Business and Business Environment Report: M&S Analysis

This report provides a comprehensive analysis of the business environment, focusing on the different types and purposes of organizations, including public, private, and voluntary enterprises, and their legal structures. It examines the size and scope of these enterprises, using M&S as a case study. The report further explores the relationship between various organizational functions, such as production, human resources, marketing, sales, administration, finance, and research & development, and their links to organizational objectives and structure. It also delves into the positive and negative impacts of the macro environment, including political, economic, social, technological, environmental, and legal factors, on business operations. The analysis includes an internal and external assessment of an enterprise to identify strengths and weaknesses and the interrelationship of these with external environment factors. The report concludes with a summary of findings and references.

Business and
Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different type and purpose of organizations and legal structures..........................................1
P2 Size and scope of different type of enterprises......................................................................2
TASK 2............................................................................................................................................3
P3 Relationship between various organizational functions and its link with organizational
objectives and structure...............................................................................................................3
TASK 3............................................................................................................................................4
P4 Positive and negative impact of macro environment on business operations........................4
TASK 4............................................................................................................................................6
P5 Internal and external analysis of enterprise in order to identify its strengths and weakness. 6
P6 Interrelationship of strengths and weakness with external environment factors...................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment is a combination of various internal and external factors which affect the
activities of an enterprise. For execute business operations in an effective way and to achieve pre
determined objectives it is very essential for manager of every enterprise to identify study
elements and its impact on business operations (Craig and Campbell, 2012). Study of strategies
use of rivals also come under this. One of the main advantage of this is that it help manager in
plan business operations and also ensure optimum utilization of all resources. M&S (Marks &
Spencer) a retail company based in UK which deals in variety of products such as cloth, food and
grocery items is taken under this report for study. Different enterprise with its purpose, legal
structure and scope is all mentioned under this report. Further, main elements of external
environment and its impact on operations of an organization is all detailed under this. Along with
this, relationship between various functions of a firm is also included in this.
TASK 1
P1 Different type and purpose of organizations and legal structures
Various type of enterprise are there which execute various operations in order to generate
more amount of profits and to capture a large market share. Basically organizations are divided
into three categories known as public, private and voluntary and these can be better understood
by following points:
Public enterprise: Firms which operate or whose ownership remain in the hands of government
of country is known as public enterprises. Main purpose of these type of organizations is to
produce innovative products for customers in order to solve their problem (Palmer and Hartley,
2016). Provide solution to social problems or issues is one of the main aim of these enterprises.
Legal structure of public enterprises:
Government: This is further divided into following:
Central government: This is also known as apex body of government which control all activities
of a country. Main work of this type of government is collect tax and print money.
State government: Activities of a particular states of a country are control by this government.
Main focus of this is to boost education activities in a state.
Local government: This government control the activities of a local area and have very little
authority as compares to states and central government.
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 Private enterprise: Firms which build and execute various activities to generate more
amount of profits is known as private enterprise. Main purpose of these type of
enterprises is to generate huge amount of profits (Klapper, Lewin and Delgado, 2011).
These type of firm carry out research in order to identify the main features which
customers want in products and than undertakes production process.
Sole proprietorship: This type of business is control and operate by one single person.
Owner take all decisions related with business and bear all risk and gains. No sharing of
profits and fast decision making is one of the main feature of this type of business.
Partnership: When two or more than two individuals come together to execute
commercial activities with the aim of earn huge amount of profit than this is known as
partnership. Main feature of this is that it doubles the resources which ensure execution
of business operations in an effective way (Krishnan, 2013). A written document called
partnership deed is signed by all partner which consist basic information about all
partners, in order to remove the ground of conflicts among partners.
Franchising: This is another type of private business. Under this owner of a popular
brand give permission to other individual called franchisee to use his brand name to sale
products in exchange of some consideration.
 Voluntary enterprises: These type of firms are formed by group of some individuals.
Social development is one of the main purpose of these type of enterprises.
P2 Size and scope of different type of enterprises
Size of scope of different type of enterprises can be understood by the following: Public enterprises: Ownership of these firms remains in the hand of government and all
major decisions are also taken by government. As compared to private enterprise scope of
these enterprise is very limited and the main reason behind is research and development
department of enterprise (Love, 2011). Private enterprises: These are the firms which operate and controlled by private hands.
Scope of these type of enterprises is wide as these organizations carry out various
activities to produce innovative products and to better satisfy the needs and wants of
customers. ALDI is an example of private company. Presently firm has more than 1600
stores in UK which generate large amount of profits every year.
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 Voluntary enterprises: Firms which are formed to do social development of society and
people living in it is known as voluntary firm. OXFAM is an example of this which help
poor people by provide them basic facilities to live.
TASK 2
P3 Relationship between various organizational functions and its link with organizational
objectives and structure
Every enterprise whether small, medium or large execute different type of functions in
order to achieve its pre determined goals and objectives. But before assign roles and
responsibilities to employees it must be consider by manager of M&S that all these operations
are interlinked with each other and get affected by each other (Macdonald, 2012). Not only this
these activities get affected by the main objectives of company and by the structure adopted by
company. So it is very essential for every organization to use simple and effective organization
structure so it can execute all its function effectively and can produce maximum output. Further,
relationship between various organizational functions and its link with objectives of company
can be better understood by following points: Production function: This is known as one of the main function of every enterprise as
this make final products to better satisfy the needs and wants of its customers. simple
enterprise structure increase the effectiveness of this department and provide all the
resources required to make attractive products for its clients while on the other hand
complex business structure increase complexities of this department. Human resource department: Employees of enterprise play an big role in success of
company. Large enterprise require more employees as compare to small business
enterprises. Skills and activities of workers affect other business operations and
decisions of managers. Marketing function: Marketing is one of the main and important activity of every
enterprise as this is the only operation which provide an opportunity to business manager
to communicate with its customers through help of various communication channels. The
main focus of this function is to attract more number of customers towards company’s
offering. Activities of this department get affect by the enterprise objective. For example
if M&S want to increase its sale by 12% in coming 6 months than managers will focus
more marketing activities.
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 Sales: This is another important function of company as this generate profits for company
and this get affected by the other functions performed by company (Williamson, et al,
2014). For example various activities such as promotion is done marketing department of
company increase effectiveness of sales function. Administrative function: This department of enterprise do various activities such as
handling complaints of customers, send them mail, handle the query and many more.
Activities of this department affect by the structure and objective of company and this
also affect the other operations of business as this provide information about customers to
other department of company. Finance department: This department of enterprise identify need of finance require and
than allocate funds as per their requirements. Basically this department affect all other
activities of business as if this department allocate funds as per the needs of other
functions than this ensure effective execution of business environment. On the other
hand, lack of funds create unnecessary delays in business activities.
 Research and development: This department of firm carries out research in order to
identify and analyse needs of customers and to develop innovative products for them.
All these are the main functions of department and all these get affected by the other
activities perform by business (Madsen, 2016). So all these factors must be consider by the
managers of M&S in order to execute all business operations in an effective way.
TASK 3
P4 Positive and negative impact of macro environment on business operations
Macro environment is also known as external environment and its consists various
factors such as political, economic, environmental, technological, cultural and social. All these
elements affect the business operations of an enterprise. some affect in a positive way while
other affect in a negative way (McDonald and Wilson, 2011). Before choose final strategy it is
very essential for manager to study all this factors. This help enterprise in attain its business
objectives in an effective way. Positive and negative impact of external environment ob business
operations of M&S can be better understood by the following points stated below: Political factors: This include the variation take place in government activities and
policies. These changes affect the marketing decisions of enterprises in both positive and
negative way. For example when government offer subsidy and low rate taxation to
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retailer than all this positively affect the marketing decisions of enterprise (Johnson and
Scholes, 2013). on the opposite of this when government increase the rate of taxes then it
negatively affect the business operations of enterprise as this increase the final cost of
company’s product. Further, political forces include possibility of election in one country
and the possible outcomes of this are peaceful or chances of political shift. Economic factors: This is known as a mixture of various elements of both national and
international environment. Different elements such as rate of inflation, deflation, interest
rate and rate of bank loan all come under this. Various in all this affect business
operations in both positive and negative way (Mojaveri and Fazlollahtabar, 2012). For
example when banks provide loan to enterprises in low rate than it positively encourage
enterprise to expand its activities and opposite of this in case of increase loan rate it
become difficult for firms to expand its operations. Enterprises who work under complex
economic environment than it affect decision making process and consumer decision
making process of company. Social elements: Cultural and social elements include the changes take place in the
attitude, behaviors, tastes, preferences and values of target customers of company. All
these elements affect the demand and supply of firm. For example: if company makes
products as per the needs and requirements of customers than it increase the sale of
company’s product and if enterprise fails to produce goods as per the requirement of
customers than enterprise fails to capture a larger market share. Technological factors: This consider the elements such as technologies, knowledge and
skills required to execute production function. Technology plays a big role and largely
affects the operations of retail company. Further the materials required for production
process also affect the business decisions of enterprise. Environmental factors: Every company whether small or large use some kind of natural
resources for its business activities such as sea products, forests etc. from all these some
are of renewal while other are of non renewal in nature. it is very essential for every
company to take business decision after consider all these factors.
 Legal elements: Variation in legal rules in one country affect the operations of company
working in that country. Some changes positively affect the business operations while
other affect the same in negative way.
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TASK 4
P5 Internal and external analysis of enterprise in order to identify its strengths and weakness
Internal factors consists as those which exist inside an enterprise while external are those
which remain outside the company and are less controllable by company (Fernando, 2011).
Identification and evaluation of these factors help manager in well identified what are the main
strengths and weakness of business. Manager of M&S can also conduct internal and external
analysis of business in order to identify its strength and weakness. For this he can use the tool
called SWOT analysis. Main strengths, weakness, opportunities and threats of M&S are stated
below:
Strengths
 High brand recognition is one of the biggest strengths of M&S. In UK M&S is known as
the firm which offer quality products to its customers. Brand values of company is high
that’s why every individual prefer M&S products.
 Another strength of firm is that its offer variety of products to its customers. Stores of
M&S has variety of products which provide an opportunity to customers to choose the
best.
 M&S has number of stores and outlets all around the world.
 hese number of stores make the business more large and wider. M&S has variety of popular brands which help the enterprise.
Weakness
 One of the main drawback of firm is that enterprise is non trendy and out of fashion.
Even firm offer variety of products to its customers but people has a wrong
assumption that company offer clothes for only aged people. All these wrong and
false assumptions make the business low.
 Another weakness of company is this company still follow the old techniques and all
this increase the cost of business operations.
Opportunities
 Increasing global presence is one of the main opportunity for M&S.s
 With the help of market segmentation M&S has the opportunity to increase
number of its branches which will increase the overall business.
Threats
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 Increase competition is one of the main threat for M&S and due to this firm has a
threat for losing its market share and number of profits.
P6 Interrelationship of strengths and weakness with external environment factors
Weakness and strengths of firm relate with internal and external factors of business
environment. Manager compare the strengths of firm with macro factors of business environment
such as political, economic, technological, legal to formulate effective strategies for business
operations. Any variation in these factors affect the decision making process of management.
Interrelationship between factors of macro environment and strengths and weakness of M&S is
stated below under following points: Economic factors: This include the variation take place in exchange rate, interest rate,
and inflation rate in market. But if enterprise has adequate financial resources and these
changes `will not affect the decision of business. But if firm does not have required
amount of funds than it affect the decision making and pricing process of company. In
order to execute all business operations in an effective way it is very essential that M&S
should have always be ready for the challenges rise due to variation in economic
elements. Legal and political factors: This consider the rules, regulations and policies formulate by
government of country in order to control economic growth of nation. Changes in legal
policies of country affect the business activities of company so it is very essential that
firm should have expertise staff to manage this. Socio and cultural factors: In order to face all challenges, arise due to changes in socio
factors it is very essential that firm must have skilled manpower and all required
resources (Erixon, 2011). As needs, beliefs and attitudes of customers changes at a fast
speed so it is very necessary that M&S should have the ability to better satisfy the needs
of its customers and offer them products as they want. Technological factors: Technology plays a big role in success of every company. When
company adopt new technology for make products for its customers and it get success
add more features in its products and attract more number of customers towards it. Not
only this new technology help in decrease price of company’s product. In order to adapt
new technology firm should have adequate amount of financial resources.
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 Environmental factors: Every enterprise use some kind natural resources for execute its
business operations. For this every company needs to follow the environmental laws
formed by government of that country and company cannot misuse that natural resources.
For this management of managers of M&S should prepare policies and strategies for this
and follow the same to conduct business in an effective way.
All macro factors and strengths and weakness of firms are related with each other and largely
affect each other. If manager fails to identify strengths and weakness of firm than he cannot
evaluate the external factors and after that it he will fail to formulate effective strategic and plans
for company (Elsevier, 2013). If firm fails to fulfill the specific requirements of customers by
supply them adequate features in products than it decrease the profitability of company.
CONCLUSION
From the above information it can be concluded that various factors such as internal
largely affect the business activities of an enterprise like M&S. For operating in an effective way
and to better utilize all resources of firm it is very essential for manager to conduct this study.
With the help of this manager can collect information about what is going in market and what are
the main features which customers want in product. Various enterprise execute business
operations for their own different purpose. Business activities not only affect by external factors
by these also affect by the structure and objectives of firm. So all these should be consider by the
managers of M&S before assign roles and responsibilities to all workers. Manager can conduct
internal and external analysis of firm in order to identify strengths and weakness of company as
this largely affect by the factors existing in business environment.
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REFERENCES
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Limited, New Delhi.
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Berkshire, UK.
Williamson, et al, 2014, Strategic Management and Business Analysis, Butterworth-Heinemann,
Oxford.
Craig, T. and Campbell, D., 2012. Organisations and the Business Environment. 2nd ed.
Routledge.
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the business creation process. In Entrepreneurship and Economic Development (pp.
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system and SWOT Analysis to prioritize development strategies of Iran agriculture.
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