Business Environment Analysis: UK

This assignment tasks students with analyzing the UK's business environment. It requires examining various legal structures (private, public, voluntary sectors), identifying key players in retail and food service, and investigating current market trends and stakeholder sourcing policies within the UK.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Purpose of private, public and voluntary organisation with their legal structure.................1
P2. Size and Scope of M&S, NHS and Oxfam...........................................................................4
TASK 2............................................................................................................................................6
P3. Relationship between various functions in M&S for attaining mission and objectives.......6
TASK 3............................................................................................................................................7
P4. Positive and negative impact of macro environment on M&S.............................................7
TASK 4............................................................................................................................................8
P5. SWOT analysis Marks and Spencer.....................................................................................8
P6. Interrelate with strength and weaknesses with external macro factors...............................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment consists of the elements and conditions in which a business
prevails. These factors are available in both internal and external environment and any change in
these can hamper the enterprises. They all impact the operational functions which includes
customers, suppliers, technology, social trends and government activities. Companies have less
control over external factors, so they come out with certain strategies in order to adapt according
to these factors. To attain all the business goals and objectives, it is necessary that there should
be effective management. This project highlights the different types of organisations and their
sizes and scope. Other than this, there will discussion about interrelation between certain
functions of a company and their link to its structure. At the end, there will be PESTLE and
SWOT analysis to know about the internal and external factors of Marks and Spencer.
TASK 1
P1. Purpose of private, public and voluntary organisation with their legal structure
In the business environment, generally there are three types of organisations that are
private, public and voluntary. Each of them have certain significance at their place as their
development plays a crucial part in growth of economy. Companies provide jobs opportunities
which brings improvement in the lifestyle of people, so whatever business activity is performed
by them directly impacts them.
Private Sector: - Each organisation which exists in market has some or other purposes &
scope, so any firm which belongs to private segment has aim of earning profit and to expand
their market share. The ownership of such type of organisation remains in the hands of the
private hands. Most of the companies in business environment are the private organisation
whether they are small or large depending upon their production and revenues. They act as the
backbone for any economy so it is the duty of government to create an environment where
private companies can grow more. To know whether the organisation is small, medium or large,
it is necessary to compare them on the basis of number of employees, capital and the production
capacity they hold. But to run any business there is requirement of the funds so private firms gets
funding from the bank , their personal savings and the subsidies provided by the government.
They always looks for the new opportunities where they can take their market on new heights.
Marks and Spencer is an example of private retail company.
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Sole Traders: - This is a kind of organisation where all the activities are managed by a
single person and at the same time, he takes all the decisions. Any company having a single
owner will be example of this. .
Partnership: - When any firm is owned by two or more people forming a partnership
with each other. These people comes together and take decision on mutual agreement.
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Illustration 1: Legal structure of private sector.

Public Sector: - In the business environment, there are various types of companies that
are controlled and regulated by government authority and these will be termed as public
company. With these, the government of any country wants to bring stability in economy and at
the same time, they also ensure that the citizens of country not lack the basic facilities. Most of
the public companies deal in banking, health and education segment. They all run their business
through using funds given by people in the form of taxes. National Health Service is one of the
organisations which is under control of government. When it comes to the legal structure of this
sector, ownership and control of such organisation can be under the hands of central, state and
local government. National Health Service (UK) is a public company and is considered as one of
the important organisation who looks for health care facilities in countries of UK. They run their
operations through the funds which they get from taxes paid by the citizens of the countries.
They have certain services which they provide to the citizens of country as these are related to
emergency care, treatment of the infectious diseases and they provide all these at free of cost to
every person.
Their main purpose is to deliver quality health care services to all the people especially
those who cannot afford health treatment. They may charge for small services like prescriptions,
dental services and etc.
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Illustration 2: Legal structure of voluntary sector.

Voluntary Sector: - In the business environment with the development of financial
economy, it is also necessary that the social economy should also be developed. They are crucial
because they deal in the social environment and put efforts to improve their lifestyle. Those
organisation which are part of this segment are basically the non-profit and aims at improving
social condition of citizens. They are typically NGOs, Self Help Groups and other social
communities.
To carry out activities for social cause they take funds from corporate houses, conduct
charity programs and etc. Oxfam is an example of this sector.
P2. Size and Scope of M&S, NHS and Oxfam.
Overview of Marks & Spencer:- It is listed as one of the biggest retail organisation in
UK market and deals in clothing, home products and luxury food products. They holds a big
market in UK which can be seen through the fact that they have 615 stores which sells food
products only. Looking at the achievement, it was the first retailer to earn a pre tax profit of over
£1 billion. They have set themselves as a flexible organisation who believes in continuous
growth and this can be analysed through that they have been successful in opening 223 stores in
various countries all across the world. They have launched an online portal in year 1999 where
they give facility to the customer to purchase their products online. This has helped them in
increasing their customer base. Now they have set plan to increase their sales between £800 m
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Illustration 3: Legal structure of public sector.

and £1 billion. Till now they have the operating income of approx. £690 million and has the
workforce strength of almost 82,904.
National Health Service(NHS):- This is a public sector organisation formed in 1948
and was started with the aim of providing better health care services to all the citizens of UK. All
their services are free of cost. They cater their services to approx. 64 million individuals in UK
and 54.3 million people in England alone. In every 36 hours NHS in England deals with over 1
million patients. It was the year 2014, the Commonwealth Fund declared that in comparison with
with the healthcare system of other 10 nations the NHS was the most appropriate of all
(Guglielmetti, 2011). When it comes to efficiency, effective care, safe care, patient care and etc.
They provide employment to almost 1.5 million people which puts them in the list of top five
companies who has most number of workforce. They also have 111,127 hospital and community
health services medical and dental staff. NHS have budget of £116.4 billion.
Overview of Oxfam:- They are the their largest organisation in the world who are
involved in some kind of social cause. It was formed in 1942 so that they can work to eradicate
poverty from the globe. Other than this they also ensure that people are well aware about the
human rights which are given to them (Robbins, Judge and Campbell, 2010). They also make
people aware that what steps they can take if their human rights are being violated. They act as
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Illustration 4: Key retail and foodservice players, 2013

mediator between the government and the needy people. For example; they care that whatever
policies and schemes are proper implemented and actual beneficiary take the advantage of this.
They sell the donated products and the profit obtained are used for carrying out different social
activities. Their mission is to engage local groups in their operations done for the social cause.
TASK 2
P3. Relationship between various functions in M&S for attaining mission and objectives.
Every organisation has certain structure which they follow as they have rules and policies
to brief them about the roles and responsibilities which have to be performed. Through
organisational audit they can control and coordinate the activities happening in the business.
Other than this they briefs that how a message will be disseminate and at what certain decision
will be taken. In centralized structure, decision flow from the top to down while in the case of
decentralized structure decision are taken on different levels. It can be called as a hierarchy
which a company follow to run their business (Welford, 2013). If a company have certain
structure they will find it easier to attain the business goals. In order to achieve the business goals
workforce of Marks and Spencer are given role which they have to perform. To gain better
outcomes a relation between the operation which are performed by the organisation and the
targets is necessary. In the case of Marks and Spencer they put emphasis on their function to
attain sustainable development model. They are aiming for this target in order to improve their
image in the market and they are concerned about the environmental development with the
infrastructural development. It is the duty of the management of Marks and Spencer to carry out
the activities related to planning, hiring, selecting, handling, evaluating and monitoring
operations. They also wants to achieve the targets but but at the same time knows their
responsibility towards environment. So to achieve this they have to set coordination with the
functions which they which can be done through organisational structure (Trkman, 2010).
Marks & Spencer follows matrix structure along with the hybrid strategy. They follow
this structure in order to bring efficiency and flexibility in the in certain departments because all
the work has to be done with effective outcome. But to achieve proper result the management
needs certain funds so that they don't face difficulty in doing any business operation. Following
are the departments in Marks and Spencer and their function:-
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Marketing and Sales:- It can be considered as crucial department because they have the
full responsibility so convince the customer in a way that they buy the product. This department
at Marks & Spencer analyse the market and try to know the demand of the consumer or the trend
which is going in the market. According to it, they inform other parts of the company and ask
them to develop products which can easily satisfy the needs of people. With an effective
marketing campaign they can easily gain competitive advantage and can easily increase their
sales.
Finance:- It is the department who have the opportunity to allocate budgets for the
different business activities of Marks and Spencer. To know that which department needs how
much funds there will be organisational audit which will give them clear picture about this. They
can also control the uneven expenses which is happening in the company they are impacting
their sales and productivity (Cantwell, Dunning and Lundan, 2010).
Customer Service:- Any problem faced by the customers are resolved by customer
service department. M&S are focusing on delivering quality products so they take care that their
customer are satisfied form their services and products. They regularly take feedbacks and
reviews about the products so that they can know what are the area where there is scope of
improvement.
TASK 3
P4. Positive and negative impact of macro environment on M&S.
In the businesses there are certain factors which are present outside the business
environment. These are also called as the deciding factor for any company so a full fledge
knowledge of these are required to gain competitive advantage. So through a PESTLE analysis
they gain know the importance of external environment.
Political:- If the country is operating their business in lots of country so they might face
difficulty in handling things out there (Teece, 2010). Various countries have different political
situation so it can impact them. UK has just voted in favour of Brexit which will impact M&S as
now they may face labour shortage.
Economical:- Business conditions are unpredictable as any change in the economy is the
sign of pleasant and unpleasant business (Belás and et. al., 2015). To see increase in their
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business the purchasing power should be strong otherwise their sales will go down and this can
happen only when the income level of the customers is high.
Socio-cultural factors:- Increase in the population, movement of the people for tourism
purpose, positive consumer behaviour and etc. are some of the factors which are included in this
socio culture and impact Marks and Spencer in positive way. M&S analyse the market to know
social trend and according to it they modify their strategy. They believes in developing better
relationship with consumer, transporter and communities and etc.
Technological Factor:- To increase their market share it is necessary that Marks and
Spencer regularly analyse the new technological trends going in the market and after that they
should try to adopt into their business. Technological modification makes them efficient as it
saves time and at the same time they can make them unique and creative (Chow and et. al.,
2012). They have also allowed their customers to go fir online shopping through their official
website and they are also should various new software for their business.
Legal Factors:- There are various legal implication made for the business and any
violation in this can cost them. They operate their business in lots of countries and each of them
have different rules so they have made a legal department who will be dealing with any legal
dispute coming in their way. In the case of Brexit now UK is facing downfall in the market and
now they have to restrict their market at parts of UK (Cordes, Richerson and Schwesinger,
2010). They should also make sure that all employment laws, contract law, health and safety law
and etc. are some of the laws which should be take care off.
Environment Factors:- With the financial development there is also need of
environment development so it is the duty of management at Marks and Spencer to adopt eco
friendly business operations so that it does not harm the environment. To improve their brand
image they can adopt CSR model.
TASK 4
P5. SWOT analysis Marks and Spencer.
The analysis of any company by the SWOT shows the internal business in term of the
strength and the weakness of the organisation, opportunities and threat shows the external factors
of the organisation. Swot is done to get the overview and to find, calculate the facts and perfect
matching figures.
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Strengths:- Mark and Spencer is leading brand in present market, as the company as
many strength but it mainly works on the brand value of the company and it have also numerous
product range and outside outlets units.
Brand name recognition
M&S is well known unit and known by everyone in the united kingdom for the quality of
product they provide in the market since they exited in the market.
Range of product
In the list of mark and Spencer wide range of product are there its helps its customer to choose
the best and quality product. For example if we choose market of vegetable ,company is selling
vegetable and fruits from last 4 decades. company has good relation with the farmers as they are
the main source and provides a good range and variety of products as needed .
Outlets
As the number of stores of company is 900 all over the world. In UK around 600 and approx 300
in more than 40 countries of the world (Bill Pasmor and CMC, 2010). As the numbers of stores
represents the statistics that sales and revenue generation of m&s is huge due to range of
product availability.
Weakness:-
Lack of awareness
The biggest weakness of the company is that company do not produce trendy and fashionable
cloth section. In the market hoax assumption is there that the clothing range is generally for the
old age people and this is not for the youngsters,this affects the business and make it low as
compared to others.
Hand made
Manually doing of the works makes down in the time this resulted in increase of cost and time.
As the time is changing they are also going for the use of machinery with use manual it will
decrease cost of the product.
Opportunities:-
Global presence
As the market in the face of stores of company is globally present. Company gets full support
from the 900 stores all over the world.
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Market segmentation
Segmentation of market relates to splitting of the customer needs as they need different product
which may be in comparable interest.
Threat:-
Increased competition in the business
Competition as increased which has made mark and Spencer to threat of loose the market hold.
Presently they are based on the mega stores they have in the streets of the UK if the scenario
continues they is proper chances to defeat in cut throat competition (Erving and et. al., 2011) . To
increase the profit and market share they should plan for increase the stores and make proper
strategy to go off from the obstacle and overcome from it.
P6. Interrelate with strength and weaknesses with external macro factors.
The strengths and weaknesses of the company has interrelation with the external factors.
Political:- Political instability results in decrease in the productivity as well as their
ability to expand their businesses.
Economical:- Marks and Spencer can face decrease in the market share if the prices of
the good will be high. So for this they have to reduce the prices of the products which has high
prices.
Social:- Due to inequality in the promotions the employees which are not promoted are
not satisfied so they are not able to work properly (Fernando, 2011). So management has decide
that they will be organising feedback sessions where employees can put their concern in front of
the management.
Technological:- It has been the issue where there is no proper way where company can
track the attendance the employees so they have decided to put a bio metric system which
automatically records the data.
Legal:- To make sure that they does not face any legal issue they have made a separate
legal department who inform the management about the legal framed which has to be obeyed
(Cronan and et. al., 2011).
Environment:- They are well aware that through it they can gain competitive advantage
so they use solar energy top lighten up their stores.
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Link to the strengths of Marks and Spencer
Marks and Spencer has strengths of range of products and the reason behind this is that
they understand that in social context there are different kinds of people demanding various
things. Due to their presence in almost every part of the world they may face political issues like
the instability in the government, taxation laws and various other legislations framed by the
government. As they have stores in every country so it means that they hold a strong economic
market. They are using internet as form of energy that's why their brand name as increased and
now it has become their strengths.
Link to the Weaknesses of Marks and Spencer
Their weaknesses is that they don't use machines for making clothes thus lacks in the
technology which is decreasing their profits in the market. They are not adapting according to the
social needs which keeps on changing as their cloths are not for the updated fashion style which
is followed in the society today. As they are focusing on brining a fashion stylist for every store
who will guide people about the fashion sense but due to increase in the taxation they find it
harder to maintain their economic stability.
CONCLUSION
From the above report it has been summarised that the knowledge of internal and external
factors are necessary for an effective business strategy. Marks and Spencer can gain knowledge
about these through SWOT and PESTLE analysis. All the three private, public and voluntary
organisation are important for the growth of any economy as each of them holds equal
significance at their places.
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