Business Environment: Macro Factors and SWOT Analysis

This report provides a comprehensive analysis of the business environment, focusing on the impact of macro factors on business operations. It explores the external factors like political, economic, social, technological, legal, and environmental (PESTLE) influences, and how these affect companies such as Marks & Spencer. The report also delves into the internal macro factors of an organization, utilizing SWOT analysis to evaluate strengths, weaknesses, opportunities, and threats. It examines how these factors shape business strategies, market positions, and overall sustainability. The study concludes by emphasizing the interconnectedness of various organizational functions and the significance of adapting to environmental changes for long-term business success. The report uses Marks and Spencer as a case study to illustrate these concepts.

Business And Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................1
3. Impact of Macro environment on business operations.......................................................1
4. Strengths and weaknesses of the internal macro factors within an organization...............3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business can be considered as a comprehensive unit which includes different types of
functions in order to achieve the main objectives of the organisation. All such internal and
external factors that effect business are termed as Business Environment. Internal and external
factors influence the business in a very long term that it may be result in loses of the firm. This
study will help in providing different types, sizes and scope of organisation that impacts on the
macro environment of the business. This report will present various types of interrelated
functions and the impact of the organisational structure on the main objectives of the business.
Furthermore, this research will also help in identifying the impact of macro environment
on business operations. The study will encourage various negative and positive factors which
leads towards the growth and sustainable development of the business.
TASK 1
Covered in PPT
TASK 2
3. Impact of Macro environment on business operations.
The macro environment consists of larger societal forces that effects the entire micro
environment. The macro environment of the company is generally consists of six factors such as
political, economical, social, technological, environmental and legal forces (Prajogo, 2016). In
this highly competitive world, M&S generally M&S need to identify the competitive strengths
and weaknesses of the company to strengthen the development of the growth and sustainability
of the firm. Political factors of M&S are referred as those aspects that mainly has legal
anticipation and these legal interruptions of government affect the cost and profit ability of the
organization. Also, the technological factors lay a great impact on the productivity of the goods
and services. Changes in the technology may effects the working capabilities of the employees.
Political factors – this factors majorly affected to M&S because due to time and frequently
changing government and taxation policy so it has facing huge losses and local government take
tax from retailers. It also influences through demonetization it is negative affect of political
factor on M&S.
As well as it has positive effect also because M&S is a retailer so it sales
clothing and food product so they have to follow government rule of reduction of fat and salt
from food product and also take care of animal welfare.
1

Economic factors - Economic factors directly impacts on the economy of the organization as
rise in prices of the products may effects the purchasing power of the customers and therefore it
may result in the decreased profitability of the firm.
However, the social factors cannot be directly controlled by the company officials as
these are totally dependent on the tastes and preferences of the people in the society.
Social factors – social trend are majorly impact on M&S and also its profitability. Consumer
choices and preferences are put deep impact on retailer (Wheelen, and et.al., 2017). Because day
by day changing in fashion, choice and trend so M&S has to produce product according to them
so its positive impact is that they maintain balance between demand and supply of product and
its opportunity to attract people through keep changes according to their needs. And increasing
consumer's standard of living. Its positive effect.
Its negative effect is that M&S has to changes their work process very frequently. So
through this they provide frequent training to their workers and competition is also increasing
through these reasons.
Technological factors – technological factors is majorly affecting to M&S because day by day
increasing technology so company has to adopt that. It consumes more and more money for
install frequently technologies. And give also training to their employees for operate. Its negative
effect of technological factors.
Its positive effect is that increasing in technology that helps in improve standard of living
of people and M&S have benefit that they have to fulfill customer needs and provide satisfaction
to them so they have opportunity to build brand image through attract to customer.
Legal factors – it is external factors that impact M&S. This analysis check legal factors impact
Because many laws affect to retailers. And it include employment law and consumer law and its
make by government. So its positive effect is that consumer get protection against any
misbehave from company and also employees of company get benefit from law because
government changes in wages rates so M&S has to pay them.
Its negative effect is that governmentt change wages rates frequently so company has
loss because it may change in their payment structure. And give total information on product
about that.
2

Environmental factors – it is external factor and its effect on M&S through climate change,
consumer health, population etc. due to increasing population so demand of product is increase
so company has to increase supply of goods so increase profitability.
Its negative effect is that due to climate change it affects demand of product according to
climate so stored stock become waste. And changing in demand so manufacturer has to change
product according to customer needs so they have to consume more cost and time.
4. Strengths and weaknesses of the internal macro factors within an organization.
Internal macro factors of the company are concerned with the those factors that effect
profitability and sustainability of the business organization. SWOT analysis of the M&S helps in
developing a strong business strategy by overcoming all the challenges and weaknesses of the
firm (Ricciardi, Zardini and Rossignol, 2016). These macro factors mainly helps in analysis the
strengths of the business as well as opportunities that will allow the M&S in wider business
context. SWOT analysis of the Marks and Spencer is provided below:
Strength and weakness
Strength and weakness of internal macro factors will be explained through SWOT analysis with
the help of Marks and Spencer Company as an example:-
Strength
 High recognition of the brand: Marks and Spencer is one of the most known and giant
brand in UK which provides the best quality products.
 M & S provide high end value products to their premium segment customers due to
which they have a clear brand image.
 They have presence all over the world with more than 1200 stores present globally in
which more than 900 stores are present in UK itself.
Weakness
 They have drawn a negative publicity as non trendy store. They provide large variety of
cloths for both men and women but for aged people only (Schaltegger, Hansen and
Lüdeke-Freund, 2016). This assumption of people is making their business much lower.
 They do not believe in using new technology in manufacturing of their products rather
they use old techniques of manufacturing. They even focus on manual work for both
trading and manufacturing.
3

 Poor financial performance and vulnerable market in UK is also one of its biggest
weakness.
Opportunities
 Can invest in developing countries like India.
 Can start reshaping their clothing segment for young generation.
 Can start simplifying their operating model.
 Can introduce new segment of clothing on regular basis according to the country they are
investing in For example In Asia demand for traditional wear is much more, so they can
start anew tradition clothing segment.
Threats
 Competitors like Zara, Tommy Hilfiger are one of the biggest competitors of M&S which
can be a threat to them (Tsangas, and et.al., 2019).
 Changing trend in cloths is also one of the biggest threat to M&S.
CONCLUSION
From the above study, it can be concluded that organisations vary according the size and
scope of the business. It has also concluded that business environment is greatly influenced by
the internal and external factors of the business. It has also been observed that different
organisational functions are interrelated with each other in order to achieve the main goals of the
company. Also, this study has provided different types of organisational structure and followed
by global, international and transactional companies. This report has also created a clear
understanding about the impact of the macro environment on business by considering different
kinds of aspects such as PESTLE factors. The study has also provided the impacts of the internal
macro factors within an organisation.
4

REFERENCES
Books and Journals
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Julien, P.A., 2018. The state of the art in small business and entrepreneurship. Routledge.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics. 171.
pp.241-249.
Ricciardi, F., Zardini, A. and Rossignoli, C., 2016. Organizational dynamism and adaptive
business model innovation: The triple paradox configuration. Journal of Business
Research. 69(11). pp.5487-5493.
Schaltegger, S., Hansen, E.G. and Lüdeke-Freund, F., 2016. Business models for sustainability:
Origins, present research, and future avenues.
Song, J., Sun, Y. and Jin, L., 2017. PESTEL analysis of the development of the waste-to-energy
incineration industry in China. Renewable and Sustainable Energy Reviews. 80. pp.276-
289.
Tsangas, M. and et.al., 2019. The Application of Analytical Hierarchy Process in Combination
with PESTEL-SWOT Analysis to Assess the Hydrocarbons Sector in
Cyprus. Energies, 12(5), p.791.
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management
and business policy (p. 55). Boston: pearson.
5