Marks and Spencer Business Environment Analysis Report

This report provides a comprehensive analysis of the business environment of Marks and Spencer (M&S). It begins with an introduction to the business environment and its significance, followed by an assessment of various organizational purposes, differentiating between private and public sectors. The report then examines the size and scope of different types of organizations, using M&S as a case study, and evaluates the relationships between various functions within the company, such as finance, human resources, and marketing. Part 2 of the report identifies the positive and negative impacts of internal and external environmental factors on business operations, including a PEST analysis. It also includes an evaluation of internal and external business analysis and explains the interrelation between strengths and weaknesses with external factors. The report concludes by summarizing the key findings and providing references.

Business and business
environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
P1 Assessment of various and purposes of organizations......................................................1
P 2 Explanation of size and scope of different types of organization....................................3
P3 Evaluation of relationship between various functions within company...........................4
PART 2............................................................................................................................................6
P4 Identification of positive and negative impact of internal and external environment on
business operations.................................................................................................................6
P5 Evaluation of internal and external analysis of business enterprise..................................6
P6 Explanation of interrelation with strengths and weakness with external factors..............8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is considered as major part of economy that reflects the position
and reflection various effective and efficient business firms that regulate their operations within
the domestic country (Commander and Svejnar, 2011). It also determines various types of
business problems and factors which are faced by these international and small business
organizations in effective management of business and also making their efforts at workplace. It
mainly consists of various environmental forces which shapes the business segments and also the
product line of company ( Guariglia, Liu, and Song, 2011). In the present the report, analysis of
Mark and Spencer's business environment is done to analyse various aspects like purpose, size
and scope of their business functions. Apart from this, there are some other significant operations
of company have been which provides them support in achievement of objective in competitive
business environment. Analysis of micro and macro environment factors have been discussed
with a view to describe the factors that affects growth and development of company in market.
At last, the international between external factors and strengths and weaknesses of company is
also explained.
PART 1
P1 Assessment of various and purposes of organizations.
In the business environment, there are various types of business organisation that exists in
the economy within the economy of country with the different purpose and motives. Some
organization like M& S work with an purpose of profit maximization and others like OXFAM
works as beneficiary of people (Nikolaou and Evangelinos, 2010). With effective research an
individual will recognise that the organization in country will consider as different from their
structure, environment and culture. In this context, as business develop managers various types
of organizations needs to be discussed with their purpose, vision and mission.
 Private Sector: One of the major sector that consist of various small and global
organization regulating in very industry. Organization in this sector are considered as
private firms which ultimately regulate their business with an aim of maximizing profits
and increasing there growth in Economy. In UK, presently there is major contribution of
these private sector firms towards increasing the rate of GDP. Private firms not offers
there shares to public at large.
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In retail sector, there are many private sector firms like Iceland, B&M retails etc. which have
achieved major growth by making continuous innovation in their goods and services to attract
customers. Further, there are some legal structure of private organization are:
Sole trader: It is considered as simplest form of structure in which there is one single
owner who regulates the business operations and liable for every business situation either
profit or loss (Osterwalder and Pigneur, 2010). For example: private firms are also owned
some private entrepreneurs or individuals with an aim to maximize profitability.
Investment is made by owners either from there capital or borrowing from financial
institution or stakeholders.
Partnership firms: Major form of private sector organizations in which the company or
individuals makes an agreement for working together in business for achievements of
profits (Sekaran and Bougie, 2016). In UK, presently there 1.2 million partnership firms
existing that have huge contribution in economic development of country.
Private limited Company: It is a company which is held private individual for small
business purpose. In this, liability held by partners are limited as per the contribution of
investors.
 Public sector organization: Large business firms that operates there business at
international level with an aim to satisfy the needs of people and achievement of target
return from the investments (Lewin, Massini and Peeters, 2011). In this context, Marks &
Spencer is considered as public limited organisation as it generates its financial resources
from the public by issuing shares. Government have there shares in this organization as it
aims to satisfy the needs of consumers.
Further, different legal structure public sector organization are as follows:
Franchise: These public sector organization also provides there franchises to there
franchises to other individuals by taking royalty amount as they are using there brand for
regulation of business (Wirtz, Schilke and Ullrich, 2010). Marks and Spencer has also
provided its many franchises to different individuals or firms to increase there brand
reputation as well as increasing the sale of there products in market.
Workers cooperative: These are considered as public organization in which the workers
acts as partners of business and share a percentage of profit.
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Voluntary organization: These organizations are established by some individuals with an aim
to serve the society and resolve the problems rather than maximizing profits. Social
organizations that aims to satisfy the needs of people in society (Yuan, 2013). In this context,
there are some major voluntary organization of UK have been analysed such as:
 Oxfam: It is an international union of charitable organizations which has its focus on the
alleviation of the global poverty (Kew and Stredwick, 2017).It is one of the most
significant in the local communities of UK, formed in Support of the national famine
relief committee. The main objective of this charitable organisation committee is work
for the welfare of people in UK.
 Age UK: It is world's largest charity group which is dedicated to helping everyone and
mainly old age people (Aterido, Hallward-Driemeier and Pagés, 2011). It provides
services and support at a national and local level to inspire, enable and support older
people.
P 2 Explanation of size and scope of different types of organization.
Public sector organization (PLC)
 Vision: Marks and Spencer is a retail organisation in public sector and there vision is to
be the criterion against which others are measured.
 Mission: It is a statement that reflects the concern of administration and what there
cardinal intent is at that place (Siewiorek, Saarinen, Lainema and Lehtinen, 2012).
Marks and Spencer's mission is to provide inspiration quality which is directly accessible
to others.
 Objectives: Marks and Spencer operates their business with the aims of maximizing
profit, employees orientation and achievement of sustainable growth in market shares by
maximizing the profits.
 Size and scope: Marks and Spencer is global retailer brand that presently has its
existence in many countries (Wheelen and Hunger, 2011). It currently has 979 retail
stores in UK which has provided a profitability of 115.7 million in 2017. Mainly, it has
its headquarters in London and they have wide scope of expanding there business
operations in various other countries like China, India, Japan etc. By making
collaboration with other firms.
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 Stakeholders: These are considered as major parties that supports the organization in
achievement of these vision, mission and objectives and also supports them in expansion
of there business operations (López-Gamero, Molina-Azorín and Claver-Cortés, 2011). In
this, the stakeholders of Marks and Spencer will be its suppliers, competitors,
shareholders, customers and government competitors and employees etc.
Private organization:
 Vision: It is a statement of organization which reflects there future desired position in
market. In this, retail organization B&M is operating its business in UK and there Vision
is to be leader in retail industry and increasing its market share as compared to its
competitors.
 Mission: This statement defines the action which organization needs to take to for
accomplishment of future position. In this, “the vision of B&M retail is to provide
quality of products to its customers and establishment of new business structure in other
countries.”
 Objectives: Main purpose of B&M is to achieve continuous growth, increase profitability
and expand their retail stores across countries.
 Size and scope: With the continuous growth in economy, B&M has also achieved a
sustainable growth and expanded their business at international level. They presently
operate in countries like UK, Scotland and Wales with 500 retail stores. The main scope
of these firms is to expand their business in retail market and increase their profits
through expansion of business in other countries.
 Stakeholders: As compared to public limited company, the stakeholders of private
organization are different. For example: Stakeholder of B&M are considered as financial
institutions, investors, suppliers, competitors and employees.
P3 Evaluation of relationship between various functions within company.
In various organization, there are significant functions which are needed to be performed
by employees for the smooth regulation of business operations. In this context, various functions
within Marks and Spencer have been considered which interlinked with its business structure.
These important function are determined below:
 Finance: It is most important that consists the activities related to management of
financial resources within organization (Gecevska and et.al., 2010). Marks and Spencer
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also has finance department in its every business units which keeps records of all
financial resources of organisation and also makes financial statements for the effective
allocation of resources for there future activities. Other than this, this function also has its
coordination with other departments in organization. It also considered major part of
organization that helps in analysing the growth in profitability by making comparison in
financial records and statements.
 Human resource management: Important business function of Marks and Spencer
which has a major responsibility to analyse the requirement human resources and hiring
qualified employees
 That provide support in accomplishment of other business functions and objectives.
Moreover, they also perform task of increasing the competencies of employees and
analysing there needs at workplace ( Fernando, 2011). It also decreases the expenses of
organization by reducing the cost of hiring new employees.
 Research and development : Firms at international level, provides major significance to
function and also establish a separate department for this in organizational structure. This
department provides major support to company like Marks and Spencer by providing
information about Market trends, consumers preferences, changes in technology,
competitors policies as well as increase or decrease in growth of country. It provides an
estimation about companies future position and profitability in market as compared to its
competitors firms.
 Marketing function: In retail industry, the marketing of products and services is
considered as important to increase the sale and profitability (Hair, 2015). Marks and
Spenser has established a separate marketing department in organisation structure which
aims at increasing the promotion of business and influencing the people to purchase the
products.
Apart from this, the structure of cited firm defines its authorities that has to performed by
different employees working at every level of hierarchy at workplace. From the research, it has
been recognised that matrix organization structure is followed by Marks and Spencer which
helps them in accomplishing the work more effectively by utilizing all the resources. With the
helps of this, they have developed proper coordination between all departments at workplace.
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PART 2
P4 Identification of positive and negative impact of internal and external environment on
business operations.
Every business enterprise with UK, get affected with the macro and micro environmental
factors that exists in every industry. Various market research has provided an understanding
there are some factors the exists in environment of country and also aims at accomplishment of
objectives within organization (Rachid and El Fadel, 2013). In this context. Business operations
of Marks and Spencer are also affected positively and negatively by this important factors in
internal and external environment. Further, In this case, PEST analysis of Marks and Spencer is
done to analyse various factors that affects the business operations and growth in domestic
country.
 Political factors: These are considered as major factors that presently exist in macro
environment of company which is related to the policies and rules of political parties and
government which currently in operation with UK. In this, Various policies of
government like Quality, health and consumer rights also affects the policies and
business operations of Marks and Spencer (Self and Wu, 2012). Further, it has also been
recognised that there are various important business policies of government related to
employees rights and safety also creates negative impacts on the profitability of firms.
 Economic factors: Changes in economic policies and practices also affects the business
function of organization and reduces the sale as well as profitability of organization
( Teece, 2010). In present economic scenario, there is continuous growth in economy of
UK which has provided a positive impact on the business of Marks and Spencer due to
rise in income level of people in country.
 Social factors: It is macro environmental factor which describes the impact of cultural
values, perception of people on the growth of business of Marks and Spencer. Further,
there are various important things that change the perception of people towards the
products and services like Quality, quantity and prices charged by firms. In this, context,
the company is providing the best and quality products as well as services to its customer.
Therefore, these major factors have positively influenced the company and also increased
its profitability within the economy of UK.
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 Technological factors: There are some important technological factors are analysed in
this research which has positively affected the business operations of company.
◦ Affect of structure of cost in retail sector.
◦ Impact of technology on product development.
◦ Rise in rate of diffusion in technology.
P5 Evaluation of internal and external analysis of business enterprise
In corder to examine the internal strength of an entity there is need to have an internal
audit with which a firm can be able to measure its own strength and areas of loopholes. Thus,
such examination will help the managerial professionals in making the adequate decisions which
helps in enhancing the internal strength of the business (Wheelen and Hunger, 2011). Thus, this
analysis will help in creating the brand image in the external environment. Moreover, it
facilitates directors with the adequate information about the loopholes of the firm and they could
make efforts in presenting the adequate decision making. It helps in provoking the efficiency of
the workforce which results in favourable outcomes as well as designing the consumer
satisfactory level of products. However, the internal audit of Marks and Spencer will be analysed
as:
Strength
 This organisation has the favourable
brand image which in turn helps the
unit to gather adequate amount of
funds.
 It has the wide ranges or varieties of
product which in turn attract the large
numbers of buyers as well as it
facilitates the satisfactory services
(Marks and Spencer SWOT Analysis,
2017).
 The firm has adequate numbers of staff
members such as more than 84000
employees are currently serving in
Weaknesses
 Products facilitated in the organisation
as mainly outdated and as well as non
trendy which influence in attracting
consumers.
 Has the higher rates of the gods and
services which are non affordable
sometimes for buyers.
 Poor operational management in the
firm which results in late delivery of
goods and inadequate inventory.
 There is need to install various
technical devices which in turn brings
promptness in business operations.
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Marks & Spencer.
 The firm has favourable turnover such
as 115.7 million in accordance with the
current records which indicates that the
business is running on the profitable
state.
Threats
 There will be multiple threats which
has to be faced by Marks and Spencer
in context with the increasing trend of
grocery stores and rivalry firms in UK.
 There are various retail giants are
performing in the adequate maturity
face such as Sainsbury, Asda, Tesco
etc. which in turn challenging the
operational activities of the firm.
 There will be threat of changing
governmental policies relevant with the
taxation and various laws which affects
the business operations.
 Inflation will be threat to the firm as it
create the bull in the prices of the
commodities as well as reduces public
intestine to make any expense.
Opportunities
 It will be fruitful for the business as
they will plan to expand the operational
activities.
 They need to adopt various marketing
techniques which in turn helpful for the
business in at various locations as well
as in decision making.
 They need to implement policies such
as market segmentation, dividend
policies as well as new product lines
which helps in attracting stakeholders
or investors.
 Managers of the organisation must
focus over expanding the business over
online platform which in turn helps
them in having adequate marketing as
well as making consumers aware with
new trends or fashion.
P6 Explanation of interrelation with strengths and weakness with external factors.
By considering Marks & Spencer's internal and external strength it can be said that, there
is need to make changes in operational activities as well as brings innovative changes which in
turn helpful for the business in managing all the financial drawbacks as well as enhance the
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efficiency of the firm. Hence, it can be said that there is need to make changes in the operational
activities of this retail store which can be as the use of various accounting and financial
techniques which in turn improves the economical strength of the business. Moreover, there is
need to implement changes in dividend policies or the industry must facilitate the insurance
cover to its shareholders which in turn reflects in attaining the trust of them as well as their
interest in capital structure (What Are Internal & External Environmental Factors That Affect
Business?, 2017).
On the other side, there has been influence of various competitors in the market which are
challenging the firm with providing the substitute at lower rates. Thus, such techniques will
distract the large numbers of consumers which affects the profitability of firm. Hence, in
accordance with retaining the consumers for the operational tasks of the organisation there is
need to make efforts in designing the products or services which satisfies the large numbers of
consumers more effectively than the other firms. Moreover, professionals of the firm need to
appoint the adequate numbers of qualified and talented staff members which in turn helps the
organisation in making dealings with buyers as well as providing them the adequate informations
relevant with products and services (Internal and External Environments of Business, 2017).
There is need to install new updated technologies which in turn makes it easier for the entity to
record all the transactions and it also helps in having the periodical audit of all the transactions.
Hence, with the help of such financial data the professionals will be able to make beneficial
disclosure of accounts which in turn attracts the large numbers of stakeholders in context with
making investment in Marks and Spencer. Hence, it can be said that such factors helps the
owners or director in terms of making the adequate decisions making.
CONCLUSION
In the presented report, there has been discussion based on the various operational
activities of Marks and Spencer as well as the relevant factors which influences its performance.
Thus, there has been discussion based on the organisation's internal strength as well as aims and
objectives of business. However, there will be fruitful suggestions awarded to the firm's
managerial professionals which are relevant with the enhancing the efficiency of entity and the
activities in the business. Moreover, it can be said that, there will be various rivalry firm which
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are influencing the profitability as well as consumer attention which in turn a broad operational
obstacle that needed to be sort out.
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REFERENCES
Books and journals
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growth? Business environment and employment growth across firms. Economic
Development and Cultural Change. 59(3). pp.609-647.
Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance. The Review of Economics and Statistics. 93(1). pp.309-337.
Fernando, A.C., 2011. Business environment. Pearson Education India.
Gecevska, V., Chiabert, P., Anisic, Z., Lombardi, F. and Cus, F., 2010. Product lifecycle
management through innovative and competitive business environment. Journal of
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Guariglia, A., Liu, X. and Song, L., 2011. Internal finance and growth: microeconometric
evidence on Chinese firms. Journal of Development Economics. 96(1). pp.79-94.
Hair, J.F., 2015. Essentials of business research methods. ME Sharpe.
Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context. Kogan
Page Publishers.
Lewin, A.Y., Massini, S. and Peeters, C., 2011. Microfoundations of internal and external
absorptive capacity routines. Organization Science. 22(1). pp.81-98.
López-Gamero, M.D., Molina-Azorín, J.F. and Claver-Cortés, E., 2011. Environmental
uncertainty and environmental management perception: A multiple case study. Journal
of Business Research. 64(4). pp.427-435.
Nikolaou, I.E. and Evangelinos, K.I., 2010. A SWOT analysis of environmental management
practices in Greek Mining and Mineral Industry. Resources Policy, 35(3), pp.226-234.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Rachid, G. and El Fadel, M., 2013. Comparative SWOT analysis of strategic environmental
assessment systems in the Middle East and North Africa region. Journal of
environmental management. 125. pp.85-93.
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