Marks & Spencer: Global Business Environment Analysis Report - BM461

This report provides a comprehensive analysis of Marks & Spencer's (M&S) global business environment. It begins with an introduction outlining the scope of the analysis, followed by a detailed PESTEL analysis examining political, economic, sociocultural, technological, environmental, and legal factors affecting M&S's operations. The report then presents a SWOT analysis, identifying the company's strengths, weaknesses, opportunities, and threats. The analysis highlights key drivers from both the external and internal environments. The report then explores the impact of these drivers on two functional areas: marketing and human resource management (HRM). The marketing section discusses the effects of Brexit, currency depreciation, and the need for online presence. The HRM section focuses on cost efficiency, employee training, and the importance of employee communication. The report concludes by summarizing the key findings and implications for M&S's strategic decision-making.

Global Business Environment

Table of Contents
Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
PESTEL analysis....................................................................................................................1
SWOT analysis.......................................................................................................................2
Impact on functional areas of M&S.......................................................................................2
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................5

INTRODUCTION
Global business environment refers to the environment in different countries with all
factors related to an external group with home environment of organization. This global business
environment put impact on the decision related to resource uses and abilities of a business
organization.The Marks and Spencer which was founded in 1884 is a chain of household and
clothing products. The company operates retail outlets all over the world and is a very common
name in United kingdom. In this report we will analyse the operating environment of Marks and
Spencer with broader view using PESTEL analysis. Other objective is to complete the SWOT
analysis of Marks and Spencer and identify the key drivers from external and internal
environment. Next objective is to identify the impact on Marketing and HRM.
MAIN BODY
PESTEL analysis
This identifies external factors of M&S and is mentioned below:
Political factors: The global political condition and political climate of all operating
countries impacts the base of M&S. Policy allows M&S with subsidies to invest globally,
transferring profits in headquarters with no tax (The Economic Times, 2007). Dubbed Brexit,
made a huge impact on business of company’s operation. Though it is unclear that where the UK
will stand for the trade regulation and tariffs, but it seems like the outcomes are unfavourable for
the retailers.
Economic factor: M&s is in consumer goods business, thus affected by income of its
customers. Because of financial crisis income of consumers is dropping from past few years
resulting in fall in luxurious goods. These goods are substituted by those available at lesser price.
Fluctuation in exchange rate also affects global operation of M&S as business done transfer into
UK.
Sociocultural factors: Clothing depends on cultural and religious backgrounds, M&S
needs development here by adapting to cultural and religious values of consumer. The food
habits also depends on culture and local cuisine of different countries.
Technological factors:
The trendy thing in retail market is online shopping trend. As this trend grows Marks and
Spencer is already a established e-commerce company, offering most of its products.M&S
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doesn't deliver the food items like other food stores. M&S got advantage of mobile payment
methods in various sectors.
Environmental factors: As the M&S is maintaining image of luxury brand it has pledged
to be more sustainable retailer.Natural environment impacts clothing and food preference giving
opportunity to fulfill requirements depending on climate.
Legal factors: It’s needed for M&S to synchronize with global legal system and local legal
system of countries it’s operating in. Food,beverages must follow standards enforced locally.
SWOT analysis
Internal environment of M&S is mentioned below:
Strengths: M&S strengths are- Global operation,operating in more than 40 countries is
chance for it to serve largest customer segments earning revenue. Potent 2000 supplier chain
across glob giving best quality at lower cost. Skilled workforce of 78000 who all are well trained
to perform their tasks.(M&S Corporate website 2012).
Weakness: Prices of M&S products are high among all same marketeers and this cause
lose in market share in past (Felsted, 2012). M&S is concentrated to focus more on UK business
instead of expanding operation throughout world.(M&S Corporate website, 2012)
Opportunities: M&S can expand in China and India for better results as these countries
have high economic growth. Other is mobile industry, because it’s fast moving M&S can open
many mobile stores.
Threats: Political issues in Middle East, African countries put global operation at risk
and reduction in income of consumers make them shift to cheaper substitutes are threats for
M&S.
These analysis indicates that economic environment rise threats as consumer income falls
and internal environment could help in business decisions.
Impact on functional areas of M&S
Marketing: From analysis it’s clear that company hugely depends on UK market for
revenue,which is affected by Brexit effect and currency depreciation. M&S needs an exploration
to fresh markets plus requires to improve online appearance to integrate its market positioning.
In this increasing trend of online purchasing and marketing renovating this area is need of hour.
The online market is highly competitive but once well established with consistency it provides
marginal benefits. M&S largely investing on IT systems which helps in increasing reach-ability
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to customers, with this marketing strategy company aims of becoming multi channel retailer.
Increasing accessibility with mobile, tablets, stores and web seems decent marketing and also
more then half of online orders are placed on mobile and tablet devices. So company can plan to
provide exciting offers and discount coupons on online shopping platform.The British retail
market is chiefly putting attention on it through partnership models and online business. As
mention earlier also M&S has big scope in Asian market such as India and China, this
opportunity can be grabbed and an effective marketing strategy for business in these countries
can be implemented. The 17% of clothing space of UK market is with M&S. Unlike earlier it’s
clothing are designed with categories not by brands. Company can market these variant of
clothing as needed by customers.
HRM: M&S functions on believe that customers are completely right at any given time.
Company now is focused on reducing cost and improving efficiency. HRM is hugely responsible
for achieving coast efficiency as customers of M&S are becoming wise. Highly competitive and
fast moving retail industry the importance of human resource is increasing. HRM employees are
the communicator of company with customers and are forming organizational structure. Human
resource management hire best suitable people, increase their abilities with training, mange them
and share vital information.All recruited employees take part in activities needed for performing
skills in work area. Enthusiastic employees have opportunity for higher position in organization.
This self managed team improvise the organizational performance of M&S and HRM and
strategy making of company is linked. The strategies of company is base for strategies of human
resource and HRM has important role in managing the human resources of organization. HRM
employees collaborates with functional areas like finance, marketing attributing to overall
performance of M&S. HR management at M&S provide timely training to employees to keep
them updated with all current methods to interact with customers and provide best of service, as
discussed above Marks and Spencer is becoming more cost efficient. Although they can consider
the approaches like team work in decision making, all employees must integrate in change
process management. M&S is service focused company and to continue so HRM train
employees with interpersonal communication skills.
CONCLUSION
From this report of global business environment of M&S it can be concluded that external
environment given by PESTEL analysis identifies political and economic environmental threats
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rising due to fall in income of customer. Technology is appearing as factor of opportunity for
M&S to increase profit which is being lost because of threats. The internal environment analysis
helps in determining SWOT of company and is used for decision making in business. All these
factors impact the functional areas like HRM and marketing.
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REFERENCES
Books and Journals
Ahmad, A.M.B., Masri, R.B. and Lee, C.A., 2019. Future Challenges to the Entrepreneur in Relation to the
Changing Business Environment. Global Business & Management Research, 11(2).
Črešnar, R. and Jevšenak, S., 2019. The millennials' effect: How can their personal values shape the future
business environment of industry 4.0?. Naše gospodarstvo/Our economy, 65(1), pp.57-65.
Halbert, T. and Ingulli, E., 2020. Law and ethics in the business environment. Cengage Learning.
Hampden-Turner, C. and Trompenaars, F., 2020. Riding the waves of culture: Understanding diversity in global
business. Hachette UK.
Kadagishvili, L., 2020. Prospects of Cooperation between China and Georgia in Global Business
Environment. Ecoforum Journal, 9(2).
Möller, K., Nenonen, S. and Storbacka, K., 2020. Networks, ecosystems, fields, market systems? Making
sense of the business environment. Industrial Marketing Management, 90, pp.380-399.
Rao, S., 2021. International business environment. Himalaya Publishing House.
Vlados, C. and Chatzinikolaou, D., 2019. Methodological redirections for an evolutionary approach of the
external business environment. J. Mgmt. & Sustainability, 9, p.25.
M&Senvironmentalanalysis.,2019[Online]availablethrough<https://www.ukessays.com/essays/
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