Business Environment Analysis: Marks & Spencer

This assignment delves into the business environment of Marks & Spencer, utilizing a SWOT analysis to evaluate its strengths, weaknesses, opportunities, and threats. It explores various external factors influencing the company's operations, such as economic conditions, competition, technological advancements, and regulatory changes.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purposes of organisations.......................................................................1
P2 Size and Scope of various types of organisations .................................................................1
TASK 2............................................................................................................................................1
P3 Relationship between different organisational functions and its link with organisation
objectives ....................................................................................................................................1
TASK 3 ...........................................................................................................................................3
P4 Positive and negative impact of Macro environment on Business operations.......................3
TASK 4............................................................................................................................................6
P5 Internal and External analysis of Marks and Spencer............................................................6
P6 Interrelation of Strength and weakness with external Macro factors....................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business Environment can be stated as the combination of all organisations and other
several elements which have the potential to make impact on the level of performance within the
company in positive and negative manner (Agarwal, Grassl and Pahl, 2012). There are number
of companies who are dealing and have set their process in various sector and have number of
operations which are being conducted. Mainly there are two types of factors which are being
compiled within the process of business environment and those can be stated as internal and
external. In this report company chosen for this kind of report is Marks and Spencer who has
been dealing in retail sector since 1884 across the globe. Purpose, size, scope along with the
legal structure of various types of the company which will be explained in this report.
Furthermore, interrelation between all the organisational functions and their link with the
objectives of the business which can be explained. In addition, there are some negative and
positive affects on the macro environment which will also be discussed.
TASK 1
P1 Different types and purposes of organisations
To Be Covered in PPT
P2 Size and Scope of various types of organisations
To Be Covered in PPT
TASK 2
P3 Relationship between different organisational functions and its link with organisation
objectives
Since every organisation is different so their purpose of operating in the business
environment is also different. So, it is very important for hem to design their organisation
structure as per the objectives and goals of the company so that it can be achieved in an effective
manner. Marks and Spencer is a public limited company and is having more than 85000
employees (Aterido, Hallward-Driemeier and Pagés, 2011). They are considered as a
multinational retailing company which is dealing in so many segments like clothing. Food
products, luxury items etc. So, for production they will require large amount of funds so as to
make operations more effective in nature.
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Source: Organisational structure, 2018
It has been observed that Marks and Spencer is having a Flat organisation structure. Here
there are very less level of management in the company and the employees can easily
communicate with the top level management. Through these type of structure , Marks and
Spencer tries to encourage their employees to participate in the decision-making process which
are being carried out to design new plans and policies of the company (Auzair, 2011). M&S is
having so many employees who are working in this organisation structure and they are required
to take instant decisions time to time.
The various functions that are performed in Marks and Spencer are like HRM, Research
and development, finance, accounting, sales , purchases etc. They are performing these functions
in a very effective manner and because of this only they are able to achieve top position in the
marketplace. So, when these functions are combined with the organisational structure then goals
and objectives of the company will be achieved very easily.
So, the interrelationship of organisational structure with the function being followed in Marks
and Spencer are :
 Marketing Department – This is one of the most important function which is
performed in Marks and Spencer. It is very helpful for them in marketing their products
ans services which are being by them for them for their customers. Through this
department, organisation will be able to achieve competitive advantage in market
(Adeoye and Elegunde, 2012). It is very important for Marks and Spencer to have good
marketing team because then only they will be able to achieve high position in the
market.
 Human Resource Department – Human resource department plays a very
important place in the company as they only recruit the employees for the company. So
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Illustration 1: Organisational structure

they are working at all the departments at Marks and Spencer and is performing the role
of bringing cooperation and coordination between the team members.
 Production and Operations – This is the function which is being performed at an
early level only and that is why they are being considered as one of the most important
function ion every company which is strongly linked with the structure of the
organisation (Bar-Isaac and Shapiro, 2013). In this, Marks and Spencer will be
producing goods which will later on be sold in their stores. The production is done as per
the needs and demands of the customers.
 Accounting and Finance – This function is linked with monetary transactions
which are happening in the company on daily basis. They allot funds to various
departments in the company through which activities are being performed. It includes
creation of assets, doing survey in markets etc. So, by presence of this department
organisation will also perform
 Research and development – Through this department, Marks and Spencer will be
able to produce goods and services as per the needs and wished of the customers. In
Marks and Spencer, various types of goods are being offered to the customers so this
department do a proper research through which they come to know about what are the
trends that is going on in the market so that goods can be produced as per that (Burns and
Winter, 2011).
TASK 3
P4 Positive and negative impact of Macro environment on Business operations
There are so many factors that is present in the business environment who are having
very strong impact on the activities which are being performed in the company. The organisation
is not having control on the external factors present in the company. All of them are having both
positive as well as negative impact in the operations that are being done in the company. They
are even having effect on the rules and policies which are being performed by the management
for the staff members (Boons and Lüdeke-Freund, 2013). Marks and Spencer is also having
various policies which will help them in performing their activities in more easy manner and
help in getting competitive advantage as well. They are also getting affected by the external
factors present in the business environment for them which is not a good factor. So, management
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will make use of PESTLE Analysis through which they will be able to know what are the
positive as well as negative impacts of these factors in the country. So, PESTLE analysis of
Marks and Spencer is conducted as follows :
 Political factor – In this element, all the policies which will be created by the government
so as to provide benefits to the company are included. So, here if government will come
up with new laws and policies for production of goods and services then Marks and
Spencer will get affected by it as they also produce goods and services for their
customers so if there will be any change in the law then it will be shown in their
production activities.
Positive effects – There are so many positive benefits that will be derived by Marks and Spencer
through political factors like by having free trade policy they are able to reduce their sourcing
cost. Brexit is also implementing the business in a positive manner.
Negative effects – If they will come up with new tax rates then Marks and Spencer will get
resources at a very high rate which will further increase the cost of their products as well and
sales will also be affected (Chow and et. al., 2011).
So, it is required that Marks and Spencer should maintain good relation with the
government so that they can sustain these changes in an effective manner.
 Economical factor – These are the factors which is related to inflation,growth rate.
Wages etc. of a particular company. These factors differs in every country and thus
Marks and Spencer should make sure of this element as they are operating in so many
countries. So, if there is any kind of economic slowdown or up-gradation then it will be
having an effect on the sales and growth of company (Commander and Svejnar, 2011).
So, management of Marks and Spencer is required to measure all the changes that are
happening in the economy and its impact on the business activities as well.
Positive effects – If there is inflation in the economy then the flow of funds will be there in the
economy so more no. of people will come to buy the products of the company which will be
beneficial for them.
Negative effects - The negative impact on change in the economical factors came in the form of
conflict which happened with small retailers over the rise in the product due to the currency
impact of Brexit.
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 Social Factor – Since every company is taking resources from the environment so it is
their duty also to give it back to them. It is also considered as corporate social
responsibility of companies (Cronan and et. al., 2011). These factors plays a very
important role in deciding the activities which needs to be performed by Marks and
Spencer in the society.
Positive effects – The positive factors which is associated with this element is that Marks and
Spencer gets to connect with the people in the economy and so they are able to make customers.
Negative effects – The negative effects of it has happened in case of chain of products which is
being introduced by Marks and Spencer. It was said that it is creating a negative social trend.
 Technological Factor – In this, many new technologies are being introduced in the
country which are being adopted by companies as well (Dahan and et.al., 2010). Through
these, Marks and Spencer will be able to perform their task in more easy manner.
Positive effects – If Marks and Spencer will introduce technological advancements in the
company then they will be able to complete all their activities within the specified time and
achieve their goals and objectives.
Negative effects – They will have to invest more amount of funds for implementing technologies
in the company.
 Legal Factor – There are so many laws which are created by government and it is
required to be followed by every company (Fernando, 2011).
Positive effects – If these laws will be followed by Marks and Spencer then it will be sure that
all their activities will be conducted in legal manner.
Negative effects – If Marks and Spencer will implement these laws every time then their own
policies will not be followed in the company.
 Environmental Factor – These are the factors which is related to the environment and is
having strong effect on the activities of companies.
Positive effects – In Marks and Spencer, its positive impact will be that red-tapism will be
reduced and work will be carried out effectively.
Negative effects – Marks and Spencer have to decline all paper work and start using internet
work through which decline in inadequate work get done.
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TASK 4
P5 Internal and External analysis of Marks and Spencer
In order to take any decision for the company, it is very important for the management to
find out the strengths and weaknesses of the company so that they can decide what is good for
them and what is not. Marks and Spencer will also do the same and will conduct a SWOT
analysis through which they will be able to identify and measure their strength, weakness,
opportunities and threats (SWOT Analysis of Marks & Spencer.2017). It is as follows:-
 Strength – Marks and Spencer is having so many strengths because of which they are
operating successfully in the market. They are highly recognised in the market because of
which lots of customers are attracted towards it (Halbert and Ingulli, 2011). By having a
strong brand value they are able to bring customers to the store and satisfy them as well.
There are so many variety of products which are being offered by them and to sell it they
are having more than 600 stores across UK.
 Weaknesses – Since nothing is perfect so Marks and Spencer is also having drawbacks.
One of them is that the market consider it is out of fashion or non-trendy. They are
having clothes for all the segments but it is normally believed that they are keeping
clothes for old age people only (Gebauer, Paiola and Edvardsson, 2010). Their
management have also failed to attract new customers to the store so the sales of the
company is also effected. They are also not updated in case of technologies and that is
why they are investing more amount in recruiting more no. of staff.
 Opportunities – Since Marks and Spencer is one of the top retailing company in the
market but still they are having only 600 stores all around the world so they can increase
their presence in the global market. It was estimated that M&S is having more than 21
million customers per week so by entering into more segments they will be able to earn
more amount of profits in the market. They can even bring goods of different market
segment for different type of customers.
 Threats – They are having so much competition in the market so they are having a kind
of threat to lose their business due to fast changes that are happening in the economy. All
their other competitors are very strong in the market and are also technologically
advanced so customers will not think before shifting to another brand (Hamilton and
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Webster, 2015). So they need to cone up with new techniques for maintaining their
customer base in the market.
P6 Interrelation of Strength and weakness with external Macro factors
Like of every company, M&S also have some strengths and weakness. External factors
are making both positive and negative impact on growth of this organisation. M&S is earning
most of their revenue from UK. They are registered in this country. Brexit is a political incident
which may restrict this enterprise from attaining their gaol of rapid expansion. Marks and
Spencer is strong international presence specially in Europe but post Brexit, they may face new
hurdles at the time of expanding their operation in more region of Europe (López-Gamero,
Molina-Azorín and Claver-Cortés, 2011). This external factor is going to create more challenges
for M&S in upcoming time because they have to spend more money and time, post Brexit, for
fulfilling various kind of responsibilities.
This company fail to attain success in their food segment business. Their sale in this
segment in continuously declining and they are lacking behind their key competitors. More legal
restrictions in emerging and developed market regarding packaging of food will put an extra
financial burden on M&S. Beside this, Marks and Spencer is known for their effective CSR
strategy. This is one of their strength which is helping them in increasing their goodwill and
image in the market. They have started a program which is focusing on waste management.
Company is concerned about all the factors which impact environment. They understand that
they are running their many stores and release huge amount of waste (Mahmood and Hanafi
2013). This program, known as Plan A, is assisting M&S in fulfilling their CSR in an effective
way. They have attain the image of a company who is selling high quality of product and they
are not shying in sharing their profits for welfare of environment.
Brand equity of M&S is very strong. They are considered as one of the leading brand in
clothing segment. Marks and Spencer is entering in emerging markets like India. This country
has highest economic growth rate and purchasing power of people in this nation is also
increasing. This external factor is assisting M&S in covering their investments in less period of
time. This company is operating in premium segment of clothing, enhancing income of upper
middle class people is a good news for them because more income is directly linked with more
disposable expenditure. Revenue of M&S in this region is continuously increase and they are
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opening more stores in India. This external factors is helping them in following their strategy of
rapid and global expansion.
Weak logistics is a key weakness of M&S. This company can use latest technology for
improving their operations related to logistics. They are well known internation chain and if they
start using latest soft-wares of managing goods and sales then they can overcome this
weaknesses (Avramenko, 2012). This will also reduce their cost of business in long run because
using new software and system will minimise wastage of resource sand make a proper balance
between demand and sale. M&S can also use new technology in analysing various market trend
which is present in different countries. They are operating in many nations so if they will
evaluate each market then they can produce goods and provide services accordingly.
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CONCLUSION
From the above mentioned report, it is being comprehended that business condition
expect a to a great degree enter part being developed and accomplishment of a business
component. In light of working activities, business affiliations are described into three classes,
i.e. open, private and wilful. In addition, each one of these substances have their own specific
targets and goals for their accomplishment they make procedures and game plans. Close by this,
various levelled limits are interlinked with its structure keeping in mind the end goal to perform
quality in target publicize. In various levelled structure of M&S, there is incorporated three sorts
of division, i.e. finance, human resource and exhibiting.
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REFERENCES
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Online
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SWOT Analysis of Marks & Spencer.2017.[Online].Available
through:<https://businessteacher.org.uk/swot/marks-and-spencer.php >.
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