Unit 1 Business and the Business Environment Assignment

Unit 1 Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
ESSAY.............................................................................................................................................1
Identify the positive and negative impacts the macro environment has upon business
operations which is supported by specific examples..............................................................1
Conducting internal and external analysis of specific organisations in order to identify
strengths and weaknesses.......................................................................................................3
Explaining how strengths and weaknesses interrelate with external macro factors...............5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Business may be understood as the organised efforts of enterprise to supply consumers
with goods and services for a profit. Businesses vary in size, as measured by the number of
employees or by sales volume. Business environment factors are the most important drivers
which has to be measured in a proper way. Such factors includes political, legal, technological,
social and economical. Present study will be discussing the external or internal business
environment of Marks & Spencer in order to measure the possible outcomes and results.
Therefore, the report will also justifying business environment through some marketing factors
like PESTLE, SWOT analysis in order to identify their key strengths and weaknesses. However,
such model of market analysis also will describe the interrelationship between external factors
and internal.
ESSAY
Identify the positive and negative impacts the macro environment has upon business operations
which is supported by specific examples.
In order to determine the positive and negative impacts of the macro environment on the
business operation such as M&S PESTLE analysis is the most required tool for the organisation
performance (Schaltegger and Burritt, 2017). Along with that, PESTLE analysis is the most
reliable source that shows the elements associated with the business like M&S to explore the
new business organisation. Directly or indirectly external business environment affect the
opportunities of the business. On the same side, external factors include political, legal, social,
economic, environmental all such factors belongs to the external factors that might be threat for
the company.
Political factors: Political factors play a significant role in order to determining the
factors that can impact Marks & Spencer. Political factors play a significant role in determining
the factors that can impact M&S in more than dozen countries. In retail sector political factors
are highly influenced and dynamic industry across the various countries which is to diversify the
systematic risks of political environment (Aldrich and Wiedenmayer, 2019). Marks & Spencer
group Plc can also closely analyse the following factors in order to enter or investing to a certain
market. Company get affected by political factors in terms of anti trust laws, wage legislation
and mandatory employees benefits.
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For example : UK government planning to modify some changes in fiscal policies to
recover the recession of 2008. so such formations will help M&S in several contexts.
Economic factors : Economic factors impact businesses in terms of inflation rate,
savings rate, interest rate, foreign exchange rate and economic cycle which has been determine
the aggregate demand and aggregate investment in an economy (Jamali and Karam, 2018). On
the same side, Economic factor can also become beneficial for the company in case inflation
rate comes down. The reason financial crises has always been given the negative impact on the
customer demand and company sales rate. For example : UK government amend some
modification in wage act. That helps M&S employees to get the higher pay as compare to others.
Socio Cultural factors : Social factors is the another significant factors which drives the
company confidence level. Social factors influenced by the society demands and their needs and
wants. Retail industry get affected by the demographical change and skill level of the population.
On the same side, it also get affected by education level as well as education standards.
Organisations should always known about the attitudes and behaviour of their target audience
which helps to measure the future potential opportunities and threats (Foss and Saebi, 2017).
For example : M&S soon planning to invest in the green projects in order to initiate the eco
friendly environment at the workplace. This practices or initiatives helps company to maintained
the Corporate social responsibilities within the environment. However, the new system also helps
to make the systematic business image in the market.
Technological factors : Technologies and innovation is the key source for development.
In other words, technology is also very fast and disrupting various industries across the world.
That might be affect the company transformational opportunity and goals. Technological factors
has their own pros and cons which sometimes can be beneficial for the organisations or
sometimes may be not. For example new technologies and software helps to offering the better
services to the customers (Boudet and et.al., 2016). Also, this factors can helpful for the
organisation sin terms of maintaining the good sustainability in value chain structure in customer
service sector.
On the same side, technologies and new advancement sometimes cause the company data
in negative manner which also very harmful for the company growth. For example : M&S is
planning to launch the new system that helps customers to make the fast billing system and also
avoid the possibilities of delayed.
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Legal Factors : Legal factors is the most significant factors which might affect the
organisation very badly in case company found with some illegal activities. In order to protect
the firm or an organisation from the legal interference company should need to follow the proper
guidance of the legal structure. Legal factors can also restrict the business to provides their
services to the end consumers (Estrin, Mickiewicz and Stephan, 2016). Or on the same side, with
good relationship with government company can also getting good offers from the government
side. For example : High business legal regulations and business opportunities partially impact
the business in different context which also affect the business regulations and lack of
opportunity and task.
Environmental factor : Different markets have different norms and standards which can
impact the overall industry sustainability. Environmental factor is highly dynamic and uncertain.
Before entering into a new market the firms should carefully examine the new business
opportunities and threats. Such factors which must be considered by the company is weather,
climate change, laws regulating environment pollution, recycling, waste management in
consumer service sector. Negative impact of the environmental factor is dynamic customer needs
and wants (Steiss, 2019). New trends and business opportunities can be the different task and
potential sources to define the best outcomes and goals.
Flexible laws and regulations can helpful to the company in terms of producing the best
legal authorities and various new reforms for the better development ideas and growth resources.
Environmental factor can be the positive sign for the company in case company pay a full
attention towards the regulations government and also it includes the business performance and
also regulate the best opportunity task to maintained the effective performance level.
Conducting internal and external analysis of specific organisations in order to identify strengths
and weaknesses.
SWOT
SWOT Analysis is the tool used to analysis the micro factor of the organization in term of the
Strength, Weaknesses, opportunity and threat of the business (Bryson, 2018). SWOT analysis
help the organization in understanding the current micro situation of the organization in the
market.
STRENGTH
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Goodwill: The biggest strength of Mark and Spencer is the goodwill which has been made by
the company in the local market by offering the good Quality of the product to consumer for the
purpose of selling the product in the local market. Mark and Spencer is one of the most
recognised brand in the Local market (Phadermrod, Crowder and Wills, 2019). Mark and
Spencer is the third largest retailer in the UK on the basis of the market area coverage.
Variety of the Product: Mark and Spencer offers the variety of the product in the store which
helps the organization in attracting the large number of the customer in the store of the
organization. Mark and Spencer used to sell the all the range of the product which help them in
attracting all level income people in the organization store. Mark Spencer used to sell the product
of the big brand which gives the opportunity for the customer to get the choice of selection at one
place and this is the biggest strength behind the Mark and Spencer success.
WEAKNESSES
Competition: It is the biggest weakness which used to be faced by the Mark and Spencer in their
functioning as the organization used to operate in the market where there are many big
organization used to operate which generally affects the profit margin of the company. As Mark
and Spencer used to get the tough competition from the Tesco and Asda the organization always
used the price as the technique to attract the customer by lowering down the price of the product
offered by the Mark and Spencer which eventually cuts the profit margin of the company (Gürel
and Tat, 2017). Competition also increases the cost of the company as the company used to
invest very heavily for the promotion of the company product in the local market.
Globalization: It is the another big weakness of the company as company always find it difficult
to enter into the Global market as the company is not able to adopt the culture of the host country
very easily. This is the main reason behind closing of almost 100 store by the Mark and Spencer
Globally. That's the reason it creates the extra burden on the UK store as all the funding used to
come from that end only for the organization (Bull And et.al., 2016).
OPPORTUNITY
Technology: The biggest opportunity which is present in front of the Mark and Spencer is that
the company can take the help of the Technology to develop the own innovative product which
has been not brought by any competitor in the market. Mark and Spencer with the help of the
technology can develop the product which is in demand and the customer are in need of the
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same, Need and the demand of the product can be better understand by the company with the
help of the market research.
Globalization: Their is a very good opportunity available for the Mark and Spencer to grow
their business in the global market as there are many developing country in the world where
Mark and Spencer can plan to grow as the developing country always bring the demand of the
good quality product in the consumer (Bull And et.al., 2016). Mark and Spencer can make the
goodwill of the company in that country by establishing their business at very initial stage itself.
Developing country always offer the variety of the benefit to the Organization operating in the
local market.
THREATS
Overdependent on the UK store: The biggest threat which is in front of the Mark and Spencer
is that the company is overdependent on the operation of their UK store. As the store of the mark
and Spencer is not able to earn the good profit in the other country other than the UK it creates
the extra burden on the Stores of the UK (Phadermrod, Crowder and Wills, 2019). It can be the
biggest threat for the organization as the expectation from the UK store is very high from the
organization side.
Profit Margin: It is the second threat for the Mark and Spencer as the organization always lower
down the price of the product to be competitive in the market which eventually result in lowering
down the profit margin for the organization (Amuna, Al Shobaki and Naser, 2017).
Explaining how strengths and weaknesses interrelate with external macro factors.
Internal or external business factors are interrelated with each others. There are certain
situations happened within the organisation which might affect the business goals and objectives
(Ansoff and et.al., 2018). The social factors affected in M&S company by making good product
for the different types of customers. In terms of external business factors it has been identified
that social factor is the most beneficial factor for the company to measure the best resource
development task in order to better understand the opportunity and task. The technological
environment analysis makes the biggest facilities in the business environment. Technological
factor is the another factor that can be the source for the company to generate profit and
customer satisfaction. Technological changes is the most productive factor that helps
organisations to produces the best organisation sources in order to implement the best
organisation sources and goals (Grant, 2016). M&S also cannot increases their business due to
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the low economy and politics. However, the economical and political environment are the culprit
for the weakness in M&S. On the other hand, economical factor affect the internal environment
of the business which impact the sufficient financial resources than changing in these rate will
not affect the pricing and marketing strategy of the organisation. Economy of the country
interrelate with the internal factors which directly impact the company resources. Political and
legal factors also affect the company beliefs and values which comfort the business goals and
objectives (Ginter, Duncan and Swayne, 2018). Critically evaluate the technological factors
which inspired by the business organisations and also affect and impact the business purposes
and effective leading business opportunities. However, the business organisation can also highly
influenced by environmental factors which also helpful to certainly getting the advantageous of
the new opportunities and task in order to sustained the business opportunity. But on the same
side dynamic business environment can also helps to introduce the new concepts which are very
much potentially stable and growing.
On the other side, Low economic rate can also decreases the possibilities of the business
growth. Economical and political environment are the main factor affecting weaknesses of M&S
which is uncertain and not beneficial for the company (.Sekaran and Bougie, 2016). On the other
side, economical environment is also different in various type of countries which is basically
very harmful for the growth of the business organisation. Economical environment is different in
various types of the countries. Also M&S cannot get the advantage from economical
environment. It also very much essential for all kind of businesses is to grow the business
opportunities and also implement the best idealogical task. The business contraction strategy has
influenced the business rise of retail shop. Retail business should always be aware from the
environment which involves the high business fall (Bull and et.al., 2016).
CONCLUSION
On the basis of above tasks, it has been analysed that how much internal or external
business environment impact the business organisation activity goals. Study also analysed the
positive and negative impact of business environmental factors in order to study the effectiveness
of the organisation. Further, learning also explained the SWOT analysis of the company internal
environment to measure the opportunity and draft to examine the business opportunity.
Therefore, organisation opportunity can also be very liable to form a good results and objectives
to be form a systematic manner. At the end of the segment report further explains about the
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interrelationship between external or macro factors of the business in order to gain the advantage
results and opportunities for the best and better results goals. It also concluded that business
should need to review the external as well as the external situations while forming the new
business activities. Such business practice is very much helpful for the new business
opportunities.
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REFERENCES
Books and Journals
Aldrich, H. E. and Wiedenmayer, G., 2019. From traits to rates: An ecological perspective on
organizational foundings. In Seminal Ideas for the Next Twenty-Five Years of
Advances(pp. 61-97). Emerald Publishing Limited.
Amuna, Y.M.A., Al Shobaki, M.J. and Naser, S.S.A., 2017. Strategic Environmental Scanning:
an Approach for Crises Management.
Ansoff, H. I. and et.al., 2018. Implanting strategic management. Springer.
Boudet, H. and et.al., 2016. The effect of industry activities on public support for
‘fracking’. Environmental Politics. 25(4). pp.593-612.
Bryson, J. M., 2018. Strategic planning for public and nonprofit organizations: A guide to
strengthening and sustaining organizational achievement. John Wiley & Sons.
Bull, J. W. and et.al., 2016. Strengths, Weaknesses, Opportunities and Threats: A SWOT
analysis of the ecosystem services framework. Ecosystem services. 17. pp.99-111.
Bull, J. W. And et.al., 2016. Strengths, Weaknesses, Opportunities and Threats: A SWOT
analysis of the ecosystem services framework. Ecosystem services. 17. pp.99-111.
Büyüközkan, G. and Ilıcak, Ö., 2019. Integrated SWOT analysis with multiple preference
relations: Selection of strategic factors for social media. Kybernetes. 48(3). pp.451-470.
Estrin, S., Mickiewicz, T. and Stephan, U., 2016. Human capital in social and commercial
entrepreneurship. Journal of Business Venturing, 31(4), pp.449-467.
Foss, N. J. and Saebi, T., 2017. Fifteen years of research on business model innovation: how far
have we come, and where should we go?. Journal of Management. 43(1). pp.200-227.
Ginter, P. M., Duncan, W. J. and Swayne, L. E., 2018. The strategic management of health care
organizations. John Wiley & Sons.
Grant, R. M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley &
Sons.
Gürel, E. and Tat, M., 2017. SWOT analysis: A theoretical review. Journal of International
Social Research. 10(51).
Jamali, D. and Karam, C., 2018. Corporate social responsibility in developing countries as an
emerging field of study. International Journal of Management Reviews. 20(1). pp.32-61.
Phadermrod, B., Crowder, R. M. and Wills, G. B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management. 44. pp.194-203.
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Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues, concepts
and practice. Routledge.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Steiss, A. W., 2019. Strategic management for public and nonprofit organizations. Routledge.
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