Business Environment Analysis of Marks and Spencer: A Report

This report provides a comprehensive analysis of the business environment of Marks & Spencer (M&S), a leading UK retail business. It begins by exploring different types of organizations, including public, private, and voluntary entities, and their legal structures. The report then categorizes businesses by size and scope, examining micro, small, medium, and large organizations. It further delves into the interrelationships between various organizational functions such as marketing, human resources, finance, and sales, highlighting the advantages and disadvantages of departmental collaboration. The report also analyzes the impact of the macro environment on M&S using a PESTLE analysis, considering political, economic, social, technological, legal, and environmental factors. Finally, the report assesses the strengths and weaknesses of M&S and how they interact with external macro factors, concluding with an evaluation of the overall business environment.

BUSINESS AND THE
BUSINESS ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION............................................................................................................................3
LO1..................................................................................................................................................3
P1 Different types & purposes of organisations..........................................................................3
P2 Types of businesses and organisations by size and scope wise..............................................5
LO2..................................................................................................................................................7
P3Relationship between different organisation functions...........................................................7
LO3..................................................................................................................................................9
P4Impacts of macro environment on organisation......................................................................9
LO4................................................................................................................................................12
P5 Strengths and weaknesses of company.................................................................................12
P6 Strengths and weaknesses interrelate with external macro factors.......................................14
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Business environment is basically a zone for an organisation to conduct and operate
different activities of business. Currently every business in market place tries to analyse its
business environment because after having effective business environment, any company can
simply grow in market place (Vlachos,2016). Top-level management within organisations have
to adopt different models of situational analysis. After conducting situational analysis, any
business can simply find out those elements and factors of the market which can affect that
business in both manners positively and negatively. This report is completely based on the
different business environment factors of Marks and Spencer’s (M&S). Marks and Spencer is
one leading retail business in the UK, headquartered in London, England, UK. This report
discusses different types of organisations, size and scope of organisation, relationship between
different organisational functions, macro & micro environment factors etc. Some other key
factors relating to business and business environment also have been discussed in this report.
LO1
P1 Different types & purposes of organisations
Many types of organisations exist within the market place which has different purposes
and different morals. There are public organisations, voluntary organisations, private
organisation etc. some key types of organisations which has been described below;
PUBLIC ORGANISATIONS
Define: Public ventures, these organisations are always selling their services and products in
market place, so that, any person can simply buy different shares of any public company or
organisation in market place (Agustinaand et.al., 2020).
Purpose: The main purpose of these organisations is to generate huge profit margins in market
place by providing different products and services. On the other side, most public businesses or
companies always runs their business operations at the international level. These organisations
always capable to invest very high amount of fund in purchasing the modern and hi-fi
technology. A public organisation always has large number of employees within its workplace.

Basically, public ventures always able to generate very excellent employment opportunities to
people in market place. Currently Marks and Spencer P.L.C. is an excellent example of a public
organisation, because it sells its shares publicly (Marks and Spencer p.l.c. - Company Profile,
Information, Business Description, History, Background Information on Marks and Spencer
p.l.c., 2020).
Legal structure: A public limited company need to register itself in the companies’ house of the
country. Companies house is generally a governing body which manages different businesses
within the country. A public venture, like; M&S can freely sell its shares within market place,
and purchasers of those shares become limited liability of this public company. Public ventures
can simply provide public shares to people in market.
PRIVATE ORGANISATIONS
Define: Private organisation and companies not sell their shares in market place, so that people
not enable to buy shares of these companies. Many times, top-level management provides shares.
Most of public ventures mostly run their business operations only at the national and regional
level. Currently only few private businesses exist within the UK’s business environment which
are capable to run their business operations at the international level. A private company always
have fewer numbers of employees than a public company.
Purpose: The main purpose of these private organisation is to gain effective profit in market.
These organisations mostly try to invest in buying those technologies which are very necessary
to them (Pfeffermann, 2017). Currently Iceland foods ltd. is the best example of a private
organisation.
Legal structure: A private limited company also is required to register itself in the companies’
house. A private company, like; Iceland foods not able to sell its shares within market place to
raise a specific fund. According to the UK’s business law, the private organisation is legally
distinct entity with its own profits, assets and liabilities. These ventures generally operates by
sole traders and partnership contracts.
VOLUNTARY/SOCIAL ORGANISATIONS

Define: Voluntary and social organisations, these organisations mainly work in the social
welfare or public welfare. Earning very higher profit margins is not the main objective of this
these organisations. Currently many of voluntary organisations exists within the UK’s business
environment, in which the Children’s society is one of key examples of voluntary businesses.
Purpose: The main purpose of these organisations is to maintain ethics and effectiveness within
society by working the social welfare. Currently donation and charity are two key main sources
of funding to these organisations. Most voluntary and social organisations operate their
operations at very small scale. Currently only few social organisations are able to run their
operations at international market. For example; World food organisation, WHO etc.
Legal structure: A voluntary organisation, like; the Children’s society also need to register itself
in companies house to be legally formed as a social or voluntary organisation. The voluntary
organisations also enable to sell their shares publicly. These ventures can offer public shares as
well to raise fund.
These all are key types of organisations which commonly exists within the UK’s business
environment. There are some key laws and regulations also has mentioned above which should
be followed by top-level management of each business to get appropriate results in market place.
P2 Types of businesses and organisations by size and scope wise
Organisations within country has categorised by size wise and scope wise as well.
There are micro, small, medium and large-sized organisations are key types of organisations
within the United Kingdom. These all types of organisation have been described here;
Micro Small Medium Large
Micro business
category, those
businesses mainly
comes under this
category which have
less than ten
employees, and also
which are generating
turnover of €2
million in each
financial year. This is
the actual definition
Currently venture
which are able to
generate turnover of
€10 million in each
financial year, and
have fewer than fifty
employees, then that
venture or business
comes under the
category of small
organisation (Prange
and Pinho,2017).
In the medium sized-
businesses, only
those ventures of
companies come
which are able to
generate €50 million
turnover in its each
financial year of
business operation.
Businesses which has
less than 250
employees are also
Large-sized
businesses are
generally those
businesses within the
United Kingdom that
has more than 250
employees or workers
and also, they are
able to generate
turnover of more than
€50 million in its
financial year. There

of a micro business
within this country.
Currently lots of
micro businesses
exists within the
UK’s business
environment which
always contributes
employment
generation aspect of
the United Kingdom.
The root coffee café
is the best example of
micro business within
the United Kingdom.
Currently there are
thousands of small
businesses exists
within the UK’s
business environment
which has generated
very higher
employment
opportunities to the
local people of the
United Kingdom.
According to the
government of UK,
small businesses
plays an excellent
role in the all over
growth of country’s
GDP. Prufrock coffee
café is an excellent
example of small
business in the UK.
comes under this
same category.
Number of medium-
sized businesses also
very higher within
this country, and
these ventures also
highly contributes in
the all over growth of
the UK’s economic
growth. Currently
Garden View Hotel is
the best example of
medium-sized
businesses.
are lots of large-sized
businesses exists
within the United
Kingdom, in which
key large-sized
businesses are Marks
and Spencer, British
petroleum, Tesco,
Morrisons, Unilever.
These organisations
are very helpful for
the UK in the terms
of economic
development, because
large-sized
businesses always
able to run their
business operations in
the international
market (Jabeen,
Faisal and
Katsioloudes,2017).
In this situation,
when any business
runs its business
operations in
different countries,
then it can simply
gain huge foreign
exchange.
SIZE AND SCOPE OF PUBLIC, PRIVATE AND VOLUNTARY ORGANISATIONS
Public (Marks and Spencer): The size and scope of this organisation is very large, because
M&S is a multinational retail brand which currently serves in over 57 countries.
Private (Iceland foods ltd.): This private organisation has minimum size and scope in
comparison of M&S, because currently it serves only in few neighbour European countries, like;
Ireland, Netherlands, France etc.

Voluntary (WHO): WHO is an international health care social or voluntary organisation, and it
is very large by size and scope wise, because currently it serves across the world.
Evaluation
These all types of organisations play very excellent role in the growth of UK’s GDP.
Basically, these different sized businesses have generated great employment opportunities to the
local people of this country, existence of these all sized organisations is very beneficial for the
United Kingdom.
LO2
P3Relationship between different organisation functions
Inter relationship of various organisations functions can be projected in the following
manner.
Marketing and Human resource
Marketing team needs to collaborate with all other functions to achieve the overall
objectives of operations. Marketing team need to collaborate with sales management to raise the
sales capacity of the department. Marketing needs to work with human resource function in
channelizing recruitment campaigns of company (Li and et.al., 2019). Human resources provide
the effective and skilled human resources to the marketing team so that department could meet
up all its various objectives. Human resources department also channelizes its recruitment
advertisement with the support of marketing department.
Finance department and marketing
Finance management need to prepare budget for each functions of marketing team. On
the basis of the needs and requirements of marketing departments it requires to prepare budget so
that they can meet their needs and requirements (De Vries and et.al., 2017). Marketing team also
provide relevant information about the market to finance department.

Sales and marketing departments
Sales management in Marks and Spencer Company work with marketing department to
achieve the overall objectives. Sales team, carry the responsibility to entertaining the sales
targets of company. Sales team directly contact with the marketing team to get publishes various
advertisements and promotions of company. Marketing team also take various information
related to potential customers with the sales team.
Advantages of working together
 It improve the overall productivity of the company.
 Work culture at organisation also improved in this strategic tool.
 Inter relationship between departments also improve through this working approach.
Disadvantages
 It create extra confusion regarding operations of company.
 It improve cost of operations.
Organisation structure
Organisation structure is segregated into three different parts divisional, matrix and
horizontal organisation structure.
Divisional organisation structure: Divisional organisation structure differentiate each functions
in different divisions. Each division contains necessary resources that are needed to meet the
roles and responsibilities of such division.
Matrix organisation structure: Matrix is a form of organisation structure in which employees
reported to more than one manager or superior authority rather than reporting only to one
managerial personal in company. This make the process more wide in term of controlling the
operations.
Horizontal organisation structure: This organisation structure has a few level between
management and employees. Limited departments are entertained in organisation structure.
Company try to keep the organisation structure simple.

Marks and Spencer Company organisation structure is indicated as horizontal
organisation structure.
It is analysed that how collaboratively every single department in Marks and Spencer
Company work to achieve the overall objectives of such individual function in company. This is
very necessary task to the upper management of company to always maintain an effective
relationship between all departments.
LO3
P4Impacts of macro environment on organisation
Marco environment of Marks and Spencer highly affects it in both ways negatively and
positively (Han,2019). Basically, there are lots of factors exists within M&S’s macro business
environment which influences company’s business operations. The management at this retail
company has always required to make some appropriate strategy to systematically deal the
impact of these all macro factors. There are PESTLE analytical tool has been used below for
identifying and analysing key macro environment factors of M&S.
PESTEL Analysis
PESTLE analytical tool is very beneficial to a business or company in the market place.
Currently many of companies uses this tool for analysing different factors of their macro
business environment. PESTLE term mainly refers six key factors of macro environment of any
business called; political, social, environmental, economic, legal and technological etc. These all
factors of M&S’ macro business environment has been discussed below;
POLITICAL FACTORS
Political factors are highly affecting to the business operation of M&S. Basically, the
management of this retail business has always required to follow different rules and regulations
which has formulated by the local government of UK. Currently company is responsible to fulfil
different governing formalities as well. For example; the management of M&S always fulfil is
formality of taxation. There are Brexit decision of the UK also has highly affected to this
company. For example; after Brexit, M&S has required fulfil lots of paper work formalities

while exporting its products and services in those nations which are still members of European
union. On the other side, the company have to maintain different business standards while
importing and exporting its various products and services.
Positive impact: The positive impact of political factors is that, M&S has gained an effective
business environment to run its business activities, because local government of the UK always
tries to develop existing business law.
Negative impact: The negative impact of these factors is that, this retail company have to give
huge fund to government due to higher rate of taxation.
ECONOMIC FACTOR
The company is highly affected by the economic factors as well. Basically, when any
country has well-developed economic condition, then existing businesses of that country has
automatically gained excellent opportunity to generate huge profit (Makarenkoand
Plastun,2017). Nowadays, this retail company able to boost its sales, because there are many
people avoid to visit in market, just because of the fear of Covid-19 infection.
Positive impact: The positive impact of the UK’s economic factors is, this country has well-
developed economic condition, in which local people of this place can simply affords M&S’
products and services, and this retail company can easily generate huge revenue by selling
different products and services.
Negative impact: Currently the UK’s economy faces some slowdown just because of corona
virus pandemic. In this situation, this economic factor has very negatively affected to the sales
ratio of M&S.
SOCIAL FACTORS
Social factors of the United Kingdom are very favourable to M&S. Social factor mainly
indicates the perception of different people, caste and region of people, communities etc.In this
situation, many of people take interest in buying products and services from this company in the
UK, because they like extra-ordinary levels of customer service of M&S.

Positive impact: Positive impact of these social factors that, these factors influence company to
work in the social welfare. In this situation, the company always increases its brand image in
market place by fulfilling corporate social responsibilities in market place.
Negative impact: There is negative impact of these factors is that, there are customers have
different perceptions in market place. In this situation, when people made negative perception of
company, then this retail company can’t grow in market place. So that, upper management of
business always need to work in social welfare to affect customers’ perceptions in very positive
manner.Basically, positive perception of customers will definitely influence them to buy
products and services through Marks and Spencer.
TECHNOLOGICAL FACTORS
Technological factors mostly very positively affect to business environment of the M&S.
Positive impact: The positive impact of technological factors on M&S is that, with the support of
hi-fi technology, this company can simply achieve excellent performance and productivity in
market place.
Negative impact: On the other side, these factors put negative impact also on company (Quanand
et.al., 2018). For example; adopting hi-fi technology is necessary to this company for always
maintaining its effectiveness within market, but adopt technology is very expensive deal to this
retail business, and that’s why this is negative impact of technological factors.
ENVIRONMENT FACTORS
These factors also affect company in both ways positively and negatively. Basically,
currently globalisation is very badly affecting to the natural environment. so that this
environmental factor impacts to company for avoiding such activities within its workplace which
can negatively impact the natural environment.
Positive impact: The positive impact of these factors is that, environmental factors impacts to
M&S to work in the natural environment protection. After working in natural environment
protection, company can simply put positive impression on the society.

Negative impact: The negative impact of these factors is that, understanding and following all
rules and regulations of environmental protection is very complicated task to company. There are
lack of natural resources also very negatively affecting to M&S in market place.
LEGAL FACTORS
Legal factors also highly affect to business operations of Marks and Spencer. According
to the UK’s business law, a business has highly required to adhere different legal and ethical
considerations in its workplace.
Positive impact: The positive impact of these factors is that, by following different laws and
regulations, M&S can be simply legally formed.
Negative impact: The negative impact of these factors of is that, knowing and adhering all laws,
standards and regulation is very complicated task to this retail company, which consumes lots of
precious time and resources of this business as well.
Evaluation
These all macro business environment factors always affect M&S’ decision making and
objectives. On the basis of analysis, most external factors of the company’s business
environment are positively affecting its business operations. However, these factors put some
negative impact also on this retail venture. In this situation, the management should properly deal
with all negative impacts of these all macro environment or external factors.
LO4
P5 Strengths and weaknesses of company
Analysis of different strengths and weaknesses is also a very necessary task to the upper
management of M&S, because after knowing strengths and weaknesses, this company can
simply make appropriate business strategies to earn huge profit (Ivanov, Sypchenkoand
Webster,2017). There is SWOT analysis tool has been used below for identifying key strengths
and weaknesses of company.
SWOT Analysis of Marks and Spencer

SWOT analysis is very effective tool for different companies and businesses in the term
of knowing different key internal factors of business environment. In this situation, top-level
management of M&S also have to adopt and use this tool. SWOT term mainly refers four key
internal factors which has been discussed below;
Strength
 M&S is one of highly reputed retail brands in across the international retail sector.
 Currently this business is succeeded in highly expanding its business in across the world.
 This business is fully capable to provide different quality products and services to
customers in market place.
 On the other side, this business has an effective marketing team as well. With the support
of own effective marketing function, this venture is able to widely promote its brand in
the world.
 Top-level management within M&S has an effective skill of people management, and
these all are key strengths of company.
Weakness
 Top-level management at M&S is currently not able to take effective decisions within its
daily operations, so that this factor of company mostly affects its business operations in
negative manner (Albort-Morant and Ribeiro-Soriano, 2016).
 In this situation, the management have to develop its skill of decision-making to take
effective decisions.
 On the other side, this business has not perfectly handled the Covid-19 pandemic
situation, so that this year its revenue also will be decreased because of this reason.
 So that, the management have to develop its problem-solving skill to deal different
barriers, difficulties and problems of the business.
Opportunities

 Currently M&S has an effective opportunity to highly boost its brand in the international
retail sector by adopting and implementing social media marketing.
 Basically, social media marketing is highly trending in this modern business
environment, so that this will defiantly give opportunity to M&S to attract lots of people
in market.
Threat
 Currently there is very tough competition within the UK’s retail industry, in which this a
big threat to this business.
 Basically, Tesco, Sainsburys, Morrison etc, retail companies of the UK gives very tough
competition to M&S.
SWOT Analysis of Tesco
Strength: This is a most reputed retail brand of the UK and have the largest distribution channel
in this country’s retail industry.
Weakness: There are thousands of people currently works within the Tesco’s workplace, so
currently the management is not able to perfectly manage these all people or employees.
Opportunities: It has great opportunity to gain large customer base by expanding its business
operations in new countries (Ištvanićand et.al., 2017).
Threat: Existing high market competition threat and the threat of new entrants are main threats
of Tesco right now.
P6 Strengths and weaknesses interrelate with external macro factors
There are strengths and weaknesses of company completely interrelate with its different
external macro factors.
Political: This company is the leading retail company of the UK and also capable to export its
different products and services in many other countries, so that local government supports to this
company by charging low amount of duty in its exportation practices.

Economic: Generally, when M&S exports its products and services in foreign, then it can
provide huge foreign currency to the UK. On the other side, currently the UK’s economic
system faces some slowdown just because of Covid-19 pandemic. So that, this factor fully
interrelates with company’s weakness that, it is also not able to perfectly handle the situation of
this pandemic.
Social: M&S is fully capable to provide excellent product quality, so that this strength of
company has built positive perception in people within the society. Currently the company has
strength that, it has succeeded in building its effective brane image by fulfilling CSR in the
market. In this situation strength is interrelating with company’s legal macro factors, because
social factors of the UK say that, every business should always work in social welfare (Gaspar
and et.al., 2016).
Technology: the management has poor decision-making skill, so this factor interrelates with
technological factors of macro environment, because having weak decision-making skill
influence the management for taking huge time to adopt any appropriate technological gadget or
tool for company.
Environmental: Nowadays M&S’ is able provide quality products and services to customers, and
this is one strength of this company, in which this strength completely interrelates with
environmental factors, because natural environment is the only source to company for fulfilling
its various needs relating raw-material.
Legal: The management of company has well-developed skills of problem-solving, so that
company can easily solve various legal issues by using these skills. On the other side, weakness
of poor decision-making can affect legal structure of M&S in negative way, so that the
management should improve its decision-making capabilities.
According to these all findings, it can be state that Marks and Spencer’s strengths and
weaknesses are fully interrelating with is macro environment factors.

CONCLUSION
On the basis of above findings, it can be concluded that currently M&S is highly affected
through different macro and micro business environment factors. There are two key analytical
tools called PESTEL and SWOT has used above in this report to systematically understanding
the actual impact of different business environment factors on M&S. According to the current
market situations, the company has great opportunity to more expand its business operations its
new market segments to increase its market share within the international retail industry.

REFERENCES
Books & Journals
Agustina, T., and et.al., 2020. Role of social entrepreneurship in business management. Journal
of Critical Reviews. 7(1). pp.257-262.
Albort-Morant, G. and Ribeiro-Soriano, D., 2016. A bibliometric analysis of international impact
of business incubators. Journal of Business Research. 69(5). pp.1775-1779.
Becherer, R.C. and Helms, M.M., 2016. The role of entrepreneurial marketing in improving
market share for small businesses facing external environmental or resource
challenges. Journal of Business and Entrepreneurship. 27(2). pp.119-147.
De Vries, R.E., and et.al., 2017. Explaining Unethical Business Decisions: The role of
personality, environment, and states. Personality and individual differences. 117.
pp.188-197.
Gaspar, J., and et.al., 2016. Introduction to global business: Understanding the international
environment & global business functions. Nelson Education.
Han, K., 2019. The Effect of Characteristics of Venture Business Founders and Management
Strategy on Business Performance. Asia-Pacific Journal of Business Venturing and
Entrepreneurship. 14(6). pp.29-43.
Ištvanić, M., and et.al., 2017. Digital marketing in the business environment. International
journal of electrical and computer engineering systems. 8(2). pp.67-75.
Ivanov, S., Sypchenko, L. and Webster, C., 2017. International sanctions and Russia’s hotel
industry: the impact on business and coping mechanisms of hoteliers. Tourism Planning
& Development. 14(3). pp.430-441.
Jabeen, F., Faisal, M.N. and Katsioloudes, M.I., 2017. Entrepreneurial mindset and the role of
universities as strategic drivers of entrepreneurship. Journal of Small Business and
Enterprise Development.
Kosa, A., Mohammad, I. and Ajibie, D., 2018. Entrepreneurial orientation and venture
performance in Ethiopia: the moderating role of business sector and enterprise
location. Journal of Global Entrepreneurship Research. 8(1). p.25.
Li, J. and et.al., 2019. Investigation of Proteomic and Phosphoproteomic Responses to Signaling
Network Perturbations Reveals Functional Pathway Organizations in Yeast. Cell
reports. 29(7). pp.2092-2104.
Makarenko, I. and Plastun, A., 2017. The role of accounting in sustainable
development. Accounting and Financial Control. 1(2). pp.4-12.

Pfeffermann, N., 2017. The role of communication as a dynamic capability in business model
innovation. In Revolution of Innovation Management. (pp. 191-212). Palgrave
Macmillan, London.
Prange, C. and Pinho, J.C., 2017. How personal and organizational drivers impact on SME
international performance: The mediating role of organizational
innovation. International Business Review. 26(6). pp.1114-1123.
Quan, Y., and et.al., 2018. Firm sustainable development and stakeholder engagement: The role
of government support. Business Strategy and the Environment. 27(8). pp.1145-1158.
Van Loon, N. M., Vandenabeele, W. and Leisink, P., 2017. Clarifying the relationship between
public service motivation and in-role and extra-role behaviors: The relative
contributions of person-job and person-organization fit. The American Review of Public
Administration. 47(6). pp.699-713.
Vlachos, I.P., 2016. Reverse logistics capabilities and firm performance: the mediating role of
business strategy. International Journal of Logistics Research and Applications. 19(5).
pp.424-442.
Online
Marks and Spencer p.l.c. - Company Profile, Information, Business Description, History,
Background Information on Marks and Spencer p.l.c. 2020. [Online]. Available
Through: <https://www.referenceforbusiness.com/history2/68/Marks-and-Spencer-p-l-
c.html>.