Business Environment Report: M&S, Functions, Analysis, and Comparison

This report offers a comprehensive analysis of the business environment, focusing on Marks and Spencer (M&S). It begins with a definition of business and then provides an overview of M&S, including its history, global presence, and mission. The report delves into the purpose, size, and scope of organizations, differentiating between private, public, and voluntary sectors, and comparing M&S with Adidas. It examines the relations between various organizational functions, such as research and development, production, commercial, staffing, and financial accounting, within M&S. Furthermore, the report includes PESTEL and SWOT analyses, exploring external macro factors that influence the business. The report concludes with a summary of the key findings and references.

Business Environment

Table of Contents
What is a business............................................................................................................................................2
Marks and Spencer......................................................................................................................................3
1.The purpose of organizations..............................................................................................................4
2.The size and scope of organizations..............................................................................................................6
3.The relations between various functions of organizations ......................................................................8
4.PESTEL analysis..................................................................................................................................11
5.SWOT analysis……………………………………………………………………………………………………………………………….12
6.The external macro factors……………………………………………………………………………………………………………14
CONCLUSION.........................................................................................................................................15
References.............................................................................................................................................16
What is a business?
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According to business dictionary, business is “an organization or economic system where
good and services are exchanged for one another or for money”
Business is an essential part of modern world because nowadays we are looking continuously
to satisfy our unlimited wants. Besides business is an economic activity which produces and
distributes goods and services to satisfy customer needs (David, 2011).
According to Dickens, “Business refers to a form of activity conducted with an objective of
earning profits for the benefit of those on whose behalf the activity is conducted”.
The main objective of a business is the profit, because the profit it`s a reward for the contract
between the seller and the buyer. The contract is the subject of the business. The reward that
the businessman is receiving after he`s providing his services is the profit. The consumer`s
satisfaction is the one that businessmen is trying to promote.
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MARKS AND SPENCER
MARKS AND SPENCER had been founded by Michael Marks and Thomas Spencer in
1884.Marks and Spencer is a multinational retailer in UK and is specialised in the selling of
clothing, luxury food products and home products.
In present Marks and Spencer has 959 stores in UK and the ones that only sales food product
are about 615 stores.
The company was the first British retailer with a pre-tax profit of over 1 billion in 1998.M&S
has many international stores:58 stores in India, 48 stores in Turkey,37 in Russia,27 in
Greece,17 in Ireland,14 in France, 11 in Poland, 6 in Hungary and Finland,5 in Spain and 959
in UK (Marks and Spencer, 2017).
M&S promise to make every moment special for his customers so they are serving high
quality, own-brand Food Clothing and Home products. M&S has 1433 stores worldwide
where all the employers are trying to do the best for the customers.
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1. The purpose of private (M&S), public and voluntary organisations and their
legal structure.
According to Mooney and Reilley (1985) “organisation is the form of every human
association for the attainment of a common purpose”. Better than that if you consider it the
external environment and the same goals of a group of people, you can talk about an
organization. There are many types of organizations:
 Corporations
 Governments
 Non-governmental organizations
 Political organizations
 International organizations
 Armed forces
 Charities
 Not-for-profit corporations
 Partnerships
 Cooperatives
 Educational institutions
The organizations which are fulfilling public duties and are developing commercial market
activities are hybrid organizations which operates in both the public and the private sector. A
public organization is any organization that is a part of the public sector, no matter the size of
the business.
“Marks and Spencer” is a private organization because the company is operating in a private
sector, where the customers are the one who creates the environment of the organization(Kian
Chong and et. al, 2011). The main purpose of the organisation is to provide a quality product
with quality service and to provide reasonable price. The serving community is another
purpose which is associated with company’s mission and vision statement.
A voluntary association is an organization which is consisted by volunteers.
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The purpose of an organization is very important to define the business. In fact, the
fundamental reason for why the organization exists is the purpose of an organization. The
purpose of an organization tells about the business why the work you do is so important. The
purpose can be view like inspirational and motivational by the employers (Du, Bhattacharya
and Sen, 2010).
The purpose of a private organisation like Marks and Spencer is customer satisfaction and
effectiveness in handling customer orders within a given time-period. To achieve its
objectives, Marks and Spencer had to be SMART. That means to be:
 Specific-it means to be easy to understand
 Measurable-it means to be able to quantify
 Achievable-it means to be possible to be attained
 Realistic-it means to not dream to something that can`t be achieved
 Time bound-it means to be associated with a specific time-period
Public organizations like HM Revenue & Customs set objectives for service, like in a certain
time-period they process customer`s tax returns.
The purpose of voluntary organizations like Saint Francis Hospice Shop is to carry out some
benefits like social, educational, environmental, economic for the wider community than just
its members.
There are many types of organizations with different objectives, purposes and aims. Better
than that, some of the objectives are in conflict one and other. To achieve the success business
had to be flexible about the environment. The objectives, purposes and aims of the business
could change while the business is evolving.
Once with passing the time, the aim of an organisation can be changed. If is considered the
internal factors you talk about a growing of the business and about the external factors you
can think about an economic recession, both are factors which give influences at your
business (Schaltegger, Lüdeke-Freund and Hansen, 2012).
In the first year of a small start-up business, the aim is to survive on the market. After that the
success is achieved the aim is to increase profits or growth in size.
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An aim of an organisation is a decision on a long term, to thinking where your business wants
to achieve in the future. The aim of an organisation is the statement of the purpose.
The aim of public organisations is not only to generate profit, but also to provide good
services for the public.
The aim of a voluntary and charities organizations is led by their beliefs that they are standing
for.
The aim of Marks and Spencer is to try to make as many sales as possible and they are trying
to make the most profit possible.
There is a significant difference between the public, private and voluntary organisation
(Demil and Lecocq, 2010). For example. Private company operates for profit but on the other
hand, voluntary organisation does not operate for profit and their main aim is to could serve
the community without profitable intention.
2. The size and scope of M&S and one organisation from the public and voluntary
sector.
Considering the size of the organizations we identify: micro, small, medium and large sized
enterprises. A microbusiness is a business with nine or less employers and a turnover less than
a certain amount £2m. A small business is a business with less than 50 employers and a
turnover £5,6m or less. A medium business is a business with 50-249 employers and a
turnover between £5.6m- 22.8m. A large business is a business with more than 250 employers
and a turnover over £22.8m. Because of that we can declare that ”Marks and Spencer” is a
large company.
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Differences between large and small organizations.
LARGE SMALL
-it is very stabilized on the market
-it has the capital to do it and it is producing
complex products and tasks-produce
complex task and products
-is trying to acquire small firms
-is resisting very well to the changes which
happens in the external environment
-is applying on mass markets, is tending to
have global reach
-is introducing the competition on the
market
-is producing new products and concepts
-prey for big firms, gets bought and since
mergers are often successful, it finally gets
dissolved
-its development and existence it`s very
quickly influenced by the external
environment
-can`t serves all customers, only niche
customers and markets
Comparison between MARKS AND SPENCER and ADIDAS.
MARKS AND SPENCER ADIDAS
Mission M&S is to provide a new
stock quicker than other
fashion retailers and to could
give an exclusive choice of
fashion to his existing
customers and also to the
new one
Adidas goals is “to be the
leading sports brand in the
world.”
Goals M&S is trying to make a
suistanable development of
society consider it the
environment where it`s
operating.
“Adidas strives to inspire
and enable people to harness
the power of sport in their
lives.”
Objectives To produce standard quality To improve the operational
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products at a reasonable
price
To utilize money on
introducing new products
and not spending them on
promotion.
To continue the
development and stores
growth
and financial performance
To diversify brand portfolio
To lead through innovation
Source: Marks and Spencer and Adidas official sites.
If you consider it the mission, goals and objectives of a voluntary organisation, the things are
different. The mission of a voluntary organisation is established after a strategic planning
process and usually is given by its name. Like an example the mission of the American Lung
Association is to help the people with lung disease and prevent the new one (Avramenko,
2012). The goals and objectives of non-profit organizations are specific to the programs they
are running. But the main objective is to raise substantial funds to could accomplish its
mission.
3. The relations between the various functions within the M&S for achieving the
organisational mission and objectives.
The process organization is designed to determine what needs to be done in the organization
to achieve its goals. That is to say, its activities to be carried out and the work necessary for
the proper fulfilment of the objectives, the functions of the organization and the functions of
the management.
The function represents the field in which a set of activities is pursued aiming to achieve the
objectives of the organization. Functions are comprehensive subdivisions of the
organization`s system, representing certain groups of all the activities that take place within
the system in a certain field, including environmental-related activities.
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The functions within an organization are:
The research and development function. This function includes the activities that take place in
the organization to achieve the goal in generating new ideas to materialize in useful products
and services.
Production or operational function. Is used in the case of services and represents the activity
through which the transformation of the objectives of the work into the finished products and
services towards the customers is achieved.
Commercial function. Comprises the majority of the activities through which the economic
unit connects with the environment, both for the procurement, the material resources and for
the dissolution of the products, works and services resulted from its own activity (George and
Bock, 2011).
Staffing function. Includes the set of activities that ensure the human resources necessary for
carrying out the activities of the organization through which they increase their qualitative
level and ensure efficient employment of the labour force.
The financial accounting functions. Includes a set of activities that ensure the financial
resources necessary to achieve the objectives, the value highlighting of the economic
phenomena and the analysis of the use of the resources needed to obtain the results.
The Marks and Spencer company has a well-define organizational structure and all these
functions are properly fulfilled by all the departments of the organization, in order to carry out
in optimal conditions the activity of the company.
Any organization functions as system whose components are intimate in order to be able to
intervene at the right time with their own means to respond to a need. The organization has its
own structure determined by the purpose for which it was created. The organizational
structure of an organization is the ensemble of people and work compartments (technical-
productive, economic, administrative), the way in which they are formed and grouped as well
as the relations established between them.
A national organizational structure is essential to ensure the normal functioning of the work
compartments, the precise assignment of duties, the rigorous establishment of hierarchical
dependencies, unity between the duties of a function and the decision-making power(Reed
and et. al, 2013).
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Marks and Spencer had divided its organization into groups or units of work in such a way
that communication, coordination and cooperation between people and the sharing of shared
goals and resources are ensured. In achieving this efficient organization were taken into
account: knowledge and abilities, the processes of work and the functions performed, the time
required for the activities, the products or services, the customers and the environment.
According to business dictionary “stakeholders are individuals and/or a group who are
affected by or affect the performance of the organisation in which they have an interest”.
Marks and Spencer stakeholders are: investors, employees, customers, the Government,
media, suppliers and financial companies.
The person which bring money in the company and which are expecting that their money be
returned, are the investors. In Marks and Spencer, the investors want to help the company
growth and to increase the profit.
The employee`s main objectives are to increase their salaries and bonuses and they are the one
who helps the company to achieve its goals.
The Marks and Spencer`s customers want to get the best products at the lowest prices and to
Marks and Spencer continue to provide its services. The relations between Marks and Spencer
and Government is related at the tax revenue.
Media is regarding the social duties, environment protection and ethics of the company. The
suppliers want to be paid on time and their objectives is what Marks and Spencer order from
them.
Financial companies are the one which gives financial support to Marks and Spencer and they
wants to know if Marks and Spencer can refund their loans and interest in properly time
(Cambridge dictionary, 2015).
The responsibility of Marks and Spencer regarding its stakeholders is to be sure that all their
objectives will be fulfilled.
The competition in UK is monopolistic, that means you meet may sellers and different
products. Because its fields of activity it is very wide, Marks and Spencer must constantly
improve the quality of its products and develop and bring new products to the market. Marks
and Spencer meet a lot of competitors like: John Lewis, Next but also Tesco and Sainsbury.
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To cross the market barriers and to survive on the market, Marks and Spencer must have all
the time differentiated products.
4. Identify the positive and negative impacts the macro environment will have upon
the business operations of Marks and Spencer.
According to Armstrong and Kotler (1999), macroenvironment is “the larger societal forces
that affects the micro-environment of the company”. Better than that we can say that all the
uncontrollable external forces that affect the activities of the firm is the macro environment of
the firm.
To could see all the factors that gets influences at the business and the way that its doing, we
must make a PESTEL analyse for Mark and Spencer. The PESTEL analysis order the
influences from the macro environment in six categories: political, economic, socio-cultural,
technological, environmental and legal factors.
Political factors.
Because Marks and Spencer it`s a well-known brand it has a lot of interactions with the
policies that Government is providing. The company must to be carefully and analyse well
before planning to enter on a new market, because it can meet a lot of restriction. If the
government decided to increase tax rate or lower subsidy then it will create bad impact on
business (Parikh, 2011).
Economic factors.
Take into consideration all the factors that could influence the consumer behaviour, as his
buying and spending power, which can affect the demand for Marks and Spencer `s products.
Due to working in complex environment the company may faces challenges and difficulties in
performing its business operation.
Socio-cultural factors.
Marks and Spencer don`t tolerate discrimination, so you can see that its employees are
different types of nationalities and cultures. Withal Marks and Spencer operate in many
countries with different cultures and styles. If the company fails to identify customer's taste
and preferences then it will lower the goodwill of company as well as losing market share.
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