Business and the Business Environment Report: M&S Analysis

This report provides a comprehensive analysis of the business environment, focusing on Marks and Spencer (M&S). It begins by defining a business and its environment, differentiating between micro and macro factors, and then delves into various types of organizations (public, private, voluntary) with examples like the NHS, M&S, and Oxfam. The report examines the size, scope, mission, and legal structures of these organizations. Task 2 explores the interrelation of organizational functions and objectives, using an organizational chart to illustrate how departments like HR, Finance, Marketing, and IT interact to achieve company goals. The report further investigates the positive and negative impacts of macro-environmental factors (political, economic, social, technological, etc.) on businesses. Finally, it concludes with a SWOT analysis of M&S, examining its strengths, weaknesses, opportunities, and threats, and how these relate to macro-environmental factors.

BUSINESS AND THE
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK1.............................................................................................................................................3
Types and purposes of organisations......................................................................................3
Size and scope of chosen organisations.................................................................................6
TASK 2............................................................................................................................................7
Interrelation between organisational function and organisational objectives........................7
TASK 3............................................................................................................................................8
Positive and negative impact of macro environmental factors upon the business ................8
TASK 4 .........................................................................................................................................10
SWOT analysis of Marks and Spencer.................................................................................10
Interrelation of weakness and strengths with macro environmental factors........................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
An organisation where goods and services are exchanged with one another for some
value is a business. Every business requires capital and enough customers, to whom goods and
services can be sold. Business environment consist of micro and macro environments. Micro
environment consist of company's internal factors which are controllable under which firms
operates like competitors,suppliers, etc. and influences the organisation directly. Macro
environment consist of external factors which are uncontrollable and affects organisation
indirectly and it includes economic, political, social, legal, technological, environmental factors.
Organisation undertaken in this report is Mark and Spencer which was founded in 1884 and it
specialises in clothing, home products and luxury food products. Types of various organisations
with their size, mission and scope will discussed in this report. This report will also covers the
relationship between various department in an organisation. Furthermore, positive and negative
influence of Macro factors of environment will also discussed in this assignment.
TASK1
Types and purposes of organisations
There are numerous organisations in a marketing world operating for different purposes .
Every organisation has separate mission behind their survival in the market. Existence of every
organisation depicts some purpose which can either be maximising share holders wealth or
maximising profit. Organisations are living bodies, they are the vehicles which helps in
improving life and the world. They should have the ability to adapt the pervasive function of
organisation. There are various types of organisations such as voluntary, public and private
which can are discussed further:
Public organisation : Any organisation that is working under the legal compliance of
government of the country are public organisations (Abdi Mussa and et. al 2013). Primary
motive of these organisation to ensure welfare for the society. It provides facilities like
education, food, health etc. Share of these organisations are freely sold to the individuals.
NHS(national Health Service) It is a organisation which is engaged in health services and the
part of public organisation.
Purposes of Public organisations are :

 Transforming economy : Public sector was acknowledged to modify the economy such
that it move towards socialism.
 Redistribution of wealth and income : Transfer of income and wealth from those who
have to those who need it.
 Development of socio economic infrastructure : Infrastructure is a basic requirement of
economic development. Public sector is accountable for maintaining and constructing
facilities that assist social services.
 Generates employment opportunities : Public sector is responsible for generating
employment opportunities in an economy
Legal structure
Local government : It is controlled and managed by municipal corporations and decisions are
taken by local bodies.
State government : It is managed and controlled by state authorities which usually rules the
state and follow the policies of central government.
Central government : It makes rules and policies for the whole nation.
Private organisation- At present, many countries have adopted the policy of
privatisation through which private sector is gaining importance (Agarwal, Grassl and Pahl,
2012). Organisations that are privately owned and managed by individuals are private
organisations. Their purpose is to earn profit. Their working areas include finance, information
technology, manufacturing, banking etc. They do not enjoy the powers of public sector
organisations. They raises money by issuing shares and debentures or by taking loan.
For instance Mark and Spencer is a public limited company which is a retail industry. Its
main purpose is to serve their customers with clothing products, luxury food products and home
products. It contributed in the expansion of its domestic and international market.
Legal structure

Partnership : A type of business organisation in which two or more persons come
together, invest their money, skills and other resources and share profit and losses in accordance
to their legal agreements.
Sole proprietorship – A business which is owned and managed by single proprietor is a
sole proprietorship. It does not need any legal requirements. In this, owner is held liable or
responsible for all the actions in an organisation.
Limited company- It is a type of business structure which has been incorporated into a
separate legal entity. Under this people are separate from the company. Company has its own
identity.
Multinational corporation- Those organisations which are operating and functioning its
products and services in more then one country other then their home country is referred to as
multinational corporations.
Global company – Companies that are operating all over the world are referred to as
global company. Due to globalisation, companies are able to increase their trade worldwide.
Transnational company – Company that operates in more then country and does not
consider any country its home country then such organisations are called transactional
organisations.
Voluntary organisation: Organisations which are governed by its own members and not
by any outside or external force. They are independent, flexible, democratic, non profit
organisations which are working for the welfare of the society. Their area of operation is narrow
and region specific. It is registered under suitable act to give corporate position to a group of
individuals so that they get a legal identity (Al‐Najjar and Anfimiadou, 2012). It has a
administrative structure which have definite aims and objects. For instance, organisation
undertaken here is Oxfam. It is international non governmental organisations which has
numerous independent charitable organisations. It was founded in 1942 in UK and its objective
is to eliminate poverty worldwide.
Purpose of Oxfam:
 It creates solutions for long lasting poverty.
 Recognizes the critical importance of gender injustice and effectively responds to the
environment.
 It uses sustainable development programs, public education, fair trade, etc.

Legal structure
Trust – They are governed by trustees only and no individual member can run voluntary
organisation. They have trust and amendments deeds.
Unincorporated Association:- Trustees in this are constituted with binding contract.
Company limited by guarantee :- Governed by directors who are also trustees in an
organisation.
Charitable incorporated organisation :- Governed by trustees and members with a
judicial duty to act in good faith.
Size and scope of chosen organisations
Different businesses have different sizes depending upon the functioning and operations
in the organisations. Their objectives are different in the term of goods and profits along with
their sizes scope and legal structures. Share holders are playing an important role in such kind of
organisations. Their size and scope are as follows:
Marks and Spencer (M&S):
 Size- M&S is operative in 50 nations along with 1463 stores in this nations. The
institution has 80,787 employees in these nation. Reported revenue from the financial
report of company in March 2017 was approx. £10698.2 million pound(). M&S is
acquiring small players in various countries in order to expand their business operations
 Scope- Marks and Spencer is a growing organisation because of its effective plans and
policy.(Boons and Lüdeke-Freund, 2013). Their founder Michael Marks and Thomas
Spencer by providing superior quality products and offer to their customers achieve sales.
 Vision- Mark Spencer make products as per the requirement of customers which helps
them in maintaining quality of products and attracting more number of customers.
 Mission- M&S is the largest growing company in the world so they want to provide
quality products and services to their customers so that, they will become loyal for the
organisation.
National Health Service (NHS):
 Size: It is the largest public organisation in the world on the basis of its employees.
Organisation has more than 1.5 million employees who provide their services in effective

manner. In their staff there are more than 1.5 lac doctors with more than 3 lac regular
health visitors.
 Scope: Its scope is huge in UK and all over the world. Organisation provides health
services in UK along with another nations in the world due to which they maintains their
sustainability and growth in the world.
 Mission: Its main objective is to provide medical services to the needy people which can
be possible through their efficient employees. For this, they makes their decisions and
strategies in order to provide better medical services to their customers.
Oxfam:
 Size: It is the largest voluntary institution of UK and it contains 20 development trust
which are working for the improvement and wellness of society. It has 1200 branches in
all over the world along with more than 19000 volunteers. Who works for the institution
in order to improvement of livelihood of the people.
 Scope: Its scope is connected with the preset objectives of the firm. For this, their
workforces are providing their maximum efforts that will be helpful for the institution.
 Vision: Its main vision is to provide better service to the poor individuals so that the
poorness will be eliminated from the nation.
 Mission: Its main objective is to supply essential services to the poor individuals so that
they can easily spend their living.
TASK 2
Interrelation between organisational function and organisational objectives
Illustration 1: Organisational Chart of Company

Source: Organisational Chart of Company. 2013
Large proportion of workforce are employed for Marks and Spencer in antithetic
department for achievement of organizational goal(Chang, 2016). It includes selling, operable,
department of Human resource etc. Top level consider chair persons, decision makers and
stockholder who are responsible for communicating information between different departments
to supply data and provide guidance to employees. Management is responsible for motivating the
employees which in turn will enhance them to work towards the attainment of organisations
objectives. All departments are inter related to each other in some or the other way. For
instance :-
HR Department- This department is a decision maker in an organisation regarding
recruitment, employee's salaries and wages, etc. HR department is interlinked with finance as
both the departments work towards one ultimate goal of achieving higher level of profitability
and performance. For instance, HR manager must consider the cost and expenses to be incurred
for recruiting new employees. In marketing, social media will be of great help to the HR
manager for finding right potential candidate.
Finance department- This department will be held liable for collection of monetary
resources from various origins, allot them in various departments as per their necessitate. It helps
another department for making easy in their functions(Dibrell and Moeller, M., 2011). For
instance, finance department have allocated budget for promotion or marketing of product which
creates a link between finance and marketing department.
Marketing department – Marketing comprehend the entire business. Primary motive of
this is customer satisfaction. This department will work with other departments to achieve the
objective of organisation. It will work with production department to analyse the market needs,
to generate orders, for research and development etc. It is linked with finance department to
ensure that there is adequate budget is available to meet the needs of research, promotion and
distribution. It is linked with HR department to ensure that suitable ability and knowledge is
there to meet product targets, to develop new ideas , etc.
IT department – This department handles issues relating to technological issues that
arise in an organisation. This is responsible for hardware, software and networking of computers
in company. IT department helps finance department to make accounting data and create reports
with the help of operating system within the company. It enhances the flow of information

between different departments. Different software help marketing department to design the
graphic images, advertisements, etc.
TASK 3
Positive and negative impact of macro environmental factors upon the business
Organisation is surrounded by various factors. It consist of all the factors that shape
opportunities but also poses threat to the company. These forces indirectly affects the company's
operations and they are uncontrollable factors. This consist of forces like political factor,
economic aspect, social factors, technological factors, etc. For instance, mark and Spencer being
operated in multiple nations faces several forces that affects their operations.
Political factors – M&S operates in several countries. Therefore, organisation faces
political issue because of various laws and legislations in these nations. Marks and Spencer have
to gave emphasize on such type of political factors that are economical stability of the
government and inflation rates.
 Positive impact: The current policies which are existing in UK and other nations
providing benefits to the organisation. Due to this, organisation can expand its business
operations in these nations.
 Negative impact- Modification in policies provide adverse influences and restrictions on
Mark and Spencer. Therefore, marketing decisions are influenced by developments and
changes in political environment. This could decrease the sales of the company which in
turn can lead to customer dissatisfaction in the target market.
 Economical factors: Mark and Spencer has a huge market presence in the world and it
gets large revenues from different countries. (Goel,and et. Al 2012) In order to generating
more revenue company have to implement some strategy and plans which are related
with the economical fluctuations such as GDP and standard of nation.
 Positive impact: Economic factors will help to generate the employment opportunities in
a company. This will contribute to the GDP and over all growth of the organisation
increases. .
 Negative impact: Hight taxation and duty charges will restrict the company to sell their
products in another country.

Social factors: It contains perception and preference of clients that affects the business
activities. These elements contains education qualification and age of customers.
 Positive impact: M&S have to measure the requirements of customer in order to
enhancing the customers.
 Negative impact: In some areas where customers have no knowledge about the products
gave negative influence on the profitability of organisation.
Technological factors: These element includes effective utilisation of tools and
techniques in order to taking competitive advantage in marketplace.
 Positive impact: Adopting new tools in the industry will provide assistance to
organisation in the terms of enhancement in sales.
 Negative impact: Old fashioned techniques may wrongly impact on the brand image of
organisation.
Legal factors: There are various countries in which M&S operates its business activities
so, they have to follow various laws and rules that are created by localised governments in order
to getting satisfaction from the customers.
 Positive impact: Management of M&S have to follow the guidelines which are created
by the government which helps them in maintaining standards of quality in products.
 Negative impact: There are some areas where M&S have not followed the guidelines so
that, they have paying penalties on that time which gave negative impact on the brand
image of M&S.
Environmental factors: It affects directly on the performance of organisation. So,
company have to follow this kind of laws which are related with environment protection. (Klein,
2011).
 Positive impact: M&S has set their vision for reducing their wastage by 50% in order to
get improvement of production.
 Negative impact: These factors can not be ignored because if a company is neglecting
them they will get wrong impact on their brand image. (McGrath, 2013).

TASK 4
SWOT analysis of Marks and Spencer
SWOT analysis is theoretical account of identifying strength, weakness, opportunities
and threat of an organisation. It used by business organisations to assess initiatives and products.
It is considered a powerful weapon for decision making because it enables an entity to grab the
opportunities for success and identify threat. Strength and weakness are internal attributes
whereas opportunities and threat are external attributes. SWOT analysis of Mark and Spencer :-
Strengths Weaknesses
 Clear brand image as, it positioned
itself as a high end value product which
target superior portion.
 They have their own labels in almost all
categories like veromoda, versace , etc.
 Innovation
 Diversity as they have employees from
all religions and genders.
 Inability to enter successfully in global
market because most of their designs.
 Customer dissatisfaction related to
return policies and in store experiences.
 Weak distribution network which could
frustrate the customer.
Opportunities Threats
 Integrated through technical companies
provides possibility of enhancement in
operations with new techniques.
 They have the opportunity to enter in
new segments like traditional and
ethnic in countries where there is
demand.
 Competitors like Zara, madam, Allen
Solly , united colours of benetton etc.
 Changes in the environment and needs
of the people .

Interrelation of weakness and strengths with macro environmental factors
Macro environment and strength and weaknesses are closely related to each other.
Strength and weakness are the internal factors of the organisation which are controllable and
macro environment consist of political, social, economic and technological factors which are
uncontrollable.
Political- These factors are regulated and controlled by the government like trade policy,
various taxes and many more. If government introduce such policies which will increase the
strength of Mark and Spencer such as reducing taxation rate will allow company to sale more at
lower price will enhance its growth (Kruger and Noxolo Mama, 2012). On contrary, if tax
increases then company will sale its products at higher prices and this will weaken the sales
revenue. Therefore, the weakness of Mark and Spencer is, they can't adopt some changes which
are related with political factors.
Economical- If cost of labour and manufacturing will be low then this will be treated as
strength for the Mark and Spencer. But if cost of labour and manufacturing is high then this will
be treated as weakness for the organisation which has a impact on its sales..
Social- Social factors consist of population growth rate, lifestyles, attitude, education ,etc.
( Malerba and et.al 2015). As mark and Spencer is operating in different countries which
employees people from different religions is a strength for company which will satisfy the needs
of all the social groups and society without being biassed towards any single group or society. At
same time, customers needs and preferences changes with the changing environment and if
organisation lacks to meet the customer demand then this will reduce sale.
Technological- These factors are related to the research and development, impact of
emerging technologies, technology transfer, etc. Mark and Spencer, being innovative is a
strength which would induce them to produce unique products with new design. This will attract
customers toward the company. Company has a weakness of distribution network and return
policy which will move customers away from the company. Technological factor can help to
increase , renovate and update the online policies of the company.
CONCLUSION
Above report concluded that the outer and interior part of an organisation plays crucial
role in the enhancement of organisation. Managers of M&S have to formulate specific strategy
plans and policies in order to reducing the factors which gave negative impact on the brand

image of Marks and Spencer. Various functions and activities of every department are discussed
in this assignment along with their interrelationship. Different type of external factors have been
measured and their positive and negative impact on the brand image of organisation identified.
SWOT and PESTLE analysis were conducted in the above report for analysing the factors in
order to get growth and sustainability in near future.

REFERENCES
Books and journals
Abdi Mussa, M. and et. al 2013. Aligning IT strategy with business strategy for competitive
advantage: a structural equation model. International Journal of Business Excellence.
6(4). pp.425-447.
Agarwal, R., Grassl, W. and Pahl, J., 2012. Meta-SWOT: introducing a new strategic planning
tool. Journal of Business Strategy. 33(2). pp.12-21.
Al‐Najjar, B. and Anfimiadou, A., 2012. Environmental policies and firm value. Business
Strategy and the Environment. 21(1). pp.49-59.
Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-
the-art and steps towards a research agenda. Journal of Cleaner production. 45. pp.9-19.
Chang, J. F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
Dibrell, C. and Moeller, M., 2011. The impact of a service-dominant focus strategy and
stewardship culture on organizational innovativeness in family-owned businesses.
Journal of Family Business Strategy. 2(1). pp.43-51.
Goel, S. and et. al 2012. Strategy, ownership, governance, and socio-psychological perspectives
on family businesses from around the world. Journal of Family Business Strategy. 3(2).
pp.54-65.
Klein, A., 2011. Corporate culture: its value as a resource for competitive advantage. Journal of
Business Strategy. 32(2). pp.21-28.
Kruger, C. J. and Noxolo Mama, M., 2012. Incorporating business strategy formulation with
identity management strategy formulation. Information Management & Computer
Security. 20(3). pp.152-169.
Malerba, F., Caloghirou, and et.al 2015. Dynamics of knowledge intensive entrepreneurship:
Business strategy and public policy (Vol. 38). Routledge.
McGrath, R. G., 2013. The end of competitive advantage: How to keep your strategy moving as
fast as your business. Harvard Business Review Press.
Temminck, E., and et. al., 2015. Motivating employees towards sustainable behaviour. Business
Strategy and the Environment. 24(6). pp.402-412.

Online:
Organisational Chart of Company. 2013. [Online]. Available
through:<http://www.innovationmanagement.se/2014/04/03/for-all-departments-how-
can-ip-help-hr-rd-sales-and-marketing-production-finance-purchase-ceo-or-owner/>.
Revenues of M&S. 2018. [Online]. Available
through:<https://corporate.marksandspencer.com/investors/key-facts>