Business Environment Analysis Report: Marks & Spencer Case Study

This report provides a comprehensive analysis of the business environment, focusing on Marks & Spencer. It examines the impact of both internal and external factors on the company's operations. The report begins with an introduction to the business environment, defining its key components and highlighting the importance of effective management strategies. It includes an analysis of the relationship between different company functions, such as marketing, human resources, production, accounting, and research and development, and how these functions interrelate to achieve organizational goals. The report then delves into the macro-environment, using PESTLE analysis to assess the positive and negative impacts of political, economic, social, technological, legal, and environmental factors on Marks & Spencer. Additionally, the report includes SWOT analysis to evaluate the company's strengths, weaknesses, opportunities, and threats. The report concludes with a summary of key findings and recommendations, providing a holistic view of Marks & Spencer's business environment and its implications for the company's future.

BUSINESSES
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................1
P1 and P2 covered in PPT...........................................................................................................1
P3 Explain relationship between different company's functions................................................1
TASK2.............................................................................................................................................3
P4 Positive and negative impacts the macro environment has upon business operations..........3
P5 Internal and External analysis of Marks and Spencer............................................................5
P6 Interrelation of Strength and weakness with external Macro factors....................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment define as internal and external factors which directly affect firm
function that includes management, customers, employees, demand, supply and business
regulation or many more. For example, how well clients expectation form product and services
offers are meet. Management of the company develop strategies and plan in order to manage
businesses environment in an effective manner. Through this, firm are able to achieve goals and
objectives effectively in specific time period. Firm are not running in vacuum, it needs living
persons, place, things, natural resources to exist. In this assignment Marks & Spencer firm are
selected to analysis impact of businesses environment on working process. It is a British
international company which run operation around 979 store in UK (Agarwal, Grassl and Pahl,
2012). Marks & Spencer is established in the year of 1884 by Michael Marks and Thomas
Spencer. In this report covers purposes of organisation private, public or voluntary and size of
company. Its also covers relationship between different firms function and positive as well as
negative impact on macro environment.
TASK1
P1 and P2 covered in PPT
P3 Explain relationship between different company's functions
It has well known that, each and every firm are formed because of their different goals
and objectives. Therefore, operations activities or process are also different which are develop
businesses environment with in an organisation. So that, it is important for management to
design structures accordingly to their vision and mission that helps to achieve objectives in an
effective manner. Since Marks & Spencer are run their businesses in public sector with almost
8500 numbers of employees at international level. They provide various kind of product food,
clothes, luxury items etc. to their customers in order to full fill needs and wants (Aterido,
Hallward-Driemeier and Pagés, 2011). For this, they will need money so that all operational
activities are completed on time in an effective ways.
Marks & Spencer has flat organisation structure with in a work place which reduce
complexity hierarchy. Since, their entire operations are effectively organise as well as conducted
by their all workers who are working in their shops. Through this structure, management of
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Marks & Spencer is encourage staff members so that they are able to participate in decision-
making process of firm. It has conducted to carry out all plan and policies with in an organisation
in enhance employees productivity. If individuals are participating in decision process then it is
beneficial for enterprises because they receive various kind of alternative solution of given
problem.
Several department like accounting, finance, sales, research and development etc. are
effect business environment. Workers who are performing operational task required to be quality
so that it can helps to achieve goals and objectives in an effective manner. It is required that all
organisation function must be related to their structure so as to gain profits and objectives of the
company in an effective ways. So, the interrelationship between function and structure of Marks
& Spencer are explain as follows:
Marketing Department : It is most important department with in a firm which are able to
sell product and services at market place in order to full fill needs and wants of the clients.
Through this, they are manage internal faction to produce high quality goods that provide
competitive advantages as compare to their competitors in same industry (Auzair, 2011).
Marketing department are conducting research to know needs and wants of clients and
accordingly develop or produce product. Through this, they are able to enhance customer's
satisfaction as well as market share. They are connected with all other division with in company
which affect their function. It is very effective in gaining competitive benefits in the industry as
well.
Human Resource Department – Human resources manager recruiting and selecting
talented candidate which create positive impact on organisation performance as well as
productivity. They are organising training program for their employees in order to enhance
professional skills and knowledge. Through this, they are able to produce high quality product
and services, it increase profitability as well as market share. They are helping other division of
firm in bringing coordination and cooperation in between all department.
Production and Operations - Production and operations function is being organised to
start developing manufacturing process of product and services. It has establish link between
structure of an organisation and goods as per set strategies or plan only (Avramenko, 2012).
Marks & Spencer is a retail organisation so that they run their business activities in services
industry. They offer various kind of product like food, cloths, luxury items etc. to their buyers.
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Management of Marks & Spencer offer high quality good that increase customer's satisfaction as
well as full fill needs and wants effectively.
Accounting and Finance - Cash inflow and outflow is manage by accounting or finance
manager effectively in order to manage whole business operations in an effective manner.
Organisation structures are affect these monetary transactions which are done on daily basis.
They provide fund to all other department with in firm so that their activities can be carried out
in an effective ways. It includes purchases equipments or assets, conducting survey at market,
pay salary, investment and many more. So, finance department want to manage fund in an
effective manner to achieve target in specific time period.
Research and development – Management of the company conducting research to
develop differential product as compare to their competitors to gain competitive benefits in same
industry (Adeoye and Elegunde, 2012). They are responsible for producing goods as per demand
of clients. Large as well as small both kind of organisation need research to know customers
preferences, attitude, perception, motivation factors etc. to produce goods accordingly. It helps to
meet demand in an effective ways.
TASK2
P4 Positive and negative impacts the macro environment has upon business operations
There are various kind of business environment factors are available which affect
enterprises activities as well as performance. Management of the company develop strategies and
plan to manage all environmental factor. Both internal as well as external types of environmental
factors create negative and positive impact on operations of an organisation. Its create impact
rule and regulation of firm which is being performed by administration of firm. Marks & Spencer
implementing several kind of policies which play important role with in work place as it is helps
to achieve aim and objectives in limited time period in order to gain high market share. So, the
management used PESTLE analysis methodology to know impact of environmental factor of
Marks & Spencer is conducted below:
Political factor –Here, all political party are come for certain period of time in power. So
that, uncertainty are attached with political as well as government rule and regulation. They
develop policies for national and international trade which affect operations as well as
profitability of an organisation (Bar-Isaac and Shapiro, 2013). Therefore, government will
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introduced new rule and policies for manufacturing goods which create impact on production
houses. Marks & Spencer is retail firm which run their business activities in services sectors, so
that government make law for services industry which create impact on Marks & Spencer.
Positive effects – The positive factors is, through globalisation firm are able to expend
their operation at intentional level in a easily and convenient way. It helps to completing task in
more effective manner. There are also free trade policy among countries which reduce sourcing
cost. Brexit is also create impact on firm performance.
Negative effects – Uncertainty as well as unhealthy relationship between countries create
negative impact on an organisation performance as well as profitability. Marks & Spencer will
get outsources product and sell them in their store which are located in different location and
unhealthy relationship between nations create negative impact on their performance as well as
market share (Burns and Winter, 2011).
Economical factor – Various kind of economical factors like interest rate, taxation
policies, inflation, balance of payment and many more affect firm performance positive as well
as negative way. These elements have different perspectives in each and every nation, since
Marks & Spencer is run their business operations in several nations therefore they needed focus
on environmental factors very carefully.
Positive effects - High growth in economy provide various kind of opportunities to firm
to increase profitability as well as market share. Low inflation increase flow of cash with in
nation that rise chance of more sales.
Negative effects – Low economic growth reduce purchased power of customers that
directly affect profitability and product sell of Marks & Spencer. It is very complicated and
difficult to manage these changes effectively.
Social Factor – Every firm earn form society and it is their responsibilities or duty to
return something back to whole community. It is called social corporate responsibility CSR
activities. Needs and wants of customers may influenced by their society. So that it is
management responsibility to understand society culture and produce goods accordingly (Boons
and Lüdeke-Freund, 2013).
Positive effects – It create several kind of opportunities to get in touch with new person
those are become customers in future.
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Negative effects – Its negative impact is, Marks & Spencer introduced retail store chain
to sell product at international level but different types of culture may influenced firm
performance.
Technological Factor – Latest technology helps to modify or produce high quality of
product and services which provide competitive advantages at market place. Through this,
management are able to gain profitability and achieve goals and objectives in give time frame.
New technology are being introduced by scientist which are used by several firms so as to do
their operations in more effective ways in given time frame (Chow and et. al., 2011). Marks &
Spencer used several technology to completing task effectively in order to gain high buyer's
satisfaction and it is help them to become dynamic in nature.
Positive effects – Technology can create positive impact on an organisation performance
as well as productivity. Marks & Spencer may used latest techniques to run business activities in
an effective ways.
Negative effects – Company may invest lot of fund in technology but in current
environment it can copy easily which create negative impact on performance.
Legal Factor – Government may rule and regulation which are minatory to follow by
companies which create positive as well as negative impact on an organisation.
Positive effects – Through legal laws, firm are able to protract their research and
development effort to make new goods and services. Marks & Spencer has follow all laws to
operate business.
Negative effects –Following all rule and regulation lead to disrespecting management
decision related to policies and laws.
Environmental Factor - All element which are related to environment may effect
organisation performance and is having strong impact on them (Commander and Svejnar, 2011).
Positive effects - In Marks & Spencer, environmental factors create positive impact like
reduce red-tapism form organisation and carry out whole work in an effective ways.
Negative effects - Non proper utilisation of natural resources create negative impact on
country as well as organisation.
P5 Internal and External analysis of Marks and Spencer
In internal analysis, company take aid of TOWS matrix that is quite helpful in getting
knowledge about organisation's capabilities and flaws. On the other hand, for conquering factors
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of external environment then PESTEL analysis should be done and elaboration of both matrix
are described as under.
So, SWOT Analysis of Marks and Spencer are as follows:-
Strengths Weaknesses
 corporation have positive goodwill and
prominent brand image in the
marketplace.
 they have peerless selling points of
their items.
 It has most effectual designed
infrastructure and business atmosphere.
 This is one of most awarded
companies of the industry (Cronan and
et. al., 2011).
 there are multiple issues in climate of
association as management is under
stress because of poor functionality of
their clothing business sector.
 There is a decrement in pre-tax profits
as it has went low by 8.7%.
 In comparison to their business rivals,
the items of their rates are high.
 Consumers are less satisfied with the
products and facilities that they are
selling as compare to other brands.
Opportunities Threats
 They have opportunities in bringing
their corporation in online sales
marketplace.
 They have successful transactions in
banking industry.
 They have slow recovery in economy.
 Company has strong rivals in the
marketplace.
Its PESTLE analysis are as follows:-
FACTORS EXPLANATION
Political  Company is working in regularly changing atmosphere.
 Government is making continuous rules and regulations.
 Tax related Policies.
Economical  People of UK are showing increments in their income level.
 Employment Opportunities.
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Social  Attention on regular changing taste and preferences of customers.
 Strong Brand image by adopting all governmental policies.
Technological  Economy gets affected by technological changes in positive
manner (Dahan and et.al., 2010).
 Various type of information and knowledge.
Legal  Policies related to packaging and eco-friendly raw material.
Environmental  Attention on waste management.
 Introduction of programmes called as Plan A for managing the
waste resources of company.
P6 Interrelation of Strength and weakness with external Macro factors
It is observed that, business atmosphere has its effects upon business operations of M&S
company in marketplace. This firm is having some strengths and weaknesses which are hard to
comprehend by management of firm. Company were quite good in earning welol profits before
exit and also have strong market positions in international market as association is earning well
in industry nut after Brexit M&S are facing some complexions in expanding business operations
in that regions. These type of extrinsic aspects are making new revulsions for Marks and Spencer
as they have to spend more money and time while fulfilling various kinds of duties.
Brand equity of M&S is very strong. they are reasoned as one of the major brand in
clothing segment. Marks and Spencer is making entry in future markets like India. This country
has highest economic growth rate and buying potential of population in this nation is also
increasing (Boons and Lüdeke-Freund, 2013). This extrinsic aspect is aiding M&S in screening
their investments in less period of time. This company is dealing in premium segment of
clothing, enhancing income of upper middle class people is a good news for them because more
earning is directly associated with more disposable expenses. Outcome of M&S in this region is
regularly showing increase.
CONCLUSION
From the above report it is concluded that business environment has create positive as
well as negative impact on an organisation performance and productivity. All environmental
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factors like customers, technology, political, legal, economical, suppliers and competitors or
many more. Marks & Spencer develop strategies in order to manage negative impact of these
factors on performance and product quality. Firm all department like finance, marketing, human
resources, operations etc. role and responsibilities may differ form public to private to voluntary.
Each king of organisation has different goals and objectives and they develop plan accordingly to
achieve market position.
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REFERENCES
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Online
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SWOT Analysis of Marks & Spencer.2017.[Online].Available
through:<https://businessteacher.org.uk/swot/marks-and-spencer.php >.
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