Business Environment and Its Impact

This assignment delves into the various aspects of the business environment, including its impact on young firm financing, transnational corporations, product lifecycle management, organizational behavior, and sustainability. The task requires students to analyze the business environment's influence on these topics and provide relevant examples or case studies to support their arguments.

UNIT 1. THE BUSINESS
ENVIRONMENT

INTRODUCTION
Business environment compromises of all internal and external factors that affects the business
organisation. Clients and suppliers, their competition and owners, laws and government
activities, improvements in technology, social and economic trends etc. are involved in business
environment. Primark is subsidiary of Associated British Foods and is headquartered in Dublin.
It was founded by Arthur Rayan in 1962. This company has 68,000 employees and has made the
overall revenue of £5,347m (Adeoye and Elegunde, 2012). It has specialised in selling men’s
wear, women’s wear, kids wear, footwear, beauty products etc. In this report, the main task is to
explain different types, size, purpose and scope of the organisations. Further, it gives the
demonstration of interrelationship of various organisations and their link to the organisation
structure. Moreover, this report gives the assessment of business’s weaknesses and strengths and
its relationship with outer macro factors.
Task 1
P1 & P2 are covered in ppt.
P3 Organisational functions and their relationship with each other

This is the organisation chart for Marks and Spencer. The organisation chart explains the
method in which the company manages its employees and jobs in order to accomplish its goals
and objectives. It defines the company's relationship with external environment, its line of
authority and scope of acceptable behaviour in the company. This chart is showing the graphical
relationship between different departments of the company. Marks and Spencer has employed
more than 60,000 employees in its stores (Gebauer, Paiola and Edvardsson, 2010). The
employees in management role guide and motivate other employees of the team. This
organisation has 3000 employees in London which plays an important role.
Every organisation requires the team of perfect employees. M & S has to hire the right
candidate to function well. The main responsibility of human resource is to hire the candidate
which has full potential to meet the needs of the organisation. The human resource manager is
responsible for selection and recruitment process (Gecevska and et.al., 2010). It provides various
learning and training programs to the subordinates to improve their performance. They take care
about the wages and other benefits of the employees. It is the responsibility of human resource
manager to look after various strategies which encourages the employees and motivates them to
take active part in completing difficult task by contributing their full efforts (Chand, 2016).
Role of safety manager is to take care about the safety and health measures of the
employees. They must look after physical and mental health of the people. It is very necessary
for Marks and Spencer to have healthy environment in the organisation so that workers will
perform better and they result in good productivity. The responsibility of safety manager is to
encourage health and safety plans at senior level (Halbert and Ingulli, 2011). For this, they must
ensure that sufficient funds and resources are available. Safety manager must monitor healthy
communication to facilitate their effectiveness for the level of risks.
Finance functions are very important for M & S to maintain their financial condition.
These functions include funds arrangement and their allocation. It is very important for the
company as the progress and image is dependent on the organisation. The proper management of
the work can be done by proper allocation of funds. M & S can attract its customer by giving
good statements regarding finance. Determination of different risk factors, profits and investment

decision of the company is done with the help of this factors. These factors are considered for the
decision making by finance manager. These factors help the organisation to regain the trust of
the customers and helps them to raise their profits and investment.
Research and development helps to give more innovation to shape their organisation.
This program also helps to provide different services to the customer. It helps Marks and Spencer
to understand the requirements and habits of their regular consumers. R&D allows organisation
to develop different techniques and strategies to organise the whole structure of the company
(Hamilton and Webster, 2015). To provide best services, R & D department conducts different
researches to know the customers preferences and habits. The research is also made on different
organisations which belongs to same industry. This helps the organisation to gain more relevant
information about their industry. R&D mainly focuses on improving company's services by
developing various techniques which assist in improving its performance. It helps Marks and
Spencer to understand different culture and demands of the customers so that they can satisfy
their needs and achieve their goals.
Research and development program examines the product thoroughly before launching
any new product. It includes production period, its cost and specification. It makes regular
updates and status of M & S existing products in the market. The development department
includes the manufacturing of the product and the product are developed to meet the demands of
the customers. Innovative ideas and innovation by the department helps the company to compete
other companies.
Marketing functions helps in promoting the mission and business of Marks and Spencer.
It is the responsibility of marketing department to reach out customers, investors, communities
and develop reputation of the company which guides company to take preventive measures
(Iskanius, Page and Anbuudayasankar, 2010). The company has make use of digital magazines
which gives whole information about it. The organisation can attract more customers by using
these techniques.
M & S has used digital magazines and made websites of its company which will provide whole
information of the products, price, their availability and all details related to the organisation.

This digitalization and adoption of new techniques helps the customers to know more about the
product and services of M & S. Further. It has also assisted the company to know the customers
needs, demands and their feedback about the new products and services of the organisation. All
this factors helps in branding and promoting their product in the market. M & S has used this
structure to maintain the well functioning of all the departments of the organisation as digital
information helps R & D department to update with new technologies and problems of the
people which helps them to research on the solution of the problem. Further, digitalization has
helped other department of the company by providing them more information about their task
and problems.
Task 2
P4 Impact on business operations of macro environmental factors
Macro environment is external to business environment. These factors are not
controllable and are beyond the reach of the organisation. In order to make growth and success,
M & S has considered different ways which helps them to achieve their target. TOWS and
PESTLE strategies are applied on the organisation which helps them to achieve desired results.
TOWS is done to analyse the strength, weaknesses, threats and opportunities of M & S. Further,
it helps it to overcome the weaknesses and threats by using its strengths. It also helps the
organisation to pursue more opportunities and prepare to avoid threats.
PESTLE analysis is done to identify the risk from political, economical, social and technological
factors on the enterprise. It also assists M & S to make effective derision after identifying these
factors.
Performance of the company is affected by uncontrollable and external factors. Various elements
of external environment are organisation, events, individuals, groups, agencies and conditions.
Marks and Spencer frequently contacts these factors for its well-functioning (Kew and
Stredwick, 2017). Proper administration and management of macro environment provides
suitable policies and strategies to make modifications. Positive and negative impact on
hospitality are described below:
 Economic environment: Economic environment of Marks and Spencer includes
policies, strategies, system related to the economy which are very essential for external
factors of the business. The economic situations, raw material components, supply

market, services are involved in the economic situation of the organisation. These factors
affect the supply of inputs, their services, costs, availability, quality and reliability of
products and services (Klapper and Love, 2010). It helps to examine the economical
strengths and weakness in the market. All these are very important components of
business strategy in the organisation for controlling, formulating and implementing the
economic policies. Economic policies has directly affected M & S business. It has
influenced the organisation by inflation rates, changing price, fiscal policy etc. Fiscal and
monetary policies of the government has affected the business of the organisation.
Government high tax rate will force the company to charge more price to the customers
for their products. If government imposes tax at low rate then, the organisation is able to
open new sectors and hence increased the employment ratio.
 Political environment: Political environment includes political and government
environment. There are several laws that handles the smooth conduction of Marks and
Spencer business. These laws include various aspects like standards of business and its
production and services. The political parties do not form stable government, as it affects
the government policies. Therefore, it is very necessary for Marks and Spencer to have
stable government so that they can achieve their targets and goals on time. Political
factors include government policies and its different rules which directly affect the profit
margin of the organisation. Changing government and their policies in tax and other
charges affect the company as well as customers.
 Legal environment: Laws of customers, safety and health, product safety,equal
opportunities, product labelling are some of the factors of legal environment. Marks and
Spencer face difficulty while working on this rule. It follows the policies of the
government as it is influenced positively by these aspects. Marks and Spencer must be
well known with various business laws which helps in protecting the organisation,
customers and competitors (Moutinho, 2011). Decisions are not changed for an
organisation as per this process. They are updating with new laws and regulations. They
are giving more focus on their legal protection and health and safety issues of the
employees and customers.
 Socio-cultural environment: The socio-cultural factors include values, beliefs, customs,
rituals and practises. Culture and societal environment of the organisation is influenced

by this factor. Marks and Spencer is successful due to effective utilisation of socio-
cultural environmental factors. The organisation has launched its product by concerning
the culture and tradition of the people. Further, it has also made products according to the
latest fashion and needs of the customers. People's religion, their attitude are the main
factors which helps to control their organisation. As per the culture of the organisation,
hospitality is the big factor which helps the society to a great extent.
 Technological environment: Different methods are applied to assess positive and
negative impact of the organisation. Negative impact of the technology can create worst
results and company must face various difficulties. Positive effect of technological
environment is responsible for increasing revenue of the company (Robbins, Judge and
Campbell, 2010). Technological factor greatly affected the business of M & S as it has to
provide new technical equipments frequently whenever it changes. For example, it has to
provide new printing machines for the printing clothes. Further, for maintaining website
of the company, they require new software. Regular advancement in technology has
affected all the departments of M & S.
P5 Analysis of internal and external factors
Internal business of Marks and Spencer is shown by SWOT analysis which involves its
strengths, weakness, threats and opportunities. To calculate various figures, and to make strategic
planning, SWOT analysis is done. Internal analysis of Marks and Spencer is described as
follows:
Strengths:
High recognition of brand:
M & S is popular in providing the best quality of products. The value of the product is very high
but it is very beneficial for the customers who can afford it as they get everything under one roof
with the best quality.
Wide variety of products:
The availability of variety of products in every store of Marks and Spencer provides easy access
for the consumers to buy different products under one roof. It helps the customers to chooses the

best. At the moment Marks and Spencer’s has more than 1200 suppliers with over 400 different
varieties, as well as 500 different types of pre-prepared fruits, vegetables and salads. There are
1200 plus suppliers of M & S which consists of 500 types of eatables (Teece, 2010). This helps it
to make unique identity in the market which another producer fails to give.
Large number of stores and outlets:
It has 900 stores in the world and 500 stores in UK. Its 300 stores are expanded over 40
countries. Marks and Spencer has increased its business due to large number of stores and
outlets. These large availability of stores helps the organisation to explore its business and sales.
Increase in sale is due to the wide range of products it has.
Weaknesses
Stock control:
Non-availability of the products during festival season creates bad impact of Marks and Spencer
on the customers. The lack of performance of home delivery and shopping service gives bad
response to the organisation. The company's ignorance as out of stock creates the dissatisfaction
among customers which can create bad impact on the company's reputation (Ullah, Lai, 2011).
Waste store space:
M & S has many stores in the world but they are not maintained properly. It has added 75
percent of square footage but it fails to increase its market share.
Manual working increases the costs:
Use of old techniques has greatly affected economy, time and various other aspects of M & S.
For different logistic operations, the organisation must look after both automated material and
mechanised alternatives.
Bad publicity due to non-trendy store:
Marks and Spencer is facing the problem of the outdated and non-trendy products from the
customers. It has different varieties of products and brands which helps in understanding the
customers wrong assumption (Welford, 2013).
Opportunities:
Internalization:
Global presence is increased with the help of Internalization. Marks and Spencer has many stores
in the world. It has helped in enhancing the clothing varieties. The company has given top
priority to customer segmentation and ethical foods.

Market segmentation:
M & S has speeded its branches to raise its market segmentation which helps it to increase its
market share. The company's profits can be increased by building different small shops and
separating the customers which helps it to reduce maintenance cost.
Threats:
Marks and Spencer has the biggest threat of losing its scope due to increasing competition. The
company has big threat from retailer sector as these are expanding day by day (Welford, 2013).
As other retailers are exploring their business by selling the products at lower price. They are
availing the duplicate products of M & S at lower price which is creating dissatisfaction among
the customers.
External factors:
Political factors has affected the growth of M & S. Due to change in tax rate, the
company has to pay more on their products which has resulted in great loss in their business.
Furthermore, economical include interest rates, exchange rates and recession. Interest rates
changes with different places and people. It affects the company because it is taken large loans.
Exchange rate is highly applied on the import and exchange rate. As M & S is multinational
company and has explored its business outside UK therefore, it has look after different import
and export rates of the different countries. Technical factor has also influenced the performance
of the organisation as implementation of latest technologies require frequent changes in every
department. This changes require time to understand them for the employees of the company.
P6 Relationship between internal analysis and external macro factors
Organisation consider different resources in respect to enhance productivity and profitability.
There is different external factor which are interrelated with strengths and weakness of cited
organisation.
Marks and Spencer is expanding and prosperous business. They have diversified their business
by maintaining the effective position in the market. The company has provided the services to
the customers honestly. This help them to regain its financial position which has occurred due to
large debt (Kew and Stredwick, 2017). M & S is gaining wide range of satisfaction by providing
wide range of services to the company. The organisation is making their position strong by

providing the best services to the customers with loyalty. By entering in the new market M & S
able to understand the competition and value of their market.
Marks and Spencer is facing strong competition from other retailer brands. They need to focus
more on their brand so that no one can misuse the products as fake limitations products.
Instability in the market is creating various problems and it has also created problem for the
organisation. Through weakness, firm must suffer lack of employees and manpower. These
creates lot of burden on the workers as they have to complete their task in small interval
(Klapper and Love, 2010).
The company has to face positive and negative impact of internal factors in order to meet the
goals and requirements of external factors. The business strategy has been affected by the
environmental trends which are continuously changing. Marks and Spencer can overcome its
weakness by determining the social trends and other activities. Company can able to increase the
its rank in the market by identifying the requirements of the customer (Marks & Spencer
business environment analysis, 2014).
The stronger online services are provided to the customers with the help of new technological
development. By taking care of the customer's needs and wants, the company can increase its
reputation in the market. It is very necessary for Marks and Spencer to achieve customers
satisfaction and there. This will help company not to lose its customers in case of increased price
of the products (Robbins, Judge and Campbell, 2010). By giving more concentration on the
external factors, organisation can be able to overcome its weaknesses. Marks and Spencer can
increase its market value by manufacturing unique products which provides different new
features. The company can increase its customer base by raising the quality of products. It can
diversify its business by focusing more on political and legal factors. The company must buy
latest technical equipment’s which helps it to minimize the labour cost and increase its
performance (Belás and et.al., 2015).
PESTLE and SWOT are related to each other in context of business analysis. PESTLE
mainly focuses on political, economical, social, technological and legal factors. With the help of

the strengths, the company can increase its economic condition during high tax rates and
inflation rates. Further, providing the best quality of resources to the customers, M & S has
overcome the problem of socio-cultural factors. Moreover, by knowing threats and challenges, M
& S has focused more on increasing their business opportunities. It has analysed its weaknesses
and tried to understand the legal factors that are hindering its growth. Using its strengths it has
made advancement in technologies. It has provided various technologies to its R & D department
which helps them to make more innovative ideas to manufacture the products.
CONCLUSION
In this report, it can be concluded that business environment must make different strategies in
order to make successful business. The report has explained public, private and voluntary sectors
by taking example of the organisation. Further, the vision, mission, purpose, scope and legal
structure of different structures are defined. The organisation chart of Marks and Spencer is
described which consists of various manager and their duties. Moreover, the assessment of
positive and negative impact on macro environment is done. Furthermore, to identify the strength
and weaknesses of the company, internal and external analysis of Marks and Spencer is done.
Lastly, the interrelationship of strength and weakness is done with external macro factors.

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