Business Environment Analysis of Marks and Spencer

This report provides an analysis of the internal and external environment of Marks and Spencer using SWOT and PESTEL analysis. It also includes a risk assessment and action plan for managing business risks.

Business Environment
Analysis

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
Internal environment analysis of your chosen company using suitable conceptual model........3
External environment analysis of your chosen organization using suitable conceptual model. .5
Undertake a risk assessment of your chosen company, identify business risks and prepare an
action plan showing how could these risks be managed.............................................................7
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment refers to those factors which effects the organisation performance
and their departmental activities externally and internally. It includes government norms,
consumers, suppliers, competitors and others. The company which is finalized for understanding
the business environment effectively are Marks and Spencer. Marks and Spencer is a
multinational retail based company which is headquartered in United Kingdom (Abdixhiku,
Pugh and Hashi, 2018). The company was established in 1884 and the management of this
company are mostly dealing in specialised products such as home and food products, clothing
etc. The ultimate motive of this company is to display wide range of quality products in front of
customers. It leads to increase the sale of their product and also increased their revenue easily.
This report will be prepared on the basis of using SWOT and PESTEL analysis. Various action
plan are also described in this report for reducing the internal and external problems which are
faced by the organization on the monthly or yearly basis. Effective understanding of business
environment is also essential for running the company activities internally in smooth manner. In
this way the positive relationship between consumer and producers are easily developed for long
time.
TASK
Internal environment analysis of your chosen company using suitable conceptual model
SWOT Analysis -
It is a strategic tool which is used by organization for understanding the various situations
effectively which was created by the employees on daily basis (Calof, Arcos and Sewdass,
2018). In context to Marks and Spencer, management used this method for determining their
strength, weakness, threat and opporunity which are explained below -
Strength includes -
 Recognised Brand – Marks and Spencer is one of those company who facilitates best
quality products to their new and existing clients in market. In difficult situation also they
maintained effective communication with consumers. It leads to enhance the popularity
of their brand easily and due to this it is the second largest supermarket only in UK.
 Multinational company – The management of Mark and Spencer have both online and
physical stores in Middle East, Europe and Asia in large numbers. Due to this the

convenience of the customers are highly increased for ordering and purchasing the
product in low time. In covid pandemic due to having online stores consumers easily buy
the product in large quantity.
Weakness includes -
 Decline in sale – The management of Mark and Spencer did not have the effective
supply chain management. Due to this the availability of their products and revenue are
decreased in bot offline and online mode (Dang, Jasovska and Rammal, 2020). It leads to
increase the negative impression in the minds of customers towards the management for
their product and services.
 High cost – The major disadvantage of this company is high focus on middle and upper
segment customers regarding their price in product. Due to their high price in their
product lower class people did not like to purchase their product. The main reason for
their price is all situations management made lot of investment for develop best quality
product.
Opportunity includes -
 Global expansion – Due to the global activities of Mark and Spencer management
opened new stores in various locations for increasing their profit and productivity. It
includes Indonesia, Brazil, India, Poland and Russia (Durica, Podhorska and Durana,
2019). In this way their market are expanded at large extent and popularity are also
increased for long time.
 Effective use of technology – In normal situation management of Mark and Spencer
used various e-commerce platforms such as eBay and Amazon. This type of facilities are
highly useful for maintaining their position in market. With help of using this technology
company easily made effective interaction with customers for long time.
Threat includes -
 High competition – It means that in retail sector competitions are very high due to other
competitors. It includes ASDA, TESCO, Amazon, Sainsbury, John Lewis and others.
Because all these competitors are also providing the products at same price in all
segments. This create threat for the organization growth and their relations with
customers.

 Intense impact of COVID – It means that due to covid the management of Mark and
Spencer faced lots of difficulties for delivering effective services and products to users.
Because at that time lock down are initiated by the government for enhancing the safety
of public (Goldstein, Johanndeiter and Frank, 2019). Due to this strategy the visits of
consumers are reduced in their store in long run.
External environment analysis of your chosen organization using suitable conceptual model
PESTEL Analysis -
It is a technique which is used by management of Marks and Spencer for analysing and
describing the outside factors which affects their performance on positive and negative manner.
Generally these type of factors are uncontrollable by the company which are described below -
Political – It is related to those factors which effects the organization in political manner. It
includes taxation system, rules and regulations, beneficial policies and others.
 Positive – It is necessary for Mark and Spencer that they must strictly follow the policies
rules and other activities of the UK government (Herciu and Ogrean, 2018). Because all
these elements are essential for maintaining effective political stability within the
organization.
 Negative – Due to the unstable taxation and sudden changes in policies by UK
government sale of Mark and Spencer products getting decreased. It leads to enhances the
chance of brand image between the consumers.
Economical – It refers to those factors which impact the organizational performance in
economic manner. It includes governmental activities, employee wages, interest rates and so on.
 Positive – Due to their global activities Mark and Spencer established their architecture
effectively in their stores or in digital platforms. Due to this the convenience for
consumers are easily increased. In this way the coordination between employees and
customers are effectively increased for long duration.
 Negative – The important difficulty which was faced by government restrictions and
interest rate are reducing market shares and also made cost cutting in their products.
Because due to high investment company need to fix more than average price in their
product. It means when prices are decreased then, company also decreased the quality in
service for balancing their profit.

Social – It is a group of actions which is useful to enhanced changes in behaviour, people
attitude and their desires. It includes families, culture and subculture, social class groups and
others.
 Positive – Mark and Spencer is one of those company who evaluate effectively the
current culture and trend of particular location or person. Then according to that
organization divide or segments their products in wide range for all types of customers in
long run.
 Negative – In context to Mark and Spencer, management are highly concentrate on
increasing profit (Jin and Kim, 2018). But due to constant change in the customer taste
and preferences create negative impact on their productivity. Due to this the sale of their
product are not easily increased.
Technological – It refers to the use of various technological equipments by the organization for
increasing the workforce of the employees. It is also helpful for deliver the quality services and
products to consumers in time. Therefore technology is a very essential aspect for organization to
complete the task in time.
 Positive – In context to Mark and Spencer, management used different types of e-
commerce platforms such as Amazon and eBay for attracting customers. With the use of
this technology customers easily decide that which product is necessary for them then
finally buy that product at low time.
 Negative – Due to the high use of technology unemployment rate are highly decreased.
Because due to enhancing automation in the workplace manual process by the employees
for producing product are easily reduced.
Environmental – It refers to those elements which effects the company in natural way. It
includes temperature, increase of pollution, shortage of raw materials, food and others.
 Positive – In context to Marks and Spencer, management followed green policy in their
organization. In this plan company used recycled materials in form of used stylish and
colour packing in their products with their unique identity. It is highly useful for attract
the customers in large number.
 Negative – The use of carbon footprint within the organization released large amount of
chemicals in atmosphere which is harmful for living organisms. Due to these chemicals
pure oxygen are pollutes in high rate.

Legal – It is basically refer to the government norms and rules which effects the organization
activities and their performance in legal manner. With the help applying legal norms misconduct
and illegal activities are highly reduced by the employees. Because illegal activities increased the
chance for creating threat to company.
 Positive – Due to implementation various norms by the government management of
Mark and Spencer strictly followed the safety in their workplace. Because effective
safety standards is essential for employees to do their job without any fear.
 Negative – Due to their global presence sometimes their specific policies did not work in
time which are made for customers (Maemunah and Cuaca, 2021). It includes written and
exchange policy of product which create negative impression in minds of consumers. It
means due to poor service by management government has power to impose palatinates
to the company.
Undertake a risk assessment of your chosen company, identify business risks and prepare an
action plan showing how could these risks be managed
Risk assessment basically refer to determining the critical problems within the
organization create negative effect on their brand image. The various which are used by
organization for analysing the risk are -
 COVID pandemic – In COVID pandemic firm faced lot of problems for distributing
their product and services to customers in time. But the major problem is that due lock
down company are not able to sell their products effectively due decreasing the visits of
customers in their store. In context to Mark and Spencer, management are not able to
maintain their supply chain effectively. Because in covid pandemic availability of
product are also reduced due to shortage of raw materials by suppliers.
 Awareness of new technology – It means that Marks and Spencer is one of those
company who mostly focused on manual process (Mahadevan and Yap, 2019). Due to
this the employees of this company did not have any knowledge about use of new
technology. It creates negative impact on the minds of customers and employees towards
organization. Because due to low knowledge of technology services are not effectively
delivered to customers. Therefore technology is important for employees for enhancing
their work efficiency easily.

 Cyberattack – It basically refer to theft the confidential, payment amount and personal
informations of firm or their client (Sanyal, HISAM and BAAWAIN, 2020). But the
major problem which comes in this stage for consumers are payment transaction
problem at the time of buying the product. Due to their world wide network in some
situations their e-commerce platforms are not worked effective at the time money
transaction. Because in this process the hackers are highly activated for block or divert
this amount in other account. In this process fake messages are created and send to users
for gaining the OTP.
Acton plan table of risk assessment
Risk Current ability Target ability Action
Current COVID
pandemic
In present scenario the
demand and supply of
the product are
decreasing day by day
(Schwanholz, and
Leipold, 2020). It is
responsible to create
huge financial loss of
company.
In which way increase
the availability of
product for consumers.
Because with help of
enhancing product
availability consumers
buy the product with
high quantity
Due to increasing of covid
situation management
decided that they must
increase the digital
platforms. In this method
the sale and popularity of
their product are easily
increased. With help of
digitalization customers
easily attracted towards
their services. Because in
today's time mostly
people like to buy the
product through online
mode.
Awareness of
new technology
Due to less awareness
of technology the work
load and stress are
highly increased in
Through which way top
level management
facilitating proper
guidance and
In this stage management
provides the proper
training to both skilled
and unskilled employees

minds of employees.
Due to this problem
time are highly
consumed for
producing the product.
It leads to enhance
negative relationship
between consumers
and producers in long
run. Good relationship
also helped to increase
the goodwill of
organization
effectively.
instruction to workers
in each activity for
enhancing their
knowledge. Because
with help of effective
knowledge employees
understand that what is
the proper functioning
of different tools for
preparing quality
product.
about the new
technological equipments.
With help of effective
training workers do their
job in fast manner and
achieve their targets
easily. Effective training
also helped the employees
to manage balance in the
multiple works which is
essential for doing the job
in smooth manner.
Cyberattack The main reason for
increasing cyberattacks
are use of old
technologies within
organization. Due to
use of outdated
technologies threats
are raised in aspect of
security for their
personal informations.
In this stage
organization thinks that
in which method
management update
their technology.
Because updated
technology is essential
for maintain effective
communication with
customers for long run.
For improving their
technology management
are used experts in the
field of technology. With
help of experts various
safety software's are
installed in the system.
With this software's the
unauthorised access by
the competitors and
hackers are easily
reduced.

CONCLUSION
After the analysis of above information it is concluded that good business environment is
an essential aspect for Mark and Spencer to run their various functions smoothly. With help of
proper understanding SWOT and PESTEL model positive relations are also developed with
customers in long run. It means for management and organization consumers and lower level
employees are the most important asset for increasing their revenue and sales. When
organization maintained their positive work environment in workplace then definitely
coordination and work efficiency of employees are enhanced. Due to increased work efficiency
of workers they are able to give right opinion to customers that which product is highly useful
for them. With help of this information it is also understandable that in which way the risk are
reduced in business for run the operational and departmental functions smoothly. Because
without decreasing of risk in business positive word of mouth are easily spread from old and new
users. For reducing the risk lower level workers played important role in the form of using their
ideas and creativity which leads to gain company success easily. Due to the use of various
models company also realize that in which way senior officers manage the motivate and comtroll
the employees effectively.

REFERENCES
Books and Journals
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model: A case of Slovak companies. Ekonomicko-manazerske spektrum, 13(1) pp.51-
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