Higher National Diploma Business Environment Report: Marks and Spencer

This report provides a comprehensive analysis of the business environment, focusing on Marks & Spencer (M&S), a multinational retailer. It begins by defining the business environment and its impact on business functions. The report then explores different types of organizations, including public, private, and voluntary entities, along with their purposes. It also examines the different types of business organizations like MSMEs, profit and non-profit organizations, sole proprietorships, partnerships, and limited companies. Furthermore, the report delves into the interrelationships between various organizational functions within M&S, such as marketing, finance, human resources, research and development, IT, and customer service. A PESTLE analysis is conducted to assess the positive and negative impacts of the macro environment on M&S's operations. Finally, the report concludes with an internal and external analysis to identify the company's strengths and weaknesses.

BUSINESS AND BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
P1- Different types and purpose of organisations........................................................................4
P2.Different types of organization...............................................................................................5
P3 Relationship between different organisational function.........................................................6
P4. Positive and negative impact of macro environment within business operation...................8
P5. Conducting internal and external analysis of organizations in order to identify its strengths
and weaknesses..........................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business environment is a term that explains the inter-relatedness and dependency of both
the external and internal factors on the business functions. In this report the study was conducted
on Marks & Spencer which is a multinational chain of retailer in the apparel industry. The
company was established in 1884 in London, United Kingdome. They deal in garments,
household products and food commodities under their own branding. The following report will
focus on various opportunities related to the different size and type of organisations along with
the inter-relations of establishment purposes in connection with organisational structure and
formations. Further in the report it will also analyse the positive and negative impact on the
external environment. At last, to evaluate the strength and weakness of the establishment an
macro and micro analysis will be conducted.
MAIN BODY

P1- Different types and purpose of organisations
There are different types of business organisations with the different in the industry in
which they operates. The three different types of organisation are public, private and voluntary
organisation
Public organisation- This are the organisations that are run-ned, operated and controlled by the
government of the country in which it operates and that exists only to provide services to its
citizens prevailing. This can also be referred as publicly and government owned enterprises that
provide services and goods to citizens of the country where the purpose of the this type of
organisation is to help the government of the country to have social control on trade and industry
to account for equitable distribution of goods and services. The main purpose of this
undertakings accounts with to provide services to public rather than making out profits by them.
Legal structure of the company is they are being accountable to central and local government
and are being directly funded by the same. This are being run by board of directors on behalf of
various shareholders and accounts to have annual general meeting where key issues are being
discussed (Demircioglu, Audretsch, 2017). They share there stock to general public which are
being listed on stock exchange of the country. Example of Public organisation is National Health
Services based out of UK.
Private organisation- this are the company who's shares are being not offered for sale to public
and are being subject to various legal requirements. This are the firms which are being held
under private ownership where the business accounts to separate legal entity from that of its
owners. The purpose of this companies is to maximise its profits for its members and
shareholder and become leading player in there industry. This are being focused to have right
structure which accounts to serving the interest of the business. Its legal structure accounts to
that its shares cannot be sold to public(Nadikattu, 2019). Each share accounts to its owner for
one vote at time of companies AGM and also accounts to share profits of the company at the end
of financial year known as dividend where the company is being run by board of directors and a
chairman is being appointed. The liability of members or shareholders is subject to investment
they have made. Example of private organisation which is being based out of UK is Marks and
Spencer

Voluntary organisation – These are the company which is collection of groups of individual
who work together to undertake and perform activities that are in the benefit and interest of the
society. Purpose of this companies is to identify the needs of certain group of individual and
initiate programmes and activities accordingly by the means of collaboration with the
government of the country and by there own where it accounts with meeting the right of
individuals or group of members (Tomczak, 2016). Legal structure of the company accounts
with managing and governing body which includes and are being named as boards of directors,
executive committee , managing committee which exercise control and manage operations of the
company. Example for Voluntary organisation which is being based out of UK is Red cross
society of Britain.
P2.Different types of organization
There are different types of organization which could be described as below:
MSME:
It is one of the biggest category of organization which is operated in European counties.
The MSME means micro, small, and medium enterprises. The main distinguishing factor for
MSME are its number of employees and its turnover which means a micro enterprise is one who
have less than 10 employees with a turnover of less than 2 million EUR, while the number of
employees in small enterprise are less than 50 with a turnover of less than 10 million EUR. On
the other hand, number of employees in medium enterprise are less than 250 with a turnover of
less than 50 million EUR (Choudhury and Goswami, 2019).
Profit and non-profit organization:
These are the two different types of organization whose main bifurcation is their profit
motive which means if any organization is working for earning profit would be considered as
profit organization.
While not for profit organization basically works for the public benefits and not for the profit
motive which usually includes charity and social motive enterprises.
Sole proprietorship:

This type of business is solely owned by an individual person only. Because, of no legal
differentiation the accountability and liability of the owner is unlimited which means he will be
fully liable and responsible for all the profits and losses.
Partnership:
The name itself suggest its meaning as under this type the business, the whole business is
owned by two or more than two persons or parties and their relationship is governed by a deed
known as partnership deed. Every rules and regulations regarding the operation of business is
written under the deed. Like sole proprietorship the liability and accountability of the partners is
also unlimited which means in case of debt they have to pay at their own personal level as well.
Limited companies:
A limited company is a separate legal entity which means company and its owners are
treated individually. Under this, the company is treated as a legal person who can buy, sell, or
enter into any contract under its own name and it will be having all liability. Under this the
liability and accountability of the owner is limited which means in case of debt their liability is
limited up-to the amount of their share (DiFrisco, 2017).
Private limited company:
A private limited company is a small business entity whose liability is limited up-to the
number of share. A private limited company can't sell its share public ally which means it can't
list and trade its share on stock exchange. It has small number of shareholders with no minimum
capital requirement.
Public limited company:
A public limited company can freely trade its share in public. Unlike private limited
companies the public limited company has a requirement of a fixed amount of capital. Also, it is
very essential that if a company operates as a public limited company,then they have to use PLC
at the end of their name.
P3 Relationship between different organisational function
Some of the interrelationship between organizational functions of Marks and spencer are:
Marketing and finance department:

Marketing and finance department are directly linked with each other. They are the two main
pillars of every organization. Marks and Spencer finance department make budgets for the
marketing team. As marketing team require budget because they have to carry the promotional
and advertisement activity. Finance department know the correct financial position of the
company. Finance department are dependent on marketing department for the profits as
marketing team directly handles the customer. In marks and Spencer both the department have
good communication because they both contribute in the growth and success of the company
(Walsh, Bhagavatheeswaran and Roma, 2019). Without the presence of marketing department
marks and Spencer cannot increase their sales and sales will bring profits and profits are required
by finance department for working. If conflict arise in these two departments then it will be
difficult for the company to reach towards the objectives.
Marketing and human resource department:
Marks and Spencer believe that marketing department are dependent on human resource
department for the supply of efficient marketing workforce. Competition is lot in the market
nowadays so skilled workforce is very much required. Human resource should hire such
candidate who have marketing degree or skills or experience. HR should do advertisement in
such a way so that they can attract more candidates (Rastogi and Trivedi, 2016). Selection should
be done carefully. Right candidate should be selected for the right position. Hr should also
provide training to the employees so that new marketing techniques can be build amongst them.
Finance and human resource department:
Marks and Spencer should regulate these departments properly. Finance provide budget to the
human resource department to the recruitment and other activities. If HR don't carry recruitment
activity properly and select wrong candidate then it will be the unnecessary expense for the
company because hiring of employees incur costs. Finance department can even cut the budget
of the HR department if they do the wrong hiring. Coordination between these two departments
is very necessary for the growth and success of the company (Perera, 2017). If finance
department run out of budget then this will adversely affect the human resource department.
Research and development and marketing department:

Marks and Spencer have a good research team who is responsible for the growth of the company.
It is the marketing department only who give information to the research department about the
demand in the market so that they can do research according to that. Then research team do the
research in launching the innovative products in the market with the help of marketing team. As
innovation is very much require for the survival of the company for the long run. Innovation also
help the company in attracting the customer and create good customer base.
IT and finance department:
Finance department make the financial statement of the company like balance sheet or profit and
loss statements while IT help the company in adopting advance technology. In marks and
Spenser these two departments work in collaboration. If any new software comes in the market
related to the finance then IT adopt that and help the finance department in understanding the
technical part. Adoption of new technology is very important if company want to beat the
competition.
Customer service and marketing department:
After selling of the product customer service come into the scene. Marks and Spencer customer
service is one of the best customer service. If company will provide good quality of customer
service then they will able to retain the customer for the long time. Marketing department will
help the customer service department to understand that what type of services customer want.
P4. Positive and negative impact of macro environment within business operation
Marks and Spencer is multinational company. The positive and negative impact on the
business is done using PESTLE.
PESTLE
Political factors:
Marks and Spencer have their presence globally because it is the multinational company.
Company got the advantage of the trade agreements. Company believe that one should follow all
the guidelines given by the government so that they can gain the trust of the government.
Government queries are answered by the company which they ask online on their website.
Company get proper support from the government because they follow fair practices while doing
their business. Unfair practices are not followed by the company. Political stability and taxes are

the factors which influence marks and Spencer (Nandonde, 2019). If there is increment in the
taxes by the government then it will increase the cost of product of the company and which will
affect the sale of the company.
Economic factors:
When the inflation rate rise in the country then it will affect the operations of the company.
Economic factors involve foreign exchange rate, interest rate, inflation rate etc. monetary
policies of UK is very good which is helping marks and Spencer in attaining the goals of the
company. Company always believe in providing good quality of products because they think that
if they provide good quality of products then only they will able to retain the customer (Fozer
and et.al., 2017).
Social factors:
Society has a great impact on the company. Social factor include the preference, taste, demand
etc of the society. Marks and Spencer study the change in the market trend and then provide the
products which is in demand by the society. Company who is providing low price products are
easily attracting good number of customers because all the people do not buy luxury products.
Pocket friendly price is liked by the consumers. Company even provide discounts and coupons
so that they can attract more customer and customer will also get product at low price when they
apply that coupon.
Technological factors:
Marks and Spencer adopt the latest technology. Adopting new technology will help the company
to beat the competition. Technology saves time and make the work easy. Company adopted the
digital transformation. Now company is doing the promotion through their website or social
media. Doing promotional activity on social media is the cost effective and attract large crowd.
Technology makes the work flexible and easy. It does the work effectively as compare to
humans and technology with good accuracy.
Legal factors:
Legal factors are very important for the company to consider. Marks and Spencer follow all the
guidelines given by the government. They do not do any unethical practices in any of the
company in which it is operating. This will help the company in building the brand value and

also building the strong relationship with the government of that country. Company also protect
the rights of the employees. They give their employees salary on time and give proper working
environment to the employees. Company should even follow all the health and safety norms.
Security of the workforce is the responsibility of the company.
Environmental factors:
Marks and Spencer ensure that they do not do any activity which will affect the environment.
They believe in doing the sustainable growth (Christodoulou and Cullinane, 2019). Company
also do awareness programs in which they spread awareness for protecting the environment and
also educate the society how to protect the environment. Company also started doing waste
reduction practices. They started using cardboard over plastics because plastic is harmful for the
environment.
P5. Conducting internal and external analysis of organizations in order to identify its strengths
and weaknesses
Swot analysis of marks and spencer & NHS to analyse their strength and weaknesses and
evaluate the figures and facts that help for strategic planning.
SWOT ANALYSIS OF MARKS AND SPENCER
Marks and spencer has many stores and online website in a number of countries
worldwide. Its strengths, weaknesses, opportunities and threats are mentioned below:
Strengths Weakness Opportunities Threats
Marks and spencer
has strong strength
that its popular for its
high brand
recognition, famous
designer brands and
international presence
(VÍTOVÁ,2020). Its
strong offering
Organization financial
performance is poor.
It’s too much reliance
on United Kingdom
markets make it
vulnerable when
compared to its
market condition in
the local country. It
Marks and spencer
has an opportunity of
investment in the
markets of India. It
can represent itself
online to bolster its
position in the market.
It has an opportunity
to reshape its clothing
Company has a threat
of sterling
depreciation post
Brexit. It has stiff
competition in the
food sector of UK. It
also has a threat of
modifying trends in
the clothing space.

programmes in line
with markets latest
trends. Its E-
commerce
infrastructure is very
strong. Marks and
spencer corporate
social responsibility is
highly effective.
Organization always
focuses on enhancing
consumer experience.
It provides variety of
products to consumers
that help to grow its
business effectively. It
has large number of
outlet and stores more
than 600 stores in UK
and above 300 stores
in other 40 countries.
has a severe weakness
that it’s future in
chine gone for a toss
(Jin, Miao and Park,
2018). Its frequent
recalls of products
lead organization to
lose confidence of its
customers. It also
suffers from bad
publicity that it is a
non-trendy store. It
had a backdrop that it
follows old techniques
like manual working
which increases the
cost.
segment and of
simplifying its model
of operations.
SWOT ANALYSIS OF NHS
National Health Service NHS is a publicly funded organization in healthcare systems of United
Kingdom. Its strengths, weakness, opportunities and threats are mentioned below:
Strengths Weakness Opportunities Threats
NHS does not have
any real rival,
although it does not
have any kind of
NHS is unable to cope
up with the demands
because of the
increasing population.
National health
services have
opportunity to utilize
its marketing
NHS has a threat that
the work of
contractors affects its
image. High staff

monopoly in the
market (Ladd and
et.al, 2020). It
provides emergency
and accident services
that make it very
unique and its private
hospitals are available
throughout the United
Kingdom. It was
established in 1948
and has continuously
expanding and
growing its services.
NHS balances and
maintains effective
relationships with
health partners.
It services demand
high waiting time
from the patients was
the severe weakness
of it. Some of its staff
has rude behaviour
and negative attitudes.
strategies to raise its
profile. It has
opportunity to join
joint ventures and
partnerships with
voluntary and private
sector.
turnover and shifting
of its services to
primary care.
P6 Strength and weakness of external macro factors of Marks and Spencer
Strength: -
• political factor has a very huge impact on the organizations and it also gives a strength to
the organizations by providing a company advantage to the trade agreements which company
makes. when a company follows all the guidelines of the government and gain the trust of the
government it gives this trend to the organisations in increasing the work place and also get
benefit from the government policies in Texas which strength the organization.
• Marks and spencer’s work in UK and other countries but working in UK economic it is
very beneficial for the organizations to achieve the overall objectives, A good economic
condition of a country helps strength and the organization and it is very important for the Marks