Impact of External Elements on Marks and Spencer: PESTLE Analysis

This report evaluates the impact of external elements on Marks and Spencer using PESTLE analysis. It also describes the leadership style, corporate social responsibilities, and effects of Brexit and Covid-19 crisis on the business of the organisation.

Context of Business

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
Impact of External elements on Marks and Spencer Using PESTLE analysis............................1
Leadership style for business.......................................................................................................2
Effects of Brexit on the business.................................................................................................6
Situation analysis of Brexit..........................................................................................................7
Effects of Covid crisis on Business.............................................................................................7
Situation analysis of Covid crisis.................................................................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................8

INTRODUCTION
Business, it is represented to as a organisation or firm which is participated in the
commercial and the industrial activities. This is for gaining the revenue by trading services and
products. In the context of Marks and Spencer, it has build goodness all over the global market.
In UK, it has 959 stores, although its brands are present in different countries. This brand runs
more than 1300 stores in all over the world & and in London UK, it is headquartered. Thomas
Spencer is the owner of Marks and Spencer, he established it in the year of 1884. Marks and
Spencer is a clothing brand but now a days it concentrates in various field like beauty products,
food, furniture and many more like this. This report will going to evaluate about the business and
external elements affecting the business by the assist of PESTLE analysis. It will also describe
the style of leadership in related with the organisation along with corporate social
responsibilities, the analysis and effects of Brexit and Covid-19 crisis on the business of
organisation.
MAIN BODY
Impact of External elements on Marks and Spencer Using PESTLE analysis
PESTLE analysis evaluates the different external elements such as political, economical,
social and technological, (PEST). It effects the organisation with the environmental and legal
elements.
Political factor – This element is associated with the involvement of the government in
economy. This element consists policies like political stability, labour law, tax policy, trade
restrictions, and the environmental law. Marks and Spencer has always made good profit through
free trade. This free trade policy assist and give permission to import foreign products for trade
in stores at very low cost than before because it is imported in other country. Although “ Hard
Brexit” has resulted in number of loss of European supplies (Bătușaru, 2019).
Economical factor - High expansion rate of any specific economy affects the way of Marks ans
Spencer works on the cost of services or products. Rate of interest, inflation rate and foreign
exchange are included in economical factor. As the government has low rate of inflation and
strong finance is maintained, the policies like monetary and fiscal is managed. Marks and
Spencer always follow the which gives quality of services and products. Although sometimes
due to external elements organisation can also face financial crisis.
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Social factor - This factors carries all the aspects such as career attitudes, health consciousness,
growth rate of population, emphasis on safety and age distribution. Within the last ten years,
there has been huge changes in the society. For customer, Marks and Spencer has started ready
meal with the assist of latest technology in the food industry, which has increased the sales in
this industries. Marks and Spencer is in top ten distributor of ready meal in UK. Although
number of elements like psychological, cultural, social and personal changes the purchases of
customers (Breivold, and Rizvanovic, 2018).
Technological factor- This elements consists features like the rate of technological changes,
technology incentives, automation and R&D, these features leads for innovation. Marks and
Spencer has latest technologies therefore, they gives almost all their products like foodstuffs to
home products, clothes and they also provide online delivery. Marks and spencer initiated using
mass modern technology that effects its more sales and production.
Legal factor - This is the factor, which alter the functions of the organisation that indirectly
alter the price and product's demand. It consist consumer law, discrimination law, employment
law and health & safety law. Marks and Spencer always keep a session of training on the aspect
like health and make them update yearly in terms to keep the organisation updated with the
associated law and regulations. While Marks and Spencer has number of legal conflict like
Franscati Landlord, It is a centre of shopping in the Blackrock's upmarket Dublin suburb .
Environmental factor- In this factor consists climate change which shows impact on the
operations of firm and these elements has environmental and ecological features like climate
changes, wealth and so on. This factors directly affects the Marks and Spencer like farming,
tourism, and insurance. Green policy is included in Marks and Spencer's plan A, which is
established by it. This accepted policy provides positive impact on the culture of communities,
well being surroundings by the organisation. Marks and Spencer has also knowledge about the
usages of carbon and recently, it also assist to decrease emissions.
Leadership style for business
In the business firm, a leader has responsibilities to provides strategy, motivation and
direction to the worker within the firm. The leadership style described as the overall behaviour of
leader during making plans, implementing plans, managing the people and motivating them in
the firm. Each leader in the firm has their own style of doing business. Basically, it is a
classification that how a leader behave during leading the group or team in the business firm
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(Jabbar, and et. al., 2018). The leadership style is classified on the basis of behavioural approach
and situational approach. A leader play an important role in an organisation to keep good
relations among the workers and also them motivate them to achieve the company's desired goals
set by the organisation. The leadership style includes number of benefits like, it gives guidance,
motivation,build confidence, build trust, and building work environment. The leader in the
organisation required to have skills as honest, good communication skills, initiative and self
confidence in order to maintain the interpersonal relations among employees and employer .
There are some leadership style, which are mentioned below:
Commanding and Autocratic leadership style: This types of leadership style is described as
the approach like top to bottom, in this a commanding leader make any decision without any
involvement of others. That means, in this style the team members have no permission to make
any decision. It is necessary when need to make decision quickly in very critical situations. The
commanding style of leadership makes the groups or team consistent because of that one person
or commanding leader make the decision. This style also assist to describing clearly the
individuals responsibilities and role in the company. It also keeps some of the disadvantages
because of the single person take the all decision, there are no any diversity of thoughts. Group
or team feels that they don't have any single voice through which they participate in the
professional growth (Janiesch, and Kuhlenkamp, 2018).
Bureaucratic leadership style: This kind of leadership style generally found in large and well
established company. Bureaucratic leadership style consists clear authority, regulations and
clear authority. It is generally involved in the government firm like military, public sector.
Bureaucratic leader go along with the described set of rules and regulations which makes them to
partial towards the policies of organization. This types of leadership styles makes difficulty for
new ideas among the workers. The advantages of such style of leadership is that there are a clear
set of rules which removes and described favouritism. It also keeps stability in terms of security
and job safety. There is loss of new idea among workers and makes difficulty to impactful
change in the firm. It doesn't favour the professional growth of sole .
Transactional leadership style: It includes short term planning. In this type of leadership style
leaders are only worried about the work of workers. It is generally used in marketing and sales in
which leaders planned a goal or target for sole. This kinds of leadership depends upon the
appreciation and reward in order to inspire their workers to gain the identified goals. Moreover,
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it is described as the transparent exchange between team leaders and workers as that leader
describe the goal and workers required to get the target within identified period of time to gained
reward. The negative impact of this style as that it restrict creativity and growth in the company.
It also negatively affects the professional development authorities. To achieve short term goals, it
is the most impactful style (John, and et. al., 2021).
Participative leadership style: it is generally known as democratic leadership style. This type of
leadership style keeps knowledge and skills. In this type of style, the democratic leader enhance
confidence in the leadership style. This kind of style of leadership are mostly found in
government entities, school, and different businesses as well. In orders to make decision, leaders
take inputs from their teams. It motivates the corporation and collaboration between the workers.
Because of participation of workers in decision making process, the leadership style comes up
with the better and creative solutions. The Marks and Spenser's manger are going to accepting
the democratic style of leadership in terms of achieve the desired goals. The main negative point
of this styles is, as it takes more numbers of days in decision taking process. In the context of
Marks and Spencer's, the organisation is following the consultative style of leadership, in which
a leader contact with their team to take decision in obedience to mutual benefits. The
consultative style of leadership is further described below as:
Consultative leadership style: It refers to the style which concentrate on the team building. In
this, leaders contact with other member of team and get their views & opinions in order to make
impactful decision. Therefore, Marks and Spencer's leader generally contact with their workers
of bottom levels before applying strategical decision (Krawczyk-Sokolowska, Pierscieniak, and
Caputa, 2021).
Corporate social responsibilities : It is described as the concept in which firms explains
environmental and social measures in the operations of business. This is a corporate strategy
which explains that how a business assist to make society better. It plays a vital role for both
brand reputation and society. It is the most impactful way to increase the morality in the work
culture. It make stronger bond between the corporations and workers. If firm keeps desire to to
be responsible socially, it needs to be liable for for both itself and stakeholders. It make sure that
operations of the companies are beneficial for the society. This type of responsibilities are split
as economic responsibility, environmental responsibility, philanthropic responsibility and human
right responsibility. In which philanthropic responsibilities carries funding educations, charity,
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health donation and so on. Environmental responsibilities hand out with environmental policy
like pollution, management of waste disposal and carbon emission whereas human right
responsibilities hand out with unbiased labour work. The corporate social responsibilities assists
in increasing sales, cost effective, brand recognition and easy access to funding. In order to make
impactful business, the Marks and Spencer described different social responsibilities. The firm
accepted different policies that benefits human rights, environment, health and many more
(Kwilinski, and et. al., 2019). Some corporate social responsibilities which is taken by the firm as
follows:
The organisation started the corporate social responsibility program as ready for work, in 2004.
the main goal of this program is to concentrate on giving business knowledge to the recognised
people in order to direct them about the business management. The purpose of 'Ready for work'
program is to protect the environment and enhance economical well being of the communities.
They also concentrated on evolving entrepreneurial skills in students and unemployed people.
The another program that organisation concentrated are, giving scholarship to the students,
building hospital, building medical centres and schools and so on .
Charity: the organisation is giving funds to the different charitable trust. These funds obtained
from the various stores of M&S. The organisation makes partnership with different charitable
trust like The Homeless and DisabledGo.
Clothing: The company returned and donates the cloths and funds to Newlife trust. Then this
trust transfer the funds in to different medical research centre and awareness campaigning
(Mourik, and et. al., 2020). The extra fund gained from the recycling and sales of clothings helps
directly to the trust for providing 400 pieces of equipment for the people with disability.
Food: The organisation supply its additional foods to the FareShare charitable firm. FareShare is
a charitable welfare which further gives out the food to the deprived people.
Climate impact: The organisation schedule the five year environmental plan to tackle with the
climate change. The objective of the company is to reduce the emission of carbon and to make
function of company carbon neutral in the UK. The organisation is decreasing the consumption
of energy by 25 percent in the different stores. It is accepting renewable energy reservoir to
potentiate up the stores which move forward to least carbon dioxide emission. The organisation
is also concentrating on to evolve energy coherent products which assists consumer to decrease
energy utilisation.
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Waste management: The organisation is devoted to making well structured waste management.
As a part of five year strategy organisation prevent to send waste to disposal area in the country.
The organisation using garbage for generating the green energy. The organisation also decrease
plastic packaging on its different product by 25%. it is utilising that packaging material which
can be easily recycled.
Training & development: M&S is organising different skill program for students and
unemployed people and providing them chances to make the career with Marks and Spencer
organisation. The organisation denoted that 30 percent of the people we went by their training
session are employed in different field. It is positively affecting the brand value of the
organisation. In 2005 the organisation increased the reach of Ready for work program to enhance
living standard of people. This attempts made the organisation to evolving the positive image in
the stakeholders and service user (Marić, 2020).
Effects of Brexit on the business
The term Brexit refers to the 'Britain' and 'Exit' from which in the year 2020, UK take out
its presence from the EU (European Union). This take out of UK badly effect the business in
both the business structure in the EU countries and in united kingdom. Likewise, the business of
British retailer Marks & Spencer also affected by the Brexit. It is found that the organisation
dissolve its eleven food stall in the France. The products in the different stalls in France were
imparted from the Northampton, UK. So, it became problematic to the supplier to impart the
products. This Brexit shown its impact on the distribution supply chain. It became impossible to
the supplier to provide the fresh products to the service user. The main cause is that because of
change in the rule and policies of countries. Prior to Brexit, UK was following those rules &
regulations which was define by the European Union therefore, it was simple for the supplier to
handle the chain of supply. Till the year ending in March, the M&S has notified more than
22million $ in prices. Due to Brexit, the organisation had substitute the supply of the products in
Czech Republic. The organisation enhanced the scope of frozen products in place of fresh food.
The organisation had to face heavy losses due to Brexit. It made the product scarcity due to that
products are supplying from the UK. The organisation had to experience cancelled orders and
products are came back to the stall which occurs VAT, cost of duty and clearance charge (Wolf,
Stumpf-Wollersheim, and Schott, 2019).
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Situation analysis of Brexit
To the EU, the organisation had stop the supply of hundreds of products. Due to Brexit
the organisation had replaced the supply of products in Czech Republic. Instead of fresh product,
the organisation enhanced the scope of frozen products. The goods which are imported from the
EU, British government also decided to delay the checking on that products. This assist the
organization to build change in supply chain.
Effects of Covid crisis on Business
In all over the world, the Covid crisis badly affected the business. M&S noticed large
losses at the time of lockdown in the country. While first Covid lockdown, M&S has faced its
first loss due to adversely collapsed their clothing sales. It is because of all the stores outside the
country or in the country closed. The organisation noted 87.8 million dollar of pre tax loss in
retail business. The clothing sales of the organization decrease by 60 percent in the time period
of lockdown. Due to Covid pandemic workforce of the organisation were majorly affected. The
organisation decreased the number of employee due to the crisis. The organisation was
concentrating to remade itself after this crisis (Dörndorfer, and Seel, 2020). Organisation
officially announced that due to pandemic business strategy of the organisation has changed
therefore organisation can increase the turnaround strategy. Different products with shorter life
span had been expired due to pandemic. This Covid crisis shown its impact almost every sector
of business of the organisation like retailer, clothing, food and so on. Due to decrease
profitability, the organisation was not be able to pay the salaries to its workers. In fact the
organisation deduct the salaries of different workers by half or more amount of their salary.
Situation analysis of Covid crisis
The organisation accepting different plans to remain competitive in the field of business
at the time of lockdown. By the help of its website, the organisation stared to concentrate on
online medium of selling. The organisation gave different discounts and offers on shopping of
cloth through online medium. The organisation also concentrated on the secured and fast
delivery of services to its service user at the time of pandemic. The organisation accepted
different technical advantages to increase the profit via online payments and websites (Leminen,
and et. al., 2020).
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CONCLUSION
From the above discussion, it has been concluded that how the external elements shown
their impacts on the businesses through the help of PESTLE analysis. In this discussion, further
included the different types of leadership style and corporate social responsibilities in the
reference of organisation. It has been also describe the Brexit's effects and effects of Covid-19
crisis on the business of the different organizations. In this discussion, it has been mention that
how the organisation had overcome from such situation
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Mourik, R.M., and et. al., 2020. The impact of the institutional context on the potential
contribution of new business models to democratising the energy system. In Energy and
Behaviour (pp. 209-235). Academic Press.
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Wolf, V., Stumpf-Wollersheim, J. and Schott, L., 2019. The Internet of Things in a Business
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