Business Environment Analysis of Mark and Spencer: Report Details

This report provides a comprehensive analysis of Mark and Spencer's business environment. It begins by defining the business environment and its importance, followed by an introduction to Mark and Spencer, highlighting its history and financial performance. The report then delves into the different types of organizations, including public, private, and voluntary sectors, and explains their legal structures. It examines the size and scope of various organizational types, focusing on the missions, visions, and goals of each sector. Furthermore, the report explores the relationship between organizational functions and objectives, with specific examples from Mark and Spencer's flat organizational structure. It also identifies the positive and negative impacts of the macro environment on business operations using PESTLE analysis and micro environmental factors like suppliers, customers, competition and the general public. The report concludes by synthesizing the internal and external analyses to identify strengths and weaknesses, and how these interrelate with external factors, providing a detailed understanding of the company's position within its business environment.

BUSINESS AND BUSINESS
ENVIRONMENT

Contents
INTRODUCTION...........................................................................................................................................4
MAIN BODY..................................................................................................................................................5
P1 Explain different types and purposes of organizations; public, private and voluntary sectors and
legal structures. ......................................................................................................................................5
P2 Explain the size and scope of a range of different types of organizations..........................................6
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure..................................................................................................7
P4 Identify the positive and negative impacts the macro environment has upon business operations,
supported by specific examples...............................................................................................................8
P5 Conduct internal and external analysis of specific organization in order to identify strengths and
weaknesses. ............................................................................................................................................9
P6 Explain how strengths and weaknesses interrelate with external macro factors.............................13
CONCLUSION.............................................................................................................................................16
REFERENCES..............................................................................................................................................18

INTRODUCTION
Business environment can be defined as the sum total of all the factors which includes the
internal as well as external factors that have an impact on the business. These business
environment often help in analyzing the feasibility of the business means that if any company
starts there business then if or not it would be successful in achievement of their goals. These are
very important factors which the companies must consider for the long term achievement of the
organization.
Mark and Spenser group plc is a retail business which operates in the clothing industry, with its
head office in London. The company was founded by Michael Marks with his partner Thomas
Spenser in the year 1884. The company has more than 900 stores operating in United Kingdom.
The company has reported a revenue of Euro10377 million and there operating income is Euro
601 million for the year 2019. The company has been profit making for several years. Recently
when the company started facing some problems they confirmed that around 100 stores of Mark
and Spenser will be closed by the year 2022.
In this report Mark and Spenser business environment is being discussed and how the
company structure is being operated. (Yang and Gabrielsson, 2017)

MAIN BODY
P1 Explain different types and purposes of organizations; public, private and voluntary sectors
and legal structures.
There are varieties of business organization which are doing business in the current environment.
Some of these are explained below.
Public sector:
These are those organizations which operates for the public services and there welfare.
The company operating in this sector has the main purpose of public welfare and not of making
profit. This sector include the goods such as the military services, legal system, infrastructural
development like roads, tunnels, electricity, telecommunications etc., the services is used by all
the people of the country as they are benefit which the government provide to the public. For
example the services like road lights are used by all the persons walking in the street. These
organizations are generally financed by the government of the country which finance them
through the public taxes collected. These organizations must have to follow the rules and
regulation which are being formed by the government when they are operating. Some of the
organization may have a specific code of conduct set by the government such as a doctor in a
hospital has to follow some specific codes in order to treat the patient.
Private sector:
These are the organization being operated by the private individuals of the country. These
sector operates with the main objective of making as many profits as they can. This sector is
funded by the private individual of the country. This organization serve there customers
generally in exchange for money. The company Mark and Spenser is an example of the private
sectors of money. This sector follows the basic laws and regulation which are there in the
country for the smooth functioning of the organization. The report of 2019 shows that the
company employs around 90% of the population in most of the country. So this sector affects the
employment of different countries to a great extent. As the population all over the globe is
increasing the company in the private sector have a lot of employees to choose from. So they can
manipulates the employment so this must be taken care of.
Voluntary sectors:

This sector is there in the economy so that they can work on the social causes of the
country. These are generally funded through charity of different individuals. The company
operates in such sector so that the poor population of the country can also get the basic needs
such as basic health care services. The main problem faced in this sector is that they ar often
short funded as they are only operating through the charities. So now there are organizations
which are operating at international level so that they are not short funded. The American Red
Cross is an example of a company that is operating in the voluntary sector. Since they are
operating at such level they generally don’t find these problems as there are large number of
individual all over the world who provide funds to these type of organization. Other examples of
company operating in this sector is Community Sector Coalition, National Council for Voluntary
Organization.
P2 Explain the size and scope of a range of different types of organizations
Public sector:
The main vision of the public sector is that they aim to provide the best public services they can
with the tax collected by them. The government generally draft a blueprint at the start of the year
for the budget in order to allocate the funds to the different public services. The mission of the
public sector is of optimum utilization of the resources available in the economy, these mission
are formed in such a way that they can deal with the changing environment. The goals are then
perused to achieve the maximization of public welfare including the development of the
infrastructure of the country, provide facilities like public washrooms etc.
Private sector:
The mission and vision of the company operating in private sector is generally to make as much
profit as they can. They do this by forming strategies which target there customer base in thee
short term and they long term. Their goal is to gain as much market share as they can and
continue to maintain the competitive edge in the market. The mission of Mark and Spenser is
provide standardized product to their customer so that they are being satisfied with the company
and they want to be a benchmark so that the companies in the same sector can be measured
against their product, there mission is that they should continuously introduce new products so
that the consumer are not bored with the same product because they are operating in fashion

industry and which has a high changing trend. Their goal is that they try to gain as much market
share as they can and compete with their competitor like Zara, US Polo etc. they are highly
continuously investing in all their mission vision and goals so that all there stakeholders
especially there shareholders are satisfied with them. Private sectors has to satisfy some of the
social goals in order to maintain their brand image so for that they can employ their staff at the
proper salary, as the private sector holds more than 90% of the employment in most countries.
(Frösén, 2016)
Voluntary sector:
The mission and vision of voluntary sector companies are to satisfy the basic needs of the
community at large. The companies therefore, have the main goal of raising charity so that they
have more funds for the public welfare. For this the companies often conduct campaign in large
events to generate the funds they require. The staff and other employees in the voluntary sector
are generally operating at free of cost to support the social cause. The companies also help the
people like military forces, police forces who are injured in the war and local riots respectively,
the
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure.
Mark and Spenser follow a flat organizational structure as the company has limited number of
management levels are limited. The policy of Mark and Spenser is to delegate more decision
making to the employees all over the organization than just to have all the responsibilities in the
hands of the top level. This increase the skills of the employees and new leaders can be identified
in the whole organization and due to the lower level has the power to make the decision the
upper level can focus on forming the strategy for the whole organization. Though have flat
structure but unlike the traditional one Mark and Spenser have broader and flatter structure. The
different sections have their head manager who directly reports to the top level management. The
organization is able to follow this type of structure because they have a strong staff who knows
what to do and how to do it. The reports of Mark and Spenser shows that there are 3000 people
working at their head office and each and every individual have some or other specialist
knowledge, all these employees are capable of making decision and Mark and Spenser trust them

to make the decision in the best interest of the organization. The challenges being faced by Mark
and Spenser is that these employees must be continuously trained in order to make efficient
decision for the welfare of the organization. Mark and Spenser recruits there managers on the
basis of the experience they holds and according to that they are assigned there position. Each of
the manager recruited by Mark and Spenser must have a proper degree in management like
MBA, they must have leadership skills, financial skills etc. by following such a structure the
company have been achieving there objectives and all the functions at all the levels are being
managed effectively and efficiently.
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
The micro and macro both factors have an impact on the working of Mark and Spenser as the
micro environmental factors can affects the short term and the macro environment can affect the
long term goals of the organization. The company Mark and Spenser should always remain
updated with these factors in order to survive in the market. There is a critical analysis of some
of these factors explained below. (Fabus, 2018)
Micro environmental factors
Supplies- if the suppliers of Mark and Spenser have a strong power than they can charge more
for providing the products. So the company must maintain good relation with their suppliers in
order for proper quality of supply at the right time. These suppliers may poses some problems if
they are not delivering the product at the right time.
Customers- the customer requirement must be satisfied and especially for companies like Mark
and Spenser where is change in the trend of the products is so frequent the company must
always be updated with the needs of the customer. If the customer are not happy with the
products of the company then they will soon switch to the substitute available so Mark and
Spenser should keep focus on the innovative factors.
Competition- the competitor poses a threat to Mark and Spenser as if they lower their price then
Mark and Spenser has to reduce their price as well and if they don’t then they will lose their
market share. If Mark and Spenser can differentiate their products from their competitors the
they will be able to charge extra premium for their products.

General public- Mark and Spenser must also keep in mind that their action does not affect the
general public as the general public may not have power individually but they can influence the
working of Mark and Spenser collectively. (Quinlan, 2019)
Macro environmental factors
PESTLE analysis- the companies generally use this analysis so to analyze the macro
environmental factors. This analysis help the companies like that of Mark and Spenser so that
they can know the feasibility of diversifying there business in a particular region. These are the
factors which can’t be controlled by the firm so they must see that these factors does not affect
the organizations function in such a way that it becomes impossible to carry out the business in
the organization. This analysis helps Mark and Spenser save a great amount of cost as if the
company enters into a region without proper knowledge then they might have to suffer large
losses.
SWOT analysis- Mark and Spenser can use this model too for the analysis of the macro
environmental factors. This will also include the analysis of some internal factors of the
company. This analysis will help gain such knowledge with the company can gain competitive
advantage over there competitor. SWOT analysis is the analysis of the organization’s strengths,
weaknesses, opportunities and threats. (Alsaad, Mohamad and Ismail, 2017)
Porter 5 forces- this analysis is used so that the powers of different stakeholders of the company
can be known in order to keep these stakeholders satisfied. The main factor here too is the
competitive rivalry in the market which affects the functions of Mark and Spenser. Other factors
which are included are threat of new entrant into the market which will decrease the market share
of Mark and Spenser, the power of the supplier and customer etc.
P5 Conduct internal and external analysis of specific organization in order to identify strengths
and weaknesses.
PESTLE ANALYSIS

POLITICAL FACTORS:This is all about how and upto what degree or level of interference
faced by the government in the economy. This includes government policy, political stability or
instability in overseas markets, foreign trade policy, tax policy, labour law, environmental law,
trade restrictions and so on.It is clear from the above list that the political factors have a deep
impact on Mark and Spencer in the way in which the operate their business organization. Mark
and Spencer need to be able to respond to the current and anticipated future legislation and adjust
their marketing policies as per the requirements. (Prajogo, 2016)
ECONOMIC FACTORS:Economic factors also have a significant impact on how Mark and
Spencer do business and also affects their profitability. These factors include economic growth,
interest rates, exchange rates, inflation, disposable income of consumers and businesses and so
on. These factors can be further broken into macro-economical and micro-economical factors.
Macro-economical factors deal with the management of demand given in an economy such as
taxation policy, interest rate control etc. whereas Micro-Economical factors is all about people
spending their income and has a huge impact on Mark and Spencer as there isn’t much income
left within the economy. (Evans, 2017)
SOCIAL FACTORS:These factors are also known as Socio-cultural factors and are those
regions which involve the shared belief and attitude of the population. These factors include–
population growth, age distribution, health consciousness, career attitudes and so on. Social
factors are of specific interest as they have a direct effect on how the marketers understand
customer and what drives them. (Oriesek and Schwarz, 2016)
TECHNOLOGICAL FACTORS:
As we all know how fast the technological landscapes changes and how this impacts the way we
market our products. Technological factors affect the marketing and the management by three
unique or distinct ways:
 New ways of producing goods and services

 New ways if distributing goods and services
 New ways of communicating with the target market
ENVIRONMENTAL FACTORS:
Environmental factors in Mark and Spencer had been arouse forefront in the last fifteen years or
so and have become one of the most important factor due to the increasing scarcity of raw
material, pollution targets , doing business as an ethical and sustainable company, carbon
footprints which are well defined the government for the betterment of the economy. Mark and
Spencer had been performing up to required standard or level which must be done for the
economy keeping in min =d the importance of environmental factors and the betterment of the
society. (Stott, Stone and Fae, 2016)
LEGAL FACTORS:
Legal factors include health and safety, equal opportunities, advertising standards, consumers
rights and laws, product safety. Mark and Spencer have a clear mindset that what a company
must know what is legal and what is illegal in order to trade successfully and remain in economy
for a longer period of time. As we are a global organization so this becomes a very tricky area as
it is important for us to get right of each and every country before trading as each and every
country have their own sets of rules and regulations. And this is one of the foremost important
factor as without keeping in mind these rules and regulations it will be very difficult for us to
establish ourselves in other countries.
Porter five forces analysis
Barriers to entry
There is existence of higher level of barrier in retail sector as it required greater level of
investments along with development of huge market. This is creating a positive impact on

company in order to have achievement of cost-effectiveness and economizes of scale
development. As is its is not possible for peer competitors to achieve cost effective and brand
loyalist.
Threat of substitute
The company pays major level of implication over the keeping up of significant brand position
along with remain to be distinctive in order to have meet up of day today demands in respective
manner. On positive way company is majorly focusing on major development of retail in
acceptance to have clear advantage development.
Bargaining Powers of buyers
The bargaining power of customer is considered to be significant as the existence of brand
sensitivity related to price can have the major level of forces over retailer. The company tends to
build up significant level of loyalty by offering customers the values which are unmatched and
having significant convenience.
Bargaining Powers of suppliers
The company is having major level of competitive forces which is making M&S to have
outsourcing in order top reduced the cost and weakening the power of suppliers at existing level.
More over switching of cost for the companies suppliers is having major resemblance of
suppliers which is considered to be low.
Intensity of competitive rivalry
There is existence of strong level of competition in retail sector have the amplification of the
supermarket chain development of the fashion products the development of online shopping as
the major level of experience of more reduced cost. M&s is enabling to have building of online
stores in order to gain more market.
VALUE CHAINS ANALYSIS