Business Environment Analysis and Sustainability of Marks & Spencer

This report examines the business environment of Marks & Spencer (M&S), a British multinational company operating globally, focusing on the retail and wholesale sectors. It identifies and analyzes two key issues affecting the industry: the rise of online stores and increased competition. The repor...Read More

Business Environment

INTORDUCTION
The meaning of business climate implies the entirety of the inside and outside components
that influence how the organization capacities including workers, clients, the board, gracefully
and request and business guidelines. A case of a piece of a business climate is the way well
customers desires are met. Retailers are the outlets that assist the establishment in offering the
commodities directly to the consumers. In the supply chain, the retail shops responded to be the
last person who direct makes a sell to target audiences. This document focuses on the retail and
wholesalers business (Hamilton and Webster, 2018). In context of it, the organisation is Marks &
Spencer which is considered for the completion of report. It is a British multinational company
which was incorporated in 1884 and operate globally. The report will discuss about the main
issues that faced by particular industry, segmenting these issues in PESTEL analysis and learning
and experience which learn during formation the written document.
MAIN BODY
Explain any two key issues that have affected the subsector
There are different issues that each business sector faces. In food retailing and whole selling,
the industry has suffered numerous problems in term of their operational activities. Mainly, these
processes are exterior and not in control of the business venture. They are independent from the
working of any firm. In current era, these issues are rapid change in technology, customers’
needs, legislations and regulations, political and ecological aspects etc. The establishment has to
make the modifications as per these existing components because they do influence on the
business in diverse form. The complexity which is faced by M&S can be as under:
Online stores- In current time technological advancement has made and the world is getting
engaging the ways of executing the work has also involved. The online shopping has made the
life of individuals very easy because they now can purchase the good irrespective of the place
where they are sitting and the time, at which they are buying. The online store are offered
services 24*7 to consumer and the people who have the access to internet can make the do the
shopping irrespective to the place where they are sitting as the product which they has purchased
would delivered to them through the enterprise automatically (Čepel and et. al., 2018). Online
shopping also makes easy the safe transactions to the target audiences to the consumers because
they manage the data and details of customers safe and secure. With all these advantages through
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online business the target audiences automatically gets attracted to this platform for shopping.
This has generated problems for the offline retail stores that the flow of their consumers has got
reduced due to change in their preference. Online business is the key issue which is faced by the
M&S , the stores does not have that much consumer floe because it utilise to be earlier which is
creating a big loss for the organisation. The food items are not sold and making them expires
before selling. Along with this, the extra cost such as the electricity bill, workers salary,
maintenance and other miscellaneous expenditure does not get manage by the store.
Competition- It is the key issues which affect each business sector and create barriers to
entrance due to range of rivals of the establishment that can easily find out within the business
industry. Food retailing and whole selling is one of them and there are low entry barriers which
generate high rivalry (Halbert and Ingulli, 2020). As the competition in this business sector is
high, there is more likely chance of consumer moving from one retail store to another. The
consumer will buy from the store here they would find range of commodities and effective
discount. The organisation like M&S also has several rivals; some of them are Tesco, ASDA,
LIDL and Morrison etc. All these competitors can be good then M&S on several grounds such as
technology adopted discount offer, recruitment of employees through the enterprise, range of
commodities that outlet keeps to itself, customer service such as product delivery, customer
recognition and many more.
Using the PESTEL model and categories the two issues and give reason for doing so
PESTEL analysis is a tool that is utilised by the firm in analysing the exterior forces which
affect the business of firm. With the assistance of this tool, company can get information about
the aspects which create impact on the firm in positive and negative form. It is an abbreviation
for political, economical, social, technological, legal and ecological components. The two
problems that are identified from the above defined information and segmented as below:
Technological factor- these components consider technological advancement and
innovation in a company or within a country. In retail and whole sell industry, technology use in
form of management information system (Calabrese and et. al., 2018). It is a system and method
through which the company can store, save ad share the information. This information assists in
making the effective decision for them. Several business venture or establishments has accepted
the diverse systems in their operations and this also creates the rivalry benefits for them. The
system that is accepted by the M&S can be advance from some organisations and also the system
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for other firms can be advanced forms the respective enterprise. Along with this, the
maximisation in performance of online shopping has generated problems for M&S offline retail
outlet as the convenience that is offered through the online shopping does not offer by the offline
retail stores. When a company execute or operate the online business, it can saves its expenditure
cost at various grounds such in form of electricity bill and store rent does not get incur. The cost
for recruiting the workforce also save by the firm and there is much other several expenses
related to fund that could saved by executing the business at online. Along with this, the
company make maximisation in customer base by offering online shopping service and
delivering product to home.
Social factor- It considers the taste & preferences of target audiences. When the
consumers get benefits of retail store shopping and connected with it that offers more offers and
variety in comparison to M&S then they would switch and move on to that other outlet
(Jevšenak, 2019). The rivalry creates influence on the profitability of M&S organisation. For
instance, the discount prices and offers that are provided by other venture is much more than the
offers provided by M&S. Thus, it has resulted in switching of consumer to other firm due to
preferring less cost and quality product etc.
How the key issues can impact the sustainability of businesses
Sustainability is the aspect that concentrates on the long term of the activity. Here in the
business context a sustainable business within the operational act and processes is eco-friendly as
well as not harmful to the atmosphere and are for long term development and success of
company. The problems that are exiting at outside can affect the sustainability of business in the
following forms:
Profit- These complexities can put an immense impact over the profitability of a company. As
the maximisation in the shifting of consumer from offline to online retail outlets, so the target
audiences flow is educed for offline retailing stores. Cause of some of them as got closed
because they raise no sales for the owners (Krajnakova, Navickas and Kontautiene, 2018). The
discounts and the offers provided by these online shopping websites are so huge that it cannot
manage to pay for online retail shops. To make their venture sustainable for upcoming time
development, they also have to change their operational process and procedures. They are
directed to bring up their business at online platform also.
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Positive impact- The organisation like M&S would set up their shopping business at
online platform also assist its target audiences to make their purchasing for that platform. This
would enable in retaining the target audiences of the form and make maximisation in their profit
margins as well as customer base.
Negative impact- All these online business has minimised the business of for the retail
shops that are running at offline way (Nikitina and Lapiņa, 2019). They have suffered the losses
in such a manner that some got forced to shut down their outlets. The shop which are still
running suffered a loss because there consumers’ taste and preferences for buying has changed in
form of online shopping.
Competitive benefit through offers- Sustaining from the overcoming rivalry, the organisation
should form the plan of actions and offer in form that they gets different from the entire offer
which are offered by other retail outlets. When the offers made by M&S would be different and
attractive, the consumers would automatically prefer more to visit M&S outlet for purchasing
and buying products. This would outcome in more sales and profitability. Rivalry benefits can
also be gained by discounts offered to the target audiences.
Positive impact- This will enable and assist the firm in getting attention of more
consumers by these offers and discount which are offered.
Negative impact- Some time, the establishment provide these offers and discounts at their
personal profitability costs that can affect or hamper the business venture.
Loss of consumers-These all complexities would ultimately results in losing of consumers. This
can affect the sustainability of business because the main source from which an establishment
earn profits is target audiences of company. M&S can overcome this issue by getting over or
identifying the solutions for all these complexities.
Positive impact- The organisation, M&S would be able to retain its target audiences and also
would be capable to maximise the consumer reach.
Negative impact- This is quite a time consuming activity and cause of which the
organisation cannot able to concentrate on other key areas (Ślusarczyk and UL HAQUE, 2019).
Reflection
At the time of formation of this report, I faced some issues and problems but I was able to
overcome them with my good hard work, effective skills and analysis regarding my work. Some
of the challenges which are faced by me as below:
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Authentic sources- During the preparation of document, I require to collect more effective
information. The main issues in this process are that gathering of authentic source of
information. To ensure that the information and data which is collected by me in context of
completion of the report is pure and the reader must get rely on that. To get over this problem, I
looked out for the authentic sites such as company reports, their plan of actions and many more. I
prefer the sites that source for information had authentic facts.
Time period- It is another problem and issue that I faced by me during formation of the
report. The time which is assigned to complete this document was very less when make
comparison with the research work (Kokodey, Gnezdova and Lomachenko, 2018). This was
another issue that I suffer at the time of performing in this report to get over this challenge, I
made the structure of task and set time frame to complete the particular activity. Although for
overcoming this problem I framed a structure or a layout as per that my research work would be
completed. This enable me in confronting the area within I require to follow by research and put
main constrain in my work. This helped me in identifying or collecting information in easier way
and completing my research in effective manner. Along with this, I also made my time table in
such a manner that it does not influence much if there is hindrance in accomplishment of any
activity of report.
CONCLUSION
From the defined information, it can be summarised that there are several issues which
affect the business of retail and wholesale industry. PESTEL analysis is also executed in the
report which assists in indentifying the impact of external components like political,
technological, social, legal and others on business of venture. Change in consumer needs and
technical advancement are the main issues which affect a business. The document also considers
that how these issues influence the sustainability of company and business operations in
particular industry. In the end, a reflection is defined in term of learning and experiences of
report.
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REFERENCES
Books & Journals
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Čepel, M. and et. al., 2018. Business environment quality index in the SME segment. Journal of
Competitiveness.
Halbert, T. and Ingulli, E., 2020. Law and ethics in the business environment. Cengage Learning.
Calabrese, M. and et. al., 2018. From mechanical to cognitive view: The changes of decision
making in business environment. In Social Dynamics in a Systems Perspective (pp.
223-240). Springer, Cham.
Jevšenak, S., 2019. The Millennials’ Effect: How Can Their Personal Values Shape the Future
Business Environment of Industry 4.0?. Naše gospodarstvo/Our economy, 65(1), pp.57-
65.
Krajnakova, E., Navickas, V. and Kontautiene, R., 2018. Effect of macroeconomic business
environment on the development of corporate social responsibility in Baltic Countries
and Slovakia. Oeconomia Copernicana, 9(3), pp.477-492.
Nikitina, T. and Lapiņa, I., 2019. Creating and managing knowledge towards managerial
competence development in contemporary business environment. Knowledge
Management Research & Practice, 17(1), pp.96-107.
Ślusarczyk, B. and UL HAQUE, A., 2019. Public services for business environment: challenges
for implementing Industry 4.0 in Polish and Canadian logistic
enterprises. Administration & Public Management Review, (33).
Kokodey, T., Gnezdova, I. and Lomachenko, T., 2018, October. Modeling the global business
environment based on polycyclic theory. In The International Science and Technology
Conference" FarEastСon" (pp. 487-499). Springer, Cham.
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