Business and Business Environment Analysis: Marks and Spencer Report

This report provides an in-depth analysis of the business environment of Marks & Spencer (M&S). It begins with an introduction to the business environment and its impact on organizational performance. The report then delves into the positive and negative impacts of macro-environmental factors (political, economic, social, technological, environmental, and legal) on M&S's business operations, utilizing the PESTLE framework. Following this, an internal and external analysis of M&S is conducted, employing the SWOT analysis to identify the company's strengths, weaknesses, opportunities, and threats. The report also explores the interrelationship between internal strengths and weaknesses and external macro factors. The analysis covers various aspects, including M&S's brand portfolio, product offerings, store network, technological investments, and financial planning. The report concludes by summarizing the key findings and implications for M&S's strategic decision-making.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
P4. Positive and negative impact of the macro environmental factors on the business
operations....................................................................................................................................1
P5. Internal and external analysis of the Marks and Spencer ....................................................3
P6. How strengths and weaknesses are interrelated with external macro factors.......................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business environment composed of the various factors which affect the performance and
operations of the organizations. It includes all the elements which are existed with in the firm as
well as outside of the organisation's boundaries and has the great impact on the growth of the
enterprises. To gain higher level of success, business owners and managers continuously study
the environment and manage their business accordingly(Hamilton and Webster, 2018). Report
evaluates the positive and negative impact of the macro environment on the business operations
of Marks and Spencer. It also defines the internal and external analysis of the company in terms
of strength and weakness of the enterprise. In this assignment we will also discuss how internal
and external macro factors interrelated with strength and weakness of the company.
P4. Positive and negative impact of the macro environmental factors on the business operations
Macro environment includes various external factors which affect the performance and
business strategy of the Marks and Spencer. It involves factors such as political. Economical,
social. Environmental and legal factors, all of these factor are uncontrollable and has great
impact on the overall performance of the company(Aithal, 2017). With the help of pestle tool we
can evaluate the positive and negative impact of the micro environment on the business
operations of the Marks and Spencer.
Pestle analysis of the of Marks and Spencer
Political factor
It includes changes in the policies, rules and regulation of government which affect the
marketing decision of the company. Marks and Spencer is the first major retailer of the cloths
and foods in the UK which go down on the fair trade path. M&S implement the fair trade polices
which led to substantial reduction in sourcing cost, benefiting company. Marks and Spencer face
huge losses because local government has the specific operating and taxation laws for retailer in
the UK(Aalto, 2016). Political factor includes the government taxation policies which affect the
performance of the Marks and Spencer company because if the government increase the Tex
rate, company also has to increase their prices which decrease the income of the Marks and
Spencer.
If government provides the law rate of the Taxation on the retailer business then it affects
positively on the marketing decision of the marks and Spencer and with these firm provides the
1

product and services on the law cost which results in the high productivity as well as
profitability.
Economic factor
Business firms are working under the complex economic environment which affect the
decision regarding products of the organization and customer decision making process.
Economic factor are important element of the economy's performance which directly affect the
company. For example high inflation rate of any economy affect the price of the companies'
product and services. It also affects the purchasing power of the consumers because high
inflation rate results in the costly products which may be not suitable for consumers and results
in the less productivity of the Marks and Spencer. A healthy economy is a sign of increasing the
disposal income which results in the better performance of the company(Zinovieva and et.al.,
2016).
Social factor
It includes target customer of the firm, changes in the customer attitude, preference and
values affect the demand and supply of the Marks and Spencer. Trends in the social factor affect
the productivity of the firm, for competing with this M&S have to modified its self a lot
according to the requirements of the consumers which results in the high productivity of the firm.
For example, if marks and Spencer provides the goods and service according to the changing
requirement of the customers through implementing various innovative ideas in the production
process which ultimately results in the higher productivity and profitability of the company(Farsi
and et.al., 2016).
Marks and Spencer is invested huge money in various social activities which increase the
in interest of the customers towards the firm and results in increasing the productivity of the
firm. For example, all profit generated from selling plastic bags are forwarded to groundwork
which invest in project that improves play area's and public gardens in the UK.
Technological factor
It includes new technologies, skills and knowledge which needed in the production
process of the firm which affect the business decision of the Marks and Spencer. For example if
M&S implement the technological advancement in their production their business operations, it
helps in efficiently operating the business activities in the competitive market. Online shopping
has enabled M&S automate and increase the range of purchasing and reduce the supply cycle of
2

the product by selling online. Technological advancement also affect the companies in the
negative way(Misra. and Verma, 2018). For example, for adopting technological advancement in
the enterprise, M&S have to invest huge amount in implementing process which decrease the
income of the company.
Environmental Factor
This factor also affect the business operations of the firm due to the various pollution act
of the government. The marks and Spencer is the one of the most sustainable brand in the market
and the growth of its food industry largely depends upon the external environment of the
company. Environmental friendly products of the marks Spencer is quite popular with the
consumers in the present scenario where climate change and environmental sustainability plays
an important role on the production process. With these trend for gaining desired level of results
regarding environment the M&S launched a new menswear range which uses less chemical and
water in manufacturing process. For maintaining better environment Marks and Spencer have to
invest huge amount in the various environmental activities which decrease the profit of the
company(Phadermrod, Crowder and Wills, 2019).
Legal factor
Marks and Spencer also has to deal with the legal issues. It includes various factors which
related with the statutory obligation on the company. It is concerned with the various laws which
affect the performance of the enterprise such as employment law, trade law consumer protection
law and trade laws which affect negatively to the Marks and Spencer because these laws are pit
the pressure on the employer to take the decision about various laws which consumes high cost
and lot of time in carrying out their actions which results in less productivity and income of the
company.
Thus, macro environment affect the business operations of the marks and Spencer in both the
way such as positive and negative.
P5. Internal and external analysis of the Marks and Spencer
Internal and external analysis plays an important role in decision making process of the
enterprise because it is the important part of every business planning which affect the business
operations of the company(Nazarko and et.al., 2017). With the help of swot analysis tool we can
3

evaluate the internal and external environment of the Marks and Spencer company in terms of
strength, weakness, opportunities and threats.
Strengths-
Strong brand portfolio: The swot analysis of the Marks and Spencer just underlines this fact
because over the years company has invested in building a strong brand portfolio. It helps in
expanding the business operations of the M&S in the global market and also useful, if
organization expand into new product categories.
Strong offering in line with the latest industry trends: M&S promote the concept of healthy
food among the customers. Company also provides the various product and services according to
the new and latest trend demand of the customers. For example Marks and Spencer develop the
first ever vegan sandwiches and range of vegetable wraps. In the clothing sections, their products
are now designed by the category rather than by brands(Misra and Verma, 2018).
Wide variety of the products: The Marks and Spencer has the wide variety of products in every
store which helps to consumer inn selecting the best products. For example if we take the
vegetables, company start selling fruits and vegetables like carrots, English apples, avocados and
canary tomatoes. M&S also maintain the better relationship with farmer who provides the wide
variety of the products. At present company has more than 1200 suppliers and over 400 different
varieties of the goods.
High quality products: It is the major strength of the Marks and Spencer which helps in
accomplishing the business objective of the company. Customer always find high quality goods
such as fresh fruits, vegetables and other products. The Marks and Spencer company provides
the goods and services according to the need of consumer in terms of quality products.
Large number of the stores and outlets: Marks and Spencer has 900 stores across the world. In
the UK it has 600 stores and above 300 stores in the 40 countries which make the business wider
and increase the sales of the company as well as productivity(Phadermrod, Crowder and Wills,
2019).
Weaknesses-
Investment in technologies: Marks and Spencer need to invest more money in the technological
advancement to improve the production process across the board. At present the investment of
M&S is not at par with vision of the company.
4

Bad publicity as non trendy store: Marks and Spencer has disadvantage on the market as the
organization is out fashioned. Even it has the wide range of products and services with different
brands but the local communities has wrong assumption that companies provides the products
such as menswear and women's wear is only for the aged peoples not for the young peoples
which makes business low. The management have to develop new strategies to focus on the sales
for the young peoples.
Lack of financial planning: The financial planning of the Marks and Spencer is not properly
and efficiently done. According to current ratio and liquid asset's ratio company can use the cash
more efficiently than what it is doing at present(Jasiulewicz-Kaczmarek, 2016).
High attrition rate in work force: Marks and Spencer has high attrition rate and have to spend
a lot more on training and development of its employees as compared to other organizations in
the industry.
Not highly successful at integrating firms with different work culture: Marks and Spencer is
successful at integrating small companies but it has share of failure to merge with the different
work culture firms.
Opportunities-
Adopting new technology: Technological advancement provides an opportunity to Marks and
Spencer to practice the differentiated price strategy in the new market which enable the
enterprise to maintain its loyal customers with great service and attract new consumers through
other value oriented propositions.
Lower inflation rate: The low inflation rate bring more stability in the market. It helps in
reducing the cost of the products and provides the goods and services to consumers at the
competitive price which increase the productivity and profitability of the firm.
Government free trade agreement: With the help of technological advancement and
government free trade agreement Marks and Spencer has the opportunity to enter in a new
market for earning more profitability(Nazarko and et.al., 2017).
Threats-
Strong competition: It is the big threat to Marks and Spencer due to increased competition in all
the area of the business. For example in the food market there are various supermarkets such as
Tesco, Safe-way and sainsbury which provides not only the high quality but also value-added
products to build the customer loyalty.
5

The change of social environment: The Marks and Spencer company is influenced by the
social environment and the changes in social environment takes place regularly. For example
people move to other countries and their culture affects the local people in terms of life styles
such as eating and dressing(Gürel and Tat, 2017).
Marks and Spencer company can take better decision in terms of their business
operations through swot analysis because it defines the strength, weakness, opportunities and
threats of the company which helps in improving the productivity as well as profitability of the
company and also expand business operation at the global level. For example it has strength such
as strong brand portfolio which helps M&S to enter into new emerging market because every
one knows about the products and services of the company in the United Kingdom.
P6. How strengths and weaknesses are interrelated with external macro factors
Strength and weakness of the marks and Spencer are interrelated with the external macro
factors because in some business operation's organization may be influenced by the outside
factors such as political, technological, social, environmental and legal. Both the strength and
weakness are opposite factor which gives the power and weakness to the company. Macro
factors can be identified through the pestle analysis which includes the political factor that may
affect the organization in the political way such as government pressure which increase the
weakness of the business(Phadermrod, Crowder and Wills, 2019). The social factor may affect
the business in negative way such as corporate social responsibility of the firm thus M&S is
liable to do social activities. Social responsibility is the duty of every business and in the
financial terms it can be weakness for the Marks and Spencer. Economical factor involves the
changes in the interest rate and inflation rate in the market. The strength in terms of having better
financial resources in the Marks and Spencer company then changing in these rates will not
affect the pricing strategy and marketing strategy of the company.
Marks and Spencer can not increase their business due to the low economy and instability
in the political environment. Economical and political environment are the main element of the
weakness. The retail shop can not gain the advantage from the political environment and the
economic environment is different in various types of the countries, so Marks and Spencer can
not gain the advantage from the economic environment(Roth, 2017).
Strength and weakness are related interrelated with each other and affect each other. If
Marks and Spencer fails in identifying the strength and weakness then it can not evaluate the
6

macro environment factors which results in failing in formulating strategic plans and tactical
plans. Weakness also affect the marks and Spencer in the negative way, if company not able to
provides the goods and services according to the demand of the customers which results in the
less productivity and profitability of the enterprise.
CONCLUSION
The above study has been summarized with that the success of the every business firm is
largely depends upon its business environment which defines the internal and external factors.
Pestle and swot analysis are the important tool for business strategy of the Marks and Spencer
company. Swot analysis identifies the risk environment of the M&S. The enterprise need to
provide the better quality good and services to customers in the market place and also understand
the buying behaviour of the customers due to increasing the product sell. Marks and Spencer has
to design the web services, online shopping, digital product and discount price for developing the
product selling service.
7

REFERENCES
Books and journals
Aalto, M., 2016. Industry Analyses for a case company.
Aithal, P.S., 2017. An Effective Method of Developing Business Case Studies based on
Company Analysis.
Aithal, P.S., 2017. Company Analysis–The Beginning Step for Scholarly Research.
Farsi, J.Y and et.al., 2016. Structural Factors Affecting International Trade Growth in Iran.
Business and Economics Journal. 7(3). pp.1-7.
Gürel, E. and Tat, M., 2017. SWOT ANALYSIS: A THEORETICAL REVIEW. Journal of
International Social Research. 10(51).
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Jasiulewicz-Kaczmarek, M., 2016. SWOT analysis for Planned Maintenance strategy-a case
study. IFAC-PapersOnLine. 49(12). pp.674-679.
Jasiulewicz-Kaczmarek, M., Saniuk, A. and Nowicki, T., 2017. The maintenance management
in the macro-ergonomics context. In Advances in Social & Occupational Ergonomics
(pp. 35-46). Springer, Cham.
Misra, P. and Verma, V., 2018. An investigation of the factors affecting Indian exchange rate:
an analysis. International Journal of Business Competition and Growth. 6(3). pp.225-
239.
Nazarko, J and et.al., 2017. Application of enhanced SWOT analysis in the future-oriented
public management of technology. Procedia Engineering. 182. pp.482-490.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management. 44. pp.194-203.
Roth, S., 2017. Parsons, Luhmann, Spencer Brown. NOR design for double contingency tables.
Kybernetes. 46(8). pp.1469-1482.
Zinovieva, C.G and er.al., 2016. Study of external and internal factors affecting enterprise’s
stability. Advances in Systems Science and Applications. 16(1). pp.62-71.
8

9