Business and Business Environment Analysis Report: Marks & Spencer

This report provides a detailed analysis of the business environment of Marks & Spencer (M&S). Part 1 presents an essay discussing different types and purposes of organizations, with a focus on M&S's structure, size, and scope, and analyzes the links between organizational functions (HR, Finance, Marketing) and business objectives. Part 2 is a report applying PESTLE and SWOT analyses to M&S, examining internal and external factors, and assessing the interrelation of strengths, weaknesses, and macro-environmental factors. The report also includes critical evaluations of the impacts of micro and macro environmental factors on the company and concludes with a summary of findings. The report also discusses the purpose of M&S, its marketing strategies, and its financial performance. The structure and size of M&S are also analyzed, along with the roles of various departments such as marketing, finance, and human resources.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
Part 1: Essay.....................................................................................................................................2
INTRODUCTION..................................................................................................................2
a) [P1] Different types and Purposes of Organisation...........................................................2
b) [P2] P2 Size and Scope of Types of Organisation............................................................4
M1: Analysing the link between structure, size and scope of M&S with business objectives . .5
c) [P3] Relationship between different organisational functions and its link with organisation
objectives................................................................................................................................6
M2 Analysing advantages and disadvantages of relationship between organisational functions
and their impact on organisational structure..........................................................................7
D1 Critical analysis of different types of organisational structure and their interrelation ship
other functions........................................................................................................................8
Conclusion:.............................................................................................................................8
Part 2: Report...................................................................................................................................9
Section 1:................................................................................................................................9
[M3] Apply PESTLE to Marks & Spencer..........................................................................10
Section 2:..............................................................................................................................12
[P5] Internal and External analysis of M&S .......................................................................12
[M4] Applying SWOT analysis on Marks & Spencer.........................................................14
Section 3: [P6] Interrelation of Strength and weakness with external Macro factors.........14
D2 Critical evaluation of impacts of both micro and macro environment factors...............15
Conclusion: ..........................................................................................................................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business environment can be defined as combination o all internal as well as external factors that
are effecting business process. It has a deep impact on various aspects present in business like
employees , customers, management, supply and demand. This report will discuss about effect of
internal and external environment on Marks &Spencer. Its interrelations of strengths and
weaknesses with external factors are also covered.
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Part 1: Essay
INTRODUCTION
In this section, an essay has been discussed based on different purposes of Marks & Spencer.
This essay will highlight size and scope of M&S. Additionally, it will also include detailed
explanation of relationship between the organisational functions including HR, Finance and
Marketing production along with its structure and objectives.
a) [P1] Different types and Purposes of Organisation
In today's era, companies have become an important part of daily life of people because it
helps country in giving employment to people and this will bring in more money in economy
which will lead to growth of country. There are various types of organisation structures present
in business environment. A company decides its organisational structure on the basis of activities
conducted in organisation. An organisation can be broadly classified as:-
 For Profit organisation – Their main aim is to earn profit and gain maximum market
share.
 Not-for-Profit organisation – Here, main aim is to work for benefit of society and not
earning profit. Arrangement of money for conducting activities is done through donations
(Bar-Isaac and Shapiro, 2013).
Other main types of organisation are:-
PRIVATE SECTOR ORGANISATION
These type of organisation are controlled by individuals or group of individuals and not by state.
Its main motive is to earn profit and gain maximum share in market. Various types of business
that are operated in business organization are:-
 Sole traders:- Here, only one individual is doing business. It is very east to from and
dissolve as well (Becker, Kugeler and Rosemann, 2013). A sole trader has to make all
decisions itself only having limited liability. It has a low cost start up and low operational
cost as well and the owner need not to pay ant corporate income tax and any profit earned
by them will be included under individual income tax returns.
 Partnership- here, minimum two members are required to start a partnership . It can be as
mall as having 2 members and as large as having dozens of members.
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 Company- it is the most common and dominant form of business organisation in UK. It is
considered as a legal entity and it is owned by shareholders who is elected by board.
Company which is chosen here is Marks and Spencer. It is a major British multinational retailer
which is headquartered in London. It has done specialization in selling of clothes, home products
and luxury food products. It was founded in 1884 by Michael Marks and Thomas Spencer. It was
the first company of Britain to make a pre tax profit of over 1 billion euros.
Purpose of Marks and Spencer are:-
 It aims to attract, motivate and retain high potential candidates which will help them 8in
delivering good performance in market. They want to regain their leadership in clothing and speciality food.
PUBLIC SECTOR ORGANISATIONS
It is that type of organisation where majority share is held by government. Its membership is
with general public. These type of organisations are under greater control because various laws
of government are being implemented by government on them. Anyone can own stock of these
companies and these are not traded in open market or through an IPO. Here, liability of members
is considered as limited which means that if company will face any loss, then shareholders are
bound to pay only that much money which they have paid to acquire shares.
Company which is selected here is BBC. It is a British public service broadcaster which is
headquartered in London. It is considered as world's oldest national broadcasting company. Its
work is funded by an annual television license fee which is being charged to all British
household, companies and organisations.
Purpose :-
11 To provide impartial news and information to help people understand and engage with
the world around them.11 To reflect UK, its culture and values to the world
VOLUNTARY ORGANISATION
It is the type of organisation which consists of volunteers who are in a group, having entered into
an agreement to form a body(organisation) to accomplish an objective. Its examples are like
trade unions, learning societies etc. these organisations are often created for providing benefit to
public and NPO' s. They support organisations in case of conflicts and activities that are not in
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favour of employees. It basically works for socio-economic development and helps in promoting
various types of culture and arts in country (Björklund, 2011).
Company which is chosen here is Oxfam ltd. It is an international charitable organisation. Itb
was founded in year 1942 in England. It is one of the several local committees that were formed
in support of the National Famine Relief Committee.
Purpose:
It is an NGO . So, their main aim was to persuade the British government to allow food relief
through the allied blockade for the starving citizens of occupied Greece.
Purpose of Business Organisation
Main purpose of any organisation is to serve customers well and satisfy them. They also aim to
make more money and make a strong place in market so that no new entry can create a problem.
b) [P2] P2 Size and Scope of Types of Organisation
Business can be also be classified on the basis of their size and structures. They differ in
size, activities but functions performed in them are similar. Some organisations are very small
but some are not (Bocken and et. al., 2014). A company can have min 2 and max unlimited
members. size and scope of different types of organisations are:-
1. Private sector Organisation:- Marks & Spencer is a big retail company working in private
sector. There are minimum and maximum no. of members fixed to open a private
company. Size of Private company can be classified as :-
 Minimum Members- 2
 Maximum Members- 50.
The size of M&S can be classified in following ways:-
 It has 959 stores in UK and 1433 stores all around world.
 In 2013, M&S saw a growth of 11% in market share of clothing division.
 It employees more than 82,904 employees all over world.
Currently, this company is on growth stage as it is opening new stores in other countries. After
sometime this company will definitely become one of the best retail company in UK.
2. Public sector Organisation:- The Size of public company is specified as-
 Minimum Members- 7
 Maximum members- Unlimited
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BBC(British Broadcasting council) is a UK based British public service broadcaster. It is
world's oldest broadcasting organisation and the largest broadcaster also in terms of employees .
It employees more than 20,916 employees all over (Boons and Lüdeke-Freund, 2013). Since
1922, it is continuously growing in its stage and in is corporate structure, it is interdependent
from direct government intervention. Its organisation structure is completely formal which
consists of an executive committee who are responsible for day to operations of broadcaster.
They also have senior managers and operational managers who look over all this.
3. Voluntary Organisation:- In this structure, money is collected with the help of various
charities, events , funding or through investors. Here, minimum and maximum limit is
not prescribed by Govt. Oxfam is working as a voluntary association in UK. They collect
funds by giving products and services to society. They receive 4.1$ from UK government
for functioning of Oxfam. They also receive funds from various big business houses an
private companies.
Scope of Oxfam - Their focus on issues related to relief of food to relief famine and also
developing strategies to provide tools to enable people to become self supporting and alos
opening market for international trade. Their main focus is on Development work, Humanitarian
work in society.
No. of organisations associated with Oxfam are- 20 organisations which are operating in more
than 90 countries.
M1: Analysing the link between structure, size and scope of M&S with business objectives
The fundamental business objective of Marks & Spencer is to provide good quality
products to its customers and that too in reasonable price. While talking about scope of
organisation, the staff and employer present in M&S are well trained and therefore are delivering
good customer services . Size and structure of Marks & Spencer helps in maintaining business
objectives and achieving goals of organisation. For example, large workforce present in various
retail stores are capable of solving all issues of customers and delivering them products as per
their wants. A proper hierarchy is followed by them which helps them in conducting functions
effectively.
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c) [P3] Relationship between different organisational functions and its link with
organisation objectives
It is also well known that if a company is having structure then they will
perform well in the business environment. So ,success of company is not only
dependent on good sales but also on staff productivity as well. There are various
types of functions that are to be performed by the employees like human resource,
financing, marketing and sales etc. and it is very much required that they these
operations perform effectively because then only company will get good results.
Marks &Spencer is a big retail house who provides variety of products to its
customers like it has its own clothing line, luxury products , food products , home
products and many more. Company is performing really well in market as it is also
considered as one of the top most selling retail brand in UK ( De Jonge, 2011). Its
financial performance was also good as they made a net profit £115.7 million .
The role played by various departments of Marks and Spencer in business
environment are :-
MARKETING : This is the department who prepares effective business plans
and strategies for producing various goods and services and also for promoting them
in market. All the strategies which are prepared by them are implied in whole
organisation and and work should be dome according to them only. Marks
&Spencer's marketing departments make plans about how will they offer products to
customers or which product will be launched in which country and some strategies
to deal with customers.
FINANCE: This function deals with accounting of capita, preparing budgets
for company or ant other finance related function. In its organisational structure, the
main players are its accounts manager and finance manager. Funds are collected and
allocated by finance manager and other regular day to day operations are done by
accounting department (Cavusgil and et. al. 2014). This is the most important function
performed in a company. Marks & Spencer also performs this function where they
collect and manages capital assets for companies and try to maintain of balance of
money in organisation.
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HUMAN RESOURCE: It is a very essential function performed by
management which performs work of hiring, managing, recruiting, training
employees in organisation (De Jonge, 2011). It follows its own designed organisation
structure and authorities and responsibilities are also properly delegated here. Few
important people in this functional department are like HR manager, Recruiting
officer, etc. Human Resource function is also an important part of Marks &
Spencer because if employees will not do their job properly then how will the sales
increase and performance of company will go down in market
Administration : This department is having the responsibility of managing
the work of the company and running the business successfully as well. The kind of
work that is included here is protecting important documents, handling problems of
clients as well as employees. The main benefit which Marks &Spencer get from this
function is that employees get satisfied because they are getting good attention ad
their problem are also getting solved by company. So, it motivates them to become
a loyal customer of company and it indirectly impact company in a good way
because it will accomplish its goals and objective.
The interrelationship between various functions are as follows:-
Department Relationship
Marketing Marketing department is having relationship with all the other
departments of company as every activity is designed as well as
structured here itself. They also can not make any activity without
consulting operational department and HR department also take
help of marketing department for hiring employees.
Finance It is also related with every other departments like to take reviews
of customer they take help of marketing department and human
resource department helps them by hiring correct employees who
are skilled and effective.
Human Resource This is related to every department as they recruit employees for the
whole company and then frame policies also for them which helps
on their functioning.
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Administration Each and every department is connected with administrative
department because they are the ones who is supplying resources to
each and every department and they also try to improve the
efficiency between the departments so that work can be carried on
in an effective manner. They are also held responsible for handling
every important document of the company which can be used by
them later on.
M2 Analysing advantages and disadvantages of relationship between
organisational functions and their impact on organisational structure
The advantages of relationship between organisational function s includes
opportunities for staff to move to other functional areas. It also helps staff in
enhancing their knowledge and expertise, as they work in different departments and
performs various functions . The disadvantage in this regard is that the functional
areas often become challenging to manage due to huge size and structures. It can
also create distraction for employees in performing their functions. The
complexities present in different organisational structure include several factors
such as investors and partners, project size etc. Marks & Spencer is a private
limited retail company, which offers the shares of its business to the general public
and it has limited liabilities. The structure of the business indeed facilitates the
organisation in setting up organisational functions. The legal status and size and
scope of the business depend on the business’s structure.
D1 Critical analysis of different types of organisational structure and their
interrelation ship other functions
According to De Jonge, 2011,there are various functions that are carried out in
an organisation which help the company in fulfilling its goals and objectives. It is
very helpful as they bring diversity in the company and each and every activity is
being performed in an effective manner. Whether it is the human resource
department or the finance department, all are interrelated.
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As per the views of Drucker, 2017 , Marks and Spencer is having a simple
organisational structure in which all the functions are being performed very
effectively and in coordination as well. This is actually the main reason of their
success.
Conclusion:
This particular essay has discussed the background of Marks & Spencer along with
its size, scope and operations. Moreover, the organisational functions and its
relationship with organisation's structure and objectives have also been analysed in
detail.
Part 2: Report
Introduction:
This report will include the positive and negative impact of macro environment on
the business. These factors are considered as an important aspects of business, as it
facilitates the organisation to gain competitive advantage in an efficient manner. It
will also discuss the internal and external analysis of Marks & Spencer.
Section 1:
[P4] Positive and negative impact of Macro environment on Business operations
The impact of Macro Environment on various functions that are performed in
management are huge. All the factors effect the working of company very much.
The impact can be in a good way also and in bad way also. It is very important to
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understand its impact and manage it before it harms the organisation ( Laumer,
Eckhardt and Weitzel, 2010). To study different impacts of micro environment factors
on economy, all the factors have to be studied:-
 POLITICAL:- This type of environment covers the political i.e. government actions
which covers all decisions that are taken by them have an impact on business operations.
These actions can be on local, national or international level. In UK, government
introduced new taxation laws for betterment of economy. They believed that it will
increase revenue but this rule had negative impact on UK economy because these taxes
were implied on Marks and Spencer but they received all these taxes from customers by
increasing prices of products. This did not go well with customers and sale of products
decreased as so as the purchasing capacity of customers.
 ECONOMICAL:- If a country's economy is not going well, there it is situation where
changes must be introduced in policies and procedures of companies. UK's
economic condition was not good few times back so Marks and Spencer working there
had to bring in few changes in their policies so that work which is going on should be
continued without any problem . They faced unemployment also because of which
customers are not in a position to purchase goods from market.
 SOCIAL:- Societal factors also impacts activities that are conducted in Marks &
Spencer. These factors include the taste and preferences, likes and dislikes, choices of
customers (Osterwalder and Pigneur, 2010). This information is also very important for
company so that they can produce goods as per the neds and wishes of customers.
 TECHNOLOGICAL:- More Technologies should be introduced by M&S so that work
should be conducted easily. All those techniques which can help management in
delivering better results than earlier should be implemented as fast as possible because it
will help in managing activities inside and outside business environment.
 LEGAL:- There are various types of laws and rules that are implied by UK government
on M&S. These laws can be for employees or company . Whatever may be the case, it
should be implemented by companies whether they want to implement it or not (Adeoye
and Elegunde, 2012).
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