Analysis of Business Environment for Marks and Spencer (M&S) Report

This report provides a comprehensive analysis of the business environment of Marks and Spencer (M&S). It begins by defining the business environment and its impact on organizations, highlighting the importance of both internal and external factors. The report then delves into the different types of organizations, including public, private, and voluntary sectors, and their respective purposes, using M&S as a case study. It examines the size and scope of M&S, comparing it to other organizations like Cafe Coffee Day and the National Health Service. The report further explores the relationship between organizational purposes, structures, and objectives, illustrating these connections through M&S's marketing, human resource management, operations, and finance departments. It also includes SWOT and PESTLE analyses to determine the company's strengths, weaknesses, opportunities, and threats, as well as the impact of macro-environmental factors. The report concludes with an overview of the key findings and their implications for M&S.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1 ..............................................................................................................................................1
P1 Determining Purposes of different types of Organisations.....................................................1
P2 Size and scope of different types of organisation...................................................................3
TASK 2............................................................................................................................................4
P3 Explaining Relations among different organisational purpose, their link with structures and
objectives.....................................................................................................................................4
Task 3 ..............................................................................................................................................7
P4. Positive and negative impact of macro environment upon business organisation................7
Task 4 ..............................................................................................................................................9
P5 Studying on Internal and External Analysis...........................................................................9
P6 Ways in which Strengths and Weaknesses interrelate with macro factors...........................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................11

INTRODUCTION
Business environment compiles of different process and production which are inter
related with attaining of aims and objectives. It is dynamic in nature therefore it affects every
process which can go both ways, either positive or negative. Moreover it can help in gaining
efficiency in working environment or performing tasks in an effective manner. “Business
Environment” single word but both letters got different meaning and when combined , defines
the business aspects. Business, in simple words bunch of activities performed like production,
sales and purchase. Environment means the place where these activities takes place. Two factors
mainly which affect organisation are: External and Internal Environment. Under Internal factors
there are five factors {Money, machinery, materials, and man power}. External environment
consists of political, social, governance and legal factors.
Under this research, Marks and Spencer (Abbreviated as M&S) has been opted which is a
British Multinational company headquartered in London. In 1884 this company was founded by
MICHAEL MARKS and THOMAS SPENCER in Leeds where both met for jobs. Clothing,
home products and luxury food items are certain sector in which company works. In current,
company has approx 1459 stores opened across Globe in which 625 stores only sell food
products. M&S have expanded their business in India consisting of 60 stores, 38 in Russia and
many more countries. They are successful in improving graph sales of food whereas clothing
sector is falling down.
Under this study, specific intellectual research will be conducted on some specific topics
like different types, sizes and scope of M&S. Significant factors which will be determined is
internal and external environment. Apart from that SWOT and PESTLE analysis will be done on
M&s in order to determine strengths and weaknesses of the company.
Task 1
P1 Determining Purposes of different types of Organisations
In current competition environment, several types of organisation performs to gain high
growth in market and acquire good share in marketplace. This is beneficial for society and
economic conditions as well (Avramenko, 2012). On the basis of business process, these bodies
are divided into three sections, mentioned under:-
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 Public sector: This type of sector is owned and run by governance bodies who regulates
this sector to give best services to the members of society. Being the root of this sector
'Finance' can be called as power house which comes from the people in form of tax and
then this tax is allocated as finance in Govt. firms for economic development of society.
British Broadcasting organisation is an illustration of public service provider. They run
with the purpose of enriching people's lives with programmes and services that educate,
inform and entertain by being creative corporation in the world. The government runs the
organisation through revenue generated in the form of taxes. The aim is to provide
quality services to viewers. It employs people on full times and part time basis. The work
force of this organisation is 20,916 in number. The net income for this establishment
accounted for 59 million euros. Private Sector: This sector is owned and run by private firms. Although, authorities are in
hand of Govt. as rules and regulations are governed by government. Still somewhat
freedom is enjoyed by the private firms. Different types of process which can be seen in
private sector are sole proprietorship, partnership, or it can be franchises. For example:
M&S is a private firm which have market share across global. It is a British multinational
retailer headquartered in London. This company was established in 1884 by Michael
Marks and Thomas Spencer. In present scenario, they have franchises all around the
world which are working on own set of rules but still the legal section are under the eye
of Govt. of respective country. In 2017, there are more then 1000 stores out of which 615
consists of food stores. Number of employees are more then 250,000 with turnover of
10,622 million Euros. Purpose of M&S is to make inspirational quality accessible to
others.
 Voluntary Sector: This sector is not particularly owned by any single entity. However,
there are some bodies which are responsible for ensuring the completion of aims and
objectives. NGO (Oxfam) can be seen as example of voluntary sector because Oxfam is
now owned by any single or in partnership entity but its aims and objectives which are
helping old age people and not only human but animals as well who needs help are
ensured to be achieved by some of the employees. The main purpose of Oxfam is to
create lasting solutions to the exploitation towards poverty. There is no data regarding
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the number of volunteers under this organisation. They provide shelter or employment to
the people who needs help and are abandoned by family of world.
P2 Size and scope of different types of organisation
For a business there are some certain structures needs to be constructed for the operations
performed in process in order to attain dynamic environment and particular standards of
performance (Bar-Isaac and Shapiro, 2013). Dimensions of a company always depend on their
effective working, performance and competencies market. Therefore, firms in economy are
divided into small, Micro and medium business entity.
Marks and Spencer
M&S being a food chain dealer is the largest dealer in retail market of luxurious food
items. They expanded their business across the globe making it a world wide supermarket
company. They successfully acquired most percentage of market share along with the
competencies market. They are providing employment to large group of people which is more
then 70000 employees thus growth and development of whole economy. They have achieved
high market shares by expanding their business operations all around the globe. They have high
scope as there business operations are expanded all around the globe at national and international
locations. They are offering large variety of grocery products to their customers thus enhancing
their sales and profitability ratios.
M&S tried to expand their business in clothing sector but unfortunately, their graph level
of sales and revenues are falling whereas food market graph is increasing on rapid speed. So
M&S focused more on food market so that it can be increased at its maximum by providing best
quality and satisfactory services to the new and existing services.
Cafe Coffee day
CCD being a global company deals and are specialised in coffee products. Their product's
quality and taste are unique and good which made them go global. In current, they are the
leading and competition company to Starbucks in the international marketplace. At regular
period of time, CCD organise feedbacks by which they collect data and develop their taste and
quality to provide satisfaction to old and new customers. On becoming part of micro business
they do perform outside UK as well. CCD are having their business operations in public sectors
and they have recruiting talented employees who can perform all their business operations in
effective and planned ways. They have expanded their business operation's all around the globe.
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Its scope of business totally works upon the effective performance level and improving
graph levels. Business expands when customers expand. In order to attain profitability and cash
flows , company has to look after their services and products.
National Health Care
These business are working in order to provide effective service to all their customers.
They had employed more then 30000 employees who will perform all business operation's in
effectual and planned ways. Healthcare services are believed to be a essential right of the citizens
of a nation and NHS aims to fulfil that in cost effective manner. The scope of business have
expanded as they have ventured into R&D and promoting young entrepreneur who possess a
strong idea which fulfils the social needs of people.
TASK 2
P3 Explaining Relations among different organisational purpose, their link with structures and
objectives
Functions of an organisation are related with aims and objectives. These functions are
structured with an aims of achieving mission and vision of business organisation. Marketing,
HRM, research and development, accounting, finance, purchasing, sales etc. are several
organisational functions (Cai and Yang 2014). By adopting this, authority of M&S can improve
sales and develop high revenue graphs. In an organisational structure, delegation of work and
responsibilities helps managers to maintain the quality of performance. They are useful for
establishing cooperation and coordination between staff members of various sections.
Chart of an organisation
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(Source: Interrelationship between objectives and organisational structure, 2017)
As per above diagram , M&S has various sections which interrelates with its aims and
objectives. Firm's structure, all departments, and activities carried out by employee are
dependent on each other. Below mentioned is the interrelationship of organisational structure
with functions and objectives:- Marketing: This section of an enterprise plays a essential role in external market. It is
helpful in growth and development of commercial entities. In M&S, this functions
allows to increase value of its products and services at marketplace (Cavusgil, Ghauri
and Akcal, 2012). Higher sales can be attained by improvement in online sales,
advertising, personal selling etc. Marketing is considered as the front side of an
enterprise as that's the reason which bring customers, although marketing major role is to
define and organise brand's value but it can easily notifies the needs of customers.
Through application of effective marketing strategies a company can fulfil its objective
of earning profits in the market. The interrelation of marketing function with R&D can
help in creating products which are in huge demand. Human Resource Management: Role of human resource management is to manage the
resources of an organisation. In simple words, they manage the employee's productivity
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Illustration 1: Organisation's Functions

and efficiency. In M&S, human resource department is working at all levels for
establishing cooperation and coordination among staff members (Herbst and Merz,
2011). They need to work together in order to perform effectively. For example; HR can
assign different roles and responsibilities to employees according to their abilities. The
function of HR relates with various other organisational functions. The company's prime
objectives of achieving a certain level of profitability can be provided by human
resources with development of human capital so attain efficiency in the organisation. Operations and Production: It is the major function of every business to satisfy their
customers needs by providing them high quality services. Production is an input area
which turns raw material into finished or consumable goods. Operational managers have
duties to regulate on production effectiveness. This department also study on the market
trends and customer's want and market situation which directly affect the sales and profit
of organisation. Operational department also ensures that production plans are met on
time and they are fulfilling the buyer's needs and demands (Marston and et. al. 2011). Accounting and Finance: This department monitors cash flow of money in business
organisation. Finance manager of a company is capable to keep financial records and
annual budget. In M&S, accounting and finance department states cash flow of the firm.
This department does not only monitor but also maintain the finance flowing as it is
required for various aspects like promotion, product development, holding assets and
acquiring a new venture. Moreover, the liability of the firm is dependent on finance
sections as this is the only way of paying company's debts. Finance is considered to be
the most crucial organ of an establishment. Finance fulfils the day to day requirement of
business such as ensuring smooth running of operation cycle and allocating budgets to
various department to carry out their operations.
 Research and development: Identifying needs and wants of the customers by researching
and surveys. Knowing power and strength of competitors can be done through this
department. Research and development department conducts feedback surveys towards a
particular product in M&S (Meiners, Ringleb and Edwards, 2014). There are some
functions of this division with which managers can achieve goals and objectives of
business organisation effectively. They can be like development of new product and
services, keeping an eye on operational as well as strategic plan and forecasting for the
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growth and development of firm. The market research identifies the area which carry a
scope of business operations. Forwarding that too the R&D department will conduct
various experiment to provide the same in the ideal manner. Accomplishment of this
carries a direct link to the organisational objectives of earning profits through products
and services.
Task 3
P4. Positive and negative impact of macro environment upon business organisation
There are many factors which make impact on an organisation's performance directly or
indirectly. Two environmental factors on which most of the organisation works in are Micro and
Macro business environment. Macro environment consists of several elements which are related
to company's boundary and that can affect the overall business process. Micro environment can
be stated as a situation where firms operations have a vast impact on each operation which are
essential for growth and success. Appropriate analysis can be done through PESTLE analysis in
which political, economic, legal, social, technological and environmental factors are involved.
These are most important which impacts on organisational overall performance are described as
under: Political Factors: For country's growth and success it is essential to establish rules and
regulations to maintain the decorum of business process by Country's Govt.. M&S is a
popular Multinational British company who provides high quality goods and services to
clients in order to fulfil satisfaction (Morgan, 2012). Positive effect of this factor is that a
company will follow guidelines provided and they will not go out of the track like for
illegal trading. Negative impact can be stated as political parties changes after certain
period of time and that will lead to new set of rules every time and Business always plans
for long term so that will affect their strategic plan. Economic Factors: It is highly important for each firm to maintain their economic
condition, so that process will be performed in well planned manner. Profitability and
growth of M&S is based on satisfaction level of clients who want to take advantages of
offered services by firm. Positive impact of economical factor is domestic and
international growth of company inspires the development of strategic thinking in order
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to create an effective management plan by managers to achieve objectives (Moutinho,
2011). Social Factors: These factors has a vast impact on retailing, clothing and food industry
due to market trend and lifestyle of people. Social factors include age, income level,
population, attitudes and occupation. It has negative effect of taste changing as now-er
days customer's taste is changing with new innovation of products in market. Trend is
also another factor which effect business process. If M&S does research of market like
market demands and trends that now-er days if followed, so M&s can do a study and then
launch their products and services for profitability (Pikka, Iskanius and Page, 2011).
Marks and Spencer operates their business activities as per the local culture and
environment of country. Legal Factors: Govt. of UK has enforced several laws which keeps a track of illegal
retail activities and one of them is Food Safety Act launched in 1990 to set and maintain
food standards. In year 2000, there were several food standard agency developed to
maintain regulations and health of public by food safety. Thus, M&S has been following
those guidelines and laws for legal environment in company. Benefits are factors that
involves skills and expertise which can regulate ethical code of conduct but it can affect
in negative manner like for example if Govt. increases tax percentage in import and
export then M&S will face certain difficulties to launch new products with same price
and thus loosing of customers can happen. Technological Factors: In time, Innovation and technology has changed standard of
living for every common man. There are several positive factors of technology is that it
reduces time and increases productivity which makes their product unique, innovative
and impressive (Pestle analysis 2017). Technology plays a part in developing websites
and online selling. Negative impacts which can be stated that every organisation can not
adopt new technology and techniques to compete with large businesses.
 Environmental Factors: Producing of ecological and economic products which does not
affect people in negative manner should be focused by M&S food products. Positive
effect of environmental factors is that it is helpful in domestic growth of business.
Negative impacts can be said as changes in environment can affect growth of grains in
farms (Vaiman, V., Sigurjonsson, T.O. and Davidsson, P.A., 2011).
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Task 4
P5 Studying on Internal and External Analysis
Managers of M&S conducts internal and external analysis in their organisation. Research
on both environmental sector allows company to gain knowledge about their strengths,
weaknesses, opportunities and threats. SWOT analysis is essential for major decisions which are
taken in an organisation by managers. Their outcomes can be effective only when the research
has been done before the conclusion assumed. Below mentioned is SWOT analysis of M&S:
Strengths  One of the most powerful retail brand.
 Value for money products.
 Contains own brand labels.
 Over 1000+ stores across 40 countries with over 90,000
employees working.
Weaknesses  Declining in profits.
 Usage of Old techniques.
Opportunities  They can develop their own websites.
 Introduction of new market segments offering more
profitability.
 Future opportunities to expand themselves into India and
China.
Threats  Due to discounted price in other stores , they can proved as
threats.
 Being a global company , M&S are exposed to different
political factors within countries.
 Change in Govt. policies.
Affect of SWOT analysis on decision making process:
 Analysation of competencies level and developing strategies in order to lead the
competition stage.
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 It assists in realising of goals and objectives of the firm which then creates a platform
from current to future where company wants to be.
 Enhancing internal and external factors which creates goodwill.
 Motivating to upgrade next stage within time being.
Recommendations: As per above research, it can be stated that M&S are in good position where
they can use their strength to grab new opportunity of expanding their business in international
market. They can tackle their threats by new effective strategies like raising standards to fulfil
needs of customers.
P6 Ways in which Strengths and Weaknesses interrelate with macro factors
Everything is interrelated with each other in a business process. Company's strength and
weaknesses are directly affected by macro environmental factors (Vercellis, 2011). Macro
environmental factors can be done through PESTLE analysis.
Political factors: Competitive standing of a firm is directly affected by political
environment analysis in marketplace and if company is following all the Govt. policies then the
path of being successful becomes easy as compared to other firms who plays with legal bodies.
For example if Govt. of any reduces tax rate then it is easy to grab more customers through
import and export in cheap prices by M&S.
Economic factors: Strengths and weaknesses are impacted by market condition as well.
Sales graph and company's standards increases when economical conditions of a company
changes. Positive changes in the environment becomes strength and negative changes influences
weaknesses.
Social factors: These factor play an essential factor in performance of an organisation as
taste changes according to trend and environment and social development has positive impact
over the productivity of an organisation.
Technological factors: New effective techniques and technological inventions can raise
the standards of company in no time but all these requires time and money which every firm can
not afford to utilise (Zeng and Duan, 2012). New opportunities and development of products and
services can be observed when technology is a firm is upgraded on a regular basis of time.
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