Business Environment and Organizational Analysis: Marks & Spencer

This report provides a comprehensive analysis of the business environment of Marks and Spencer (M&S), a prominent UK-based retail chain. It begins with an introduction to the concept of the business environment, highlighting internal and external factors influencing organizational success. The report then examines the interrelation between different organizational functions, such as marketing, research and development, HRM, and finance, and how these functions contribute to achieving M&S's objectives. A significant portion of the report is dedicated to analyzing the positive and negative impacts of macro-environmental factors, using the PESTLE model to assess political, economic, social, technological, legal, and environmental influences on M&S's operations. Furthermore, the report includes a detailed SWOT analysis, identifying M&S's strengths, weaknesses, opportunities, and threats, and explores the interrelation of these elements with external macro factors. The analysis provides insights into M&S's strategic position and challenges within the retail industry, including its competitive landscape and the impact of economic and social changes.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 & P2.......................................................................................................................................1
TASK 2............................................................................................................................................1
P3 Relationship between different organisational functions and its link with organisation
objectives ....................................................................................................................................1
TASK 3 ..........................................................................................................................................3
P4 Positive and negative impact of Macro environmental factors an organisation operational
activities......................................................................................................................................3
TASK 4............................................................................................................................................5
P5 Internal and External analysis of Marks and Spencer............................................................5
P6 Interrelation of Strength and weakness with external Macro factors....................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is refereed to area where business operations are conducted by
people; so that organisation goals and objectives are accomplished timely. Internal and external
factors are various constituents which directly or indirectly impact on system functionality.
Shareholders, employees, suppliers, partners and customers are various elements which plays
essential role in firm. Management require to conduct market survey to acknowledge conditions
of environment and make appropriate decisions (Bahand Fang, 2015). They even require to
conduct business operations effectively and deliver quality items and services in market. This
help them to grab attention of large number of customers, thereby enhance sales and profitability.
Present report is based on Marks and Spencer which is famous clothing and retail chain
established in UK. This firm is conducting business in different sectors so they provide different
variety of items to people. This assignment defines information about size, scope, nature and
objective which differ in each organisation and varies on basis of sector. Organisation functions
have interrelation with each other and have objectives which require to be accomplished by
firms. Along with this, management require to acknowledge positive and negative influence that
micro and macro environment have on system functionality.
TASK 1
P1 & P2
COVERED IN PPT.
TASK 2
P3 Relationship between different organisational functions and its link with organisation
objectives
There are aims and objectives formulated by business in order to carry out all
their business activities according to their set goals. The environment in which
activities of firms will be operating are different in relation with the set aims and
objectives. There should be focus on formulating organisation structures so that all
business operations will be executed according to the set plans and firms will
achieve efficiency and effectiveness in their operations. Marks and Spencer is a
public limited company and there are more then 85000 employees who are involved
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in their business operations (Georgescu and Popescul, 2015). Firms are running their
operations in different segments such as luxury items, food products, clothing etc
thus they have to plan all their operations according to their financial gains in order
to achieve effectiveness in their operations.
The organisation structure which is followed by Marks and Spencer is flat as
the employees who are involved in business activities are handling all the business
activities and all the issues which are faced by them are handled on their own.
These structures are most beneficial for firms as it results in motivating the
employees to work according to the set aims and objectives also this factor is vital
for the employees as they can put their views in the decision making process thus
company can easily focus on their weak points and this is the main factor which
result in enhancing their overall sales and profitability ratios. The firm is having
their operations at larger scale thus if they will involve employees in the decision
making process and this will result in enhancing their overall sales indexes (Sodeyfi,
2016).
There are various types of functions which are performed by the Marks and
Spencer and this include various functions and departments such as HRM,
Accounting, Sales, Finance and Human Resource Management etc. The employees
should effectively perform all their business operations and this is an important
factor which result in achieving all business goals and set objectives of firms. All
the business functions should be linked with the set aims and objectives in order to
achieve effectiveness in business operations. The components of organisational
structure which is followed by Marks and Spencer is evaluated below as:
Marketing Department: This is the most vital department of every
organisation as firms are able to sell their goods and services with the help of this
department at market place. This department is having the main responsibility in
order to analyse the current need and wants of customers in order to manufacture
their products according to customers needs and wants (Cascio, 2018). This
department is connected with all the other departments and accordingly they
perform their business operations. This results in gaining competitive advantages at
market places.
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Research and development: This unit involves activities that are carried out by
members to acknowledge taste and preference of public. With help of market
survey, management find out needs and wants of people. Along with this, it also
helps firm to anticipate competitors offerings; thereby deliver adequate items and
services in marketplace.
Human Resource Department: This department is having the major
responsibility in order to recruit skill and talented employees who will be
effectively performing all their business operations thus enhancing the overall sales
and profitability indexes of firms (Hair and et. al., 2015).
Production and Operations: This unit consists main responsibilities which
is to utilise resources and manufacture quality items in according to needs and
wants of people. Marks and Spencer which is retail chain require to deliver
appropriate products in marketplace to fulfil needs and wants of people.
Accounting and Finance: This department members duty is to keep record of
cash and take care that funds are utilised properly. It is necessary that expenses and
revenue are recorded appropriately so that administration is able to ascertain
availability of capital. Financial institutions such as banks and investors are
appropriate tools which helps company to take funds and operate business gloablly.
TASK 3
P4 Positive and negative impact of Macro environmental factors an organisation operational
activities
Macro environmental factor may affect firm performance and productivity. So that, it is a
management responsibility to develop strategies and plan for reduce impact of external
environment elements on organisation market position. Every factors have their own strength
and weaknesses that create impact on business operation activities in long period of time. In
Marks and Spencer, manager develop various kind of policies in order to achieve goals and
objectives in an effective manner in limited time period (Eling and Schaper, 2017). Management
of the company used PESTLE mode to analysis macro environmental factors are explain as
follows:
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Political factor – Government of United Kingdom has make policies and rule related to
production and delivery of services. It is very important for all firms to follow entire laws and
regulations related to their work which create impact on their performance as well as
productivity.
Positive effects – Through strong government regulation, firm used free trade and globalisation
advantage in order to sell their product at international level.
Negative effects – Government rule and regulation reduce management power with in
organisation. Administration has capabilities to develop polices and plan for their firm but due to
government rule and regulation they are not executing their right. Its create negative impact on
overall business activities (Pearson, 2017).
Economical factor – Various kind economical factors interest rate, inflation, exchange
rate, taxation policies, global trade and many more has create positive as well as negative impact
on organisation performance and profits. Management of enterprises develop strategies to
manage impact of nation economy on their work. Marks and Spencer has run their business
activities around all over the world and they consider economic environment of that country in
order to operate business activities in an effective ways. They also analysis all changes to
manage work effectively.
Positive effects - High growth and how interest rate helps organisation to gain higher profits and
low operational cost to run business effectively in limited time period.
Negative effects – High exchange rate and low growth create negative impact on business market
position as well as sales.
Social Factor – In a nation several kind of culture has established which create positive
as well as negative effect on firm. Some social factors like moral, attitude, preferences,
behaviour, perception and many more and directly affect firm culture and employees
performance (Lisowska and Stanisławski, 2015).
Positive effects – Through social element, company are able to analysis demand and needs of
particular social community and accordingly produce product. Its create positive impact on
business.
Negative effects – Different type of social culture environment has reduce sales and profits
because each one community has their own needs and wants.
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Technological Factor – Through latest technology firm are capabilities to manufacture
innovative product and services which enhance employees skills and profitability. It improve
quality of goods and whole operation process. Marks and Spencer has completing their work
with latest technology to provide high quality commodity to their potential clients in an effective
ways.
Positive effects – Through latest technology firm produce high quality commodities that helps to
gain competitive advantage at market place.
Negative effects –High cost are associated with latest technologies which create negative impact
on firm performance in industry (Kolk, 2016).
Legal Factor – Law and regulation has develop by government in order to control on all
companies activities. All firm are needed to follow these policies with in a work place.
Positive effects – Save employees right as well as firm work to contribute in growth of
economical development.
Negative effects – Some legal laws has create negative impact of organisation own rule and
policies.
Environmental Factor - External environment like social culture factors, natural
resources etc. has affect firm. So that, management of the company has develop rule and
regulation in order to manage these element with in work place.
Positive effects - Marks and Spencer analysis their surrounding environment to product good
effectively (Clarke Li. and Xu, 2016).
Negative effects - Management of Marks and Spencer reduce used of paper with in work place
and start using internet.
TASK 4
P5 Internal and External analysis of Marks and Spencer
SWOT and PESTEL analysis appropriate technique that are used by
administration of Marks and Spencer. This help management require to have
complete information about market conditions and system capabilities. Along this,
they are able to utilise resources efficiently and deliver adequate items and services
to people; thereby fulfil needs and wants of customers (Crane and Matten, 2016).
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Marks and Spencer SWOT analysis is described below ( SWOT Analysis of
Marks & Spencer,2017):
Strengths Weaknesses
 Firm consists efficiently designed
infrastructure and environment to retain
members and attract people.
 Marks and Spencer provide
different variety of products in
according to taste and preference
of people. Along with this,
management have framed USP of
their items to attract customers.
 Company consists strong market
image and reputation in
marketplace.
 Administration of firm has various
problems and difficulties that are
present in environment. Along with
this, as clothing business is declining
which impact on other sectors.
 Profit of Marks and Spencer has
decreased by 10%.
 Firm provide items at high rates as
compared to competitors.
 People are not satisfied by products of
Marks and Spencer as they are satisfied
by other brands.
Opportunities Threats
 Marks and Spencer has chances of
expanding business and operate
business online. With help of
internet, administration has
constructed company's websites
and portals to provide adequate
information to customers and
enhance their sales and
profitability.
 Company have effective transaction
with bank so they are able to take
additional funds from them whenever
require in according to expand business
 John Lewis, Peacook and Austin Reed
are various strong rival firms of Marks
and Spencer. Management require
to deliver unique items and
services to people. This help
company to grab attention of large
number of customers.
 Economy consist slow improvement as
firm is established in different nations
which impact on system functionality.
Interest and inflation rates are changing
fastly which impact on sales and
revenue.
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activities.
Marks and Spencer PESTEL analysis is discussed below:
FACTORS EXPLANATION
Political In Marks and Spencer, administration formulated plans and policies in
respect to government legislations in according to trade, tax and
consumer security. This benefit company to improve market image and
goodwill, by making system function legally.
Economical Marks and Spencer which has outlets in different nations require that
administration should acknowledge interest, exchange and inflation rate
of every country. If in particular nation inflation has occurred than
consumers have adequate income to purchase items on basis of their
needs and wants.
Social Marks and Spencer which is famous retail store provide different variety
of items and give options to customers to purchase products on basis of
their taste and preferences.
Technological In Marks and Spencer, administration implement modern tools and
techniques in system which help them to utilise resources efficiently.
Along with this, superiors deliver quality items and services in
marketplace which benefit firm to compete with rival organisations.
Internet helps manager to conduct business internationally and provide
fast services to customers.
Environmental Marks and Spencer firm uses natural resources efficiently; manager had
implemented latest tools and techniques in system. Along this, manager
uses internet to execute activities effectively and keep record of material
and manpower; thereby use paper adequately.
Legal Employer of Marks and Spencer provide equal opportunities to all
members and take care that employees are not discriminated on grounds
of age, gender, religion and background.
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P6 Interrelation of Strength and weakness with external Macro factors
Administration uses PESTEL analysis which help them to evaluate impact of macro
environment components have on business operations. Government, customers and competitors
are various forces which require to be taken care by management as they have influence on
system functionality. Superiors require to provide creative and unique items and services to grab
attention of people and fulfil needs and wants of customers (Hillson and Murray-Webster, 2017).
Thus, manager require to ascertain pros and cons that macro factors have on Marks and Spencer;
thereby position themselves higher than competitors are as follows:
Political Factors: Administration require to formulate policies and tactics in respect to
laws and legislations of government. They even require to take care that as business is operated
globally so they require to take care of interest and exchange rates of nation.
Strengths: Marks and Spencer is operating business in different nations which help
executive to generate adequate revenue. Along with this, some countries have
inflation which help firm to enhance sales as people have adequate funds.
Weakness: Management faces problems as they will not be able to make system
function effectively in environment where rates change timely.
Economical Factors: Exchange rate, inflation, GDP, tax and credit availability are
various market situations which influence on firm. Administration require to make system
function effectively and set adequate prices for items so that they are able to grab attention of
large number of people (MacGregor, Doyle and McEachern, 2015).
Strengths: Marks and Spencer sales and profitability are improved as company is
operating business globally.
Weakness: Exchange rate and interest rates affect business as executive export and
import items from one nation to another.
Social Factors: This component defines that organisation provide items and services to
fulfil needs and wants of people.
Strengths: Marks and Spencer deliver different variety of products which help
administration to increase customer base and provide options to people.
Weakness: Management require to make changes in tools and techniques and make
modification in items which affect on system and company's reputation (Trad, 2015).
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Technological Factors: This element defines that management require to
implement latest tools and techniques in system. This help superiors to utilise
material and make employees perform tasks effectively.
Strengths: In Marks and Spenser modern technologies such as internet helps
members to provide quality services to customers. Along with this, company
provide quick payment facility and position firm higher than competitors (Hamplová
and Provazníková, 2015).
Weakness: Administration require adequate funds to implement latest techniques in
system and even require to conduct training programs to enhance skills and
capabilities of members and make them competent in according to technology.
CONCLUSION
From the above business report it can be concluded that business environment plays an
important role in the organization as the resources which are available in the economy are
utilized in effectual and planned ways in order to achieve growth and success in their overall
business activities. Business environment is dynamic in nature and it changes with time thus
firms should also focus on making changes in plans and policies in order to achieve growth and
success in their overall business activities. There should be effective organizational structures
designed as they are helpful in order to order to carry out the plans and policies according to
desired business goals and objectives. The size and scope of every business is different thus there
should be focus of firms in order to develop plans and strategies by which they will achieve
growth and success in their overall business operations. PESTLE are the most important tools
used by firms in order to measure their overall effectiveness thus achieving effectiveness. Firms
should analyse all their strong and weak factors in order to carry out all the activities according
to set business goals and objectives.
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