Report on the Contemporary Business Environment: Marks and Spencer

This report offers a comprehensive analysis of Marks & Spencer's business environment, commencing with an introduction to the company and its operations. It then delves into a PESTEL analysis, examining the political, economic, social, technological, legal, and environmental factors influe...Read More

Contemporary Business
Environment

Table of Contents
TASK 1............................................................................................................................................4
Introduction..................................................................................................................................4
PESTEL ANALYSIS..................................................................................................................4
SWOT ANALYSIS.....................................................................................................................5
Demand and supply.....................................................................................................................6
Graphic........................................................................................................................................6
Conclusion...................................................................................................................................7
TASK 2............................................................................................................................................8
a. Current position and debate related to the Brexit situation......................................................8
b. Obstacles being faced in during the Brexit situation...............................................................9
c. Effects of Brexit.....................................................................................................................10
d. Conclusion as well as Recommendation related to the Brexit..............................................10
REFERENCES..............................................................................................................................13

TASK 1
Introduction
Business environment en - comprises of all the internal as well as external factors which
are having both the positive as well as negative impact on the working of the company. The
present report is based on Marks and Spencer which is one of the major British multinational
retailer business firm which was founded in the year 1884. This company is engaged in retail
business services which are selling high quality clothes, food as well as home products across the
world. Marks and Spencer is currently having its business operations in 1463 places worldwide
with revenue of £10377.3 million as per 2019 and 80787 number of employees working therein.
PESTEL ANALYSIS
With the help of pestle analysis, Marks & Spencer can easily determine all the macro
environmental factors influencing its business operations related to coming up with new product
i.e. Leather bags in the market place:
Political – Changes in government policies, taxation rules plays important role in affecting
marketing strategies of M & S (Prajogo, 2016). Also, due to high cost of structure in the global
market it has negatively affected the initiatives and marketing programmes as undertaken for
introducing new product in the market.
Economical – Discounted pricing strategies as adopted by its rivalry firms for capturing market
share has resulted in loss to M & S as it always focuses on delivering quality products to its
customers across the globe. Thus, it makes the product more expensive as compared to others.
Social – For capturing current market share and opportunities, it is very much important for
Marks & Spencer to formulate effective strategies for new segment of markets. By considering
the ethics, cultural norms and beliefs of the society, M & S can design its product as per these
factors.
Technological – By using better improved techniques, business processes M & S can strengthen
its business profits as well as market share by delivering quality product at reasonable pricing.
This will assist in decreasing the overall cost of production along with increase in customer as
well as market base.
Legal – For gaining competitive advantages in the market, it is very much essential for every
business organisation to make compliance of every legal as well as regulatory frameworks. M &

S before launching its product in the global market has to understand and adhere to all principles
and regulations as laid down by such market country (Deasy and et.al., 2016).
Environmental – Before coming in market with new product, considering environmental
friendly and sustainable aspects of it can help M & S in gaining competitive edge. By delivering
environment friendly product to environment conscious customers, it can help M & S in building
customer loyalty base as well.
SWOT ANALYSIS
Strengths
Strong brand image: M & S has strong brand image as it target potential segment. Specially
company has a good brand image in clothing industry and customers trust the brand. As
company is introducing leather bags, due to its powerful brand image it will be easy for them to
market its products and satisfy them. Customers expect quality products and company is able to
provide customers with quality products.
Multichannel presence: Company sells its products through both online, offline and offer
franchising. Company has a strong customer base as its customers are across the world
(Kljucnikov and et.al., 2016). It is beneficial for company to offer new products like leather bag
under its brand name as the brand is successful in making customers familiar with its name and
string brand Image.
Weakness
Poor supply chain: One of the major weakness of company is that it has poor supply chain
scalability, M & S are trying to offer their leather bags globally but it is difficult for them to
supply its products at large scale. Company has also tried to offer its products through online
store but suppliers were unable to deliver at some location which may affects business
reputation.
Increase in the labour cost: M & S has a drawback of producing products through old
techniques instead of using new techniques (Bah and Fang, 2015). Company utilizes the
technology or effective used of manual work which in turn increases the cost of labour.
Opportunities
New segments: M & S has an opportunity to enter in new segments as there is a demand of
leather nags which are trending in the market. Company should invest in this so that its market
share increases and profits can be maximized. Company can split the customers on the bases of

their interest and offer products accordingly. It will be beneficial for company to diversify its
business in different segments.
Threats
Competition: Due to increase in the competition in every part of business has made it difficult
for the company to sustain in the market and gain competitive advantage (Belás and et.al., 2015).
There are many competitors of M & S which has made it difficult for company to maintain its
market share. Company need to bring innovation in the products or introduce new products to
reduce risk and frame strategies to attract customers. 1463 places worldwide with revenue of
£10377.3 million as per 2019 and 80787 number of employees working therein.
Demand and supply
With the help of SWOT analysis and PESTLE as well, it has been assessed that Marks and
Spencer has strong brand image among its customer across the globe. As a result, it has been
able to increase its market as well as customer base in the market place which has directly added
to its profitability level.
By delivering high quality products, services with unique as well as creative business ideas
and concepts it has been able to gain competitive advantages (Erasmus, Strydom and Rudansky -
Kloppers, 2016). This, inturn has makes improvement in its production as well as performance
level throughout the time frame.
Graphic

Conclusion
Thus, it can be concluded that with the help of strong market plans and strategies, every
business organisation can capture large market share. By formulating sound business policies as
well as strong and effective marketing techniques Marks and Spencer has been able to remain

competitive in the market place (Virglerová, Dobeš and Vojtovič, 2016). Thus, it has resulted in
increasing the overall profitability aspects of the company thereby making improvement in its
products as well as services standards, business norms etc.
TASK 2
a. Current position and debate related to the Brexit situation.
Brexit is defined as the plan of Britain to split from European Union. This will change its
relationship with the other European countries in term of trade, security and migration.
In the month of July 2019, Borris Johnson becomes prime minister of UK with the aim of
scheduled withdrawal of the United Kingdom from the European Union. As per the June 2016
referendum 52% people of UK voted in support of country’s withdrawal. Most voters in England
and Wales supported Brexit, particularly in rural areas and smaller cities. That overcame
majority support for remaining in the European Union among voters in London, Scotland and
Northern Ireland.
In march 2017, the government announced this formally with the 2 years process. Brexit
process was supposed to be concluded in March 2019, but the UK parliament thrice voted
against withdrawal agreement. It is never so easy to change the 46 years of Integration with
European Union in single stroke and hence deadline to withdraw has been extended twice and
the current date decided by European council is 31 October 2019 (Halliday and Hacker, 2017).
Now the Benn Act is passed in UK Parliament in September 2019, which seeks 3rd extension. If
proposed extension is accepted by European council, then new date of withdrawal will be 31
January 2020.
For Johnson it is very difficult to get this deal through the parliament due to lack of
parliament member’s support. Involvements of some tax arrangements in Brexit proposal is not
accepted by The Democratic Unionist Party (D.U.P.) of Northern Ireland and due to this tax
arrangement they could not support the proposal. The Conservative Party’s support to deal was
thought to be crucial but The Conservative Party has relied D.U.P. to remain in government since
it lost its majority in the 2017 election. Britain’s opposition Labour Party strongly want second
referendum. They want to give Britons a chance to support Johnson’s plan of leaving European
Union or reversing Brexit. Thus, it can be said that the Brexit is defined as the scheduled
withdrawal of the United Kingdom from the provisions of the European Union.

As per the referendum of June 2016, it has been assessed that out of 100% thoughts rocesses
only 51.9% are in desire of leaving the subject matter as a result they cast their vote in favour.
Thus, as a result the UK government makes a formal announcement related to the country’s final
withdrawal in March 2017 (Lea, 2018). This was started by making use of a strategy as well as
action plan which is of two year process. Because of such long process, it has been concluded
that the UK brexit issue has been withdrawn on 29 MARCH 2019. Also, it has been identified
that it is given much importance by all the voters who said that they were likely to vote in favour
of leaving with the aim of withdrawal. These were headed by the number of immigrants coming
into Britain every year with some commercial as well as residential purpose.
b. Obstacles being faced in during the Brexit situation.
In the referendum, 2016 of the United Kingdom European Union membership there
were so many issues which are the related to economic, human and political issues. All these
were discussed during the campaign about the withdrawal of the United Kingdom from the
European Union, during the period leading up to the Brexit referendum of 23 June 2016. On 18
May, all the major issues as identified by the voters that could be very important to them in
deciding which way to vote were headed by the impact on Britain's economy 33% on the top, the
number of immigrants coming to Britain 28% on second and Britain's ability to make its own
laws 15% on third.
Some issues has been identified as important factor by the voters who said they were
likely to vote in support of leave were headed by the number of immigrants coming into Britain
49%, Secondly Britain's ability to make its own laws 30% and then third the impact on Britain's
economy 25% (Ott and Ghauri, 2019). Later on the other issues on which people of UK voted
are the cost of EU immigration on Britain's welfare system 16%, impact on public services or
housing 11%, the number of refugees coming to Britain to claim asylum 10%, Britain's ability to
trade with countries in the European Union 9%, cost of EU membership fees 9%, regulations by
the European Union on British businesses 8%, the impact on British jobs 7%, and Britain's status
in the world 7%.
Apart from the voter who were in support of Britain’s exit from the European union,
many voter voted to remain in the European Union. Issues that had been identified as important
by voters who were likely to vote remain included the impact on Britain's economy 40% on the
top, the number of immigrants coming into Britain 15% on second, Britain's ability to trade with

countries in the European Union 12% on third. Other issues were the impact on British jobs 11%,
the impact on the rights of British workers 10%, Britain's relationship with other countries 7%,
the impact on British national security 7%, the ability to travel in the countries of European
Union 7%, the ability of British citizens to live and work in other European countries 6%, and
status of Britain in the world 6%. Some Other issues were identified by 5% of respondents or
less. This collection of issues is broadly in line with the findings of other surveys published
during the campaign.
Impact on the following aspects:
1. Economy related
2. Britain has paid more contribution into the European Union budget as compared to the
amount as it has received (Hall, 2018). Thus, the net contribution figures has ranges from
£5.7 billion 2014 to £8.8 billion in the year 2014 - 2015 which basically depends on the
sources and time frames as well.
3. Fiscal policies and regulations
4. Immigration rules
5. Impact on wages and its related norms
6. Sovereignty and its influences on the economy of the country
7. Security, law, enforcement and defence related norms.
c. Effects of Brexit
Beside the mechanism related to the subject matter for the member state of the Eurorpean
Union to leave the European Union is laid down in the Article 50 of the Treaty on the European
Union. The language as defined in the Article 50 is very general and not as per the requirements.
As a result of which this Article 50 got triggered with the help of a powerful notice as provided
by all the leaving member states to the European Council.
After the notice is given, a time period of 2 years is provided to the leaving Member state
as well as to the European Union to make negotiation related to the exit agreement. On falling of
such time period and norms will result in direct exit option to all the Members States which will
become effective on its own after two years the notice date as given (Humphreys, 2018).
The immediate impact of Brexit will have significant consequences on UK and Europe.
Some immediate impact included the change of Prime Minister. Many of the effects will depend

on whether the UK will be leaving with an agreement or with no - deal Brexit. Discussions are
mostly focussed on the votes causes and it’s repercussions on British politics future.
But a few questions also arises on the emotional side of people as “what would happen to
them”. There are a few million people who are born in EU and working in UK. Everyone has
their own opinion on Brexit: whether they want to leave or they would be allowed to stay?
Some of the laws will be unaffected by the Brexit, like in areas where UK’s antitrust laws
is already different from EU, there would be no change. A key area where consequences would
be higher is merger control. Merger fillings to European Commission will not cover UK
anymore. Resulting, in an expected increase of UK fillings and significant decrease in EU
fillings.
Although UK fillings would be notifiable to commission, they would also need review from
CMA.
This in turn would also increase workload for CMA. It may prove beneficial in
improving the UK review process but on other hand the cost and complexity of approval would
also be higher. Another key area which is having negative impact is the economy. Short term
effect would be negative on UK’s economy but in long term, it could improve on the basis of UK
creates links with other countries. Cost of living is the one thing which could see a potential
increase. There could also be some additional pressure on public services and government might
find it difficult to address this issues. In the view of global economy, there impact would be
lower as the UK share is much smaller, around 2% of the total GDP. On the positive side, UK is
going to have more control over the trade, rules and regulations and migration.
d. Conclusion as well as Recommendation related to the Brexit.
Conclusion
From the above concept, it can be concluded that the term Brexit is defined as the plan on
the basis of which Britain decided to get splits from the European Union with the aim of having
separate nation as well as regulation policies. Thus, with the help of such Brexit debate, it has
enabled the economy to come up with some new changes therein. As a result of such change, the
relationship of the United Kingdom with all the other European countries in term of trade,
security and migration has also changed. There has been noticed some impact on such
relationship as a result of which trade relationship in between both the economies got affected.
Because of existence of the substantive terms of future relationship in between the United

Kingdom and the European Union it will remain unclear for a long run period. As a result of
which any abiding with the arrangements with the EU laws is not liked by the UK.
Most of the voters in the city of England and Wales have supported Brexit especially in the
rural areas and smaller cities part. This has been overcome by the majority support for remaining
in the European Union among the voters in the areas of London, Scotland and Northern Ireland.
It has been never so easy to change the rules and norms which had been last for 46 years of
Integration with the European Union in the single stroke which hence has deadline so as to
withdraw it. Thus, it has been extended twice and finally the current date has been decided by the
European council is of 31 October 2019. With the help of the Benn Act which is passed in the
UK Parliament as on September 2019, which seeks to be considered as 3rd extension. If proposed
extension is being accepted by the European council, then the new date of such withdrawal will
be of 31 January 2020.
Recommendations
The United Kingdom in June 2016 has casted its vote with the main emphasis on leaving the
European Union which was basically known as Brexit. Following are the recommendations
which can help the Brexit issues to get its proper reform:
1. By formulating an Ad hoc frameworks and standards related to the case issues of
cooperation having its main focus in the field of merger.
2. It is required to have an framework which depicts about close relationship in between
the Commission and the Competition and Market’s Authority.
3. By making sound as well as strong business plans and strategies, it is required on the
part of the Commission and the Competition and Market’s Authority to focus on
reducing the duplication of efforts and work done for the benefit of oneself as well as for
other businesses too.

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