Business Environment Report: Marks and Spencer Case Study Analysis

This report provides a comprehensive analysis of the business environment, focusing on Marks and Spencer (M&S) as a case study. It begins with an introduction to the business environment and its impact on organizations, emphasizing the importance of considering internal and external factors. The report then delves into different types of organizations, including private, public, and voluntary sectors, along with their respective legal structures and scopes. The size and scope of M&S are examined, highlighting its role in the UK economy and its global presence. The report further explores the relationships between various business functions, such as marketing, operations, and human resource management, and their interconnectedness with organizational objectives. Social and technological factors influencing M&S are also analyzed. Finally, the report concludes with an examination of the macro-environment's positive and negative impacts on the business, a SWOT analysis, and an identification of strengths and weaknesses related to external factors, providing a holistic view of M&S's business environment.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P.1 Different types of organisation along with their scope and size...........................................1
P.2 Size and scope of different organisation...............................................................................3
P3 Relationship between functions.............................................................................................4
P4 Positive and Negative impact of Macro environment on Business ......................................6
P.5 SWOT analysis of organisation............................................................................................7
..................................................................................................................................................8
P6 Identify Strength and Weakness which are related with external factors..............................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment can be affected by the internal and external factors. Which
involves various types of forces like customers, economic, technology, social trends, suppliers
and perception of public. All these factors can affect their business organisation at high level so,
it is important to consider all these environment factors while making any decision otherwise
company cannot achieve their planned goals and objectives business (Czinkota, Ronkainen and
Moffett, 2011.). It is an approved organisational entity which is started by any individually or
group of people to achieve predetermined goals and objectives by using their own skills and
knowledge. This project report is on Marks and Spenser which is UK's leading retailer company
that provides online high quality services like clothing , home products and own brand food
items. The company have 1433 stores overall world wide. This organisation focus to make every
movement special for their customers. In this present report, different types of business
enterprises has been discussed with their scope and size.
TASK 1
P.1 Different types of organisation along with their scope and size
Business enterprises is association of people in which so many people set their common
objectives and goals and then make hard work for them. It is an organisational entity which is
started to function organisational task and activities so that people associated with the company
and achieve their professional or personal objectives (Eckardt, 2012). It can be considered as
persons. Business enterprise is legally registered by any person which is rarely called as
corporate group. There is three sectors which are primary, tertiary and secondary on the biases of
economy.
Primary sector: All companies which comes in this sector arrange their resources from
nature. Mostly the produce raw materials which includes fishing, farming, etc. which produce
only natural resources. BHP Billiton is example of primary sector.
Secondary sector: The organisation which comes in this sectors transforms the present
raw material into final goods. Traditional building Co. is example of this sector.
Tertiary sector: Organisation of this sector provides different kind of goods and services
to stisfy the needs and demands of customers. The example of this sector is softcat.
Organisations are divided into three different parts which are as follows:
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Private sector: The private organisational mainly focus on the factors which help them
to increase their business growth and business development (.Eisenberg and Miller, 2012). The
Marks and spencer is private company, Their main objective is to provide good quality product
and services to their customers. They give more importance to customers satisfaction rather than
products, as they gives high quality products and services to their customers.
Legal structure of private sectors: It is divided into various parts which are defined as follows:
Single proprietorship: This kind of organisation is operated by any single person, who is
totally responsible for success and failure of organisation. In this type of business biggest issue
is that one single person can't afford that much high capital.
Partnership: This kind of organisation is operated by two or more persons. Its biggest
benefit of partnership is that losses and profits of the organisation is divided into the same ratio
which is decided on the time of partnership.
Private limited company: This kind or organisation have their own rights and regulation
to operate the company. In this the finance of company is apart from owner's own capital. The
company's shareholders can be people or any other enterprises (Fernando, 2011.).
Private unlimited company: This type of company is mainly organised by any
individual. If any company have no limitation on the liability of its people then this kind of
company known as private unlimited.
Public sector: The NHS which is situated united kingdom, which is a public health
association which is under the control of UK government. The Public company have objective to
provide social welfare, which includes several government bodies such as local or national
agencies. This type of business organisation is come under government, as they are operate and
controlled by any legal authorities. Public sector company provides different products and
services to their customers in low price.
Legal structure: Public sector is divided into three category: Central government: In United Kingdom the Central government made so many rules
and regulations for organisation so that every company make strategies or plan according
to legal authorities. State Government: Legal authorities which comes in this category, take their power
from national government. The main function of state body is to keep control on
organisational activities and practices (Gecevska, 2010).
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 Local government: This type of legal authority makes several rules and regulations for
local areas to manage them effectively. It also help in providing justice to their local
peoples.
Voluntary sector: Welcome Trust organisation is not operated by any people or legal body.
Mainly this kind of companies is known as non profit organisation as, they provide goods and
services to very poor people. It involves with different trust and charitable organisation who give
privilege to senior citizens (Halbert and Ingulli, 2011). Its main objectives is to enhance the
social services and improve situation of country.
P.2 Size and scope of different organisation
In today's time development or improvement of nation is depends upon small or big organisation.
It is very important for every organisation to work effectively so they can contribute in economy
development. The business organisation is divided into three parts:
Private sector: The Mark and spencer have play great role in the economy of UK as,
national economy depends upon private sector company. Nowadays so many people start their
own company as they don't want to work under someone. This step of any person create job
creation. The main objective of Mark and spencer company have to satisfy customer's need and
wants by providing them high quality products and services (Hamilton and Webster, 2015).
Size and scope of mark and spencer company: It is one of the retailers leading company in UK.
The company have 1,433 stores overall worldwide which provide high quality products and
services to their customers. They have around 3000 employees in the their organisation and
around 65000 peoples work in their M &S stores. The company also get franchises outside the
country. The main objective of this company is to provide high quality products and services to
all people because of this company achieve customer's trust by providing them best services.
This also help company to enhance its goodwill in business market.
Public sector: The company which is operated by government is come under public
sector. This type of organisation makes various rules and policies. The main objectives is to
provide best services to public. The company help to poor people by providing them free
services and protect interest of weaker section (Halbert and Ingulli, 2011).
Size and scope: National health service includes all charitable trusts and organisation who
provide helps to poor peoples, old citizens and handicapped. Its objective is to improve national
conditions by providing good services to citizens (Harrison, 2011). They highly focus on weaker
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section area. The national health services situated in the United kingdom on 4th July 1948. it
operates in three sections such as community services, primary care and hospital services
Voluntary sector: Welcome trust is a biomedical research charity based in London, UK. It was
founded in 1936 with the aim of doing research on human and animal health. Their aim is to
achieve extraordinary improvements in health by funding the resources. They have 2057
employees and 11 Euro billion disburesemnets.
P3 Relationship between functions
There are different types of functions operates in marks and spencer, which are as follows:
Functional structure: In this employees work divided according to their positions in the Marks
and Spencer. There are two positions in every organisation line and staff. The employees of line
positions give command to other employees of company. Mainly people with staff position
operate all command from upper level.
Divisional structure: This is most effective organizational structure in which Marks and Spencer
divide its various departments on the basis of functions, project and product.
Matrix structure: This kind of organisation help in achieving goals with the help of specialist
employees from different functional areas. It includes various type of divisions in which people
perform in hierarchical way (Iskanius and Anbuudayasankar, 2010). Currently, The MARK
AND SPENCER company using organizational structure.
The organisational upper level structure is known as top management which make different
strategies and plans to achieve organisational goals and objectives on time. The top level
management also give instruction to lower level employees to perform work.
Major objectives of mark and spencer company have as follows:
 This company reduce its wastage to save their time and resources by utilising them
effectively.
 Enhance the profitability level and quality of production.
 To develop and improve performance of organisational
 The most important objective of company is to minimise production cost as it can
increase organisational operational cost.
 Provide high quality goods and services to customer to satisfy their needs and wants.
 and also shows that there is huge relationship between organisational functions and
objectives (Krishnan, 2013).
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Social factors: It includes all different forces related to socio cultural environment
It is responsibility of Marka and spencer to make their strategies and policies according to social
welfare. By doing this company perform corporate responsibilities towards society. The benefits
of CSR is that it help company in building strong image in business market place. Every
organisation should do business on the basis of social factor to save natural resource and
wastage. Mark and Spencer focus on customer rather than products to increase their business
level in the business market. They provide high quality of products in low price to their
customers to fulfil their needs and wants.
Technological factors: Marks and Spencer use new technologies to increase their profitability
and performance in competitive business market. Through the help of technology the company
can provide online services such as net banking to its customers. Techniques methods biggest
positive point is that, through the use of this company can record important information
regarding their suppliers, clients,consumers and shareholders of company (Bill Pasmore PhD,
and CMC, 2010). And also make online transaction which help them to save their time and cost
of organisation as well as customers. By using high technological method the organisation grow
their business level at higher level. The Marks and Spencer company need expert people to use
high technology in the organisation.
This shows that in Mark and Spencer division of structure is followed which help the
same in carrying out the different functions with higher efficiency.
There are many departments which exist in Mark and Spencer:
Marketing: It is much fundamental unit in an enterprise which aid them to attract people
towards their products and services. For above stated aim, there are many tools which can be
used by them, such as social sites, advertisement and so on. For this, they need adequate fund
which assist them to do marketing activities in an approaches manner. Thus, it can be understand
that this division is associated with finance department.
Operations and production: It is required for an association to produce goods and
services for individuals as per their requirement. For this, they need material timely; so that, they
will manufacture items within certain period of time. This unit is also connected with finance
department as they have to provide fund to them to this division, so people will produce goods
appropriately.
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Human resource management: Manager has to assign job to an individual as per their
skills and knowledge. They have to recruit suitable candidate to the vacant position. Along with
this, there fundamental duty is to determine training needs in affiliation. Employees accomplish
their task so that they will attain coveted targets within provided time frame. This unit is
connected with operational division as individuals has to complete activities appropriately.
P4 Positive and Negative impact of Macro environment on Business
Since Marks and Spencer in UK's leading retailer in food , clothing , home products and
financial services , its operations are carried out in both internal and external environment. Both
micro and macro environment has impact on business activities of marks and Spencer. The
impact that Macro environment has on business operations are like its forces helps in identifying
the change in environment. In macro environment analysis, two approaches that are widely used
are:-
 PESTLE Analysis
 Porters Five Force Model
PESTLE ANALYSIS
It is a framework that enables us to investigate the internal factors by asking factors to
each factors and then discussing their implications thereof. It contains all the elements that are
necessary for strategic management (Cantwell, Dunning and Lundan, 2010). It is basically an
acronym which expands into six factors which are:-
 Political
 Economic'
 social
 Technological
 Legal
 Environmental
The importance of all these factors is different but they play a crucial role in deciding
future activities if company. The positive impacts of Macro environment are:-
 It helps in decreasing potential threat that can come on M&S.
 This framework is simple and easy to use.
 Providing methods to identify new opportunities ion the market.
 Suggesting new ways to enter new market.
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 Helps in encouraging the strategic thinking of company.
The negative impact of macro environment analysis are:-
 Employees have a risk to loose their job
 It only requires skilled resources for its operations
 The process should be conducted regularly to give effective results.
 It can also lead to monopoly type of market.
The effect of PESTLE analysis of Marks and Spencer are:-
 POLITICAL :- Government laws affect this sector very much . It has a right to
intervene in all the matter of company. In matters regarding tariffs, trade restrictions ,
labour laws etc.
 ECONOMIC:- It includes system, policies, economic resources, level of income etc. it
affects the business in terms of growth rate, inflation, deflation etc. The economic
factors that affect company are:-
◦ The declining rate of inflation in the economy affects the business
P.5 SWOT analysis of organisation
SWOT analysis influence the external as well as the internal abilities of the company
M&S. The strengths , weaknesses , opportunities and threats are faced by M&S are : Strength: This company is commonly known for its worldwide spread of its stores which
are approx 1382 (Chavis, Klapper and Love, 2011). The company strong sector i.e. food
items managed to deliver growth in every quarter in the previous financial year,
sustaining its marketability and performance by 3.5% due to its unique and different
strategies that it has adopted within years. Another point which can be counted as
strength is that products development according to the customer needs. They focused on
customer satisfaction in the online sector by developing a concept high street chains
which has enabled the company to grow. Weaknesses: Multiple steps like combining new sub brands like Autograph by other
companies are attracting the employees of M&S and moreover launching of the website
in 2014 have been introduced to attempt the strength of clothing sector. Another attempt
was in the market share but all these attempts did not show any big results and thus
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resulting in declining made the clothing branch head JOHN DIXON leave the company
in July 2015. Opportunities: While the clothing sector sales if falling down on a rapid speed but the
strong hold of food sector is growing sales (.Commander and Svejnar, 2011). That
increment is making the company expand their food departments and are about to launch
the fastest food store in the history of the company. Another opportunity can be the
M&S bank started in 1985 launched a new concept of current account with no monthly
fee and a £100 M&S gift card. This resulted in great appreciable task and made a threat to
other banks operating. Future development can create more opportunists.
 Threats: Unstable conditions of the other countries market in several international
franchise are leading to the affects of sales market of M&S in an negative manner.
Recession can also be a major part of the threats as in year 2009 it hit and affected the
sales market of the company totally. Macroeconomics factors and low condition of euro
in the market is considered as a challenge for the company specially in the middle east
P6 Identify Strength and Weakness which are related with external factors
Every business organisation have some strength and weakness which are related with
their business. Managers have to analyse them properly so that they become able to conclude an
appropriate decision for that. Marks and Spencer analyse their strength and weakness which
made a vast impact on their business programmes. Thus, managers have to link them up with all
external factors of business so that they can prepare adequate strategies and action plan for
further business development. Thus, this process usually bind the internal working process or
environment of business with external one so that all task and project get executed in a proper
manner.
Strength: It is termed as stability or power of a company which signifies the
management ability and capability to deal with every business course of time. Thus, business
entities have to identify all strength in relation to framing their strategies. On the basis of this,
company have to link them up with external business environment.
 Management wants to open another chain of store but for this they have to identify the
government stability of such country. Frequent changes in government policies affect
most operations of business.
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 Rapid alteration in technology is termed as another drawback which increase cost of a
company. Management have to adopt new technology with a course of time so that they
can manufacture good quality products at low price.
Weakness: Inability to deal with changes will later become as weakness for a company.
Organisation have to prepare their strategies through which they can deal with various weakness
properly. On the basis of this, management of M&S bind their working with external
environment properly.
 Every country have distinct rules and regulations which have to follow by an organisation
properly. This might affect their working and operations and termed as major weakness
for a company.
 Political instability is another major weakness for a company. Thus, by continuous
change in policies and procedure will further affect the working of an entity. Thus,
managers of marks and Spencer have to determine all these changes and make their
policy formulation segment flexible.
 Company have to use new technologies through which they become able to manufacture
more quality products. By using existing technologies affect their working which is not
appropriate for the business in further development and growth.
 Opportunities: The purchasing power increase year by year this is biggest advantage for
the company. The firm mainly focused on its loan and finance services to made it
affordable for their customers.
 Threats: Biggest threat for Volkswagen is their competitors who provide same quality
services in the market place. The profit level of firm decrease in competitive market place
because of emission scandal.
CONCLUSION
From above report it has been evaluated that the company is overall covered by its
business environment. It is responsibility of manager to take decision according to the external
and internal business environment. There is two most important element of business environment
is micro and macro environmental factors. Which have high impact on organisational
performance or operations of business. All these factors have full control over the business
functions. Apart form Internal factors, external elements include social, economical and political
factors. On the external factors organisation have no control. If any person want to enhance his
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performance and profitability level of organisation then he will have to create good environment
of company. As this project report is based on MARK AND SPENCER which leading retailer in
United Kingdom who provide high quality products and services to their customers. In this
report, different purposes, scope, size and typologies of organisation has been determined so that
manager of company can give them financial services. And also discussed about relationship
between micro and macro environmental factors and also evaluated the impact of external factors
who influences business organisation positive as well as negative.
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REFERENCES
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Chavis, L. W., Klapper, L. F. and Love, I., 2011. The impact of the business environment on
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Online
What Is Business Environment? - Definition & Factors. 2017. [Online]. Available
through:<http://study.com/academy/lesson/what-is-business-environment-definition-
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