Report: Business Environment Analysis of Marks and Spencer (2024)

This report provides a detailed analysis of the business environment of Marks and Spencer, a major retailer specializing in clothing, home, and food products. The report begins with an introduction to the business environment and then delves into the micro and macro environmental factors affecting Marks and Spencer. It includes a PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors. The report then presents a SWOT analysis to identify the company's strengths, weaknesses, opportunities, and threats. Furthermore, the report includes a TOWS analysis and explores the interrelation between strengths and weaknesses with external macro factors. The analysis also considers the impact of the COVID-19 pandemic on the company. The report uses both internal and external analyses to identify strengths and weaknesses, providing a comprehensive overview of Marks and Spencer's business operations and challenges.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P4. Positive and Negative impacts micro environment has upon business operations ...............3
M3 Pestle analysis........................................................................................................................4
P5. Internal and external analysis to identify strengths and weaknesses. ...................................5
M4 TOWS analysis and its impacts on decision-making ..........................................................6
P6. Strengths and Weaknesses interrelating with the external macro factors..............................7
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment is defined as environment which consist of business operations
within the organization (Hamilton and Webster, 2018). Marks and Spencer is a major bankwhich
specializes in selling clothing, home and food products. The report further explain the SWOT
and PESTLE analysis of the organization and will explain the interrelation between weakness
and strength with macro factors.
MAIN BODY
P4. Positive and Negative impacts of micro environment on business operations
PESTEL model is practical investigation of macro environment. The model is elaborated
in the reference for Marks and Spencer's
Political Factors — Marks and Spencer's is a brand which is widespread in various countries.
The company has had the benefits of EC's trade agreements. The company apply the benefits of
large European market where merchandise travel freely across different countries (Perera, 2017).
Pricing rules and regulations are to be followed while making the product available to different
countries. Marks and Spencer works closely with government. Political stability and taxes are
two main important aspects of organizations.
Economic Factors — UK is one of the largest economies around the globe. Marks and
Spencer's has motive of providing quality services and products to customers. The company
faced crises and due to that they have jon cuts by 2% in their staff. Recession struck the
company's power to give discounts on the products and services provide to customers. Yet,
Monetary and fiscal policies of UK are properly managed as the government has strong
finances.

Social Factors — Customers are very active on social factors and it is important for the
organization to follow all the trends and changes which are impacting in the market. Marks and
Spencer's have made different segments of choices for different demographic factors in the
product and service they offer to their audience. Both these factors became a strong point for the
company which further enabled them to expand and grow. Company took opportunity for paying
through credit card system which resulted in increase of sales of organization.
Technological Factors — Marks and Spencer has announced Practical application
Transformation Programme sanctioning the organisation to become first business concern and
deliver a diversified customer experience (Shtal, Buriak, Ukubassova and et.al., 2018). This
programme is designed to make an progressive and commercial engineering that will help
company to grow. Thus, technology plays important role for Marks and Spencer to develop ways
and find new resources.
Legal Factors — Marks and Spencer keeps the whole organization updates about the current
laws and legislations and for this the company conducts training sessions every year to keep
themselves updated. The company is focused in following all the legal factors so that their work
can be done in better process and follows all the health and safety issues of their employee who
are working fro them.
Environmental Factors — The company has established their own Green Policy which they
now refer to as“Plan A”. This initiative is adopted to have positive impact on well-being and
communities. Sustainable practices for procurement are being experienced for processing of
cotton and for this they work with Better Cotton Initiative (BCI). The company has reduced
disparity in society by bringing powerful changes in company. Thus, organization has been
concerned over environment and its effects.
M3 Pestle analysis
Political factor- the utilization of the big European market is helping the organization in making
a freely travels of the product across countries.
Economical Factor- Marks and Spencer has been affected by crises to make job cuts of 2% of
their workers, also Financial condition struck the company's ability to give leverage on the
products and services supply to customers.

Social Factor- Organization is finding new ways of promoting things and utilising the social
trend to increase better results and performance. Marks and Spencer took opportunity for paying
by credit card system which resulted in enhance of sales of firm.
Technological Factors - Firm uses the Technology Transformation Programme to develop ways
and find new resources.
Legal Factors - Firm is not following Health and Safety Work Act, 1974 as legal charges were
made on the firm affecting its brand image.
Environmental Factor- Marks and Spencer established their own Green Policy organization has
been concerned over environment and its effects.
P5. Internal and external analysis to identify strengths and weaknesses.
To identify Weaknesses and strengths of Marks and Spencer, SWOT analysis is
considered which is explained as -
Strength — Marks and Spencer has been in the market since longer time. It is one of the most
recognized brand in all over the world which has made the brand image of the company reach
heights by providing quality products and services to the consumers (Gürel and Tat, 2017). As it
is a multinational company, it operates both on online and offline basis which has helped the
company to expand its business making it its strength. Marks and Spencer produces variety of
products to its customers by satisfying their needs and wants. Thus, these are key strengths of
Marks and Spencer.
Weakness — According to a report, sale in some Marks and Spencer stores was declining by the
end of 2019 which is because of unstructured supply chain and non-availability of products.
There is perception among public that the company does not offer clothes to young and
teenagers. This has created a downfall of reputation for the company. There is high cost due to
manual processes. Main drawback of the company is that it relies most on the manual operations.
It becomes costly and consumes time. Thus, these weaknesses of Marks and Spencer have not
only decreased the brand image but has also led to decrease in the impression of the quality and
services which the company produces.
Opportunity — As Marks and Spencer operate worldwide, it also needs to expand globally now
so that they could increase more sales and profits in other countries. Marks and Spencer should
actively involve in creating the website more on the online website grounds so that the company
has the advantage of making profits by selling products and services online. The company should

focus on strategies of how to make more online products available such as the clothing and home
products segment (Vlados, 2019). The policy of market segmentation which Marks and Spencer
follows is to bring up mega stores everywhere. In this process, customer segmentation will help
the company by maintaining low costs and increase in profits.
Threat — There is very high competition in the market among which the main competitors of
Marks and Spencer are Amazon, Tesco, Sainsbury, Morrisons, Gap and Next. If the company
doesn't change its strategy then there will be high risk for it to survive in the market because the
competition and competitors both are very strong. The scale of growth has already been gong
downward and the company has been shutting its stores in UK, France and China. Thus, to
continue with delivering the best to the consumers and for organization itself, the company must
take in charge of the processes which have been not considered yet. This will encourage the new
processes to be turned up.
M4 TOWS analysis and its impacts on decision-making
Threat- If Firm doesn't change its strategy and after that there will be market because the
competition and competitors both are very strong.
Opportunity- Marks and Spencer included in creating the website more on the online website
grounds to make profits through selling products and services online.
Weakness- Firm does not offer clothes to young and teenagers as it created a downfall of
reputation led to decrease within the impression of the quality as well as decreases the brand
image of the Marks and Spencer.
Strength- It is known as most recognized brand in all over the world that reach heights by
providing quality products. It also operates both on online as well as offline basis. In additon to
this produces variety of products to its customers by satisfying their needs and wan
SWOT analysis of River Island -
Strength — The company diversified its market by making 350 stores across UK, Ireland. The
company has 6 online websites operating in different currencies. River Island has the benefit of
having loyal client base duration over the period of time. Company formed unique
merchandising points making clothes look more attractive which is because of the amazing
design team.

Weakness — River Island clothes are not forward fashion brand like the other brands in market.
The production of the company is not rapid in increasing the profits (Teoli and An, 2019).
Company is not working under menswear collection. It also does not have a plus size and
maternity wear collection which creates the weakness for the organization.
Opportunity — Organization can start a shop point's card which will make it different in
working and will be better then competitor. River Island has many international opportunities to
open and expand its store. They can build more unique selling points by adding a appearance line
in rivalry with wholesale. Another opportunity is around pay day to start up promotions and new
collections towards consumers.
Threat — Political factors affect the company on large basis. Environmental factors are another
threat to the company that can affect the supply chain in situations of storm and disasters. If IT
and online stores continue rapid growth then it would threaten sales in-store. There are many
competitors of the company which are a threat to it in the market.
P6. Strengths and Weaknesses interrelating with the external macro factors
Due to Covid — 19, the market share expansion of Marks and Spencer has decreased to a
bit lower level. This has created disintegration and loss of the market share in the external
environment. The company has been facing problems due to this pandemic. The economic actor
has been impacted due to the devaluation of the market structure. The GDP of the country has
decreased due to such factor.
The technology has also been impacted due to the increased changes which have taken
place in the external macro environment. This has largely affected the productions and
operations management of the company which serves quality products and services to the
customers (Islam, 2017).
The environmental changes in the environment is the weakness to the company because it
internally affects the company's working procedures and applications. More the changes in the
external macro factors such as in the technology factor it leads to weakness.
Social factor becomes the strength for Marks and Spencer as social factors increase the
chances in the external market analysis as more the company will expand and grow efficiently
and effectively.
Thus, strengths and weaknesses interrelate with the external micro factors of the Marks
and Spencer company. In this, technology and economic factors are denoted as the weaknesses

and social factors denote strength for the company. This not only helps in analysis of the macro
environment rather helps in the internal business analysis also.
CONCLUSION
Thus, it is concluded from above report that PESTEL analysis of company helped in
identifying positive and negative impacts of macro environment factor upon business operations.
Furhter the report concluded SWOT analysis for the internal and external analysis of specific
organizations to identify strengths and weaknesses with interrelation of external macro factors.

REFERENCES
Books and Journals
Gürel, E. and Tat, M., 2017. SWOT analysis: a theoretical review. Journal of International
Social Research.10(51).
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Islam, M.A., 2017. SWOT Mix and PESTEL Analysis: Effective Tools of Risk Management of
Leasing Companies. The Millennium University Journal.2(1).pp.1-18.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Shtal, T., Buriak, M., Ukubassova, G. and et.al., 2018. Methods of analysis of the external
environment of business activities.
Teoli, D. and An, J., 2019. SWOT analysis.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.