Analysis of Business Environment: Mark & Spencer - HND Business Report

This report provides a comprehensive analysis of the business environment, focusing on Mark & Spencer as a case study. It begins by introducing the significance of the business environment and its impact on organizational functioning, including internal and external factors influencing decision-making. The report then categorizes and explains different types of organizations, including public, private, and voluntary sectors, along with their legal structures, purposes, and examples. The size and scope of these organizations are also discussed, highlighting how factors such as employee numbers affect organizational structure and operations. Furthermore, the report delves into the interrelationship between various organizational functions, such as management, sales and marketing, and production, and how these functions contribute to achieving organizational objectives like profit maximization, customer satisfaction, and competitive advantage. The report uses Mark & Spencer as a case study to illustrate these concepts, examining its strategies and objectives within its specific market context. It concludes by emphasizing the importance of aligning organizational functions with objectives to enhance efficiency and effectiveness.

Business Environment

INTRODUCTION
Business environment plays an important role in every organisation. Basically it involves
some internal and external factors which directly effects functioning of company. Mainly it
effects customers, employees, administration, supply, demand and other business activities
(Elliot, 2011). In simple words, it is comprises of micro and macro environmental elements
which influence operating situation of every enterprise. Business managers should keep these
factors in mind while making important decisions regarding company. Furthermore, it is a set of
some controllable and uncontrollable aspects which determines the current and future
performance of organisation. Market environment is a combination of social, political,
economical situations in which a enterprise operates and conduct. Macro elements of business
provides various opportunities and threats to company. This project report is based on ''Mark &
Spencer Plc'' which is a multinational retailer enterprise and it is situated in United Kingdom.
Mainly it manufacture fashionable clothes, domestic products and food items. In this report,
various types of businesses are investigate to analysis current environmental factors and their
impact on organisation (Yang, Hong and Modi, 2011). Along with this, various functions of
company has been explained to understand their interrelation with different organisational
objectives. Market environment help mangers to identify current business trends and also what
are the current preferences of customers.
TASK 1
P1. Types and purposes of different organisation
Company is place where number of people come together to achieve personal and
professional objectives. It can be refer as institution or association that has any aim and is related
to an macro environment. The success of any organization lies upon its organisational structure
and strategies. Different schemes of enterprise can be successful if these are made according to
the business environment. Every firm is established to accomplish some goals and objectives
without these elements no company can exist in market place. There are various types of
business organisations which are following as under:
Public sector: Organisation which comes in this category are known as government
companies and it provides governmental services. These enterprises are composed by country
and it includes various services like military, public roads, police, water supply,
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telecommunications, public transportation and education. BG Group Ltd. Is one of the elading
public sector company of United Kingdom. Government companies are established to provide
various benefits to society. This type of organisations are controlled by legal authorities as it
provides legal services which is beneficial for individuals. These companies plays an important
role in social issues. Public sector enterprises are established for various purposes which are
following as under:
 This sort of organisation helps in providing employment services to a huge number of
individuals.
 These firm gives its central attention to facilitate rural development. It can be done by
locating different projects in rural areas.
 The main objective of public sector is to raise national income and also enhance national
economy.
 These companies focus on lower and weaker sections of society.
 It also helps in protecting and promoting rights of citizens.
Hence, these are the purposes of establishing public sector. Legal structure of this sector
is determined below:
Central government: it is also known as federal government which makes various rules and
regulations to restrict other companies.
Local government: Central government delegates its power to local authorities so that they can
resolve issues and problems of people at local level.
Private sector: The companies which are apart from public sector is called as private
organisations. These enterprises are managed and controlled by private individuals or groups.
Generally it is manage by entrepreneurs instead of government authorities. It is known as
essential part of national economy. Mark & Spencer is also a private sector company which is
one of the leading clothing organisation.The owners of privately held company are non
government organisations or shareholders, who do not trade their business to public sector.
Private sector companies are as important as public sector. These enterprises contributes a lot in
national economy and also provides job opportunities for various people. The purposes of
establishing private companies are following as under:
 It helps in development of both urban and economic areas.
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 The main purpose of these organisations is to enhance human capital and leads national
economy to higher level.
 It also helps in promoting small, micro, medium organisations by measuring supply and
demand side.
Moreover, legal structure of private sector:
 Partnerships
 Single proprietorship
 Franchises
 organisations
These kind of enterprises are managed and controlled by business entrepreneurs. It needs to be
registered in legal records of government. It requires licence to trade its different goods and
services.
Voluntary sector: Companies which comes under this sector is known as non profitable
organisations. Woodland trust is a voluntary enterprise which is established to help poor people.
These enterprises are established to protect interests and welfare of society. It organise various
programs to enhance skills and abilities of individuals. The purposes behind developing this kind
of company are discussed below:
 For providing appropriate services to poor people.
 To protect and promote interests of society.
 To provide good facilities for senior privileged citizens.
Moreover, voluntary sector are known as old age homes, charitable trust and orphanage
for handicapped children's.
P2. Size and scope of different types of organisations
All type of business enterprises have their different size and scope. Organisational size
depends upon its number of workers. If company have few number of workers then it is known
as small enterprise. Companies are divided into three parts according to their size which are
small, medium and large organisations. Organisational structure is highly influenced by its size.
For example if a person make plans to build a building then firstly he will determine his size that
how much area will it cover. Organisational size mainly affects work specialization,
departmentalization and formalization.
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Moreover, scope of organisations is as essential as its size. Business enterprises have
been extended due to industry revolution. Responsibilities of companies are categorised in
various form which are following as under:
 Sole proprietorship: In this kind of business, organisational structure includes
entrepreneur's own capital. In sole proprietorship, single person is responsible for positive
and negative performance of company.
 Partnership: In this sort of business two organisations come together to achieve some
common goals and objectives. Involvement of two enterprises makes business structure
very simple.
 Joint stock company: Joint ventures are known as merger or acquisition of a
organisation in another. The scope of this type company is very wide and complicated.
Generally, there are three sectors of organisation which are public, private and voluntary.
Three of them have their different size and scope which are discussed below:
Public sector: Organisations which comes in this sector is fully managed and controlled
by advisory bodies of country. Public sector companies determines their organisational structure
according to their size. BG Group Plc is one of the leading British multinational oil and gas
company, which is located in United Kingdom. It have strength of approx 5,200 employees
which makes it medium enterprise. Its size is determined by number of its employees. This firm
deals in natural gas, crude oil and petrochemicals. It also operates in around 25 countries across
Australasia, North America, Asia, Africa, South America and it manufacture per day large
indefinite quantity of oil equivalent. There are various scopes of BG Group which are following
as under:
 This kind of organisations are established to protect and promote society.
 It gives its central attention to customer satisfaction.
 Mangers of public sector make organisational decisions to consider environmental
factors, it includes some internal and external components of company.
 Public organisation funded by government authorities.
 It gives its focal point to weaker sections. Mainly it improves rural areas so that poor
people can also develop their living standard.
Private sector: These are those organisations are managed and controlled by
entrepreneurs. In this kind of business one or more persons are responsible for organisational
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activities and practices. Mark & Spencer is also a privately held company and its owner is
Robert Swannell. It have strength of approx 82,904 employees which determines that its is a
large organisation in size. This company mainly deals in garments, home and food products.
There are various scope of this enterprise which are following as under:
 This firm is highly focused on profit maximisation.
 It provides various employments services which helps in economic growth.
 It giver its central attention to customer satisfaction.
Voluntary sector: In resent time, this kind of organisations are taking huge attention.
These companies are established to provide free facilities to needy persons. The main function of
voluntary organisation is protecting and promoting interests of poor people. Woodland Trust is
one of the most popular intentional company of United Kingdom, which gives it central attention
to lower sections. It does not give importance to profit maximisation.
P3. Relationship between different organisational functions and its link with objectives
Business organisations are established to fulfil its goals and objectives. Nature of
enterprise is determine by its different objectives. Enterprises set their goals to consider internal
and external environment of market. Mark & Spencer is a multinational retail company which is
more popular for its fashionable clothes (Burrell and Morgan, 2017). It distributes its various
products and services in all over the world. It is highlighted for its clothes, domestic goods and
food products. This company gives its central attention to customer satisfaction and
environmental changes. The managers of this organisation make different strategies, objectives,
goals and plans to consider its business environment. Enterprise can enhance its efficiency and
effectiveness if it makes its important decisions according to environmental changes. To improve
organisational development, M&S use effective structure so that can survive in various tough
marketing situations. Business enterprises operate their different functions according to their
objectives (Bezdek, 2013). Because various activities and practices of firm is determined by
organisational objectives. Just like other companies Mark & Spencer also operate to accomplish
its various motives which are following as under: Profit maximisation: This organisation is highly focused on profit maximisation and cost
minimisation. Customer satisfaction: M&S is a well growing enterprise because it provides high
customer satisfaction which makes it more powerful firm on clothing industry.
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 Customer service: To enhance its growth this company continuously focus on consumer
service. Competitive advantage: The most important objective of this company is to survive in
competitive market place.
 Employee satisfaction and retention: Employee are the main factor of this organisation
so it give importance to employee retention.
Hence, these are some essential objective of Mark & Spencer for which it operates its
daily activities and practices. These motives directly affects its organisational functions or it can
said that objectives and functions of business are interrelated. Some of the important roles of this
enterprise are following as under:
Management: This is the First and foremost function of every business organisation. It
plays an important role in every business organisation. It consist of four major actions which are
planning, organising, directing and controlling. After determining objectives it is the
responsibility of management department to make effective strategies to accomplish
organisational goals and objectives. It manages all business activities and practices so that
company can easily achieve its desired results (Muchiri and et. al., 2011).
Sales and marketing: Merchandising is most important element of business enterprises
as it involves various effective and systematic strategies to promote and advertise different
products and services of Mark and Spencer. If company will use appropriate marketing schemes
then it can easily attract more customers which help organisation in achieving higher financial
profit which is the main objective of this firm. Marketing department provides required
information to production department so that it can produce goods and services as per market
trends.
Production: It can be defined as a process in which different raw materials are converted
into finished goods. In simple words, it is a procedure of converting inputs into outputs to
satisfied specific needs and demand of customers. If company will produce products in a
systematic manner than it can manufacture more goods and services at same time which will
help organisation to achieve organisational objectives. Production department needs huge
number of human resources so that they can produce quality products and human resource
department help them by hiring high skilled employees who can operate business functions in
most effective manner.
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Human resource management: This is one of the essential function of Mark & Spencer.
Without help of HR department no organisation can attain its desired results. Human resource
section helps company to manage its manpower and also resolves organisational issues between
management and employee. For better success of enterprise Human resource administration is
mandatory.
Finance: This is refer as core function of M&S, because without financial management
company can not maximise its financial position. It is the responsibility of top management to
administer appropriate amount of capital, because no enterprise can achieve its desired goals
without proper administration of finance (Jing and Avery, 2011).
Research & development: Most of companies make their business strategies and plans
to analyse business environment. Market research help organisations to identify different needs
and demands of customers. Along with this, it also helps in evaluating current position of
competitors, by which company can make effective organisational structure and strategies to
compete its different contenders in market place. For conducting market research this department
needs appropriate amount of capital which it gets from finance department.
All these functional units of Marks and Spencer helps it in accomplishing its all desired
goals and objectives. There was so much complex in its old structure that is why it have create
new organisation structure which helps it in managing its all business functions in most effective
manner.
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TASK 2
P4. Positive and negative impact of macro environment on business operations
Pestle analysis is a framework which affect external as well as internal factors of the
Mark & Spencer. its headquarter is in UK with across the thousands stores in thirty countries all
roughly the world . Its food as well as the retailer of the clothing industries and day by day it also
expand its business like now they are working on furniture too (Hopkins, 2012).
Political factors:- Government has some of the policies they should not abide like
harmful health and care reacted issues and other factors too which is harmful for the environment
too if they cross them they will pay with the great loss of the fin as according to the norms.
 Positive:- Marks and Spencer makes its each and every decision by considering all
policies of government.
 Negative:- stated by the on of the costumer that they more focus on the goods value
Marks and Spencer charges to the customers on the basis of product's value instead of
the good quality.
Economical factors:- Outlook of the economic condition is not sure its kindly affect the
sales because the people don't have that much cash to spend on the luxurious clothings and food
items due to this recently that have to close many of the stores and this also leads to the 2% of
unemployment rate (Rummler and Brache, 2012).1. Positive:- M&S started care about the quality product in case of down in sales and due to
that they have to close many stores.
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2. Negative:- Marks and Spencer make increase of the unemployment rate by fire the many
employees in case of closing the stores.
Sociological factors:- the social scenario is keep changing so on the CEO (chief
executive of the company) make plan to stretch the company more often like they started the
food services too to give more of the varieties and products available for the customers . Positive:- M&S wants their brand name to got more fame and by started new food-line
may be beneficiary to the Mark and Spencer. Negative:- by launching up the new food-line may also distract the consumer and might
be it decreases the clothing sales of the company (Owen and Kemp, 2013).
Technical factors:- its a vital role company ha to mange their brand name carefully and
reputed because the brand name always affect on the consumer as a bigger brand name its
important to be technically updated they also makes online websites so people can nationally and
internationally. Positive:-its good to reach with every single person by using the technology.
 Negative:- not all people can aware about the online shopping.
Legal factors:- Mark and Spencer carry out with updated law and legislature time to
time. They almost change the taxes some business rules as per the legal provisions set by the
government. They keep packaging safely so that the things can't break or waste by it. Positive:- its good to be environment friendly and do something behalves of this. Negative:- Government fluctuate some rules as per the legally it may confuse the people
by changing tax policy by them or in price issues.
Environmental factors:- As all the companies it also changes the way of manufacture the
products because as according to the environmental conditions pressurise by the government and
it should be change so the inner product will not damage because of the climatic conditions. Positive:- extra packaging according to the climate will protect the product which will
help Marks and Spencer in dealing with environmental factors.
 Negative:- this make the packaging complicated and not so identical product by the
brand name (Welter and Smallbone, 2011).
P5. Internal and external analysis of Mark & Spencer
Business organisations makes their different management decisions to consider their
internal and external factors. Micro and macro environment affects enterprises or it can be said
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that almost all firms are influenced by its internal and external factors. Basically micro elements
are those on which company have fully control but firms can not control macro elements of
business environment. Mark & Spencer have good team of mangers because they make
marketing decisions according to its different internal and external aspects which can affect its
current and future performance. To investigate micro and macro components this company can
take help of SWOT matrix (Sevkli and et. al., 2012). Generally it is used for evaluating different
strengths, weaknesses, opportunities and threats. It can be defined as method of structured
planning which determines each and every element of organisation. Managers of Mark &
Spencer use this SWOT analysis to determine its different components which are following as
under:
Strengths:
It is known as the unique characteristics of company which differentiates it from other. Some
strong points of M&S are given below:
 Marks and Spencer provides high qualified goods and services which is its major
strength . Most of customers requires products of excellent quality such as fresh fruits,
vegetables, superior fabric of clothes and so on.
 It is highly focused on customer services, because without providing consumer
satisfaction no company can exist in competitive market place. M&S provides great
services to its clients which increase its reputation in market place (Kajanus and et. al.,
2012).
 This is the main strong point of M&S, it makes its customer comfortable while
shopping. Because if clients will not feel convenient and comfortable than they would
not buy products and services. So this company provides good shopping environment so
that more people can purchase its different goods.
 This organisation have higher position in marketplace because it continuously provide
manager training so that they can make more effective strategies for regularly
improvement of organisational performance.
 It also have a large contribution in increasing national income.
Weaknesses:
It is known as those elements which creates disadvantages for company. Some weak points of
M&S are discussed below:
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 This company is highly focused on ladies garments which is a huge disadvantage for
this company. It should produce all kind of garments so that everyone can purchase
them.
 Due to lack of information technology system this organisation suffers from unbalanced
inventory management which is its biggest weak point.
 Marks and Spencer have various store spaces but do not have enough market share in
food products which affects its profitability and productivity. So it should produce more
products to fill its extra stores (Bianchi and et. al., 2011).
 It also have various competitors in marketplace which decreases its market share.
Managers of this company should make some effective ans systematic strategies to
overcome this weakness.
Opportunities:
These are the elements which explore its current advantages. Opportunities of M&S are
following as under:
 With the emergence of various technological factors business industry is improving very
well. Mark & Spencer can also take help of technical factors to enhance its current and
future performance. Through using technology this company can make its products and
services available on its websites which makes its customers comfortable.
 M&S can offer healthy eating which will help it in increasing demand for its specific
food products.
 It can also develop new and effective strategies with the help of its well skilled mangers.
By using effectual schemes this company can enhance its product portfolio and also can
increase huge number of customers. Through extending its market it can improve its
position in marketplace and also can give tough competition to its contenders (Pache and
Santos, 2013).
Threats:
These are the elements which are uncontrollable in nature and affects a lot organisational
functioning. Menaces of M&S are given below:
 Continuously changes in business environment is a big threat for this organisation. To
cope up with environmental factors this company should make flexible marketing
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strategies which can be changed as per the need of market place.
 Marks and Spencer have carious contenders such as Safeway, Sainsbury and so on
which affects its position in marketplace. These competitors provides high qualifies
goods to customers and also attracts more customers which creates a huge disadvantage
for M&S. There are also some clothing brands like Gap, Next etc. which competes with
it.
P6. Interrelate strengths and weaknesses with external macro factors
Strengths and weaknesses are those factor which determine success and failure of a
business enterprise. Strong points of a company helps in increasing and developing its current
growth whereas weak point influence negative impact on organisational growth and development
(Liefbroer and et. al., 2015). Mark & Spencer is a multinational retail firm which have many
strengths and weaknesses which are highly influenced by macro environmental factors. Business
managers can analyse various external factors by using PESTLE matrix. Generally it evaluates
political, economical, social, technological and legal components. These elements are very
essential because it determines different strong and weak points of organisation or it can be said
that macro environmental factors are interrelated with organisational strengths and weaknesses.
Advantages and disadvantages of M&S interrelate with external elements which can be defined
as below:
Strengths: Different organisations can increase their strong points only by considering
macro factors of business environment because these factors affects performance of all
organisations (Görener, 2012). There are various strengths of Mark & Spencer which linked to
external factor, which are following as under:
 As it is mentioned above that this company provides high qualified products. It provide
extra quality because political and legal issues force it to do same. If it will not provide
qualify goods then authorised bodies can cancel its registration.
 It is a well known organisation because it have strong goodwill and reputation in market
place because it helps in national income and also provides various employments services
which helps in increasing country's economy (Remeikiene and Gaspareniene, 2016).
Weaknesses: Just like strengths, different weak points of M&S are also interrelated with
macro environmental factors which is explained below:
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 There is lack of information technology system in Mark & Spencer. This weakness in
occur because this organisation is not that much aware about technological issues.
 This company have less market shares in food products, because it is incapable in making
healthy relations with society. So this is a social macro environmental factor which
decrease its performance (HALEPOTO, Sahito and Shoro, 2015).
CONCLUSION
Through concluding this report, it is come to realisation that business environment is a
most essential aspect for all organisations. Most of companies get failed because they do not
consider environmental factors while making organisational decisions, which leads them to
lower position in market place. Above mentioned business research, is based on Marks And
Spencer which is a leading clothing company. This report has helped this organisation to
evaluate its current position by using SWOT analysis. Through this evaluation, company can get
aware about its upcoming opportunities and threats which can increase or decrease its
performance. Business environment of this organisation is affected by various internal and
external environmental factors. These elements of market can be determined by PESTLE
analysis. This report has included various positive and negative aspects which can be impacted
on organisational performance. Along with this, different kinds of business are evaluated to
identify suitable working style and organisation structure.
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REFERENCES
Book and Journals
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