Project 1 Report: Analyzing the Business Environment and Operations

This report, Project 1, offers a comprehensive analysis of the business environment, focusing on various organizational types, including private, public, and voluntary entities, and their respective scopes and purposes. It delves into the relationships between different organizational functions, such as research and development, production, finance, human resources, and sales, examining their interdependencies and the advantages and disadvantages of these interrelationships. The report further evaluates the impacts of the macro environment, including political, economic, social-cultural, technological, and environmental factors, on business operations, using Marks and Spencer (M&S) as a case study. Positive and negative effects of these factors are assessed, alongside a PESTLE analysis to identify external factors influencing the organization. Moreover, the report conducts an internal analysis to identify strengths and weaknesses, correlating these with external macro factors and employing a TOWS matrix to inform decision-making processes. The conclusion summarizes the key findings, and references provide supporting sources for the analysis.

Project
1

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P1 Different types and purpose of organisation...........................................................................3
P2 Explain size and scope of different organisation....................................................................4
M1 how structure and size link with business objective..............................................................5
LO 2.................................................................................................................................................5
P3 Relationship between different organisation functions .........................................................5
M2 Pros and cons of interrelationship between organisation functions......................................6
LO 3.................................................................................................................................................6
P4 – Evaluate the impacts of the macro environment and positive as well as negative effects
on business operations ................................................................................................................6
M3 Pestle analysis within an organisation...................................................................................7
LO 4.................................................................................................................................................7
P5 Internal analysis of organization to find out its strength and weakness.................................7
P6 Describe the interrelation with strengths and weaknesses accompanied by external macro
factors...........................................................................................................................................9
M4 TOWS and how it influence decision making ....................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12
2

INTRODUCTION
Businesses environment is considered as sum total of all the internal and external factors
that impact the business (Preza. and Cooper, 2018). Such as Consumer and employee
requirements as well as expectations, suppliers, clients, owners ,innovation in technology, market
trends, social trend many more.
Present Report focuses on types and purpose of organization, size and scope of different
organization, Evaluate the impacts of the macro environment and positive as well as negative
effects on business operations and Furthermore it focuses on Pestle and Swot analysis
LO 1
P1 Different types and purpose of organisation
There are several types of firms that exist on the basis of their aims and objectives. Apart
from that Mission and vision are also formed.
Entity can be divided into several categories are
Private firms- These are the firms that are controlled through groups or individuals. The Purpose
is earn profit and the within this service are offered to full fill the needs of the people (Lin,
2017). The polices as well as laws are also formed as per the guidelines of the government.
These private firms have to be registered under the companies Act of specified nation. The
major sectors served are tourism ,hotel as well as retail and many more. Like that Marks and
Spencer is also a private firm operating as a retailer. These types of business are also categorised
as
Partnership firms- These are the entity that are owned as well as directed through more business
partners than can be governed by the help of the partnership Agreement. The partners shares
roles as well as responsibilities . The partnership business are also known as profit oriented
business (Preza. and Cooper, 2018). The focus of such partnership is to earn more profit so that
they can survive within such competitive world.
Public limited entity-
The Firms is controlled as well as operated through government. The main aim of the firm is sere
the people through giving basic products as well as services to accomplish the requirements.
Through IPO funding can be raised . For the overall business the government is accountable. The
area where firm operates are finance, healthcare and education and many more. Here the basic
3

aim is not to earn profit but also accomplish the requirement of the People. NHS is known as the
public firm that gives healthcare services to the clients. To serve the citizen of a nation is a basic
firm.
Voluntary actions- These are the types of the firms that is used to set for the particular purpose.
The basic goal of the firm is work towards social welfare through providing services. Here there
is also no intention of profit earning. In addition to this here Firms are offered through
businessmen, charities and many more (Lin, 2017). Fund's scope can be international or national
level. The size focuses on vision as well as mission as well as what kind of the services are
given. UNCIEF that is created by the United Nation within the year 1946. The goal of the firm is
provided food as well as health care to the children of several nations all across the world. There
are 190 nations that were served by UNCIEF.
P2 Explain size and scope of different organisation
Organisation size and scope also differ from one another. it is formed on basis of goals and
objectives. there may be different scope of companies operating in similar sector as well. Thus,
the difference is explained as below :
Public sector
(NHS)
Private
(M&S)
Voluntary
(UNICEF)
Background The organisation is
formed in 1948 to
provide health care
services to people
It is founded in 1884
and deals in clothing
and other products.
The organisation is
formed by UN to
serve at global level.
Size and scope NHS operate in UK
and it provide care
services to people
(Markovic. and
Salamzadeh, 2018).
There are 959 stores of
at global level and
offer variety of retail
products to customers
UNICEF helps
children and families
in war regions to
support their
livelihood.
Vision To develop partnership
between patient and
clinics in order to
deliver care services
To provide a standard
against which its
competitors may be
measured
To protect right of
every children in
world
Mission To improve well being To make inspirational To protect children
4

of people quality accessible to
others
rights
Structure The structure is in type
of umbrella and is
formed by UK
government
It follows flat structure There is flat structure
which is governed by
30 members
Employees 1,70,000 employees
working in it
Total 85, 209
employees
2025 staff are there
(Ekici. and Ekici,
2019).
M1 how structure and size link with business objective
usually, size and structure are formed on basis of goals and objectives. it means if objectives
are long term then structure is formed is complex. however, when organisation set a huge target,
they form good structure. besides, scope is reviewed to develop goals.
LO 2
P3 Relationship between different organisation functions
There are several types of the functions that can be performed within a business. Depends upon
size as well as scope functions have several goals as well as objectives. There are several
functions that can be explained such as
In marks and spencer flat ogranisation structure is followed. in this there are different
department interlinked with BOD, CEO, etc. each department performs different functions.
Research and development- It is relatable for doing Research and market evaluation. Here lot of
information is gathered as it is interrelated accompanied through marketing department as well
5

as gives information regarding the needs of the consumer as well as trends. Thus it interlinked
with operations also.
Product department- The main function of the production department is to produce goods
through converting raw materials into the finished goods. Thus, production of goods is
interrelated to the sales (Ortiz-Walters, Gavino. and Williams, 2015). Goods are produced on the
basis of demands and supply as Marks and Spencer's function is linked to finance as the funds
are given to purchase raw materials as well as machinery. It focuses on the attaining goals and
objectives as well as producing units.
Finance Department- The core function of this department is banking as it includes managing
overall transactions such as credit, cash transfer, debit, issues of currency and many more.
Within this department M&S is connected with each other. Funds are given here for marketing
for the performing actions such as promotion. Funds are also given to the department of the HR
regarding for giving salary for the employees of Marks and Spencer.
Human Resource management- This department of M&S is related to managing the human
resource as it includes making payroll, hiring and many more. They are the one who hiring the
potential candidates and also accountable for training and development of the employees. They
also accountable to resolve the issues between the employees (Lin, 2017).
Operational – It includes the methods as well as procedure that are used to ensure the smooth
flow of the operations. The operational managers of organisation includes developing as well as
performing operations.
Sales Department- The main goals of this department of firm is to enhance the sales as well as
profits.
M2 Pros and cons of interrelationship between organisation functions
pros
it enables in increasing efficiency of overall productivity as all department works together. thus
goal and objectives are attained.
there is quick exchange of data and info within them which allows in taking effective decision.
cons
As each unit works in different way there is lack of coordination among them. so, it affect on
their operational efficiency (Ekici. and Ekici, 2019).
6

LO 3
P4 – Evaluate the impacts of the macro environment and positive as well as negative effects on
business operations
Political- Marks and Spencer mainly operates within United Kingdom. Nowadays Free trade is
considered as one of the positive impacts as free trade enables firms to import foreign goods for
sales within their store at cost- effective prices (Ahmed, Yusof. and Oroumchian, 2019). One of
the major impact on the operations of Marks and Spencer is due to leave the United Kingdom
form European Union, As an outcome of it , there are several losses of the policies of the
European suppliers, resulting within a higher product cost for the costumers.
Positive- free trade policy will allow company to trade freely with other nations. So, company
can trade with other countries easily.
Negative- brexit will highly impact on organization growth. They will not be able to operate
properly in Europe.
Economic
One of the major factor of the retail industry is Price as from the last few decades there are
several retailers within the United kingdom such as from clothing to the supermarkets, as these
new competitors are stealing market share from the premium brands through inspiriting
consumers to enjoy same type of the gods at less expensive rates (Markovic. and Salamzadeh,
2018).
Positive- due to covid 19 retail sector growth has increased. As it provide essential needs of
people and due to lock down only retail sector were allowed to operate.
Negative- brexit will results in decrease in sales and profits of company. This is because it will
led to impact on economic growth of UK and its GDP.
Social cultural
The social cultural factors that impact the M & S is that from last few years society enhance the
Consumption regarding the ready foods items as it is due to as ready meals are more tasty. Marks
and Spencer is one of the top 10 ready meal distributors of the United Kingdom.
Positive- shift in consumer need on high and premium quality products will benefit M&S. now,
they are buying high quality products to ensure heath safety.
Negative – frequent change in needs of people will force M&S to develop new products. They
will need to focus on health and safety standards.
7

Technological
Self checkout- It is considered as one of the modern retail trends. It is designed to aids retailers
to save money that can be spent on the cashier counts. At the same time it offers consumers an
experience of checkout that is faster as most of the stores of the UK such as M&S has already
implemented such kinds of several services checkout systems all over the world. Online
shopping is of the biggest as well as new trends in retail industry as it offers all products for
home products to clothing items (Ortiz-Walters, Gavino. and Williams, 2015). It is considered as
a traditional approach of the M&S to the online shopping and also delivers the products directly
to the consumers. Thus firms are unable to deliver the food items to their consumers.
Positive- technological change will result in decrease in cost and improving quality of product.
This is because new system will be installed in operation. So, it will improve efficiency.
Negative- it will led to increase in expenses in order to maintain IT infra. The company will
have to maintain IT system and software.
Environmental
To maintain the image of luxury brand as it becomes more sustainable retailer on several
occasions. Firm has faces several serious issues regarding the financial issues over the recent
years. While on the other hand firms has also faces several upsides and downside within the
current arena of the business. It also produces the products as well as brands that are Eco
friendly.
Positive- focus on sustainability will enable company to built good image in society. they can
contribute towards CSR practices to build positive image.
Negative – it will affect on their operations as they will have to reduce plastic. So, entire
operational process has to be changed
M3 Pestle analysis within an organisation
Political – Brexit will highly impact on company growth and development as they generate
major revenue from UK market.
Economic- brexit will led to decline in economic growth of UK. Thus, it will highly affect on
organisation growth and sales and profits.
Social – change in taste and preference of people as they are now more concerned towards health
will affect on company operations.
8

Technological- advancement in technology will affect in positive way as M&S will focus on
online sales.
Environmental- The government is focusing on sustainability so it will force company to form
new policy and work in different way.
LO 4
P5 Internal analysis of organization to find out its strength and weakness
Swot analysis
It is considered as a detailed analysis of the strength as well as weakness of a firm as it also
examines the opportunities and threats of a firm. Marks and Spencer is one of the best retailer
within United Kingdom
Strength
huge market experience
The firms is one of the best leading firm within thin United Kingdom as it begins its journey
form Penny Bazar within the UK in the year 1884. As firms working with several business
partner in abroad and United Kingdom. This huge market experience of the firm is considered as
one the great strength of the firm (Ahmed, Yusof. and Oroumchian, 2019).
Brand Recognition
People are aware of the products of M&S as it is considered as one of the greatest reputation for
its quality products. The consumers who wants for high street shopping prefer the brand Marks
and Spencer as they can do their whole shopping form the one brand.
Weaknesses
One of the weaknesses within this firm as it has non trendy and out fashioned stuffs even firms
has wide variety of several brands. Most of the people makes the false assumptions that this
Brand is only for aged people. This false perceptions of the people caused several problems for
Entity.
Opportunities
The online presence of the firm is good. Firm has also expanded its services to one of the biggest
nations across the world. Such as India, Indonesia, Russia as several expansions opportunities
within several big firms such as Poland and Brazil and may more (Usry Abdullah, 2019).
Marks and Spencer enhance the techniques that are associated to the market segmentation by
increasing its branches all across the world as firms have stores, but they didn't focuses on
9

splitting the consumers as per the area of their interest. Through establishing several stores, Firm
have the opportunity to dividing their consumer into the small shops that will also decrease its
cost as well as increases its profit.
Threats
Firm faces some great competitors both on abroad and United Kingdom. Such as Gap, Next,
Tesco, Amazon, John Lewis and many more. Competitions are so tough that firms faces big
threat to lose its scope within business globally. Because of the fierce competitors, Entity loses
its operations across the world. It also pulled out form France , china and United Kingdom.
Swot of tesco-
Strength
Bigger grocery store- It is known as biggest grocery seller in UK and is having an intense
supplier of network which led to reduce in cost. They generate high revenue from UK market.
Highest market share- as tesco is biggest grocery store so the company is having highest market
share with 27.8% in UK.
Largest private employer in UK- the company provide more job to people as compared to other
firms it has around 500,00 staff globally. Largest employer in Europe and diversification at
global level.
Weakness
Fail in US and japan- the company entered in japan but they shut down it stores in 2 years as
they can not export goods and so, it failed in US and japan market.
Accounting fraud scandal- the Company was involved in accounting fraud scandal in 2017 as
court found showing less profit in accounts books. Thus, it led to damage of brand image and
reputation of firm.
Threat
Brexit deal- Brexit will highly impact on company revenue as it generate majorly from Europe.
This will result in long term impact on sales as well.
Rise in competition - the company can face intense competition from rivals such as aldi,
waitrose, M&S etc. and other new emerging player in retail sector.
Opportunity
Expansion of jack store- company has opened a new store in name of Jack it can expand in new
emerging market to increase customer base and compete with rivals such as Aldi
10

Online shopping- company is having online app so it can upgrade it to attract more customers
and retain them for long term.
P6 Describe the interrelation with strengths and weaknesses accompanied by external macro
factors.
There is interrelationship between internal and external factors. they are explained as
Political factors- The several factors such as corruption, political stability, tax policy and many
more impacted the firm (Markovic. and Salamzadeh, 2018). The several strength of M&S has
aids the firms to operate politically. Such as the well planned network of its suppliers capable the
firm to enlarge its operations in several nations and encouraged them to surmount the uncertainty
of several nations. Weakness- It is related to strength as M&S dependency on European market
will flourish. So, as company operate in UK so Brexit will led to instability in UK so it will
affect on company strength.
Economic factor
Exchange rates, unemployment, inflation rates and many more have an influence on the overall
operations of the firm. Financial errors and financial performance has affected the firms within a
more negative way. In United Kingdom the high interest rates made challenging for the firm to
borrow funds for its activities and also for the financial errors (Uyob, Saad. and Ahmi, 2019).
This will affect on company operating profit as they it is already less.
Social factors- Attitudes ,population growth, cultural barriers are some social factors that impact
the activities of a firm within a great way. One of the most crucial strength of the firm is
regarding the ready foods items has made the entity more string socially and culturally both. It
deals huge market experience and Brand Recognition as people are aware of this brand when
they want to do street shopping and also have the clothing line for all the age groups.
Technology factors
The factors of technological focusing on the innovation level, online shopping, automation and
many more that hugely describes the success as well as failure of the firm .One of the best
technology advancement of Marks and Spencer is a self checkout as it has improves the
consumers experience also it is cost-efficient as there is no need of the cashier due to self
checkout. Due to its high innovation capacity firm's profit as well as competitive position has
impacted the firm hugely. Strengths- With this M&S can focus on online business model to
11

increase sales. They can grab opportunity to expand in other markets. With that they can remove
weakness of online business model.
Environmental factors- The several factors that impacted the operations as well as
competitiveness of a firm within a negative way. As Marks and Spencer has won several awards
that is its bigger strength as firms has also won the wards for its sustainability (Gu, 2020).
Another biggest strength of the firm is its vast contribution towards environment as it becomes
more responsible and ethical within the eyes of the consumers. Because of all this contribution of
the firm is impacted in a more positive way.
Legal factors
one of the aspect of the firm as it operates into several nations and also impacted within a
negative way as well as becomes its weaknesses as it has to remain exposed to several varieties
of legal regulations (Uyob, Saad. and Ahmi, 2019).
M4 TOWS and how it influence decision making
threats
Firm faces some great competitors both on abroad and United Kingdom. Such as Gap, Next,
Tesco
weakness
One of the weaknesses within this firm as it has non trendy and out fashioned stuffs even firms
has wide variety of several brands
opportunity
by improving techniques that are associated to the market segmentation by increasing its
branches all across the world.
strengths
Brand Recognition
People are aware of the products of M&S as it is considered as one of the greatest reputation for
its quality products.
this highly influence decision making as company can grab opportunity and make it as
strength. technology can be installed and brand recognition is improved as well. similarly, with
non trends products it may be difficult for firm to survive in market (Gu, 2020).
12