Business Environment Report: M&S Analysis, Unit 1, Semester 1

This report provides a comprehensive analysis of the business environment, with a specific focus on Mark & Spencer (M&S). It begins with an introduction to the business environment, defining internal and external factors that influence a company's performance. The report then delves into the various organizational functions, such as marketing, human resources, research and development, production & operations, finance and accounting, customer services, and information technology, explaining their roles and interrelationships. The report further examines the impact of the macro environment on business operations, utilizing PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors affecting M&S. An internal and external analysis of M&S is presented, culminating in a SWOT analysis to identify strengths, weaknesses, opportunities, and threats, and how these interrelate with the external macro factors. The report concludes with a summary of the key findings and insights into the business environment.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1 ...........................................................................................................................................3
Covered in PPT ..........................................................................................................................3
P3 Relationship between different organisational functions and how they link to
organisational objectives and structure.......................................................................................3
TASK 2 ...........................................................................................................................................6
P4 Impact of macro environment upon business operations......................................................6
P4 Internal and external analysis of the business organisation ..................................................7
P6 How strengths and weaknesses interrelate with external macro factors ...............................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment is related with collection of all individual, entities and other factors
that may or may not be under control of the organisation, but they impact on its performance,
growth, survival and even profitability. In other words, business environment influence
companies as well as its operating activities. Competitors, suppliers, customers etc. are related
with external factors whereas employees, management, value system, corporate culture are
considered with internal factors. Mark & Spencer is the chosen organisation in this present
report, which is specialised in selling of clothing, home and food products as well. Along with
this, the report is discussed various types of business organisations and their purpose as well as
their legal structure also. It also has described size and scope of private, public and voluntary
sectors. There are many external that affect on company's market position; such are as follow: -
political, economical, social, technological, legal and environmental. At last, SWOT analysis of
Mark & Spencer and its interrelationship macro environmental factors is also explained.
TASK 1
Covered in PPT
P3 Relationship between different organisational functions and how they
link to organisational objectives and structure
An organisation function is the core process of business activities or a
set of activities which are carried out in a department or the areas of
company. Managers of business organisations can easily achieve goals and
objectives of company from target market. Without an appropriate
organisational structure, Mark & Spencer is not capable to make business
strategies and policies. Marketing, customers services, human resource,
accounting, finance, information technology, production & operations,
research & development etc. are the important function of business
organisation. Below mentioned a brief description of all these functions,
such are as follow: -

 Marketing – The function having an important role in growth and
success of bushiness organisation\. Marketing helps managers as to
promote their products and services in competitive market; this ill
hel0p them to attract more customers. Along with this, in Mark &
Spencer . The growth and development of business organisations is
lies upon marketing; it makes higher sales and profit for the company.
Along with this, marketing is an activity, which is introduced to
potential customers. Without this function managers cannot offer
their best products and services in target market. Marketing helps in
build up the brand name as well as market reputation of company
(Agarwal, Grassl and Pahl, 2012). For example- when a company reaches the
high expectations of the company, its reputation stands on firmer
ground. Human resource management – Every business organisations
needs human resources in order to operates its functions and
activities. Mark & Spencer has skilled and qualified employees which
are capable to perform tasks effectively. Along with this, without
human resources a company cannot promote or introduced its
products and services. The HR managers of the company is concerned
to resolve all issues which are related with managing people in the
organisation. The process is also helpful in recruiting appropriate
candidates, identifying the training needs of existing staff, ensuring
the working environment is safe for employees, securing employee
relations and raising awareness of current workplace legislation. If
staff members are getting all these facilities as they can easily
focusing on their work and tend towards achieve performance targets
of the company. In Mark & Spencer, HR person monitor the culture as
well as talent management process. It helps in increasing employees
skills and abilities. Research & development – The research & development
department helps managers to understand needs and wants of

customers. In Mark & Spencer, the unit plays an intergarl role in the
life cycle of the product. While research department is totally
separate from sales and production divisions. This will gives them
guidance to products accordingly. If customers are getting products
as per their needs and requirements then they can easily attracts
towards business organisations. When ever a new product is
developed, managers of this department conduct a study which
supports the project. The research is also involves an evaluation of
the need and demand of product in competitive market (Aterido
Hallward-Driemeier and Pagés, 2011). Apart from this, the unit also liable for
quality checking of the product. In many companies, research &
development department, allows its team members in order to ensure
that product is really able to meet with market standards. It is also
helpful in improving existing products through which customers get
value added products; this will helps in increasing their attraction
towards business organisation. Production & operations – production is the functional area which
is responsible for turning inputs into value bale outputs with the help
of production process. The department of production and operations
related with new product development or improvising the existing
new products. If business organisations have new innovative and new
products; it will help to achieve goals and objective from target
market. In Mark & Spencer, the production manager is liable that raw
materials are provided timely to employees as they can produce better
and something innovative. The unit also check the quality of the
products, keeping cost low and supplying products on time. At last, a
successful operational managers is helps to attain and retain products
in business organisation, by the quality of products; this will aids to
company as it can achieve sales target. Finance and accounting – Finance is the blood of business
organisation; it is a necessity to it for completing day to day activities.

It helps the firm to know how viable it is. Along with this, finance
manager of the company is able to prepare and create financial
accounts, keep and maintain budgeting records and analyse the
current financial position of the company. If Mark & Spencer has,
sufficient fund as it can easily develop its business strategies and
polices which will help it achieve goals and objectives from global
market. Along with this, a company's growth and success occurs when
the principle of corporate finance are followed (Auzair, 2011). Customer services – The department is capable to handle company
issues in stores by the e-mails and phones. Customer service is
essential for a business organisation for a number of reasons, i.e. to
resolve technical or software problems. It is very difficult for a
company to survive without customers, if firms have poor customers
services then they may loss its buyers which will put a negative
impact on its market position. But an excellent customer services
helps an organisation to many customers from competitive market.
 Information technology – In modern world, it is essential for
managers for use effective tools and techniques in their production
process. This will them to reduce wastage though which
manufacturing cost of goods is also decreased. Information
technology department also helps in implementing effective
communication between suppliers, employees and managers.
TASK 2
P4 Impact of macro environment upon business operations
Macro environment is an intermixture of all external factors which put
a huge impact on organisational performance as well as its productivity.
These elements also influence market image as well as decision making
process of the company. The environment dominant upon competitors,
changes and interest as well as cultural rates, government regulation and
weather. Mark & Spencer plc was set up in 1884; it is considered as one of

the UK's leading multinational retailer with across 1382 stores in
worldwide. M & S is a market leader of women wear, lingerie and
menswear. Last financial year, it has revenue of £1.1 billion. Apart from this, there
are many factors which involves in PESTLE analysis of company, such are as follow: - Political factors – these factors mainly relates with the role of government in setting
taxes, environmental policies, establishing labour policies, industry investment norms and
others etc. The UK government apply some rules and regulations for retail companies, as
it affects the overall business of Mark & Spencer. Along with this, retailing industry is
concerned with safety and health regulations. For example- if the new government is
entered in UK market with new taxes and duties, as sometimes it impact on growth and
success of business organisations. But sometimes, such taxes are favourable for
companies; it generates their profits and sells in competitive market (Avramenko, 2012). Economical factors – It involves, future frugal outlook and industry growth of the
company. Factors such as- income level of customers, inflation and deflation in currency
rates, plays a very important role in growth and development of company financial
position. At present, the economic situation of UK is very uncertain and affects directly
retail sales. With this, people are not able to spend more money on luxury items, i.e.
clothes and food products. In recent years, due to economic crises in UK Mark & Spencer
had to closed its many stores; and job was also cut by 2 % of their 70000 staff. Due to
inflation in currency, the prices of products and services are increased then customers do
not purchase costly things; it reduces sales and profits of company. Part from this, due to
deflation in currency the prices of products goes down; it generates demand and supply of
goods and services in capital market. Social factors – Such factors involves population, demographics, cultural aspects, values,
beliefs, and morale of the people. For Mark & Spencer, customer's needs, fashion trends
towards health and safety products plays an important role. Organisation has to adopt the
changes and trends of society; and produce their accordingly it will helps in raises its
sales and make higher profits. Technological factors - Innovation and technology is vital in retail market. In modern
world, needs and wants of customers are rapidly changed; as it is the responsibility of
managers to fulfil the requirements of their buyers. Along with this, customers across the

global are harnessing the power of internet in order to purchase products online. There
are various marketing tools and techniques of promotion through which managers can
easily attract many customers from target market. These innovation and techniques can
build up market presence of the company as it can easily gain competitive advantage
from global market (Cronan and et. al., 2011). But the cost of money is very high of new
machines; it is not possible for every company to adopt all new tools and techniques of
production. Due to this, such firms are not able to compete with another firms in global
market. Legal factors – There are many legal rules and regulations also having a great impact on
business organisation. Like any other firm, Mark & Spencer has also faced some legal
issues and problems. The government of UK has continuously changing. Cited
organisation also have to carry out re-training and update every year with new laws and
legislation towards retail products. This will also impact on production process as well as
decision-making process of company; with this mangers also need to change their
strategies and policies. The core concept put a negative impact on market presence of the
company (Commander and Svejnar, 2011).
 Environmental factors – it focuses on producing eco friendly products and services.
Mark & Spencer has pursued own Green policy in which it encourage people to reduce
wastage, reuse and recycling of waste materials. The company has the responsibility
towards environment so as it have to fulfil its all corporate social responsibilities
activities.
P4 Internal and external analysis of the business organisation
In business entities, there are many internal and external factors which put a great impact
on its market growth and success. Internal are known as- strength and weaknesses, whereas
external factors are seems with opportunities and threats. With the help of SWOT analysis,
managers can easily identifies power and strength of rivals in competitive market. They also get
knowledge about needs and wants of customers.
SWOT analysis of Mark & Spencer
STRENGTH
 Mark & Spencer plc has its own 1382
stores in global market. As it there are
WEAKNESSES
 Strong competition from another retail
brands means having a limited market

many customers who are using its
products and services; although
company has a strong loyalty of
customers.
 Due to internal expansion via franchise
agreements gives a strong competitive
advantage to company in UK market.
 M & S is an iconic brand and it is still
considered one of the top 10 brands
today. As the brand position of the
company is very high so that it offers
high quality and good value added
products to their customers (Ullah and
Lai, 2011).
 Financial maturity and well skilled
employees who are also responsible for
producing branded goods and services.
Over 80000+ employees are working
globally.

share.
 Being a popular retailer brand of
clothing, it needs to be protected and
secured from misuse of fake imitation
products.
 Having only decided on implementing
a digital transformational strategy till
2010.
 High level of prices.
 Weak online presence
 Unfocused segmentation of clothing
ranges.
OPPORTUNITIES
 Improvising the offer of clothing
ranges.
 More focus on ethical foods and
organic products.
 Tend towards customers segmentation.
 The M & S website has 6 million
online customers and yet to be reached
over 10 million. They can introduced a new market
segment which offer more profits and
THREATS
 M & s has been affected by the
economic rescission, in last years the
sales of clothing was decline.
 Conflicts among shareholders and
executives.
 Ineffective implementation of the
proposed strategy.
 Newly appointed top management not
fitting in corporate culture.

sales to company.
P6 How strengths and weaknesses interrelate with external macro factors
In competitive market, the strength and weaknesses of business
organisation are interrelated with all macro environmental factors. In Mark
& Spencer, macro environmental factors are considered as- political, social,
legal, technological, environmental and economical elements. They have a
vital role in order to reduce or increase market image of company in global
market. For example- if the tax rates and duties of retail products is
extended suddenly; then managers of cited business organisation are not
able to sell their products in international market. This can also reduces
sales as well as financial position of the company. Such factors can also
decreased the number of customers as well as market presence of company.
Apart from this, if organisation is not following legal rules and
regulations which are developed by UK government; it may be the main
cause of organisation's weaknesses.
Legal factors involves that firm has to follow all laws regarding purchasing
and selling of clothes. Along with this, it is also the responsibility of
company to produce products as per the trends, beliefs, values, standards
and choices of customers (Teece, 2010). So as Mark
& Spencer has to develop its goods according to the taste of customers
where the business is situated. If business organisation is not using new
tools and techniques of production, as it cannot compete with its
competitors.
If company is not able to fulfil its all responsibilities in an effective
then it will have to face many challenges in future; this might be put a
negative impact on market growth and success of company.
CONCLUSION
From the above mentioned file it has been concluded that, business
environment plays a significant role in growth and development of business

organisation. It is a combination of internal and external factors. The
present report is a brief study of Mark & Spencer. The first task of the
report is consists with various types of business organisations and their
purpose as well. It also include size and scope of these organisations, they
are divided into three categories, such as- public, private and voluntary
sectors. Along with the second task of the report involves organisational
functions and its macro environmental factors of company. At last, SWOT
analysis and its interrelationship with macro environmental factors has
been discussed.

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