Business Environment Report - Module: Business Environment, Term 1

This report examines the business environment, focusing on different types of organizations including private, public, and voluntary sectors. It provides an in-depth analysis of Mark and Spencer, a multinational retailer, exploring its background, mission, legal structure, and stakeholders. The report delves into the interrelationship of various functions within the organization, showcasing how they align with its objectives and structure. It also assesses the impact of macro-environmental factors on business operations, identifying the strengths and weaknesses of Mark and Spencer through internal and external analyses. The report concludes by summarizing key findings and referencing relevant sources to support its arguments.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Types of organisation and discussion on the growth of international business surrounding.
.....................................................................................................................................................1
P2 Background, mission, legal structure of types of organisation..............................................3
P3 Functions of Mark and Spencer and how it interrelates with its objective and structure. ....5
TASK 2............................................................................................................................................7
P4 Impact of macro-environmental factors on business operations. ..........................................7
P5 Identification of strengths and weakness of Mark and Spencer by conducing internal
analysis........................................................................................................................................9
P6 Identification of strengths and weakness and its relationship between external macro
factors. ......................................................................................................................................10
CONCLUSTION ..........................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
It is a well known fact that the success of any business depends upon its capability to
understand the micro as well as macro environment (Craig and Campbell, 2012). There are
different types of businesses depending upon the various goals and objective. Size of every
single business unit also varies as per the objective of the company. There are many prevailing
environmental factor that directly affects the company. An organisation is made up of its key
stakeholders, size, scope and its legal structure. Marks and Spencers is one of the leading brand
in terms of multinational retailers. Its main head quarter is in U.K. They are specialised in home
products, luxury foods and clothing (Cadle, Paul and Turner, 2010). They serve best quality
product to their customers. Given report is based upon the various aspects of business
environments. It will help to understand the various type of organisation and its size. A detailed
description about the background, vision, mission and objective of chosen organisation will be
discussed.
TASK 1
P1 Types of organisation and discussion on the growth of international business surrounding.
Organisations established so as to achieve some specific goals. All the business unit have
some aim and objective for which they are into the market. Company determines their main
target and after that they select the best possible method or technique with the help of which they
can achieve their goal. On the basis of nature of the target, a company finally choose a type of
organisation under which they wants to conduct all their business operations. There are basically
three types of business organisations namely private sector, public sector and voluntary sector.
Given below is the brief discussion about all these types of organisations.
Private sector
As its name suggest, these kind of companies have its own owner. They are not abide by
any such norms where they needs to take legal permission (Czinkota, Ronkainen and Moffett,
2011). Their main goal is to prepare best product and deliver best services as per the demand of
the customers. As this report is concern about, Mark and Spencer is a name of brand in respect of
multinational retailers of U.K. That is why, this company provides quality of products to their
customers. Given below are the major purpose if private companies into the market.
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1. This company meant to provide all the products and services which are in high demand
from the side of customers (Detlor, Hupfer and Ruhi, 2010). That is why, these companies are in
much demand. They serve exactly what a customer wants.
2. One of the main objective of private companies is to as many profit as they can. That is
the reason they are the highest type of organisation who expands within a shorter time period.
They get a sense of stability in the market.
3. One of the major role of the manager of this company is to determine the demands of
the customers and then provide best products and services to them.
Private companies are further divided into three major parts namely partnership,
franchisee and single proprietorship. If there is a single owner of private company who is liable
to take all their important decisions without interference of any other person is known as single
proprietors. On the other side partnership can be defined as the way by which two or more than
that two people are liable for conducting all the business operations together. At last, franchisee
can be defined as when a company takes franchise from a particular firm. In this way it can be
concluded that private sector is in the market to provide products and services as per the needs
and wants of the customers.
Public sector
This is just opposite to private companies. Public sectors are the area where all the work
has been done under the guidelines of the legal authorities. All the business operations under this
sector is liable to the government (Fernando, 2011). In other word it can be concluded that public
sector companies are in the control of government, they needs to take permission from the
government in order to take any decisions. Their working pattern gets affected by the norms
imposed by government. The main objective of such companies is to provide services to the
public and work for their benefit. All the profit that has been earned in the public sector is again
used for the benefit for the public. The major role of this company are as given below:
1. As this company is working for the benefit of the society that means the living
standard of public will increase.
2. They have basic concern of giving value to the product and services as they are not at
all concern about earning profit.
The can be divided into three major parts such as central government, state government,
local government
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Voluntary sector
This can be defined as the business venture which are not meant to make profit in the
market rather they are in the head of non profitable company(Gao, Li and Clarke, 2010). Their
main goal is to provide products and services to those people of the society who are struggling
for their livelihood. Given below are the major objective of this company:
1. They are into the market in order to secure the interest of the poor people. As a result
of this, the condition of weaker section of the society gets improved.
2. They make sure that the poor people gets all the necessary products and services and
thus this will provide a basis of improving their standard of living in the society.
In context of international business environment, it has been noticed that now a days due
to globalisation, there is exchange of products, services and technologies between different
countries. This will lead to create more stable economic conditions for most of the countries.
Mark and Spencer is the brand in global marketing. But still there is a lot of scope to expand
even more in the international market.
P2 Background, mission, legal structure of types of organisation.
Above discussed types of organisation are private, public and voluntary company. Mark
and Spencer is the most popular name in terms of multinational retailers. They have their own
brand in the market. With the help of quality of products they are now ruling the entire economy.
In order to understand their business environment it is essential to know their basic mission,
vision, legal structure and stakeholders. It come under the head of private company.
Private company
1. Background of the organisation
Mark and Spencer has their head quarter in “city of Westminster” London. It has been
listed in the London stock exchange. They are mainly into the selling of quality products such as
luxury food items, clothing and home products (Guglielmetti, 2011). It was founded by Michael
Marks and Thomas Spencer in 1884. in order to understand its expansion the market, it is very
well evaluated that currently the company is having 959 stores within U.K. They also have so
many stores throughout the globe including 52 stores in India, 37 in Russia, 48 stores in Turkey
and many more.
2. Mission and vision
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This company is having a very clear view of its mission in the market. They are basically
for the purpose of providing best quality products to the customers. They have a set norms which
indicates that the company will always work as per the demand of the customers. They prefer
customer's needs and wants to their priority and then they want to expand their business in the
rest of the market. Their vision is to survive in the long run with full efficiency of work in the
market. For this purpose, they have taken many steps and are following all the possible method
with the help of which they can achieve their target.
3. Legal structure
This can be defined as the way by which company categorised into sole proprietorship,
public limited company, partnership and many more (Halbert and Ingulli, 2011). Legal structure
of private company
4. Stakeholders
Stakeholders can be customers, suppliers, employees and many more. Mentioned
company needs to be very specific about choosing effective stakeholders in order to get best
possible responsible in the market.
5. Size and scope
As this company has expanded their business operations in all over the world that means
its size is quite large as compared to any other retailers in the market. They have a set structure
of their business activities which lies within the range of organisation. In terms of scope, it has
been found that this company is having lot of scope in the market. This is because customers
now a days are very price and quality conscious. They have done all market research and then
they move towards any specific company to buy a products (Hill Westbrook, Helms and Nixon,
2010). People wants quality of food product, clothing and home items and this is all offered by
Mark and Spencer. That is the reason, its scope in the market get increased. Consumers are
moving towards the product offered by the mentioned company. This will lead to create
maximum number of market shares for the company with so many profit as well.
6. Product and services
Mark and Spencer is one of the most popular company in all over the world. They are
into the multinational retailers. They offers quality of products which mainly include home
products, luxury foods and clothing. They make sure that all the products which are delivered by
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this company must have best quality. That is the reason, this company is having maximum
number of market shares.
Public company
This company basically comes under the control of government. They are in the market
to work for the benefit of the common people. One of the very popular example of public
company can be NHS. Their main mission can be determined as the way by which the standard
of poor people in the society can be improved. Their vision is to provide all the products and
services to the unprivileged society of the country. Its structure depends upon the number of
employees working under this company. NHS is the most popular brand in context of providing
health care services.
Voluntary company
It is simply a non profitable organisation responsible for working in the favour of society.
Social welfare is the main concern of this company. Their legal structure depends upon the type
of services they are offering to the customers. Their scope is wide in the market. One of the very
famous example of voluntary company is world vision and American red cross.
P3 Functions of Mark and Spencer and how it interrelates with its objective and structure.
It is a well known fat that every company follows some basic organisational structure
depending upon its objective and mission. Functions of Mark and Spencer is directly connected
to its major activities. Organisational structure is one of the key factor that can foster the
effectiveness of any task performed within a company. It can be defined as the way by which
several functional unit of a company interrelate with each other (Jackson, Joshi and Erhardt,
2010). This is a hierarchical representation of various functions that is performed by the
mentioned organisation. Given below is the organisational chart of Mark and Spencer.
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functions of chosen organisation can be defined as the way by which they formulate their
strategies in order to carry out all their business operations. Mentioned company is liable for
maintaining quality of products. They are into the selling of luxury foods, home products and
clothings. They are following a flat structure in their organisation. On the basis of above
mentioned organisational chart, it can be concluded that all the functions of this company are
interrelated with each other. From top to bottom, there is a hierarchical function that must be
followed in order to carry out all the major activities of their companies. Functions of mentioned
company can be understood as they are directly connected with the objective and structure of the
company. This is because on the basis of determined objective, mission, goal and aim of the
company, the functions take place (Klapper, Lewin and Delgado, 2011). It is but obvious that
when a company determines their main objective then only they will decide their functions.
Hence it can be concluded that functions of the mentioned company are interrelated with its
objective and structure.
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Illustration 1: Organisational chart of Mark and Spencer

TASK 2
P4 Impact of macro-environmental factors on business operations.
Both macro and micro environmental factors plays a vital role in determining the success
rate of any organisation. As far as this report is concern about, it has been evaluated that external
factors must be considered so as to apply all the business strategies to its best level. In order to
investigate external factors, there are various methods that can be used. One of the best method is
the PESTLE analysis. Given below is the PESTLE analysis of Mark and Spencer.
Political
This basically includes the legal entity under which all the country's operations took
place. Political factors may comprises with government norms and regulations. This is one of the
major factor under PESTLE analysis which directly affects the operations and functions of any
organisations. Mark and Spencer is one of the most popular company in all over the world. They
are working under the political factor of U.K. That is why, they are getting full support from the
U.K government to conduct their business operations in most effective manner. That is why, this
company is booming in throughout the world.
Economical
Economic conditions must be stable and growing in order to support the establishment of
any business unit in the market. This may includes tax rates, fiscal policies, exchange rates, per
capital income and many more. Mentioned company is getting a positive response from the
economic conditions of U.K. As this company is dealing in international market that is why, for
their further expansion, it is necessary to properly choose growing economy in order to get
positive response from the market (Nikolaou and Evangelinos, 2010). Mentioned organisation is
all set to enter in more new markets and to get maximum number of market shares. This can only
be achieved once they will tap the most growing and booming economy.
Social
This factor under PESTLE analysis is responsible for deciding the major trend in the
market. Social factors may includes the value, belief and norm of a particular nation. That is
why, company needs to give full attention towards the social factor of any country. As a
company can only be successful in the market, if they are making products and services as per
the needs and wants of the customers. Mentioned company have to consider the social factors
and on the basis of this only, they can take their further business decisions.
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Technological
It is a well known fact that a company needs to be active in the market in order to beat the
competition. That is why, they need to adopt all major techniques which are prevailing in the
market. Technologies have made all the business operations very easy. It saves time of the
company. It is important for Mark and Spencer to adopt all latest technologies in order to
maintain its brand image in the market. They need to implement the most fastest technologies
with the help of which they can shine in the market.
Legal
This is again a very important factor that can foster or even slow down the growth of any
organisation. It is essential for the mentioned company to full fill all the legal obligations that are
required under the establishment of any business operations. There are certain norms, rules and
regulations that are imposed by the head authority of any country in order to deal with all the
issues under business sector (Ommani, 2011). Mentioned company do not have any strict rules
and regulations and that is why they are expanding their business in all over the world.
Environment
Every company needs to consider the environmental factor. This is because there is a
strict norms that says that the business operations should be conducted in such a manner that it
will not leave any harmful effect in the atmosphere. Mentioned company is using those methods
or techniques which are Eco- friendly.
Positive impact
One of the major positive impact of PESTLE analysis in the business operation is that
company gets to know about the external factors and thus they can effectively use these factors
in order to determine its success rate in the market. Determination of various political, economic,
social, technological, legal and environmental factors will lead to generate most effective
business plan.
Negative impact
This can be considered as the way by which external factors leaves a negative impact on
the business operations of the mentioned company. It is not always necessary that all the
estimated external factors are relevant to the company. Thus sometimes, it will lead to create
confusion in the organisation.
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P5 Identification of strengths and weakness of Mark and Spencer by conducing internal analysis.
It is very necessary to conduct both internal as well as external analysis in order to
determine the stability of the company in the market (Sørensen, 2012). As discussed above,
external analysis can be done with the help of PESTLE analysis. Its importance to know the
political, economic, social, technological, legal and environmental factors so that company can
affectively use it in their business operation and can set a bench mark in the market. In order to
determine internal factor, SWOT analysis can be done. Given below is the brief discussion about
the SWOT analysis of the mentioned company.
Strength
One of the major strength of this company is that it is a market leader. They are providing
best quality products in the market. They have expanded their business in most of the countries
like India, Spain Ireland and many more. They acts like a trusted brand for the consumer. They
have good level of market shares
Weaknesses
One of the basic weakness of this company is that they are not at all aware about its
competitive advantages. They are not using it properly. They need to choose best stakeholders
who are trust worthy and can give best results to the company. These weaknesses must be
overcome by the company in order to maintain its suitability in the market. They have to take
some immediate actions so that they can maintain their work efficiency.
Opportunities
Although this company is having good commend over the market still there is a
lot of scope for this company to expand their business operations in more countries. One of the
great opportunities available for the company is that they can use international resources in order
to effectively implement their business plan in the market (Teece, 2010). They can also utilise
best technologies with the help of which they can provide best possible product and services to
the customers.
Threats
One of the major threat of this company is the increasing level of competition in the
market. Government is also making stringent policies and that is why, it is essential for the
company to take their decisions in the most effective manner.
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Above mentioned internal analysis can directly affect the decision making capability of
any organisation. This is because when company will do an entire analysis of its internal as well
as external analysis then only they can take strategic decisions. This will help the company to
establish best possible decisions.
P6 Identification of strengths and weakness and its relationship between external macro factors.
As discussed above it can be very well concluded that Mark and Spencer have to evaluate
its internal as well as external factors. This is because with the help of these factors, company
can successfully determines way by which they can achieve best market position. As discussed
above with the help of SWOT analysis that company have some basic strengths and weaknesses.
This can be related with external environment with the following ways:
Political
Under this factor it can be very well evaluated that government policies plays a vital, role
in directing the business operations of the mentioned company (Wetherly and Otter, 2014). On
the basis of various strength of this company, it is very easy for the mentioned organisation to
handle political pressure. They can survive in the market with most effective manner. As they are
a market leader, thus political factors can be easily handled by the company.
Economic
As this company is having good command over economic conditions. They are having a
stable market conditions and that is why they are performing best in the economy. With the help
of growing economy, Mark and Spencer is providing best possible products to the consumer. In
this way, it can be concluded that the strength of this company is interrelated with economic
factors such as economic.
Social
Social factor may includes the recent trends in various countries. As this company have a
major strength to make quality products as per the demand of the customers (Wild, Wild and
Han, 2014). This is the most important strength of the company that is directly related with the
economic factors. Mentioned organisation can succeed in the market as they have successfully
evaluated the social factors.
Technological
Although this company is using best possible technologies in order to get updated in the
market but still there is a lot of scope where this organisation can adopt more fastest and latest
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technologies (Auzair, 2011). Due to its weak approach towards technologies, the company may
face some serious trouble in the coming future.
Legal
Under the legal structure it has been advised to the mentioned company to follow all the
legal obligations by the government. This company is having best legal position in the market
and thus they can expand their business without any further restrictions. In this way company's
strength and weakness is interrelated with the external factors such as legal.
Environmental
This is again a very important factor which must be considered by every company in the
market. It has been evaluated that all the business operations can not use those techniques or
methods which can directly or indirectly affect the environment (Yüksel, 2012). That is why,
mentioned company have to make strict decision to strengthen their plans to follow those steps
which do not have any harmful affect in the environment.
On the basis of above factor, it can be concluded that internal as well as external factor
plays a major role in order to determine the sustainability of the business operations in the
market. This will make the company more popular among customers. They can earn maximum
number of market shares as well as profit.
CONCLUSTION
On the basis of given report it can be concluded that business environment is consist of
internal as well as external factors. Companies like Mark and Spencer needs to consider those
elements which can directly affects the business operations. As far as this report is concern
about, there are basically three types of organisation. For example private, public and voluntary
company. Different organisations have different objectives and on the basis of their main goal,
the structure and functions can be determined. Mission, vision, objective, legal structure,
products and services, size and scope are all varies as per the type of organisation. PESTLE
analysis must have done in order to evaluate the major external factors. For internal analysis, the
best method is the SWOT analysis. These factors are interrelated with each other. On the basis of
strength and weakness of a company, major decision can be taken. In this way, mentioned
company can get best possible responsible in the market by delivering best products and
services. In short, organisation have to take actions on the basis of their objective. Their crucial
decision gets affected by the internal as well as external environment. That is why, it is suggested
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for the entire companies to evaluate all possible aspects which can directly or indirectly affects
the company image in the market.
REFERENCES
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Yüksel, İ., 2012. Developing a multi-criteria decision making model for PESTEL analysis.
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Business environment. 2017. [Online]. Available Through:
<http://www.investorwords.com/19252/business_environment.html>. [Accessed On 12 August
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