Business Environment Analysis and its Impact on Marks and Spencer

This report provides a comprehensive analysis of the business environment, exploring different types of organizations (public, private, and voluntary) and their purposes, with a focus on Marks and Spencer, Crown Prosecution, and Oxfam. It examines the size and scope of various business types, differentiating between micro, small, medium, and large organizations. The report delves into organizational structures, including functional and divisional frameworks, and their functions within businesses like Marks & Spencer. Furthermore, it applies the PESTLE model to assess the external environment, analyzes the micro-environment using Porter's Five Forces, and conducts a SWOT analysis to evaluate the internal and external factors impacting business operations. The report concludes by explaining how strengths and weaknesses interrelate with macro factors, providing a holistic understanding of the business environment and its influence on organizational performance.

Business and the Business
Environment
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Table of Contents
INTRODUCTION................................................................................................................................3
PART 1.................................................................................................................................................3
1) Different types and purposes of organisation..........................................................................3
2) Size and Scope of various types of organisation.....................................................................4
3) Organisation structure and functions.......................................................................................6
PART 2.................................................................................................................................................7
a) PESTLE model to the sector....................................................................................................7
b) Micro- environmental analysis using Porter’s Five Forces model, identifying the positive
and negative impacts upon business operations..........................................................................9
SWOT analysis of the organisation...........................................................................................10
c) Explanation of how strengths and weaknesses interrelate with macro factors......................11
CONCLUSION..................................................................................................................................12
REFERENCES.....................................................................................................................................1
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INTRODUCTION
Business environment is specifically being considered as state of affairs, which focuses
over both internal along with the external elements. Basically, these are the specific elements that
impacts upon company's performance level among both negative and positive manner. Thus, it is
required for the company to keep on making appropriate modifications among all these elements
in order to get rid of any risks that may affect company's productivity and profitability (Business
environment. 2018). On the other hand, present report is going to be enclosed with different
types of businesses and these are public, private along with the voluntary as well. Under this,
firms which are being taken into consideration are: Marks and Spencer (Private), Crown
Prosecution (Public) along with the Oxfam which is particularly considered as a Voluntary
Organization. Away with this, report will also consider sizes along with the scope of different
types of businesses. Lastly, assessment will focus over interrelationship among all the strengths
& weaknesses that macro environment carries.
PART 1
1) Different types and purposes of organisation
In present time, it is said that various business companies are performing at both
domestic and international level and performs operations for different purposes. Basically, all the
businesses are coming under three different types and these are: not-for-profit, profit earnings
along with the voluntary as well, which performs different range of actions in relation to
fulfilling various needs along with the requirements as well of different consumers in all over the
world (Chaouk, Pagliari and Moxon, 2020). Including this, it is also said that government along
with the individuals are the ones who specifically conducts these organisations for different
reasons, which can be anything from welfare of the citizens of a country, to earn profit and to
build economic stability through offering customers with different services like transportation
and so on. In this context, Profit organisation, which is particularly being considered as one of
the crucial one, that also consists of a particular purpose i.e. selling different range of products
and services with an aim of earning profits through filling needs of customers (Chattopadhyay
and Bhawsar, 2017). Away with this, it is also said that in order to survive within the market,
companies performs different operations through offering appropriate employment opportunities
to various staff members who are looking forward to get a job, which raised many benefits for
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the country as well. This is where, an example can be considered is of Marks and Spencer, which
is particularly dealing among fast fashion, food and grocery industry. Including this, purpose of
this organisation is to offer consumers with quality products and fuldil all the requirements of
customer in order to become the market leader. Also, it is also developing different strategies
that has impacted positively among their competition generating strategies in order to give
rivalry to various rivals like Tesco, Zara, E-Spirit and so on (Fernandes, 2017).
On the opposite side, if it is talked about the Public Organisations, then at this point it
will be considered as the segment which fundamentally directed over finances given or driven by
government so as to build up the nation and its monetary conditions (economy). From building
infrastructures, criminal cases, enactments diverse scope of administrations are being given by
the government. Under this, public organisation that has been taken into considerations is Crown
Prosecution, which is considered to be an agency which executes criminal cases in Wales and
England (Guo-rong, 2018). Essentially the primary reason or the purpose for this association is to
offer bolster and encourage identified with enactment related lawful publications given to the
police for searching so as to determine the different cases that are specifically connected to
criminology. Alongside this, another sector that has been taken into consideration is Voluntary
associations, that specifically consist of a particular scope of administrations so as to improvise
the living standards given or offer the shelter to vulnerable. Along side this, Oxfam can be taken
into consideration of a very good example, which is performing number of operations to raise
living standards of citizens who are not earning, giving education to children whose parents
cannot afford the educational fees and so on. This is specifically done not to earn money but to
enhance the living standards and for the other purposes as well (Hamilton and Webster, 2018).
2) Size and Scope of various types of organisation
In present time, it is said that various business companies are performing businesses
considering different scopes along with the sizes as well. Basically, small, micro, mid and large
business companies can be considered as the drivers of today's economy. Basically, these firms
are differentiated on the basis of different elements and these are scopes along with the sizes
(Hillary, 2017). Over the years, if it is talked about United Kingdom's differentiated firms where
the first one is Micro organisations, that are specifically coming within smallest subdivision but,
carries a really very huge impact over economy of UK. If it is talked about this company, then
size of this organisation mainly stays small in nature, where mainly two or one staff member
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performs different tasks within the shop and fulfils the needs of customers (Hilton and Platt,
2018). Along with this, small setup like shops and more also targets a small area only. On the
other side, if it is talked about the market share of this type of business then it only holds a very
small section only. But, the number of businesses within this sector grabs a huge market share in
UK. These organisations hardly sustains which means a company coming under this sector has
no future until and unless provider is offering customers with what they are actually looking for.
This undoubtedly affects their growth and the profit margins stays really very low and owner of a
micro company invest to survive within the market (Johnson, 2015).
Including this, small business organisations are the ones that small share within the
market but it stays much larger than micro sector. Basically, these organisations holds much
more earning than the micro ones. These firms mainly holds minimum 2 and maximum of 25
employees only. Also, it has been found that growth of companies that are coming within this
industry holds limited market share and operates business among small area only. Over the years,
people of UK has kept their focus over opening their own businesses rather than working for any
other person is said to be something, which affected economic conditions in a befitting manner.
Another crucial business sector that came in front is Medium sized organisations that
specifically carries high market share but lower than larger organisations. It is said that this
particular sector may develop or break a country, because companies under this sector recruits
employees regularly and brings innovation in order to deliver high competition to rivals. These
firms mainly holds 5 to 250 employees at a time. Also, it can be said that profit margins under
this sector specifically stays really very high in nature as it delivers high competition to rivals in
that are coming under small, micro and larger sector (Preuss, 2017).
This is particularly the largest sector where Large organisations performs different tasks
in order to grab the a good percentage of market share through performing businesses among
different regions and the areas of the world. Marks and Spencer is particularly one of the good
example that is coming under this sector, which is not only performing number of operations
within United Kingdom, but among different nations as well like India, Australia and so on
(Specifically Asian and African continent). Under this sector, a company holds staff members
more than 250. Including this, motive of these firms stays to become a leader, which helps them
in giving good rivalry to customers. In order to do so, company also raise employment among
different regions in which it is performing it's operations. As these companies are offering
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employment, it is said that government of United Kingdom and of other countries supports them
in sustaining which helps them in becoming a stronger brand at international level (Sarsby,
2016).
3) Organisation structure and functions
Organisational structure of micro-level business companies, specifically the which the
owners basically follow functional only, as company mainly do not consists of high number of
staff members, where complex situation may take place. This is the place where employees may
perform direct communication with each other as it is only performing number of operations at
micro level only. Away with this, if it is talked about small business companies then they may
follow both matrix or functional because, number of staff members stays only in the numbers in
between 5 to 25. Along with this, complexity of SMEs remains connected to massive changes
would hardly be noticed, and it's also only because this is one of the best and quickest ways to
move knowledge through highest level-level to low-level management (Springer, Cham and
Hillary, 2017). At the other hand, there have been numerous strategies for all the middle level of
organizations, market environment, goals, size, scale that decide the allocation of division
employees. And that's also a consideration that requires complexity that indicates that these
organizations primarily follow a framework for the task due to the extreme scope of rivalry in
marketplace. (Crane and Matten, 2016). Retail store organization called Marks & Spencer, that
will be undergoing large-scale company restructuring, also implemented the divisional corporate
framework throughout global market management.
As a result, resource will be used effectively as well as the company's advantage with respect to
rivals is retained. Representatives are split in all of these groups in terms to the competencies &
expertise. It enables the administration to include ample employees for the supply to consumers
of services and goods. Division of Human Resources, HR's job would be to handle personnel to
get enough employees to carry out all the operations. Recruitment, selection, compensation,
employee relations, training and development are various practices which are executed by
management of Marks and Spencer. This helps them to delegate and distribute staff members in
other units that are finance, operation, marketing, sales, R&D (Talamini and et. al., 2013).
Seniors can therefore create strategic edge and fulfill people's demands. In addition to this, that is
the responsibility of each Department of Research & Development to perform surveys to obtain
knowledge about the wants and needs of competitor and public companies. Products & facilities
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must be delivered by company in compliance with people's expectations (Türetken and et. al.,
2011). Marks and Spencer is the retail company whose R&D department performs business
analysis to gain market knowledge. That allows companies build innovative & creative goods &
offers which will draw consumers (Zahari and Romli, 2019).
PART 2
a) PESTLE model to the sector
PESTEL Analysis-
Market is wider and broader which depicts the rising competition. There are number of
factors which affect the business growth and development which are to be analysed in proper
manner. External factors track and monitor with help of PESTEL Analysis. It is essential to
examine external environment so that business activities run in smooth manner. In relation with
Marks & Spencer they use this analysis so that factors has impact on firm productivity are
analysed in effective manner. So, PESTEL has been discussed below-
Political Factor- These are those factors which comprises of wages, labour law,
environmental law etc. Effective decision making is required in these factors otherwise conflicts
and errors will be arose. In context to Marks &Spencer, they affect political factors affect the
progress level of business.
• Positive Impact- Exploring more opportunities at wider level by Marks& Spencer
increases which results in acquiring more customers as well as market share growth.
• Negative Impact- Political factors are dynamic and because of new rules and
regulations Marks and Spencer’s have to change their policies so that changing done by
government are followed in proper way.
Economical factors- Economical factors are those which includes inflation and deflation
rate, governmental activities, tax rates etc. These are the factors which the firm profit and sales
revenue as well as financial stability of the business. In context to Marks &Spencer, with help of
their marketing team they took proper awareness about these factors so that management of
entity remain focus towards their work.
• Positive impact- Economy of government is essential because that decides the business
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growth and development. As economy of UK is rising at rapid level, Marks &Spencer
get benefit from this factor because business sector is stable and growing across the
country as well as worldwide.
• Negative Impact- Government involvement is more in this factor and is not controllable
by the organisation. In context to Marks &Spencer, there management structure get
affected at top level by interference of this factor (Dowell, Morrison and Heffernan,
2015).
Social Factor- Further comes the social factors which affect the business and consumer
switching behaviour. These factors comprises of lifestyle, attitude, income etc. By considering
social factor important firm acquires more customers and market share growth. In relation with
Marks &Spencer they uses these factors to analyse and examine the customers and society traits.
• Positive Impact- When involving social factors in to business Marks &Spencer are
able to determine the customers behaviour easily and which results in properly
identifying need and requirement of customers.
• Negative Impact- Marks and Spencer mostly target medium and high status customers
and due to this acquiring more customers in business become difficult.
Technological Factor- Technological factors are those in which use of technology affect
the business at both negative as well as positive level. These factors includes advance use of AI,
smart devices etc. Yes, technology has changed the world but it has also reduced the morale of
employee within the firm.
• Positive Impact- In this factor, Marks &Spencer use technology for security and safety
of customers data as well as information.
• Negative Impact- Upgrading technology require huge cost and which leads to high cost
of production of Marks & Spencer.
Environmental Factor- Further comes the environmental factor in which weather,
climate, temperature etc. In relation with Marks &Spencer, they use raw materials which are
eco-friendly and does not affect the environment.
• Positive Impact- When focusing on this factor, Marks &Spencer goodwill increases
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socially and continuity of business enhanced for longer period of time.
• Negative Impact- This factor is essential but also it is time consuming and Marks
&Spencer cannot achieve their goals and objectives in proper manner (Lee, 2017)
Legal Factors- These are those factors which affect the business profitability, goodwill
etc at broader level. In context to Marks &Spencer their legal team always remain active when
such situation arises.
• Positive Impact- A positive relationship is maintained by the management of Marks
&Spencer if factors are managed by legal team effectively.
Negative Impact- Arising of legal affects the goodwill of the at wider level and also the process
is time consuming.
b) Micro- environmental analysis using Porter’s Five Forces model, identifying the positive and
negative impacts upon business operations.
Micro environment refers to environment which affect the progress and productivity of
business . It is important to analyse these ME factors such as supplier, competitors, distribution
channels/intermediaries. In context to Marks &Spencer, their business operations also get
affected by these micro environment because it is leading apparel &fashion company and
number of people are involved in the process.
Porter's Five force Model- This model is used by firm to analyse the effect of market
and factors which affect the business productivity and decision making. In relation with Marks&
Spencer they use this model in effective manner which is mentioned below-
• Threats Of New Entrants- At this stage, new companies come in the market and start
doing business of the either same line of product or introducing new products in the
market. This distract the customers from older brands and firm which affect the business
in negative manner. In context to Marks &Spencer they are also affected by new entrants
and to protect themselves from the new entries of business they implement effective
strategies and tactics.
Bargaining power of buyers- Every buyer in the market demand and wish too bargain
when purchasing something. Bargaining power of buyers is mostly high because it often happen
that most of the sellers get agreed when buyer comes in the process of bargain. In relation with
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Marks&Spencer bargaining power of firm and customers is low. This leads to de-satisfaction
amongst both the party (Thompson, Strickland and Gamble, 2015).
• Bargaining power of Suppliers- Further comes the bargaining power of suppliers, in
which suppliers such as vendors, retailers bargain in the market and it depends upon the
product or resource and thneir value in the market. In relation with Marks & Spencer,
bargaining power of supplier is flexible because of availability of other vendors too.
• Competitors Rivalry- This refers to when competition in the market revolves around
existing organisation/ entities. In relation with Marks &Spencer their competitors are
blackberry, H&M, Zara etc.
Describe VRIO & strength and weakness in relevance with organisation
VRIO analysis is a framework used by organisations to determine the usefulness of
resources and to avail the competitive advantage. VRIO has been mentioned below-
.........Valuable- The first stage is valuable in which firm identify the product and resources
which provide benefit to the organisation. Valuable resources are have high demand in market
and increase competition with other firms. In context to Marks &Spencer, there valuable
resources which are being considered as important are customers because profit and sales
revenue are increased at rapid level (Lu and et. al., 2015)
Rare- Further comes the rare, in which those resources are focused and examined which
are rare in market and provide a boost in the business operations and activities. In relation with
Marks&Spencer, they provide after sale service more than one year which makes them unique
from other retailing companies.
Imitable- This refers to copying of the product resources or product. Market size is
spreading and there are mainly retailers who copy the products and sell in the market at lower
prices. In relation with Marks& Spencer, copying the product is not easy because of high patents
used by the firm.
Organised- In this stage, it is essential for the firm to analyse or capture the value of the
resources because without value resources are not used in proper manner. In relation with Marks
&Spencer, they should focus on their management structure so that value of resources is
identified in appropriate manner.
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SWOT analysis of the organisation
It is tool used by firm to analyse the strength and weakness of business by tracking and
monitoring market situation and competitors.
STRENGTH
• Marks &Spencer is old brand which
increases its trust amongst the people and
market.
• Organisation marketing is goal as well as
task oriented which makes them different
from other brands (Deasy and et. al.,
201
WEAKNESS
• Marks& Spencer has not been able to
increase their business access across the
globe because of rising competition.
OPPORTUNITY
• Firm have opportunity of increasing its
sales revenue by acquiring efficient
resources and manpower.
THREATS
• Due to new entrants of other retailing
brands Marks & Spencer might loose
their value in the market.
The SWOT of TESCO is going to be mentioned below:
STRENGTH WEAKNESS
TESCO is well known chain of supermarket
which is located in UK offer wide variety of
products and services to its customer. It helps
in increasing sales as well as profitability level
of business organisation.
There is different competitor available such as
Sainsbury’s, Aldi as well as ASDA offer high
quality products and services at fewer prices
can be considered as a threat for company.
OPPORTUNITIES THREAT
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Due to implementation of advanced
technology, the company offer innovative
products and services to its customer. It helps
them in retaining for a longer period of time.
Due to economic recession, it creates threat for
business organisation.
The cost of implementation of advanced
technology is adding extra cost to the product
of business organisation.
c) Explanation of how strengths and weaknesses interrelate with macro factors
Inter- relation STRENGTHS WEAKNESS
POLITICAL FACTORS
ECONOMIC FACTORS
Government of UK is strict
towards the policies and
procedures. So, Marks
&Spencer works with ethics
and by following rules and
regulations which results in
strong relationship between
both the party.
Factors such as wages, taxes,
are included. In this, firm
maintain their management and
structure which results in
positive outcomes.
Political factors affect the
business at broad level because
of which Marks and Spencer is
unable to increase their
performance level (Stott, Stone
and Fae, 2016).
Tax and wages affect the
business and its productivity at
wider level.
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