Business Environment Report: Functions, Impacts, and Analysis

This report provides a comprehensive analysis of the business environment, examining public, private, and voluntary organizations, including their types, purposes, and legal structures. It delves into the size and scope of Marks & Spencer, the NHS, and the British Red Cross Society, outlining their missions, visions, goals, and objectives. The report further explores the relationships between different functions within Marks & Spencer and their objectives, encompassing internal, external, and support functions. Additionally, it assesses the positive and negative impacts of the macro environment on Marks & Spencer's business operations. Finally, the report concludes with PESTEL and SWOT analyses of Marks & Spencer, providing a detailed understanding of the political, economic, social, technological, environmental, and legal factors influencing the company's performance, along with its internal strengths, weaknesses, opportunities, and threats. This assignment, contributed by a student, is available on Desklib, a platform offering AI-based study tools and resources.

BUSINESS AND BUSINESS
ENVIRONMENT

Definitions
Business is a legal and organizational entity which is
formed with the group of persons who join together to
achieve the organizational goals and objectives.
Business environment includes all internal and
external factors which affect the operations of business.
These factors includes employees, customers,
management, supply and demand, and rules and
regulations related to business.

P1 Types and purpose of public, private and
voluntary organizations and legal structure
Public sector organizations: these are the organization owned and controlled by
Government of the country (Fong, 2016). The plans and policies of these
organizations are made by the government by keeping in mind their purposes.
Central government controls the organizations providing their services to whole
country like defense, health, social security, roads and universities etc. services.
Local government controls organizations which provide their services to particular
state or city like education, social services, roads and parks etc. services.
Purposes: Main aim of these organizations is to provide essential services to public
and to use resources of country well for the benefits of society. There are two types
of Government who control these organizations i.e. local and central.

Types of public organizations:
•Schools and universities are the public institutes funded by central and local
government for providing primary and secondary education services to public of UK.
•Public corporations are controlled by central government and their funds from public.
The chairman and directors in these companies are appointed by government. For
examples NHS England, BBC and royal mail etc.
•Statutory corporations are controlled by local government. For examples Transport for
London is provide transport services in greater London.
Legal structure
The public organizations are controlled by government so there are many legal
restrictions. The legal restrictions for organizations funded by centrals government is
more than local government. Legal restrictions on organizations controlled by both
government have to fulfil the legal formalities of both the governments.
For example: NHS is the publically funded health care system for England. The purpose
of this organization is to provide health and care services to people of UK and visitors.

Private sector organization: these are the organizations which are owned and controlled
by the private individuals.
Purposes: The main aim of these organizations is to earn profits. These organizations are
finance by the private individuals (Ebert, 2014). Bank loans etc. The private individual can
be the businessman, group of persons etc. the other aim of these organizations is to increase
market share and market growth. The other aim is to increase the sales by providing
products.
Types of private organizations:
• Sole proprietorships: The business organizations are small operating firms which is
owned by the sole traders. The entire operations of business are manages by the sole
owner of the firms.
• Partnerships: these are owned and controlled by two or more partners. All partners
manages the operations of business and agree to share profits and loses of business.
• Public Companies: This are the publically listed companies which are owned by the
shareholders who invested in company. Shareholders select the directors who manage the
business activities. They offer their share to public for sale.
• Private companies: These companies not offered shares to public for sale.
• Franchises: This are the firms which act as the agent for the company’s products.

Legal structure: the private sectors have less restrictions then the
public sectors. The sole proprietors can start business when they have
enough funds to start business. The partnership firm can start business
as per the partnership acts in UK. The public companies need to fulfil
more restrictions then private companies.
For examples: Marks and spencer is private sector organization which is
the public listed company listed in London stock exchange. The purpose
of marks and spencer is to provide clothing, house hold and food
products to the public of UK.

Voluntary organizations: these are the organizations not owned and controlled by
private individual (Nielsen, PeterBøegh, and Timothy Sturgeon, 2014). Someone is
responsible to ensure that the set objectives are achieved with the available finance.
Purposes: Main aim of this organization is to achieve that goals for which the
organization is set up. They provide help to the people indifferent manners (Carroll,
and Buchholtz, 2014). To survive they spent only that much amount which is
available from fundraising, grants and donations.
• Types of voluntary organizations:
• Charitable trust is the organization work for charitable work and funded by
trustees.
• Foundations are privately started to provide funds to people related to foundation
aim.
• Non-government organizations (NGO) which are formed by the citizens
voluntarily.
• Nonprofit organizations are the organizations not work to earn profits. These are
formed to perform that work for which it is formed.

Legal structure: this are cam be formed by the legal
formalities which is required to be filled by the
charitable organizations. This can be started when there
is proper fund and donations available.
For example: British Red Cross Society is the nonprofit
organization which is the registered charitable
organization. This society is work to provide the help to
the people at the time of crises in UK as well as world.
Legal status of this is it is incorporated by royal charter.

P2 Size and scope of marks and spencer’s, NHS and British Red Cross society
NHS England is the public sector organization which is owned and
controlled by UK government. It is a responsibility of Secretory of state
for health to ensure the operations of NHS and it is funded by the
department of health (Prajogo, 2016). It is one of the most popular
health care service provider of United Kingdom.
• Size: British Red Cross is the large public organization which have
more than 1.4 million employees and it is also have 211 clinical
commissioning groups.

Scope:
• Missions: “to provide health care to legal resident of England”.
• Visions: “to provide free emergency treatment for infectious diseases
to everyone including visitors”.
• Goals and objectives:
• This organization provide health and care services to public with
high standards.
• They make sure that public resources are utilize efficiently.
• Their main aim is to provide health care services irrespective of
money.
• They provide routine checkups, treatments, etc.

Marks and spencer is founded by two brothers Michel marks and
Thomas Spencer which is the private sector organization. It is the retail
firm of United Kingdom and provide their services to the world. The
company is specializes in selling clothes, home products and food
products.
• Size: marks and spencer have currently 979 stores in UK which
includes 615 stores who sold food products only. It also have 454
stores in the international market which includes 58 stores in India, 45
stores in Turkey, 37 stores in Russia, 27 stores in Greece, 17 stores in
Ireland, 14 stores in France, 11 stores in Poland, 6 stores in Hungary,
and 5 stores in Spain. It is a large private organization which have
84939 employees who help in achieving the objectives of the firm.

Scope:
• Missions: “to provide high quality products in different areas like
cloths, food, home, and financial services”.
• Visions: “to become world most sustainable major retailor by 2018”.
• Goals and objectives:
• Increase the sales of the products like cloths, food etc.
• Increase the market share in the retail sector.
• Provide innovative products and services.
• Provide high quality and fresh products and services.

British Red Cross society is the voluntary organization established in London. It
is also called British national society which work as an aid to people who are victims
of sick and wounded wars.
• Size: British Red Cross society is a registered charity with more than 32500
volunteers and 3500 staff. They all work to provide help to the person who is
affected by the crises.
• Scope:
• Missions: “to provide help in UK to people without discrimination in gender,
nationality etc.”
• Visions: “to get people of world out of crises”.
• Goals and objectives:
• They work for providing help to people in emergencies.
• They provide service like first aid services, services in disasters, also help in
finding missing people and provide health and social services etc.
• To encourage voluntary services in UK to get funds.
• Provide safe and cost effective services.

P3 Relationship between different functions performed within marks and
spencer and their objectives.
Internal functions:
• Functions includes acquisitions of finance means making available cash and finance from
different sources to start the functions and operations.
• Then with help of this finance next function is performed to purchase raw materials and
products to sell.
• The internal function also includes the appointment of labor and employees who
perform these functions and their efforts are directed towards achievement of
objectives.
• Then the overhead and expenses are managed for reducing the cost so that products
provided to customers at a reasonable prices.
• In this manner internal functions help in achieving objectives of Marks and spencer like
availability and proper utilization of finance for performing operations, employing
qualifies people, reducing cost and providing products to customers at affordable prices.

External functions:
• This functions include market research which is the function performed to
understand the needs of customers and to understand the market of
competitors.
• With the help of market research marks and spencer can understand demands
of customers and then make changes in products as per their needs (Wild,
Wild, and Han, 2014).
• They provide innovative products as per the trends in the market. They also
win over the functions of competitors with help of research of their
operations.
• Sales promotion and advertisement strategies made by sales agents help in
increasing sales of products of Marks and spencer which is one of the
important objective.
• The sales and distributions functions involved policies that help in increasing
the sales and providing quality products to customers.

Support functions:
• These functions are assisting functions for internal and external functions. Accounts
functions help in maintaining Accounts for sales, purchase, expenses and incomes of
marks and spencer which help in making policies for future.
• Public relations officers perform functions to develop good relation between
company and customers, government, media, shareholders and others.
• It provide support to production and sales function of marks and spencer.
• Quality control function is help in achieving one of the most important objectives of
company.
• It help in checking quality of raw material used in products and also the quality at
the time of distribution of products.
• Business process outsourcing functions help in achieving the objectives like solving
the complaints of customers so they can build trust and loyalty among customers.
• It also focus on income generating functions to increase sales.
• Human resource function to satisfy the needs of their employees to motivate them to
work.

P4 Positive and negative impacts of macro environment on the business
operations of Marks and Spencer
Positive impact:
• The macro environmental factors help in increasing sales if the
government policies in the favor of company.
• It help in development in technologies of the company.
• It also help in improving the sales and promotional strategies.
• This also help building good relations with customers, government etc.
• Advance technologies help in developing latest products.
• Increase the market share and market growth.
• Affects the profitability positively if in favor of operations.

Negative impact:
• It reduces the prices of company.
• Changes in customer’s preferences reduces sales.
• Changes in law also abide the operations of company.
• Changes in technologies requires high amount of funds.
• Affects the profitability negatively if not in favor of operations.

P5 PESTEL and SWOT analysis of Marks and spencer
Political factors:
• This are the factors related to changes in government policies and
regulations. Government introduces some health and safety standard
which abide operations of Marks and spencer because if companies not
abide by standards they are forced to close their workings.
• Br exit is one of very important political decision taken by government
which means UK withdraw from European Union. It has the negative
impact on the sales of marks and spencer.
• Home sales of cloths has reduce by 8.9% due to bank crises.
• This reduce the prices of 1000 product lines and also reduces the
promotions events which results in decrease in the sales of the company
(Mkude, and Wimmer, 2015). Share of marks and spencer fall by 40%.

Economic factors:
• The Br exit also collapse the value of pound which have bad impact on
operations of marks and spencer. The pricing strategies of marks and
spencer is also changed and the summer is also delayed due to fall in
sales by 8.9%.
• They reduce the prices of woman’s legging from 19.50 pounds to 15
pounds to increase sales.
• There is also reduce jobs by 2% in marks and spencer. Marks and spencer
make plans for facing the recession because of change in market.
Social factors:
• Marks and spencer make changes in products as per trends in market.
This factors are related to consumer’s needs and preferences which is
changes due to cultural, social, personal and psychological characteristics.
The competitors market is also affect the functions of marks and spencer.

Technological factors:
• In marks and spencer technology plays a very important role. By using
technologies companies must have communicate about the products to
customers.
• Marks and spencer regularly advertise their products to communicate the
information related to new products to customers.
• Marks and spencer offers new clothing ranges for women who is major
target of marks and spencer.
• The websites also are created which is attractive to impress the
customers.
Environmental factors:
• Marks and spencer make green policy which is also called Plan A. They
introduce 100 point five year plan to become the carbon neutral
company, no waste, they trade ethically and also take care about health.

Legal factors:
• Marks and spencer must take care about the acts related to health and
safety of the people. Changes in taxation also affect the business
activities (Song, Sun, and Jin, 2017). Law like fair packaging and
labelling act (1996) is apply in marks and spencer according to which
packaging of the products must done properly to reduce the wastage of
products.

SWOT analysis
Strengths:
 Leader of clothing market.
 Known Brand (Bohari, Hin, and
Fuad, 2017).
 Effective cooperate social
responsibilities (CSR).
 Strong foreign market which help in
market growth.
Weaknesses:
 Decrease in sales of food due to Br
exit.
 Reduction in return on investment.
 Competitive disadvantages.
 No scale to compete with the
competitors.
Opportunities:
 Increase in sales by online shopping.
 Internationalization.
 Introduce new products.
Threats:
 VAT reduce customer’s purchasing
power.
 Price increase of clothes.
 Less availability of finance due to
pension deficits.

P6 Strengths and weaknesses interrelates with external factors
The strengths and weaknesses are closely related with the internal
factors. The strengths includes the strong market share and well-known
brand. This can be generated because of this promotion strategies which
is formed on the basis of social factors (Mkude, and Wimmer, 2015).
Strong position in the foreign is can be created because of the free trade
policies made by the UK government. Changes in rules and regulation
also affects the strengths of the company. Legal factors like changes in
laws help in making changes in company which increases their
strengths.

Weaknesses can also converted in strengths only when external factors are in the
favor of operations of marks and spencer. With the help of understanding social factors
company can win over competitors in UK. Marks and spencer conduct research of social
factors which help them in understanding competitor’s policies to win over competitors.
They can take competitive advantage by using the external factors. The external factors
analysis help in converting weaknesses in to strengths.
CONCLUSION
This report concluded that purposes of private sector organization is to earn more
profits and purposes of public sector organization is to provide services to public whereas
voluntary organizations are formed to achieve goals for which they are established. Scope
and size of private i.e. marks and spencer, public i.e. NHS England and voluntary i.e.
British Red Cross society is different from each other. Different functions within marks
and spencer help in achieving goals and objectives which includes increase in sales etc.
Macro environment have positive impacts on operations like increasing sales etc. and the
negative impacts on the operations can affect the profitability. PESTEL and SWOT
analysis help in internal and external analysis of marks and spencer. The relation between
strengths and weaknesses and external factors help in converting weaknesses into
strengths.

REFERENCES
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Online
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