Detailed Business Environment Analysis of Marks and Spencer, ABC Uni

This report provides a comprehensive analysis of the business environment, focusing on Marks & Spencer (M&S). It begins with an introduction to the business environment and its impact on organizations. The report then delves into the types and purposes of organizations, differentiating between profit and non-profit entities, as well as public, private, and voluntary sectors. The analysis extends to the size and scope of various organizational structures, with specific examples from M&S, Nestlé, and Age UK. The report also explores the relationship between different organizational functions, such as human resources, finance, administration, and marketing, and their contribution to achieving organizational objectives. Furthermore, it analyzes the complexities of different organizational structures, including sole proprietorships, partnerships, and companies. Finally, the report examines the positive and negative impacts of the macro environment on business operations, along with an internal and external analysis of M&S, evaluating its strengths, weaknesses, and the interrelationship between them and external factors. The conclusion summarizes the key findings and offers insights into the future of M&S within its business environment.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Types and Purpose of Organisation..................................................................................1
P2 Size and Scope of Different Organisation.........................................................................2
TASK 2............................................................................................................................................4
P3 Relationship between different organisational functions and its link with organisation
objectives................................................................................................................................4
D1 Analysis of complexities in different types of organisation structure..............................5
TASK 3 ...........................................................................................................................................6
P4 Positive and negative impact of Macro environment on Business operations..................6
TASK 4............................................................................................................................................7
P5 Internal and External analysis of M&S ............................................................................7
P6 Interrelation of Strength and weakness with external Macro factors................................9
D2 Evaluation of impact of Micro and Macro factors on business objectives.....................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment means a collection of individuals , firms, and various other factors
which may or may not under the control of organisation. All these factors have effect on
performance and profitability , growth and survival of organisation. Each organisation operates
in different environment and have different kinds of activities to be performed. It is an important
pat of effective and efficient management of business (Boons and et. al., 2013). In this report,
business environment of Mark and Spencer will be analysed. M&S is a British multinational
retailer based in London. it has total 1433 stores worldwide and serving high quality, own brand
food, clothing and Home products. Factors which are discussed like its size and scope, their
market structure, impact of external and internal environment factors on business environment of
M&S and internal strengths and weaknesses of company and its interrelationship with external
macro factors.
TASK 1
P1 Types and Purpose of Organisation
In today's world, organisations have become a very important part of life because it
provides employment, growth in society through which improvement is shown. Organisation can
come in various forms and it affects various groups like government, society, stakeholders ad
individual person as well. Therefore,a business organisation can be defined as group of people
who work together to achieve same goals and deliver same results. There are basically two broad
classification of organisation-
 Profit organisation- its main objective is to gain profit and market share in market
 Not- for profit Organisation- its main objective is to work for welfare of society and not
to earn profit.
Other types of business organisation can be classified as :-
1. Public Sector Organisation:- It is that type of organisation whose membership is with
general public. Minimum no. of people to start this company is seven and maximum is
unlimited. A company is considered to be Government if majority of shares are held with
government. These companies are under greater control because of implementation of
various laws of government (Briggs and Grisaffe, 2010).
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Stock of these companies can be owned by anyone and their liability is also considered to
be limited which means that in case of loss, shareholders will only that amount which they have
paid fir shares. It also allows companies to sell shares to investors which is beneficial for raising
capital.
2. Private Company :- It is that type of organisation where goods and services are
distributed by individuals and not a part of any government. There are various types of
legal; structures available for private sector companies. There is various types of
businesses in private sector also like-
 Sole trader ship
 Partnership
 Private Limited company with Private shares
 Public limited company with open shares
These types of companies are allowed to issue shares and have shareholders but these
shares are not traded in public exchanges and are not issued through an IPO.
3. Voluntary organisation:- These types of association is also called as union . They are a
group of individuals that enters into an agreement voluntarily to form a body or
organisation to accomplish a common purpose. These type of organisation are working
for socio-economic development of country and promoting various types of culture, arts
and other activities (Brinckmann, Grichnik and Kapsa, 2010). These type of organisation
have a legal structure whether it is an unincorporated association or a trust or a limited
company.
Purpose of Business Organisation
1. If it is For-Profit organisation then making more money is the main purpose of such type
of companies.
2. Generate more revenue and try to sell more and more products to it customers.
Purpose of Marks and Spencer are:-
 It aims to attract, motivate and retain high potential candidates which will help them 8in
delivering good performance in market.
 They want to regain their leadership in clothing and speciality food.
 They see that there is plenty of sales opportunities in market present for them so they will
be working in that directions also.
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Legal Structure:- It is a Public Limited company.
P2 Size and Scope of Different Organisation
Classification of businesses can also be done on the basis of their size and structure.
Every business organization differs in size. Some businesses are very small having more than 5
members and some are really big having more than 2000 members. A company can be run by a
single member company also like a beautician, designers etc. the size and scope of different
types of organisations are:-
1. Private Sector Organisation- Since Marks and Spencer is a private company and is aa big
retail company working since 1884 successfully. The size of Private companies can be
specified as-
 Minimum Members- 2
 Maximum Members- 50.
The size of M&S can be describes in following ways:-
◦ It is having 959 stores working throughout UK and 1433 stores all over world.
◦ It is employing more than 82,904 employees all over.
◦ There were many stores which are unprofitable were closed for cost cutting .
◦ In 2013, Clothing division of M&S had 11% growth in market share in UK.
Since it is working worldwide so it is having a very strong position in market and it size
is also increasing due to opening of new stores in so man countries.
Growth opportunities:- In private sector, companies can grow only when there will be
Infrastructure development in country, improved governance, competitiveness and more access
to finance.
2. Public Sector Organisation- Size of public company is specified as-
 Minimum Members- 7
 Maximum members- Unlimited
Public company which is referred here is Nestle. It has many joint ventures around the
world and tie yup with many companies producing different types of products. Some are like-
Nestle- Palmolive and Colgate Palmolive. Tie up with Coca-Cola. It is employing more than
335,000 employees all around the world. Company has expanded its business in larger sphere of
Ban-Don.
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Growth opportunities:- In public sector, companies can grow only when the industries present
there are growing and if there will be economic growth then companies will also grow. It may
also have growth opportunities when there will be more employment in this sector and small
scale industries are given more importance by govt.
3. Voluntary Organisation:- here, money is collected with the help of various sponsors and
investors. They only help in improving financial conditions of such types of companies.
The voluntary organisation referred here is Age UK. It is a registered charity institution
which is formed after combining two largest separated charities which are 'Age Concern
and 'Help the Aged'. It has a combined income of more than £160 million in which
£47million a year is raised through funding and by performing commercial
services in Age UK enterprise.
Growth opportunities:- In Voluntary sector, Companies can grow only when they are given
proper facilities by government and are given proper attention by them and activities are
managed properly.
TASK 2
P3 Relationship between different organisational functions and its link with organisation
objectives
Marks and Spencer is retailing company specialized in selling of clothes, home products ,
luxury food products. It became first British retailing company to make a pre tax profit of £1
billion. The financial performance of company is also very good because it ha
recently made a net profit of £115.7 million which is a good score. Company is
able to perform well only because of proper functioning of its management. All the
functions in company is being conducted properly and staff is also giving good
productive results to the company ( Bryman and Bell, 2015). If any of the function will
not be performed well then companies activities will be effected very much. The
various functions that are performed by organisation:-
Human Resources
This is one of the most important functions of management because it helps
in bringing efficient people in organisation whom perform tasks given to them by
their seniors. People involved in this department are like HR managers, Hiring
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Officers, recruitment agencies etc. they all provide help in employing people in
organisation and that too skilled one. Various types of plans and policies are made
by companies to hire people as per their need. A proper structure is followed by
companies to perform recruitment (Zott, Amit and Massa, 2011).
It is linked with achieving goals and objectives of organisation since it helps company in
hiring right employees for the job. If right person is appointed for right job then employees will
be able to do their job properly and all activities are performed well which helps in achieving
objectives of organisation.
Human Resource function is also an important part of Marks & Spencer because if
employees will not do their job properly then how will the sales increase and performance of
company will go down in market.
Finance
This function is related with dealing in income and revenue of companies. It
monitors how much a company has earned in a given period of time and how much
expenditure is being done by company. All the important accounts that are being
prepared by company is made and evaluated by Finance department only. It also
perform function of raising funds for company whenever they need them ( Carroll and
Shabana, K 2010).
It manages funds that are being utilized by various other departments. The people who
perform this function belongs to finance field only. They are qualified finance managers. The
financial planning is done by managers of finance and it includes details about allocation of
funds and investments done and utilisation of funds as well. The financial managers determines
budget, investments for respective company.
It is linked with organisational goals and objectives since it helps in gathering and
allocating funds which are further utilized by other departments as well and then all the functions
are performed well. They help in increasing efficiency of organisation by increasing net profit.
Administration
It is based on clerical activities which helps in managing records of
customers, protecting departments, treat the grievousness of clients and various
other works as well. Organisation's security and its maintenance is also included in
admins work. When all these functions are performed well then customers
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satisfaction is achieved and mismanagement is reduced ( Wild, Wild and Han, 2014). So
it helps in achieving goals and objectives by directly attracting consumers.
Marketing and Sales
This department has responsibility of making strategies and plans for
promoting and marketing of products and services of various companies. These
plans should be implemented and effectively followed so that objectives can be
achieved. Sales is also linked with achieving goals because it helps in making a
brand image of companies in market and position the product in minds of customer.
D1 Analysis of complexities in different types of organisation structure
Starting a business is a big step but what is more important is to choose what type of
business will be done. Business structures can carry as types of business that use them. Choosing
a right structure is very important for success and life of company.
According to the view point of ,Sole traders are considered as most common structure of
business organisation and it is easiest to run. Here the owner receives all profits and are also
liable for all losses (Cavusgil and et. al., 2014). The control of whole company is also with
owner himself. According to , setting partnership is also simple but here all the members are
jointly liable for the acts of single member also. Another structure is company which is not easy
to operate but has several benefits. All these types organisation structures are linked with
functions of organisation as well because functions which are performed by sole trader or
partnership firm or company is nearly same. The difference is only of resources available with
company. If more resources ad funds are available then a private company can be opened but if
less resources are there then sole traders is good option .
TASK 3
P4 Positive and negative impact of Macro environment on Business operations
Macro environment has big impact on activities performed in a company. The elements
present in external business environment effects the work done in company. They are influencing
the growth of company. It can be in positive way or negative way. Either it brings organisation
on top or bring it down by giving threats continuously. The impact of Macro environment on
Marks & Spencer is as follow:-
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Political – It influences internal environment of M&S by introducing new laws and regulations.
New tax laws has been introduced by government of UK for increasing revenues of country. But
it is not going well with companies because more tax is implied on companies which is indirectly
received from customers . Thus has reduced organisations sake because rates of products and
services is increased (Drucker, 2017). Hence purchasing ability of customers has decreased .
This step does not lead to development of either company or country.
Economical – Economic conditions have a big impact on functioning of company. If a country;s
economy is not going well then there will be changes in policies and procedures of company. UK
has faced lots of economic problems because of which there were major changes in policies of
M&S. Because of unemployment , purchasing power of customers has decreased so is the sale of
company.
Legal – The laws and regulations that are implied on M&S by UK has impacted the internal
system a lot. These laws are implied by government to company. Some rules are made for
benefit of employees but some are made for country's benefit which is not good for customers as
well as employee because it does not provide any benefit for individual rather harm them.
Technological – Marks & Spencer should bring more and more technologies into the
organization to perform work more easily. The world is becoming digital ow and if now
companies will not become digital then it will not be able to connect with the customers.
Techniques that will help company in managing activities inside management and outside
customers should be implemented very fast . All the staff members should be given proper
training for using these technologies.
Social – Factors related to society also impacts company like in case of M&S , the likes and
choices of customers , their taste and preference is very important for company to be known
because then only company will be able to produce goods as per the wish and demands of
customers (Elliot, 2011).
Environmental – It includes factors like polluting environment, produce huge amount of
garbage etc. company should try that they are not providing any harm to environment and
should try to recycle wastage that has been been collected while producing goods.
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TASK 4
P5 Internal and External analysis of M&S
In order to analyse internal as well as external environment of Matrks &Spencer ,
company' s Swot Analysis ans PESTLE analysis need to be dine which will then define the
strengths and weaknesses of company.
SWOT analysis of M&S is as follows:-
STRENGTHS WEAKNESSES
 High Quality- They are a provider of
high quality goods which are making
M&S successful.
 Customer Services- They are very
good in dealing with customers and is
good in maintaining good relationship
with its customers.
 Manager Training- it conducts a strict
manager training so that they now
what work they have to perform and
no mistake is happened (Osterwalder
and Pigneur, 2010).
 Clothing lack segmentation- they are
lacking in providing segmentation to its
customers because nowadays customers
prefer products off different brand label
at one place.
 Stock Control- There were many situation
s like when customers were told that
product was out of stock so, this type of
situation should not arrive and extra
products should always be stored by
companies in case of out of stock.
 Waste Store Spaces- it has a good store
space but it is not being utilized properly
and is lefty empty.
OPPORTUNITIES THREATS
 Internet technology- it is used widely
by company to attract customers and
to sell products online and customers
are getting used to this model a lot.
 Healthy Eating- company should see
that what type of eating products are
liked more by customers and should
 Strong competition- they are facing
strong competition from companies like
Tesco, Asda, Safeway. They all ae having
good quality products and good customer
base.
 Change of societal environment-
customers taste and choice changes very
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provide more of that so that more
selling is done and customers are
made.
 Marketing Extending- it can expand
itself by giving franchise to various
other businessman who can
successfully operate it in market and
should also enter into partnership
with other successful ventures.
fast so companies should always be
updated about the changes that are
happening in environment (Teece, 2010).
Pestle analysis of Marks & Spencer can be given as:-
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Illustration 1: PESTLE analysis

(Source: External environmental factors, 2017)
Political Economic Social
Government has regulated
health and safety British
Standards and company has to
abide by it.
It helps in rising income
for economy because it is
making huge profits in its
segment.
Changes in customer's taste and
preferences is a big social element
that company should take care of it.
Technological Legal Environmental
Internet is helping them a lot
on selling their products.
Mobile phone selling is highly
preferred by customers
(Trkman, 2010).
Laws related to standard
packing . Manufacturing
and using eco friendly
material is also preferred.
Company should try to manage its
waste and try to recycle it. They
have even come up with a
development program called Plan A.
P6 Interrelation of Strength and weakness with external Macro factors
The interrelation of external factors with Strengths and weaknesses of Marks &Spencer are:-
Political Factors- New tax policy that has been introduced by UK has declined the sales
of companies and purchasing power of customers. But companies there are providing more
employment to people which is working in favour of government.
Economical Factors- Company is making huge profits which is good for economy and
the bad economic conditions that are prevailing or have prevailed in economy is taking company
towards loss.
Social Factors- M&S are producing good and services as per needs of customers is a
strength but due to fast changing environment taste of customers are changing which is a
weakness for company (Schaltegger, Lüdeke-Freund and Hansen, 2012).
Technological Factors- Involving new technologies in company is a strength but not
training employees about its usage is not good.
Legal Factors- If company is following the laws made by government then it is good but
these laws should provide benefit to employees as well otherwise work will hamper.
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