LSBM103 Business Environment Report: M&S Internal and External Factors

This report provides a comprehensive analysis of the business environment of Marks and Spencer (M&S). It begins with a company overview, highlighting its history, current operations, and financial standing. The main body of the report then delves into the value chain model, breaking down the primary and supportive activities essential to M&S's operations, such as inbound and outbound logistics, operations, marketing, service, procurement, human resource management, technology development, and infrastructure. The report further examines the micro-environmental factors impacting the business, including customers, suppliers, distribution channels, and competitors, assessing their influence on M&S's strategic decisions. Finally, a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) is presented to evaluate the internal business environment, summarizing M&S's key advantages, disadvantages, potential growth areas, and external risks. The report concludes with a summary of the key findings and insights into M&S's overall business strategy and market position.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Company overview..................................................................................................................3
2. Value chain model for internal environment...........................................................................4
3. Micro environment factor that may affect the business...........................................................6
4. SWOT in internal business......................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1

INTRODUCTION
Business environment refers to marketing factors that affect the operation of company,
ability to build a successful relationship between management and customers. These factors are
internal and external which are arises in environment and affect the company to operation
market. M&S is one of the leading brand n fashion industry and offers the stylish fashion cloths
and accessories (Ankamah-Yeboah,and Bronnmann, 2017). M&S is the British multinational
retailer situated its headquarter in London. There specialization in selling cloths and home
products. This report shows the internal and external factors that affect the business values chain
model. While, micro environment are also mentioned in report.
MAIN BODY
1. Company overview.
Marks and Spencer having its headquarter in London is a British Multinational retailer in
England having its specialization in selling men and women cloths, home products like furnitures
and decoration items and food products through on its own label. M&S is also listed on London
Stock Exchange. Marks and Spencer was found in 1884 by Michael Marks and Thomas Spencer.
M&S having more than 959 stores across UK.
In 1998, M&S also became first British retailer that gained profit before tax over£1
Billion (Jackson and et al., 2019). Further M&S focus on the online sales through app and
website of fashion products across globe and offers new collection of fashion to their customers.
M&S was planning to close its most of the physical store by 2022 and focus on the selling
product through online stores directly through company website and app or through company
indirect process like Amazon. The fashion industry is being one of the most focused market
segment by M&S that provide the newest collection within the budget range of customers and
provide new collection quit frequently. The company is selling other products too which include
the retail sector products and home products that is being used by company to generate revenue
by company and selling on their own name. M&S is also use adopted new technology to promote
their goods in market and moving towards the highest selling of products in UK as a leading
brands and to gain the competitive advantage.
Hence, M&S is making money through selling of fashionable products, retails stores
goods and home products used in decoration is being working segment of company. Currently
net worth of £3,303,400,000.00 in 2020 report.

2. Value chain model for internal environment.
Value chain model is a business model that shows the full range of activities needed to
produce the product or service. M&s producing fashion goods, value chain compromise the steps
that involve bringing a product from idea to distribution of product and involve every step such
as procuring raw material, manufacturing function and marketing activities of company to
distribute goods in market. This model shows that more value create more profit is gained by
company. Whereas, if more value is added to customer to build competitive advantages (Paras,
Pal, and Ekwall, 2018).
It includes the Porter's value chain which focus on system and how inputs are being
changed in to outputs that is being by customers. This shows the chain of activities common to
all organization and divided into primary activity and support activity.
Primary activity:
This activity is directly related to physical creation, maintenance and sale to support the product
or service. These activities consist of following activities.1. Inbound logistic: The process is to recurving, storing and distributing inputs internally of
M&S company. The supplier relation of M&S is the key factor to create the value.
Distributing goods or information through various channel to different departments of
company to use resources appropriately and convert them into a useful resource that is
being used to gain objectives of company. All department having essential resources at
time to complete their daily task create the value that move towards company goal.2. Operation: This stage shows the transformational activities that enable input into output
and further sold to customer. However, operational system create the value for business.
In this activity raw material is converted into finished goods that is being further used to
sell products. These activities maintain the market demand and supply of consumer and
company balanced (Paras, and et.al., 2018). Effective input and output of company
create the value to company in order to produce goods.3. Outbound Logistics: In this stage, activities are being deliver by M&S products to final
customers. IT include the collection, distribution, Storage, system which are internally or
externally within M&S company. Further it is used to sell good in market to meet the
demand of consumers and gained the competitive advantage through effective strategies

used. To maintain the flow of goods in market properly through different distribution
channel and storage enough of products t meet demand creates the value for company.4. Marketing and sales: These process is used by company to influence customers to
purchase from company store or website instead of competitor brand in same industry.
More benefits M&S offer, effective communicate with customers create the value
(Quarton,and Samsatli, 2020). Marketing department makes the value through promoting
and selling of goods more in market by attracting consumer towards company and make
purchase that create value for company.5. Service: This process maintain the value of M&S products to existing customers which
are using the company's product. This is usually after sales service which is being given
to customers to solve their problems related to product they are consuming of company.
Other services are also given in a form of quires in company that is generated through
online reviews or feedback that is given by customers. By solving problems of customers
that is being arises from there side and provide satisfaction create the value for company.
Supportive Activities
These activities support the primary activities of company function. Each support
activities are support with more than one primary activities. They coordinate and support the
function of primary activities by providing with human resources, technology and other
managing function. These activities include the following:1. Procurement: It refers to purchasing of input used in M&S value chain. Various recourse
are being purchase by company for operating in market. This includes steps from finding
vendor to negotiating the best price from them (Özbük and Coşkun, 2020). Companies
having various vendors that are providing raw material and other goods that need to be
converted them into useful outputs. M&S usually purchase raw materiel of cloth and
home product then convert them into final product.2. Human resource management: This shows the quality of employee that company
recruit, select, hire and trained for better work. It also includes the motivation through
reward and recognition for employees. Employees are significant source of value and
make a company good practise to create advantage. Talented pools are being hired by
company in order to make company effective and increase the working efficiency to
attain the target goal.

3. Technology development: This activity is being used to manage and process information
while protecting the company knowledge base. It minimizes the cost of company through
reducing information technology cost, working with the latest tending technology which
help to maintain the quality and price according to market. IT assist M&S to maintain
their technical excellence in company for smooth flow of work (Al-Dalaeen, Sivarajah
and Irani, 2021). This all factor create the value for business. It also used the Research
and development process that is being used to develop the new product feature and line
before their competitor does.
4. Infrastructure: To maintain daily operation of company, support system function to
maintain the activity tat create advantage to company. It involves accounting,
administration, legal and general management that are of necessary infrastructure that
makes value to business. To operate in the environment infrastructure is one of the
important part of business were all business operation is being processed.
3. Micro environment factor that may affect the business.
These fare the factors which affect the business operation internally and can be improved
through analysing of market. They are being analysed by managers on behalf of company and
changes company strategies according to time. Following are the micro environment factors:
Customers: The key factor that affect the overall business of company which are the
major part for any company. Customers are the king of market and companies need to change
their strategies according to customers buying behaviour. With the changing environment,
customers demand, taste and preferences are also changes. It may affect the company working
and to avoid such changes, analysis of market is being done by manager to know the future
demand of customers or taste and preference that is being occurred (Keszey, 2020). To generate
high revenue by company, future demand of customer need to analyse before in order to use the
opportunities.
Suppliers and distribution channel: The suppliers of business that provide raw material
and other goods to company in order to manufacture the finished goods. This is the primary
focus of company to get success and in market. A well manage distribution channels is very
important that makes the cost effective of operation and improve efficiency of operation. It
allows company to maintain its price of product low and offer more to customers, improve

bottom line of company. For maintain the flow of goods in marker balanced, effective
distribution channel is very important for company to provide high goods.
Competitor: Another important factor that may affect the business operation. M&S
need to analyse the company's competitors that are working in same industry and having a strong
hold in market. To gain the competitor advantage in market, new opportunities that is being
gained through analysing of market demand and more offer to attract the customers towards
company. Higher the competition in market leads to lower market share of company. They affect
the business porkling through attracting customer to company through offering lower price and
quality Gbadamosi,2021. M&S need to analyse the market share of company and their
competitor market strategies that is followed by them in order to attract customers.
4. SWOT in internal business.
To know the internal business environment of company, SWOT analysis is being used.
SWOT means strength, weakness, opportunities and threats that are analysis by business.
 Strength: the major company strength is known brand in market which help to gain the
customers easily towards company that make trust. High volume of loyal customers in
market which shows the company goodwill. Long history of brand in market help to
company to gain the high customer base. High quality goods is another major strength
which attract more customers toward company and generate revenue. While new
technology is being used for marketing that shows the company efficiency toward market
and low price offering (Sheehan, 2020).
 Weakness: Ageing demographic of company that shows the limited number of employee
within a limited area. Wide range of merchandise may create customer confusion about
the quality and price which bring against company products. Further, long term lease of
land is also one of the weakness of company that may affect the company operation if
lease complete or any other issue arise. Overcapacity of products that affect the storage of
company and store which sometimes curse damage to some products and suffer with
losses. Also, UK is not having global online market where goods are being sell too few
countries only. Discount is being given to customers in order to attract them when there is
high stock available in company, may create loss.
 Opportunities: recreating of brand logo to attract more of customers is one of the
opportunities having in market to companies. Innovative design may attract high

customer towards company with lower price offering but having high margin in those
products. Technology, automation are being used to gain future opportunities of company
(Lenis Escobar, and et.al., 2020).
 Threat: Decrease in loyal customer base line in company over time period. Reduce in
margin due to offer discount on products in market. It also affects the business operation
if new opportunities are not taken.
CONCLUSION
The above report shows that business environment is very dynamic in nature and changes
over time. M&S is working in a UK market and operation in fashion industry majorly through
online stores. The value chain model show's the internal environment of company where M&S is
working with models shows primary and supporting activities in order to gain competitor
advantage. Further, micro environment factors which affect the operation of company internally
and overcome through analysing the market. Lastly, SWOT is being used to know the internal
business environment of company which can be used.

REFERENCES
Books and journals
Al-Dalaeen, Q.R., Sivarajah, U. and Irani, Z., 2021. Determining Sustainability Key Performance
Indicators for Food Loss Reduction.
Ankamah-Yeboah, I. and Bronnmann, J., 2017. Asymmetries in import-retail cost pass-through:
Analysis of the seafood value chain in Germany. Aquaculture Economics &
Management. 21(1). pp.71-87.
Gbadamosi, A., 2021. Consumption, religion and digital marketing in developing countries.
In Religion and Consumer Behaviour in Developing Nations. Edward Elgar Publishing.
Jackson, P.,and et. al., 2019. The multiple ontologies of freshness in the UK and Portuguese agri‐
food sectors. Transactions of the Institute of British Geographers. 4(1). p.79-93.
Keszey, T., 2020. Environmental orientation, sustainable behaviour at the firm-market interface
and performance. Journal of Cleaner Production. 243. p.118524.
Lenis Escobar, A., and et.al., 2020. Design of Strategies for the Implementation and
Management of a Complementary Monetary System Using the SWOT-AHP
Methodology. Sustainability. 12(17). p.6849.
Özbük, R.M.Y. and Coşkun, A., 2020. Factors affecting food waste at the downstream entities of
the supply chain: A critical review. Journal of Cleaner Production. 244. p.118628.
Paras, M.K., and et.al., 2018. An exploratory study of Swedish charities to develop a model for
the reuse-based clothing value chain. Sustainability. 10(4). p.1176.
Paras, M.K., Pal, R. and Ekwall, D., 2018. Systematic literature review to develop a conceptual
framework for a reuse-based clothing value chain. The International Review of Retail,
Distribution and Consumer Research. 28(3). pp.231-258.
Quarton, C.J. and Samsatli, S., 2020. The value of hydrogen and carbon capture, storage and
utilisation in decarbonising energy: Insights from integrated value chain
optimisation. Applied Energy. 257. p.113936.
Sheehan, N.T., 2020. SWOT to the 6Ps of Business Strategy. Teaching Strategic Management: A
Hands-on Guide to Teaching Success, p.164.
Voss, H. and et.al., 2019. International supply chains: compliance and engagement with the
Modern Slavery Act. Journal of the British Academy.7(s1).pp.61-76.
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