External and Internal Analysis of Marks and Spencer

Assignment
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INTRODUCTION
Every organisation operates under a specific boundary which is known as business
environment. The environment is not static as it fluctuates with change in trends or factors. There
are internal and external factors. However, a business needs to identify them as it directly
impacts on their growth and development (Ansoff, Kipley and Ansoff, 2018). For this they
need to develop various types of strategies and use tactics in order to sustain in market for long
term. Besides that, it depends on their capability and competency which allow in their growth.
Moreover, goals and objectives have to be formed in accordance with resources available.
Through that, short and long terms goals are attained.
In present assignment, it will be described about the external environment of Marks and
Spencer. Also, it will be discussed on mission and vision statement and how it relates to market
place. Furthermore, bac strategic competence and capabilities is mentioned along with analysis
of internal environment. However, at last strategies will be described that can be applied by
company.
Marks and Spencer is British retail company headquartered in Westminster , London. It was
founded by Michael and Thomas in 1884. They are operating world wide with 959 stores. It
offers variety of products and services such as grocery, food items, financial services, clothing,
etc. (Baumgartner and Rauter, 2017)
TASK 1
Models to analyse external environment
An organisation external environment depicts that what changes are occurring in it. Also,
the industry in which company operate needs to be analysed. Any change in market condition is
due to change in factors of industry. So, it is necessary for company to identify industry
scenarios so that they can get an insight on market conditions. This provide them relevant data
and info on current strategic position. On basis of that, strategies and plans are developed. For
understanding business environment, there are several relevant models and concepts available
which can be used in it. Thus, Pestle and porter five force analysis is done of Marks and Spencer
(David and David, 2016). It is as below
Pestle
Political – They are those factors related to change in political condition within a nation. It can
be change in government, trade laws, political situation, etc. Due to this trade and tariff laws are
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changed. It highly affect on business operation. Brexit will result in change in political situation.
So, they will have to change in trade laws. It will lead to decrease in sales and growth on its
company. It is because as company profits are dependent on UK economy so Brexit will result in
negative impact on it.
Economic- they are related to change in economic condition of nation that include GDP,
inflation, currency rate, etc. it directly impact on business operations and its growth. This is
because it changes interest rate, tariff policies, and others. Thus, Brexit can have a negative
impact on Marks and Spencer operation. It is because as company profits are dependent on UK
economy so Brexit will result in downfall in GDP of UK. Similarly, overall economic growth of
UK and retail sector will be affected (Hanson, Hitt and Hoskisson, 2016). Thus, Brexit will
affect on Marks and Spencer growth in negative way.
Social – In this the factors included are related to change in social trends, taste and preference of
people, their needs, etc. Alongside, it also refers to cultural ethics, beliefs, values, of people and
society in which they live. So, any change in social factor affect on business growth. Now,
people are becoming more trendy and fashionable. They want strain free clothes and of high
quality as well. But as Marks and Spencer is having a large customer base in UK so any change
in people taste and needs will highly affect on company growth. Moreover, they will have to
develop new cloth with latest design to fulfil needs.
Technological – As name suggest the factor is related to technological advancement within a
nation. Now, in retail sector many companies are focusing on online or E commerce platform to
increase sales and profits. So, there has been shift in doing business. Also, UK is already
advanced nation where most people use high tech technology. Therefore, organization needs to
transform towards online one. By shifting business to online platform, it will impact on Marks
and Spencer in positive way (Hitt and Duane Ireland, 2017). They will be able attract more
people and rise customer base in UK and other countries. In addition, they can compete with
rivals in the market for long term.
Legal- the external business factors are related to modifications in different types of laws and
regulations. They are employment, health and safety, minimum wage act, etc. These all directly
impact on firm operation as they have to adhere and follow these laws. Thus, any change in these
affect it. In UK change in minimum wage act is enforcing all organization to adhere it and
provide minimum wage to workers. Hence, Marks and Spencer will also have to follow it.
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