Analysis of the Business and Business Environment for Marks & Spencer

This report provides a comprehensive analysis of the business environment, focusing on Marks & Spencer (M&S). It begins by examining different types of organizations, their purposes, legal structures, and the size and scope of public, private, and voluntary sectors. The report then delves into the relationship between various organizational functions and their alignment with business objectives, including human resources, production, and finance. It also explores the positive and negative impacts of the macro environment on M&S, considering political, economic, social, and technological factors. Furthermore, a SWOT analysis is conducted to identify the company's strengths, weaknesses, and their connection to external macro factors, concluding with a summary of the findings and relevant references.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Different purposes & types of organisations and their legal structure...................................3
P2 Size and scope of different types of organisations.................................................................6
TASK 2............................................................................................................................................8
P3 Relationship between different functions of an organisation and its link with objectives....8
P4 Positive and negative impact of macro environment on business operations......................11
TASK 4..........................................................................................................................................13
P5 External and internal analysis of organisation to determine strengths & weaknesses.........13
P6 Interlink of strengths and weaknesses with external macro factors.....................................14
CONCLUSION..............................................................................................................................15
REFERENCES .............................................................................................................................17

INTRODUCTION
Business environment consist of all the external and internal forces that influence
operations and activities of an organisation. It is a collection of all entities, individuals and other
components which may or may not be in control of firm. Various factors are involved in business
surroundings such as customers, management, supply & demand, employees and business
regulations (Asif, Garvare and Ahmad, 2011). Consideration of all these forces helps businesses
in meeting challenges successfully and provides directions for growth. In the present report,
chosen organisation is Marks & Spencer which is a renowned multinational retailer of United
Kingdom. This assignment discusses about types, purposes, size, scope and legal structure of
different organisation. Relationship of different functions and their link with business objectives
as well as positive & negative impact of macro environment is defined. Apart from this, SWOT
is conducted to determine strengths and weaknesses & their link with external macro factors is
discussed in this project.
TASK 1
P1 Different purposes & types of organisations and their legal structure
There are different kinds of organization that exist in market place such as public, voluntary and
private that have their own distinct legal structure and purpose. Each and every organization is
bound to follow these structure and act accordingly. There are some businesses who run with an
aim of earning profits while others run with the purpose of providing benefit to society and its
members.
Public:
Organisation under this sector are mainly government owned i.e. control, run and
managed by government body of respective country. They provide services to everyone and do
not make profit out of it (Bhaduri and Ha-Brookshire, 2011). These are usually funded by
government which is collected through fees and taxes pays by all citizens. For example: National
Health Care Services
Company Overview: It is a publically funded national health care system of England. It
provide healthcare services to all English residents among which most of them are mainly free. It
is funded by general taxation system and administer by Health Department.
Purpose: The main purpose of NHS is to improve the well-being and health of people of
all communities, patients and its staff via innovation, professionalism and quality in care.

Legal Structure:
Firms under this sector are bound to carry out their business practices and operation as
per the rules and regulation formulated by Government Authority of respective country
(Chetwood and et. al, 2014). Structure of public sector are characterize below:
Private:
Such organizations are not controlled and managed by government rather these are
mainly handled by private players only. They generate profits out of sales they make. Private
companies generate revenue by competing against their rivals by ensuring that their goods and
services create value for their target customer (Crane and Matten, 2013). This further assist them
in attracting more customers which means profitability ratio of such companies automatically
increases. For example: Marks and Spencer
Company Overview: M&S is a leading British multinational retailer, located in the City
of Westminster. It mainly deals in offering home products, clothes and luxury food products. The
company practice their business operation in more than 40 countries with over 900 stores.
Purpose: Their main purpose is to generate higher sales lead and increase profitability
ratio by delivering high quality products at economical cost.

Legal Structure:
Its legal structure include the following:
 Sole Trader
 Partnership
 Limited Companies (Gharajedaghi, 2011).
 Co-operatives
Voluntary:
These are also known as community sector as they laid stress on helping and benefiting
the local residents without thinking of generating higher profits (Kian Chong, Shafaghi and
Leing Tan, 2011) . They usually provide services with an aim of providing benefit to all citizen
without having any personal interest in it. Some people prefer to work as a volunteer with some
charities that give them no money in return. The money that volunteers raise goes directly
towards their selected charity organization. For example: Maytree

Company Overview: Maytree is a charitable based organization that help people in
suicidal crisis to restore hope and to re-engage with life. Their services run 24 hours a day. They
have vast team of volunteers who nearly spend 77 hours with each guest so to provide them best
services (Li, and et. al., 2011).
Purpose: Their main promote is to improve systematic solution to eradicate poverty and
strengthening civic communities. Our key areas include housing, strong cities, poverty and
human rights and renewing our social contracts.
P2 Size and scope of different types of organisations
Size and Scope of each type of organization varies from one another depending upon its
nature and business activities. Discussed below are the size and scope of public, private and
voluntary enterprise:-
Public: Vision: “To deliver better care, better value and better health to all legal English
Residents” Mission: “To render quality of care to every person on daily basis” Size: NHS was established within various countries of UK through different legislation.
Presently, there are four health services running in United Kingdom including NHS
Wales, NHS England, HSC Northern Ireland and NHS Scotland.
 Scope: Plenty of services related with health and medical care is given by NHS to all UK
residents with an aim of making country a better place to live such as children's
physiotherapy, cardiac rehabilitation, diabetes services, paediatric, autism assessment etc.
Private: Vision: “To become sustainably leading international and domestic retailer with the
primary interest of earning high profits and revenues”. Mission: “To provide high quality products at economical cost in the areas of food,
cloths, financial services and home”. Size: Presently, the company is operating in more than 40 countries with over 900 stores
among which 600 stores are located in United Kingdom and remaining 300 are situated
all across the globe (López-Gamero, Molina-Azorín and Claver-Cortés, 2011). Scope: Mark and Spencer specialize in offering clothes, luxury food products and home
products. Among all its stores in UK, majority of them only sells food products which

implies that company is having high market and demand for its food items (Meiners,
Ringleb and Edwards, 2014).
Voluntary: Vision: “To safeguard the social and economic rights of every individual”. Mission: “To advance action that leads to promote the interest and welfare of society and
its members”. Size: It is a autonomous charitable trust who runs with an aim of eradicating poverty,
promote educational rights and human rights. Their services are available 24*7 with an
aim of providing services to people when they needed (Sekaran and Bougie, 2016). Scope: It was founded in the year of 1982 with an objective of creating solution for
removing poverty and provide guidance to individual who tries to attempt suicide.
Stakeholder Analysis:
The framework is used by organization so as to evaluate various key stakeholders
associated with business. With the help of this, needs and contribution of stakeholder can be
determined in an appropriate manner.
 High power: Fascinated people.
 High power: Less fascinated people
 Low power: Fascinated people
 Low power: Less fascinated people

TASK 2
P3 Relationship between different functions of an organisation and its link with objectives
In an organisation, various functions are performed which assists in attaining objectives
of company (Türetken and et. al., 2011, June). For meeting requirements of customers and
providing high quality goods to them, Marks & Spencer performs several functions that helps in
attaining its predetermined business objectives. Such functions and their link with objectives are
defined below:
Human resource department: This department of firm performs role of recruiting,
selecting and hiring skilled candidates for right position. Different activities are associated with
this department such as performance appraisal, employee compensation, salary and wages,
training & development etc. These all activities assists human resource manager of Marks &
Spencer in increasing employee motivation and attaining set objective and targets of company.
Production & Operations department: In this function, raw material is converted into
final goods. Operations manager apply various techniques or approaches that assists in

controlling production cost and ensures optimum use of resources in an effective and efficient
manner. In Marks & Spencer, this department assists in manufacturing clothes of high quality in
order to meet customer's needs. It helps firm in achieving its set targets and objectives in an
effective way.
Finance department: This function of an organisation plays crucial role in running its
activities and operations smoothly and effectively (Vaiman, Sigurjonsson and Davidsson, 2011).
Financial manager of Marks & Spencer has the responsibility to assign budget as well as allocate
proper funds to all departments. They are also responsible to maintaining appropriate amount of
finance within firm. All this assists in performing activities and operations on time which in turn
results in attaining objectives of company.
Types of organisational structure:
Divisional: In this, functions are grouped into division which in turn helps in bringing
flexibility in operations of company. Geography or product line of firm is supported by needed
functions and resources that are included in particular division.

Functional: On the basis of specialized areas, functions of firm are divided into small
groups. This structure is commonly used in organisations as it assists in bringing efficiency in
operations because shared skills are grouped by function (Wack, 2017).
Matrix: In this structure, people are grouped simultaneously by 2 distinct operational
perspectives. It is complex structure and used in large organisations which operates in several
countries. In M&S, matrix structure is used as it is inherently versatile that makes it beneficial
for firm (Yu and Ramanathan, 2013).

P4 Positive and negative impact of macro environment on business operations
Marks & Spencer is a well known British multinational retailer of United Kingdom
which operates its business activities all over the world. There are various factors exist in market
place which affects functioning of an organisation in either positive or negative way. These
involves political, legal, technological, environmental, economical and social forces which are
defined below:
Political:
This factor involves trade restrictions, political stability, labor law, trade policy and
tariffs. All these forces are made and changed by government and influence operations of
business negatively or positively (Zsambok and Klein, 2014).
Positive: The company has been favoured by European Commission's free trade
agreement that made imports of products much easier and led to decline in sourcing cost.
Negative: In international market, higher cost structure becomes disadvantage for
company due to which it suffered losses of market share when they entering new market. Lack of
clarity regarding energy efficiency scheme influence initiatives of M&S negatively.
Economical:

Foreign exchange rates, inflation rate, economic growth pattern, interest rates etc. are the
variables that are included in economic factors. These elements are determinants of
performance of economy and influence firm directly.
Positive: During financial crisis, M&S emphasize on better consumer satisfaction by
providing them higher quality products. It assists them in increasing confidence of customers and
maintaining their market shares.
Negative: Falling prices of oil affects performance of their UAE and Middle Eastern
countries store in negative manner (Bhaduri and Ha-Brookshire, 2011) .
Social:
It involves cultural aspects, buying behaviour of consumers, age distribution etc. which
affects business and its marketing strategies. Generation shift and changing values in population
are the factors that affects business of M&S.
Positive: In modern scenario eating healthy food is the first preference of consumers,
M&S have introduced new range of organic and natural products.
Negative: Frequent changes in likes and dislikes of customers makes is difficult for
company to alter their product line constantly.
Technological:
Evolution in technology on constant basis has helped M&S to efficiently and effectively
in competitive market.
Positive: Strong online and social media presence of M&S helps firm to aware
consumers about their brand and assists in maintaining good position in market.
Negative: High cost is involved in embedding new technology in business operations and
practices.
Legal:
It involves all the laws and regulations made by legal authority of respective country.
Non-compliance of those affects business functioning in negative manner (Asif, Garvare and
Ahmad, 2011).
Positive: Application of some laws such as health and safety, environmental, anti
discrimination, consumer rights etc. affects functioning of firm in positive manner.
Negative: Following decision of UK to exit EU leads the company to face various legal
issues due to which firm loose its access to common market.

Environmental:
In current scenario, people of society as well as business enterprises are concerned about
environment. In this regard, M&S formulate various strategies and plans in order to promote
environmental awareness among public.
Positive: Establishment of “Green Policy” helps firm in becoming carbon neutral and
assists in sustainable sourcing, ethical trading, zero waste to landfill and health promoting
business (Kian Chong, Shafaghi and Leing Tan, 2011).
Negative: Non compliance of environmental policy results in bad image of company in
eyes of people of society.
TASK 4
P5 External and internal analysis of organisation to determine strengths & weaknesses
SWOT ANALYSIS:
This framework represents the internal business in terms of strength and weakness of a
company, threats and opportunities of the external business. Basically this analysis is done by
M&S with an aim of examine current situation and implement strategies in order to gain high
competitive edge in the market place.
Strength: High Recognition of brand: The company has gained popularity for
delivering high quality products. Their brand value is high as the consumer
who go to high street for shopping must visit M&S as they can finish their
whole shopping under one roof only.
Large number of outlets and store: In UK high street, M&S is the giant
with over 900 stores all across the globe within which 600 is in UK and
remaining 300 spread worldwide. Sales of Marks and Spencer is increasing
tremendously because of their wide range of quality products available at
reasonable cost
Weakness: Bad publicity as non-trendy stores: One of the main drawback of M&S is
non-trendy and out-fashioned. Even though the company is offering wide
range of products but people do have wrong assumption about it like they
only offer clothes for aged people not for young people or teenagers. Not
only this, even their management failed to attract customers of all age group.

As a result, it adversely affects its sales and profitability ratio.
Manual working increases the cost: Another backdrop that M&S has in
terms of following old technology instead of practising high end technology
that leads to save their overall cost, time and energy. Now a days every
organization prefer to become effective and efficient by following latest and
advance technology. This is where M&S lacks.
Opportunities: Internet technology: Over the past few years, internet technology has
developed fast which mainly provides an opportunity to M&S in terms of
promoting its product on vast level such as using social networking sites like
facebook, instagram, you-tube. Now a days buying online is becoming the
another trend. With advance technology, M&S can launch its own mobile
application and website that allow customers to buy their product either
through their mobile application or via its own website.
Healthy Eating: Today, eating and living a healthy life is the main
preference of almost all people. Taking the benefit of this, the company has
decided to launch low fat or organic food.
Threats: Increased Competition: The major of threat of M&S is the availability of
strong competitors in the market place. For instance: In its food market they
are facing tough competition from other giant firms such as TESCO, ASDA,
SAINSBURY. In its cloth market, their key competitors include NEXT,
TOPSHOP, GAP etc.
P6 Interlink of strengths and weaknesses with external macro factors
Weaknesses and Strengths of a business enterprise is highly interrelated with macro
forces. So, managers of M&S are require to determine this interlink in order to exploit
opportunities & gaining competitive advantage in marketplace (Li and et. al., 2011).
Political:
All regulations and laws are needed to implement by firm so that effective teams can be
developed and enables to perform operations in better manner.

Strength: By considering all political factors of respective country, firm is able to run its
operations in smooth and better manner.
Weaknesses: Non-compliance of political variables hampers functioning of Marks &
Spencer as laws of each country is different.
Economic:
Business functioning is highly influenced by economic variables such as interest rates,
deflation, inflation, exchange rates etc.
Strengths: If economy of respective country is strong then it assists in its development
and long term growth as well as also supports in generating more profits.
Weaknesses: Product demand in market is highly influenced during inflation as
purchasing power of customers becomes low (Meiners, Ringleb and Edwards, 2014).
Social:
It involves cultural aspects of people of society as well as age distribution. Firms are
require to fulfil needs of society so that their living standard can be enhanced.
Strength: Marks & Spencer is engaged in various social activities which facilitates in
building its strong image in society.
Weaknesses: Production of those products which are of low quality declines sales of
goods as well as revenues of firm.
Technological:
Firm is require to keep updating themselves about any change that takes place in
technology. It helps them in getting high competitive edge in market.
Strength: Use of latest technology in manufacturing of goods assists in satisfying
customers in more better way and attaining competitive advantage in market.
Weakness: Use of traditional processes of production may results in declining growth of
company (Wilson, 2015).
CONCLUSION
According to the above mentioned report it can be concluded for smooth running of any
business it is important to analyse both external and internal factors that affect overall operation
and activities of company directly or indirectly. Different tools are such as PESTLE, SWOT with
the help of which impact of these forces on business can be determined easily and also

relationship between external and internal forces can also be figured out in a proper manner.
Further different type of organizations has also been discussed such as public, private and
voluntary has also been discussed along with its distinctive size, scope, purpose and legal
structure. Lastly it also ascertained how different departments of a company such as human
resource, marketing assist in achieving organizational goals and objectives in a cost-effective and
timely manner.

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