Business Environment Report: M&S, Business Environment Factors

This report provides a comprehensive analysis of the business environment, focusing on Marks and Spencer (M&S). It begins by defining the business environment and its importance for organizational growth. The report then delves into the different types of organizations, including public, private, and voluntary, and their legal structures, using M&S as a primary example. It explores how organizations are categorized by size and scope, from micro to large, and examines the size and scope of public, private, and voluntary organizations. The report further investigates the relationships between different organizational functions such as marketing, human resources, finance, and sales, highlighting the advantages and disadvantages of their collaboration. It also analyzes the impact of the macro environment on M&S, utilizing a PESTLE analysis to examine political, economic, social, technological, legal, and environmental factors. The report concludes by assessing the company's strengths and weaknesses, and how they interrelate with external macro factors, providing a thorough understanding of M&S's business environment and its strategic implications.

BUSINESS AND THE
BUSINESS ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
P1 Different types & purposes of organisations..........................................................................3
P2 Types of businesses and organisations by size and scope wise..............................................5
LO2..................................................................................................................................................7
P3 Relationship between different organisation functions..........................................................7
LO3..................................................................................................................................................8
P4 Impacts of macro environment on organisation.....................................................................8
LO4................................................................................................................................................11
P5 Strengths and weaknesses of company.................................................................................11
P6 Strengths and weaknesses interrelate with external macro factors......................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business environment is basically a zone for an organisation to conduct and operate
different activities of business. Currently every business in market place tries to analyse its
business environment because after having effective business environment, any company can
simply grow in market place (Vlachos,2016). Top-level management within different companies
have to adopt different models of situational analysis, because after conducting situational
analysis, any business can simply find out those elements and factors of the market which can
affect that business in both manners positively and negatively. This report is completely based on
the different business environment factors of Marks and Spencer’s (M&S). The M&S is one
leading retail business in the United Kingdom, headquartered in London, England, UK. This
report discusses different types of organisations, size and scope of organisation, relationship
between different organisational functions, macro & micro environment factors etc. Some other
key factors relating to business and business environment also have been discussed in this report.
LO1
P1 Different types & purposes of organisations
Many types of organisations exist within the market place which has different purposes
and different morals. There are public organisations, voluntary organisations, private
organisation etc. some key types of organisations which has been discussed below;
Public organisations
Public organisations, these organisations are always selling their services and products in
market place, so that, any person can simply buy different shares of any public company or
organisation in market place (Agustinaand et.al., 2020). The main purpose of these organisations
is to generate huge profit margins in market place by providing different products and services.
On the other side, most public businesses or companies always runs their business operations at
the international level. These organisations always capable to invest very high amount of fund in
purchasing the modern and hi-fi technology. A public organisation always has large number of
employees within its workplace. Basically, public ventures always able to generate very

excellent employment opportunities to people in market place.Currently Marks and Spencer
P.L.C. is an excellent example of a public organisation, because it sells its shares publicly
(Marks and Spencer p.l.c. - Company Profile, Information, Business Description, History,
Background Information on Marks and Spencer p.l.c., 2020).
Private organisations
Private organisation and companies basically not sell their shares in market place, so that
any person not able to shares of these companies. Many times, top-level management provides
shares, The main purpose of these private organisation is to gain effective profit in market place.
On the other side, many of public ventures mostly run their business operations only at the
national and regional level. Currently only few private businesses exist within the UK’s business
environment which are capable to run their business operations at the international level. A
private company always have fewer numbers of employees than a public company. These
organisations mostly try to invest in buying those technologies which are very necessary to them
(Pfeffermann, 2017). Currently Iceland foods ltd. is the best example of a private organisation.
Voluntary/social organisations
Voluntary and social organisations, these organisations mainly work in the social welfare
or public welfare. Earning very higher profit margins is not the main objective of this these
organisations. The main purpose of these organisations is to maintain ethics and effectiveness
within society by working the social welfare. Currently many of voluntary organisations exists
within the UK’s business environment, in which the Children’s society is one of key examples of
voluntary businesses. Currently donation and charity are two key main sources of funding to
these organisations. Most voluntary and social organisations operate their operations at very
small scale. Currently only few social organisations are able to run their operations at
international market. For example; World food organisation, WHO etc.
LEGAL STRUCTURE
A public limited company has always required to register itself in the companies’ house
of the United Kingdom. Companies house is generally a governing body which manages
different businesses within the country. A public venture, like; M&S can freely sell its shares

within market place, and purchasers of those shares become limited liability of this public
company.On the other side, A private limited company also has highly required to register itself
in the companies’ house. A private company, like; Iceland foods not able to sell its shares within
market place to raise a specific fund.According to the UK’s business law, the private
organisation is legally distinct entity with its own profits, assets and liabilities.Lastly, a voluntary
organisation, like;the Children’s society also has required to register itself in companies house to
be legally formed as a social or voluntary organisation. The voluntary organisations also enable
to sell their shares publicly.
These all are key types of organisations which commonly exists within the UK’s business
environment. There are some key laws and regulations also has discussed above which should be
followed by top-level management of each business to get appropriate results in market place.
P2 Types of businesses and organisations by size and scope wise
Organisations within the United Kingdom has categorised by size wise and scope wise as
well. There are micro, small, medium and large-sized organisations are key types of
organisations within the United Kingdom. These all types of organisation have been discussed
below;
Micro Small Medium Large
Micro business
category, those
businesses mainly
comes under this
category which have
less than ten
employees, and also
which are generating
turnover of €2 million
in its each financial
year. This is the actual
definition of a micro
business within this
country. Currently lots
Currently venture
which are able to
generate turnover of
€10 million in its each
financial year, and have
fewer than fifty
employees, then that
venture or business
comes under the
category of small
organisation (Prange
and Pinho,2017).
Currently there are
thousands of small
In the medium sized-
businesses, only those
ventures of companies
come which are able to
generate €50 million
turnover in its each
financial year of
business operation.
Businesses which has
less than 250
employees are also
comes under this same
category. Number of
medium-sized
Large-sized businesses
are generally those
businesses within the
United Kingdom which
has more than 250
employees or workers
and also, they are able
to generate turnover of
more than €50 million
in its financial year.
There are lots of large-
sized businesses exists
within the United
Kingdom, in which key

of micro businesses
exists within the UK’s
business environment
which always
contributes
employment generation
aspect of the United
Kingdom. The root
coffee café is the best
example of micro
business within the
United Kingdom.
businesses exists within
the UK’s business
environment which has
generated very higher
employment
opportunities to the
local people of the
United Kingdom.
According to the UK’s
government, small
businesses plays an
excellent role in the all
over growth of
country’s GDP. There
are Prufrock coffee café
is an excellent example
of small business in the
UK.
businesses also very
higher within this
country, and these
ventures also highly
contributes in the all
over growth of the
UK’s economic growth.
Currently Garden View
Hotel is the best
example of medium-
sized businesses.
large-sized businesses
are Marks and Spencer,
British petroleum,
Tesco, Morrisons,
Unilever. These
organisations are very
helpful for the UK in
the terms of economic
development, because
large-sized businesses
always able to run their
business operations in
the international market
(Jabeen, Faisal and
Katsioloudes,2017). In
this situation, when any
business runs its
business operations in
different countries, then
it can simply gain huge
foreign exchange.
SIZE AND SCOPE OF PUBLIC, PRIVATE AND VOLUNTARY ORGANISATIONS
Public (Marks and Spencer): The size and scope of this organisation is very large, because
M&S is a multinational retail brand which currently serves in over 57 countries.
Private (Iceland foods ltd.): This private organisation has minimum size and scope in
comparison of M&S, because currently it serves only in few neighbour European countries, like;
Ireland, Netherlands, France etc.
Voluntary (WHO): WHO is an international health care social or voluntary organisation, and it
is very large by size and scope wise, because currently it serves across the world.

Evaluation
There are all types of organisations are playing very excellent role in the growth of UK’s
GDP. Basically, these different sized businesses have generated great employment opportunities
to the local people of this country, existence of these all sized organisations is very beneficial for
the United Kingdom.
LO2
P3Relationship between different organisation functions
Inter relationship of various organisations functions can be projected in the following
manner.
Marketing and Human resource
Marketing team needs to collaborate with all other functions to achieve the overall
objectives of operations. Marketing team need to collaborate with sales management to raise the
sales capacity of the department. Marketing needs to work with human resource function in
channelizing recruitment campaigns of company (Li and et.al., 2019). Human resources provide
the effective and skilled human resources to the marketing team so that department could meet
up all its various objectives. Human resources department also channelizes its recruitment
advertisement with the support of marketing department.
Finance department and marketing
Finance management need to prepare budget for each functions of marketing team. On
the basis of the needs and requirements of marketing departments it requires to prepare budget so
that they can meet their needs and requirements (De Vries and et.al., 2017). Marketing team also
provide relevant information about the market to finance department.
Sales and marketing departments

Sales management in Marks and Spencer Company work with marketing department to
achieve the overall objectives. Sales team, carry the responsibility to entertaining the sales
targets of company. Sales team directly contact with the marketing team to get publishes various
advertisements and promotions of company. Marketing team also take various information
related to potential customers with the sales team.
Advantages of working together
 It improve the overall productivity of the company.
 Work culture at organisation also improved in this strategic tool.
 Inter relationship between departments also improve through this working approach.
Disadvantages
 It create extra confusion regarding operations of company.
 It improve cost of operations.
It is analysed that how collaboratively every single department in Marks and Spencer
Company work to achieve the overall objectives of such individual function in company. This is
very necessary task to the upper management of company to always maintain an effective
relationship between all departments.
LO3
P4Impacts of macro environment on organisation
Marco environment of Marks and Spencer highly affects it in both ways negatively and
positively (Han,2019). Basically, there are lots of factors exists within M&S’s macro business
environment which influences company’s business operations. The management at this retail
company has always required to make some appropriate strategy to systematically deal the
impact of these all macro factors. There are PESTLE analytical tool has been used below for
identifying and analysing key macro environment factors of M&S.
PESTEL Analysis

PESTLE analytical tool is very beneficial to a business or company in the market place.
Currently many of companies uses this tool for analysing different factors of their macro
business environment. PESTLE term mainly refers six key factors of macro environment of any
business called; political, social, environmental, economic, legal and technological etc. These all
factors of M&S’ macro business environment has been discussed below;
Political factors:Political factors are highly affecting to the business operation of M&S.
Basically, the management of this retail business has always required to follow different rules
and regulations which has formulated by the local government of UK. Currently company is
responsible to fulfil different governing formalities as well. For example; the management of
M&S always fulfil is formality of taxation. There are Brexit decision of the UK also has highly
affected to this company. For example; after Brexit, M&S has required fulfil lots of paper work
formalities while exporting its products and services in those nations which are still members of
European union. On the other side, the company have to maintain different business standards
while importing and exporting its various products and services. The positive impact of political
factors is that, M&S has gained an effective business environment to run its business activities,
because local government of the UK always tries to develop existing business law. The negative
impact of these factors is that, this retail company have to give huge fund to government due to
higher rate of taxation.
Economic Factors:The company is highly affected by the economic factors as well. Basically,
when any country has well-developed economic condition, then existing businesses of that
country has automatically gained excellent opportunity to generate huge profit (Makarenkoand
Plastun,2017). In this situation the positive impact of the UK’s economic factors is, this country
has well-developed economic condition, in which local people of this place can simply affords
M&S’ products and services, and this retail company can easily generate huge revenue by selling
different products and services. On the other side, currently the UK’s economy faces some
slowdown just because of corona virus pandemic. In this situation, this economic factor has very
negatively affected to the sales ratio of M&S. Nowadays, this retail company able to boost its
sales, because there are many people avoid to visit in market, just because of the fear of Covid-
19 infection.

Social Factors:Social factors of the United Kingdom are very favourable to M&S. Social factor
mainly indicates the perception of different people, caste and region of people, communities
etc.In this situation, many of people take interest in buying products and services from this
company in the UK, because they like extra-ordinary levels of customer service of M&S. There
is positive impact of these social factors that, these factors influence company to work in the
social welfare. In this situation, the company always increases its brand image in market place by
fulfilling corporate social responsibilities in market place. There is negative impact of these
factors is that, there are customers have different perceptions in market place. In this situation,
when people made negative perception of company, then this retail company can’t grow in
market place. So that, upper management of business always need to work in social welfare to
affect customers’ perceptions in very positive manner. Basically, positive perception of
customers will definitely influence them to buy products and services through Marks and
Spencer.
Technological Factors:Technological factors mostly very positively affects to business
environment of the M&S. The positive impact of technological factors on M&S is that, with the
support of hi-fi technology, this company can simply achieve excellent performance and
productivity in market place. On the other side, these factors put negative impact also on
company (Quanand et.al., 2018). For example; adopting hi-fi technology is necessary to this
company for always maintaining its effectiveness within market, but adopt technology is very
expensive deal to this retail business, and that’s why this is negative impact of technological
factors.
Environment Factors:These factors also affect company in both ways positively and negatively.
Basically, currently globalisation is very badly affecting to the natural environment. so that this
environmental factor impacts to company for avoiding such activities within its workplace which
can negativelyimpact the natural environment. The positive impact of these factors is that,
environmental factors impacts to M&Sto work in thenatural environmentprotection. After
working in natural environment protection, company can simply put positive impression on the
society. The negative impact of these factors is that, understanding and following all rules and
regulations of environmental protection is very complicated task to company. There are lack of
natural resources also very negatively affecting to M&S in market place.

Legal Factors: Legal factors also highly affects to business operations of Marks and Spencer.
According to the UK’s business law, a businesshas highly required to adhere different legal and
ethical considerations in its workplace. The positive impact of these factors is that, by following
different laws and regulations, M&S can be simply legally formed. The negative impact of these
factors of is that, knowing and adhering all laws, standards and regulation is very complicated
task to this retail company, which consumes lots of precious time and resources of this business
as well.
Evaluation
These all macro business environment factors always affect M&S’ decision making and
objectives. On the basis of analysis, most external factors of the company’s business
environment are positively affecting its business operations. However, these factors put some
negative impact also on this retail venture. In this situation, the management should properly deal
with all negative impacts of these all macro environment or external factors.
LO4
P5 Strengths and weaknesses of company
Analysis of different strengths and weaknesses is also a very necessary task to the upper
management of M&S, because after knowing strengths and weaknesses, this company can
simply make appropriate business strategies to earn huge profit (Ivanov, Sypchenkoand
Webster,2017). There is SWOT analysis tool has been used below for identifying key strengths
and weaknesses of company.
SWOT Analysis of Marks and Spencer
SWOT analysis is very effective tool for different companies and businesses in the term
of knowing different key internal factors of business environment. In this situation, top-level
management of M&S also have to adopt and use this tool. SWOT term mainly refers four key
internal factors which has been discussed below;
Strength
 M&S is one of highly reputed retail brands in across the international retail sector.

 Currently this business is succeeded in highly expanding its business in across the world.
 This business is fully capable to provide different quality products and services to
customers in market place.
 On the other side, this business has an effective marketing team as well. With the support
of own effective marketing function, this venture is able to widely promote its brand in
the world.
 Top-level management within M&S has an effective skill of people management, and
these all are key strengths of company.
Weakness
 Top-level management at M&S is currently not able to take effective decisions within its
daily operations, so that this factor of company mostly affects its business operations in
negative manner (Albort-Morant and Ribeiro-Soriano, 2016).
 In this situation, the management have to develop its skill of decision-making to take
effective decisions.
 On the other side, this business has not perfectly handled the Covid-19 pandemic
situation, so that this year its revenue also will be decreased because of this reason.
 So that, the management have to develop its problem-solving skill to deal different
barriers, difficulties and problems of the business.
Opportunities
 Currently M&S has an effective opportunity to highly boost its brand in the international
retail sector by adopting and implementing social media marketing.
 Basically, social media marketing is highly trending in this modern business
environment, so that this will defiantly give opportunity to M&S to attract lots of people
in market.
Threat
 Currently there is very tough competition within the UK’s retail industry, in which this a
big threat to this business.

 Basically, Tesco, Sainsburys, Morrison etc, retail companies of the UK gives very tough
competition to M&S.
SWOT Analysis of Tesco
Strength:This is a most reputed retail brand of the UK and have the largest distribution channel
in this country’s retail industry.
Weakness:There are thousands of people currently works within the Tesco’s workplace, so
currently the management is not able to perfectly manage these all people or employees.
Opportunities:It has great opportunity to gain large customer base by expanding its business
operations in new countries (Ištvanićand et.al., 2017).
Threat:Existing high market competition threat and the threat of new entrants are main threats of
Tesco right now.
P6 Strengths and weaknesses interrelate with external macro factors
There are strengths and weaknesses of company completely interrelate with its different
external macro factors. This company is the leading retail company of the UK and also capable
to export its different products and services in many other countries, so that local government
supports to this company by charging low amount of duty in its exportation practices. Generally,
when M&S exports its products and services in foreign, then it can provide huge foreign
currency to the UK. On the other side,currently the UK’s economic system faces some
slowdown just because of Covid-19 pandemic. So that, this factor fully interrelates with
company’s weakness that, it is also not able to perfectly handle the situation of this pandemic.
M&S is fully capable to provide excellent product quality, so that this strength of
company has built positive perception in people within the society.The, the management has
poor decision-making skill, so this factor interrelates with technological factors of macro
environment, because having weak decision-making skill influence the management for taking
huge time to adopt any appropriate technological gadget or tool for company.Currently the
company has strength that, it has succeeded in building its effective brane image by fulfilling
CSR in the market. In this situation strength is interrelating with company’s legal macro factors,
because social factors of the UK say that, every business should always work in social welfare

(Gaspar and et.al., 2016). Nowadays M&S’ is able provide quality products and services to
customers, and this is one strength of this company, in which this strength completely interrelates
with environmental factors, because natural environment is the only source to company for
fulfilling its various needs relating raw-material.
According to these all findings, it can be state that Marks and Spencer’s strengths and
weaknesses are fully interrelating with is macro environment factors.
CONCLUSION
On the basis of above findings, it can be concluded that currently M&S is highly affected
through different macro and micro business environment factors. There are two key analytical
tools called PESTEL and SWOT has used above in this report to systematically understanding
the actual impact of different business environment factors on M&S. According to the current
market situations, the company has great opportunity to more expand its business operations its
new market segments to increase its market share within the international retail industry.

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