This report discusses different types of organisations, size and scope of organisation, relationship between different organisational functions, macro & micro environment factors etc. Some other key factors relating to business and business environment also have been discussed in this report.
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BUSINESS AND THE BUSINESS ENVIRONMENT
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TABLE OF CONTENTS INTRODUCTION...........................................................................................................................3 LO1..................................................................................................................................................3 P1 Different types & purposes of organisations..........................................................................3 P2 Types of businesses and organisations by size and scope wise..............................................5 LO2..................................................................................................................................................7 P3 Relationship between different organisation functions..........................................................7 LO3..................................................................................................................................................8 P4 Impacts of macro environment on organisation.....................................................................8 LO4................................................................................................................................................11 P5 Strengths and weaknesses of company.................................................................................11 P6 Strengths and weaknesses interrelate with external macro factors......................................13 CONCLUSION..............................................................................................................................14 REFERENCES..............................................................................................................................15
INTRODUCTION Business environment is basically a zone for an organisation to conduct and operate different activities of business. Currently every business in market place tries to analyse its business environment because after having effective business environment, any company can simply grow in market place (Vlachos,2016). Top-level management within different companies have to adopt different models of situational analysis, because after conducting situational analysis, any business can simply find out those elements and factors of the market which can affect that business in both manners positively and negatively. This report is completely based on the different business environment factors of Marks and Spencer’s (M&S). The M&S is one leading retail business in the United Kingdom, headquartered in London, England, UK. This report discusses different types of organisations, size and scope of organisation, relationship between different organisational functions, macro & micro environment factors etc. Some other key factors relating to business and business environment also have been discussed in this report. LO1 P1 Different types & purposes of organisations Many types of organisations exist within the market place which has different purposes anddifferentmorals.Therearepublicorganisations,voluntaryorganisations,private organisation etc. some key types of organisations which has been discussed below; Public organisations Public organisations, these organisations are always selling their services and products in market place, so that, any person can simply buy different shares of any public company or organisation in market place (Agustinaand et.al., 2020). The main purpose of these organisations is to generate huge profit margins in market place by providing different products and services. On the other side, most public businesses or companies always runs their business operations at the international level. These organisations always capable to invest very high amount of fund in purchasing the modern and hi-fi technology. A public organisation always has large number of employeeswithinits workplace.Basically,public venturesalwaysable to generatevery
excellent employment opportunities to people in market place.Currently Marks and Spencer P.L.C. is an excellent example of a public organisation, because it sells its shares publicly (Marks and Spencer p.l.c. - Company Profile, Information, Business Description, History, Background Information on Marks and Spencer p.l.c.,2020). Private organisations Private organisation and companies basically not sell their shares in market place, so that any person not able to shares of these companies. Many times, top-level management provides shares, The main purpose of these private organisation is to gain effective profit in market place. On the other side, many of public ventures mostly run their business operations only at the national and regional level. Currently only few private businesses exist within the UK’s business environment which are capable to run their business operations at the international level. A private company always have fewer numbers of employees than a public company. These organisations mostly try to invest in buying those technologies which are very necessary to them (Pfeffermann, 2017). Currently Iceland foods ltd. is the best example of a private organisation. Voluntary/social organisations Voluntary and social organisations, these organisations mainly work in the social welfare or public welfare. Earning very higher profit margins is not the main objective of this these organisations. The main purpose of these organisations is to maintain ethics and effectiveness within society by working the social welfare. Currently many of voluntary organisations exists within the UK’s business environment, in which the Children’s society is one of key examples of voluntary businesses. Currently donation and charity are two key main sources of funding to these organisations. Most voluntary and social organisations operate their operations at very smallscale.Currentlyonlyfewsocialorganisationsareabletoruntheiroperationsat international market. For example; World food organisation, WHO etc. LEGAL STRUCTURE A public limited company has always required to register itself in the companies’ house of the United Kingdom. Companies house is generally a governing body which manages different businesses within the country.A public venture, like; M&S can freely sell its shares
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within market place, andpurchasers of those shares becomelimited liability of this public company.On the other side, A private limited company also has highly required to register itself in the companies’ house. A private company, like; Iceland foods not able to sell its shares within marketplacetoraiseaspecificfund.AccordingtotheUK’sbusinesslaw,theprivate organisationis legally distinct entity with its own profits, assets and liabilities.Lastly, a voluntary organisation, like;the Children’s society also has required to register itself in companies house to be legally formed as a social or voluntary organisation. The voluntary organisations also enable to sell their shares publicly. These all are key types of organisations which commonly exists within the UK’s business environment. There are some key laws and regulations also has discussed above which should be followed by top-level management of each business to get appropriate results in market place. P2 Types of businesses and organisationsby size and scope wise Organisations within the United Kingdom has categorised by size wise and scope wise as well.Therearemicro,small,mediumandlarge-sizedorganisationsarekeytypesof organisations within the United Kingdom. These all types of organisation have been discussed below; MicroSmallMediumLarge Microbusiness category,those businessesmainly comesunderthis categorywhichhave lessthanten employees,andalso whicharegenerating turnover of€2 million initseachfinancial year. This is the actual definitionofamicro businesswithinthis country. Currently lots Currentlyventure whichareableto generateturnoverof €10 millionin its each financial year, and have fewerthanfifty employees,thenthat ventureorbusiness comesunderthe categoryofsmall organisation(Prange andPinho,2017). Currentlythereare thousandsofsmall Inthemediumsized- businesses,onlythose ventures of companies come which are able to generate€50million turnoverinitseach financialyearof businessoperation. Businesseswhichhas lessthan250 employeesarealso comes under this same category.Numberof medium-sized Large-sizedbusinesses aregenerallythose businesseswithinthe United Kingdom which hasmorethan250 employeesorworkers and also, they are able to generate turnover of more than€50 million initsfinancialyear. There are lots of large- sized businesses exists withintheUnited Kingdom, in which key
Evaluation There are all types of organisations are playing very excellent role in the growth of UK’s GDP. Basically, these different sized businesses have generated great employment opportunities to the local people of this country, existence of these all sized organisations is very beneficial for the United Kingdom. LO2 P3Relationship between different organisation functions Inter relationship of various organisations functions can be projected in the following manner. Marketing and Human resource Marketing team needs to collaborate with all other functions to achieve the overall objectives of operations. Marketing team need to collaborate with sales management to raise the sales capacity of the department. Marketing needs to work with human resource function in channelizing recruitment campaigns of company (Li and et.al., 2019). Human resources provide the effective and skilled human resources to the marketing team so that department could meet up all its various objectives. Human resources department also channelizes its recruitment advertisement with the support of marketing department. Finance department and marketing Finance management need to prepare budget for each functions of marketing team. On the basis of the needs and requirements of marketing departments it requires to prepare budget so that they can meet their needs and requirements (De Vries and et.al., 2017). Marketing team also provide relevant information about the market to finance department. Sales and marketing departments
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Sales management in Marks and Spencer Company work with marketing department to achieve the overall objectives. Sales team, carry the responsibility to entertaining the sales targets of company. Sales team directly contact with the marketing team to get publishes various advertisements and promotions of company. Marketing team also take various information related to potential customers with the sales team. Advantages of working together It improve the overall productivity of the company. Work culture at organisation also improved in this strategic tool. Inter relationship between departments also improve through this working approach. Disadvantages It create extra confusion regarding operations of company. It improve cost of operations. It is analysed that how collaboratively every single department in Marks and Spencer Company work to achieve the overall objectives of such individual function in company. This is very necessary task to the upper management of company to always maintain an effective relationship between all departments. LO3 P4Impacts of macro environment onorganisation Marco environment of Marks and Spencer highly affects it in both ways negatively and positively (Han,2019). Basically, there are lots of factors exists within M&S’s macro business environment which influences company’s business operations. The management at this retail company has always required to make some appropriate strategy to systematically deal the impact of these all macro factors. There are PESTLE analytical tool has been used below for identifying and analysing key macro environment factors of M&S. PESTEL Analysis
PESTLE analytical tool is very beneficial to a business or company in the market place. Currently many of companies uses this tool for analysing different factors of their macro business environment. PESTLE term mainly refers six key factors of macro environment of any business called; political, social, environmental, economic, legal and technological etc. These all factors of M&S’ macro business environment has been discussed below; Political factors:Politicalfactors are highly affectingto the business operation of M&S. Basically, the management of this retail business has always required to follow different rules and regulations which has formulated by the local government of UK. Currently company is responsible to fulfil different governing formalities as well. For example; the management of M&S always fulfil is formality of taxation. There are Brexit decision of the UK also has highly affected to this company. For example; after Brexit, M&S has required fulfil lots of paper work formalities while exporting its products and services in those nations which are still members of European union. On the other side, the company have to maintain different business standards while importing and exporting its various products and services. The positive impact of political factors is that, M&S has gained an effective business environment to run its business activities, because local government of the UK always tries to develop existing business law. The negative impact of these factors is that, this retail company have to give huge fund to government due to higher rate of taxation. Economic Factors:The company is highly affected by the economic factors as well. Basically, when any country has well-developed economic condition, then existing businesses of that country has automatically gained excellent opportunity to generate huge profit (Makarenkoand Plastun,2017). In this situation the positive impact of the UK’s economic factors is, this country has well-developed economic condition, in which local people of this place can simply affords M&S’ products and services, and this retail company can easily generate huge revenue by selling different products and services. On the other side, currently the UK’s economy faces some slowdown just because of corona virus pandemic. In this situation, this economic factor has very negatively affected to the sales ratio of M&S. Nowadays, this retail company able to boost its sales, because there are many people avoid to visit in market, just because of the fear of Covid- 19 infection.
Social Factors:Social factors of the United Kingdom are very favourable to M&S. Social factor mainly indicates the perception of different people, caste and region of people, communities etc.In this situation, many of people take interest in buying products and services from this company in the UK, because they like extra-ordinary levels of customer service of M&S. There is positive impact of these social factors that, these factors influence company to work in the social welfare. In this situation, the company always increases its brand image in market place by fulfilling corporate social responsibilities in market place. There is negative impact of these factors is that, there are customers have different perceptions in market place. In this situation, when people made negative perception of company, then this retail company can’t grow in market place. So that, upper management of business always need to work in social welfare to affectcustomers’perceptionsinverypositivemanner.Basically,positiveperceptionof customers will definitely influence them to buy products and services through Marks and Spencer. TechnologicalFactors:Technologicalfactorsmostlyverypositivelyaffectstobusiness environment of the M&S. The positive impact of technological factors on M&S is that, with the support of hi-fi technology, this company can simply achieve excellent performance and productivity in market place. On the other side, these factors put negative impact also on company (Quanand et.al., 2018). For example; adopting hi-fi technology is necessary to this company for always maintaining its effectiveness within market, but adopt technology is very expensive deal to this retail business, and that’s why this is negative impact of technological factors. Environment Factors:These factors also affect company in both ways positively and negatively. Basically, currently globalisation is very badly affecting to the natural environment. so that this environmental factor impacts to company for avoiding such activities within its workplace which can negativelyimpact the natural environment. The positive impact of these factors is that, environmental factors impactsto M&Sto work in thenatural environmentprotection. After working in natural environment protection, company can simply put positive impression on the society. The negative impact of these factors is that, understanding and following all rules and regulations of environmental protection is very complicated task to company. There are lack of natural resources also very negatively affecting to M&S in market place.
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Legal Factors:Legal factors also highly affects to business operations of Marks and Spencer. According to the UK’s business law, a businesshas highly required to adhere different legal and ethical considerations in its workplace. The positive impact of these factors is that, by following different laws and regulations, M&S can be simply legally formed. The negative impact of these factors of is that, knowing and adhering all laws, standards and regulation is very complicated task to this retail company, which consumes lots of precious time and resources of this business as well. Evaluation These all macro business environment factors always affect M&S’ decision making and objectives.Onthebasisofanalysis,mostexternalfactorsofthecompany’sbusiness environment are positively affecting its business operations. However, these factors put some negative impact also on this retail venture. In this situation, the management should properly deal with all negative impacts of these all macro environment or external factors. LO4 P5Strengths and weaknesses of company Analysis of different strengths and weaknesses is also a very necessary task to the upper management of M&S, because after knowing strengths and weaknesses, this company can simplymakeappropriatebusinessstrategiestoearnhugeprofit(Ivanov,Sypchenkoand Webster,2017). There is SWOT analysis tool has been used below for identifying key strengths and weaknesses of company. SWOT Analysis of Marks and Spencer SWOT analysis is very effective tool for different companies and businesses in the term of knowing different key internal factors of business environment. In this situation, top-level management of M&S also have to adopt and use this tool. SWOT term mainly refers four key internal factors which has been discussed below; Strength M&S is one of highly reputed retail brands in across the international retail sector.
Currently this business is succeeded in highly expanding its business in across the world. This business is fully capable to provide different quality products and services to customers in market place. On the other side, this business has an effective marketing team as well. With the support of own effective marketing function, this venture is able to widely promote its brand in the world. Top-level management within M&S has an effective skill of people management, and these all are key strengths of company. Weakness Top-level management at M&S is currently not able to take effective decisions within its daily operations, so that this factor of company mostly affects its business operations in negative manner (Albort-Morant and Ribeiro-Soriano, 2016). In this situation, the management have to develop its skill of decision-making to take effective decisions. On the other side, this business has not perfectly handled the Covid-19 pandemic situation, so that this year its revenue also will be decreased because of this reason. So that, the management have to develop its problem-solving skill to deal different barriers, difficulties and problems of the business. Opportunities Currently M&S has an effective opportunity to highly boost its brand in the international retail sector by adopting and implementing social media marketing. Basically,socialmediamarketingishighlytrendinginthismodernbusiness environment, so that this will defiantly give opportunity to M&S to attract lots of people in market. Threat Currently there is very tough competition within the UK’s retail industry, in which this a big threat to this business.
Basically, Tesco, Sainsburys, Morrison etc, retail companies of the UK gives very tough competition to M&S. SWOT Analysis of Tesco Strength:This is a most reputed retail brand of the UK and have the largest distribution channel in this country’s retail industry. Weakness:There are thousands of people currently works within the Tesco’s workplace, so currently the management is not able to perfectly manage these all people or employees. Opportunities:It has great opportunity to gain large customer base by expanding its business operations in new countries (Ištvanićand et.al., 2017). Threat:Existing high market competition threat and the threat of new entrants are main threats of Tesco right now. P6Strengths and weaknesses interrelate with external macro factors There are strengths and weaknesses of company completely interrelate with its different external macro factors. This company is the leading retail company of the UK and also capable to export its different products and services in many other countries, so that local government supports to this company by charging low amount of duty in its exportation practices. Generally, when M&S exports its products and services in foreign, then it can provide huge foreign currency to the UK.On the other side,currently the UK’s economic system faces some slowdown just because of Covid-19 pandemic. So that, this factor fully interrelates with company’s weakness that, it is also not able to perfectly handle the situation of this pandemic. M&S is fully capable to provide excellent product quality, so that this strength of company has built positive perception in people within the society.The, the management has poor decision-making skill, so this factor interrelates with technological factors of macro environment, because having weak decision-making skill influence the management for taking huge time to adopt any appropriate technological gadget or tool for company.Currently the company has strength that, it has succeeded in building its effective brane image by fulfilling CSR in the market. In this situation strength is interrelating with company’s legal macro factors, because social factors of the UK say that, every business should always work in social welfare
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(Gaspar and et.al., 2016). Nowadays M&S’ is able provide quality products and services to customers, and this is one strength of this company, in which this strength completely interrelates with environmental factors, because natural environment is the only source to company for fulfilling its various needs relating raw-material. According to these all findings, it can be state that Marks and Spencer’s strengths and weaknesses are fully interrelating with is macro environment factors. CONCLUSION On the basis of above findings, it can be concluded that currently M&S is highly affected through different macro and micro business environment factors. There are two key analytical tools called PESTEL and SWOT has used above in this report to systematically understanding the actual impact of different business environment factors on M&S. According to the current market situations, the company has great opportunity to more expand its business operations its new market segments to increase its market share within the international retail industry.
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