
This will promote in increasing their sales and customers which will ultimately help in
recovering from the negative post Brexit effects.
Economical:
The instability in price due to Brexit and COVID-19 pandemic has forced the
management at Marks and Spencer to increase its product prices. This has also impacted their
supply chain operations and reduced their customer base. This has created a threat for Marks and
Spencer as it has put strain on the organisation to remain competitive in the market relative to
their competitors. In order to solve these issues, the company should utilize its brand awareness
to attract various suppliers through their reputation and years of experience in the market. It will
enable the company to procure raw material from various source which will result in reduced
cost. Moreover, it will help the company to expand its supply chain operations negating such
future hindrances.
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Social:
The management is unable to understand the needs of their current customer base and is
decreasing in popularity over time. This has resulted in company not being able to target
potential customers which has caused decrease in sales an overall brand awareness. Moreover,
company has faced issues related to multiple product recalls which have reduced customers trust
in the brand and its reliability. This has created a potential threat for the company as various
competitors can attract customers for their business. The company should utilize its strength of
market presence in order to maintain its customer base and use their years of experience to better
understand needs for their customers. The company should also use its research and development
team to produce higher quality products which will reduce the number of product recalls which
will not only increase profitability but also help regain customers trust.
Technological:
It is essential for Marks and Spencer to emphasises on their online presence as it is not at
par when compared to various competitors in market. It is also crucial for them to use new
technological advancement in order to make their operation automated which will provide them
with an opportunity to lower their overall production cost. In order to negate these issues Marks
and Spencer should use their research and development department in order to come up with
effective ways that can eliminate the need for manual production of products. Moreover, they
should also focus on enhancing their current online store in order to attract new potential
customers which will increase their brand value and profitability.
P3 Evaluation and recommending leadership styles for Marks and Spencer.
Leaders are individuals who can identify how things can be improved and rallies people
in order to move then towards a better vision (Jia ., 2020). These leaders can work towards
making an organisation vision a reality by utilizing various leadership styles to initiate actions
and motivate individuals. Moreover, by using these styles they are able to provide guidance and
build a working environment in an organisation. Various leadership style are elaborated below:
Daniel Goleman's leadership styles:
This leadership theory states that there are various emotional leadership styles can enable
a leader to ensure a healthy working environment. It implies that a leader should posses an ability
to change the environment on the work floor through emotional intelligence (Lorber , Treven and
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Mumel ., 2018). There are six emotional leadership styles in this theory and they are mentioned
below:
Affiliative leadership:
This leadership style is concerned with establishing a harmonious working environment
within a team and eliminate negative ambiance and create balance among member(Pettinger .,
2020Pritwani ., 2019). Leaders with this style focus on resolving conflicts and attempt to
promote collaboration. They try to create teams where individuals feel valued and have a sense
of belongingness.
Democratic leadership:
It is a style of leadership where leaders appreciated the contribution of all members in a
team. These leaders include members in crucial decision making process regarding
organisational objectives and have high employee engagement. This type of leadership style is
useful when leaders are dependent on the expertise on team.
Commanding leadership:
This leadership style refers to when leaders provide specific task to employees and expect
it to be completed with any questions or complaints and expect the task to be performed
efficiently (Soni and Mehta ., 2020). This type of style is only beneficial for a short duration of
time and is usually utilise after performance failure in previous task.
Pacesetting leadership:
These leaders pay emphasises on results and high-quality work. They expect their teams
to deliver desired quality work in a given time frame and for the task to be performed in a
efficient manner. Moreover, these leaders function in teams that have high competence rate
combined with engagement.
Authoritative leadership:
It refers to leader that are concerned with positively energizing the team to reach
organisational objectives and promote an understanding relation with their subordinates. This
leadership style requires experienced leaders in order to effectively motive a team. These leaders
show empathy towards their employees and solve several issues through their understanding of
various kinds of emotions.
Coaching leadership:
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These leaders are focused on identifying strengths and weaknesses of their employees in
order to enhance the development of their team members. These leaders encourage to improve
employees overall skills and capabilities. Moreover, they emphasise on achieving long term
goals and how employees can contribute in achieving these goals.
In order to combat various issues such as effect of post Brexit, high rate of product
failure, decrease in sales and customer base. The management at Marks and Spencer should
adopt an authoritative leaderships style as it will enable leaders to motivate teams and individuals
to improve their performance and efficiency especially during the time of COVID-19 pandemic
where employees require direction and guidance from their leaders. Moreover, a motived team
will be able to increase the number of sale which will ultimately result in growth of customer
base. This leadership style will enable the company to improve its brand awareness which will
attract opportunities for potential new suppliers assisting the company to solve its dysfunctional
supply chain. Furthermore, it will enable Marks and Spencer to gain a competitive edge in
market.
P4 Evaluation corporate social responsibility of Marks and Spencer.
Social responsibility in a business are crucial in order to maximize stakeholder value and
improve brand image. These responsibilities have become increasingly vital for investors and
customers who are actively looking for companies that fulfils their social responsibilities
(Vilchez and de la Hiz ., 2018). Organisations that are socially responsible adopt policies which
promote well-being of society and the environment with reduced negative impact on
environment. In order to fulfil these responsibilities organisations utilize corporate social
responsibility which is a self-regulating business model. It enables companies to be socially
accountable towards its society and environment. The various social responsibilities are
mentioned below:
Ethical responsibility:
These responsibilities refer to the welfare of employees to ensure an organisation
practices fair labour practices. Moreover, it also seeks to promote ethical practices for suppliers
in order to secure raw material which are certified and meet fair trade standards. Fulfilling these
responsibilities will help in eliminating gender, race or religious discrimination among
employees and management. Furthermore, it promotes appropriate wages are being given to
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employees for a better lifestyle (Zhang, Yuan and Ye ., 2020). In context to Marks and Spencer,
management focus on building a positive and healthy relationship with their employees and
suppliers in order to keep them satisfied and maintain the operational performance of the
company. This helps the organisation to build a better brand image for is customers which results
in increased sales.
Philanthropic responsibility:
It refer to responsibilities that pay emphasises on improving humanity and focuses on
well-being of unprivileged individuals who require support. Organisations try to fulfil their
philanthropic responsibilities by various donations of time and money or providing various
charities with free resources at national and international levels (Volk and Zerfass ., 2020). This
allows an organisation to enhance it brand awareness and satisfy its stakeholder. In context to
Marks and Spencer, the higher authorities promote and volunteer for various charities. The
organisation provide funds and free products to multiple humanitarian organisation in order to
provide them assistance. This not only enables them to build a better society but also promote
their brand and its value in a favourable light. Moreover, it provides assistance to organisation
especially during expansions
Environmental responsibility:
These responsibilities have become crucial over time due to increase in pollution and
scarcity of resources. It enables an organisation to be more aware of their environmental impact
and promote them to counteract their carbon foot print. Organisations have realized that fulfilling
environmental responsibilities is not just a duty but it affects their bottom line and their long-
term success of their business (Walzel ., 2021). Moreover, it obligates companies to recycle their
waste during their business operations which impacts the environment positively. In context to
Marks and Spencer, its management focus on fulfilling their environmental obligations in order
to ensure that their business operations do not impact the environment or people surrounding it
negatively. They also support various environmental organisation through donations and charity
which ensures that their quality of brand values remain high in order to attract customers.
Economic responsibility:
These responsibilities are interconnected with environmental and philanthropic practices
as it focuses on striking a balance with them. It promotes growth and profits of a business by
abiding to the set standards of ethical and moral regulations (Wang and Jin ., 2020). These
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promote an organisation to improve its overall operations while participating in sustainable
practices. This can enable companies to identify new techniques and technologies which will not
only reduce waste of resources but be cost beneficial to company. In context to Marks and
Spencer, management is on a constant look out to identify new advance ways of conducting their
business operations that can positively impact not only their performance but society as well.
They focus on keeping their quality of functioning high and provide customers with products that
are developed with minimal wastage of resources. This not only ensure cost saving for the
organisation but provides satisfaction to customers and their suppliers.
CONCLUSION
From the above report, it is concluded that it is crucial to have an understanding of
business in order to conduct operations in an efficient manner. Moreover, it enables an
organisation to track and monitor their progress which are vital to develop an effective business
strategy. Furthermore, utilizing analytical tools such as SWOT and PESTEL render vital
understanding of organisational environment and how they can use its strengths and
opportunities to negate threats and improve upon weakness. In addition various leadership styles
are used in order to enhance their performance by motivated and satisfied employees. This
ensures that organisational goals and objectives are met on time with high efficiency. It is also
critical for an organisation to be consistent in maintaining and performing their social
responsibilities in order to have a positive impact on their overall brand image and improve the
relations with their stakeholders.
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