Comprehensive Report: Marks & Spencer's Business Environment Analysis

This report analyzes the business environment of Marks & Spencer, a major retail company. It begins with an introduction to the business environment and different types of organizations, classifying them as private, public, and voluntary, providing examples like Marks & Spencer, NHS, and Save the Children. The report then examines the scope and size of these organizations. It delves into the relationships between various organizational functions, such as human resources, marketing, research and development, and finance, and their impact on achieving overall objectives. The report highlights Marks & Spencer's flat organizational structure. Finally, it applies a PESTLE analysis to assess the positive and negative impacts of political, economic, social, technological, legal, and environmental factors on Marks & Spencer's operations, providing insights into the company's strategic environment and challenges.

BUSINESS ENVIRONMENT

INTRODUCTION
Business environment is explained sum total of external and internal factors which
influence the business. These factors affect on ability of company to develop as well as maintain
customer relationship successfully. Each business firm operate in distinctive environment as this
can nit exist in to isolation. Such kind of environment influence on business and get impacted
through its activities (Babu, 2012). This research is based on Marks & Spencer and this company
deals in the retail industry. In this mention report will discuss about various types of companies
and development of international business environment. Relationship among various
organisational functions and link with organisational objectives will be discuss. PESTLE
analysis will be conducted for analyse the impact of macro environment factors on organisations.
TASK 1
P1 Different kinds and purposes of organisations
Business organisation is defined as entity that formed for aim of carrying on the
commercial enterprise. There are several different kind of companies which are working within
country. These organisations are classified in to various categories such as voluntary, public and
private (Bah and Fang, 2015). These all have the different legal structure and objectives. The
Purpose and the legal structure of various kinds of organisations are explained:
Private organisation
It is part of an economy and under this business is run through people and organisations
for aim of earning profit. It includes all the profit business which are not owned through
government. Private organisations are allow to issue stock and also have shareholders but they
are not to be permitted to trade their shared on the public exchange.
Marks & Spencer is multinational retailer and it is specialise in selling the high quality of
clothing, home products and food items(Ballard and et. al., 2012). This company was situated in
1884 through Thomas Spencer and Michael Marks in Leeds. Revenue amount which is earned
through a company by operating business operations is around £10,377.3 million. There are
almost 80,787 employees are presently working.
Purpose of Marks & Spencer
 Its main purpose is to serve as the general store that caters for middle to the upper and
lower class.
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 Develop sustainable business by attaining the profitable growth.
Legal structure of private company
Sole proprietorship: It is one- person business mainly found in traded where the
requirement of less amount to set up. Owner may be operate on her or his way to employ others.
The business owner has unlimited personal liability of the debts which incurred through
business.
Partnership: It is business form under which two or more than two persons are operate
business for attaining set objectives (Bansal and Hoffman, 2012). Each partners has unlimited
personal liability of debts which incurred through partnership.
Limited companies: It is classified in two various categories that consist limited through
shares.
Public organisation
Under this, companies are owned and operated through government and also exist to give
the services for citizens. The different business activities or services are covered in this are
education, transport, healthcare and many others.
NHS is publicly funded national healthcare system that gives comprehensive range of the
health services in UK.
Purpose of NHS
 It provides comprehensive range of healthcare services. It gives medical facilities to people of society.
Legal structure of public company
Central government: It assure the assure proper functioning of state as well as central
government departments.
State government: It assure about the effective functioning is to be done through
agencies of state government.
Local government: It insure that the public companies should perform activities
according to regulations provided through government.
Voluntary organisation- These are one which relies on the regular or occasional volunteers for
its business operations (Belás and et. al., 2014). These organisations run their business for
welfare of society.
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Save the Children organisation work to improve lives of children by giving them better
services such as health care, education, economic opportunities etc. It promotes the policy
changes to gain more rights for the young people (Bocken and et. al., 2013).
Purpose of Save the Children
 Its purpose is to save life of children and provide them better or healthy life. It give robust health and the nutrition advantages to children.
Legal structure of Voluntary company
Trusts- It is traditional structure for charity and several other charities are the trusts.
These are mainly set up for manage the money for defined purpose.
Charitable unincorporated association- It is governed through constitution which is not
to be prescribed. It will require to consists features like prohibition on funds distribution to
members.
Different types of businesses are given below:
Micro businesses- These business operate at very small scale and employing the nine
people or less than these. These are having turnover less than £200000. Mostly the
microenterprise are the family business which employing one or three persons. The main
objectives of micro businesses owners is to earn for their families.
For an example- Grocery shops, dairy products, FMCG goods are the main businesses
which microenterprise conducted.
Small businesses- These businesses are privately owned, sole proprietorship and
partnership with few staff members and minimum annual revenue. The range of the small
businesses from 50 employees.
For an example- The small size businesses are convenience stores, bakeries, restaurants,
photographers etc.
Medium businesses- The medium size enterprise are those which have the 100 to 999
staff members. These businesses are registered and also pay the taxes.
P2 Scope and size of a range of various kinds of organisations
All organisations having their various scope and size within industry. The scope and size
of various organisations are given below:
Marks & Spencer
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Size: Marks & Spencer is main British multinational retailer in London that provides
food items, clothing and home products. It was established in 1884 through Thomas Spencer
and Michael Marks in Leeds. It conduct its operations in around 1463 locations. In this company,
there are 80, 787 staff members are working. The revenue of this company is earned in year 2019
is £601.0 million.
Scope: It can be determined from products and serviced which are provided through
company. Marks & Spencer company provides wide range of the home products, designer and
better quality of clothes at global level (Cai and Yang, 2014).
NHS
Size: NHS is publicly funded healthcare system that gives the better health care related
services to people. The government provide fund to NHS so that it can provide high quality
services to English residents. This organisation was establish in year 1948 with aim of provide
free cost services to people. In this organisation, around 1.4 million people are working
presently.
Scope: Scope of NHS can be determined from services which are provided through NHS.
It served various kinds of functions such as optical care, basic medical facilities and dental care.
Save the Children
Size: It is non- profit organisation which working for improving life of children. It works
on protect the life of children and provide them healthy life. It was founded in year 1919
through Dorothy Buxton and Eglantyne Jebb in United Kingdom.
Scope: Main activity of Save the Children is to give healthy life to children (Hair and et.
al., 2015). It provides lifesaving supplies and emotional support for children which caught up in
the disasters such as earthquake, wars etc.
TASK 2
P3 Relationship among various organisational functions
Marks & Spencer is private organisation and it is having objective of earning the more
profits by capture the large market share. Its main aim is to give better quality of services and
goods to people fort satisfying their needs and demands. In this company, there are different
departments with various objectives and roles but they are interrelated with the each other.
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Interrelation among different departments of company and also guidance for attaining overall
objectives are mention below:
 Human resource with Marketing: Under this, Human resource is one of main function
of an organisation. Its main role is to hiring the qualified and capable candidates which
are able to perform their roles in a better manner. They assure that the capable candidates
are appointed in company which are serve effectively towards departments as well as
company. Interrelation of human resource department is with the marketing can be
understood from the point that helps for employees which have the clear understanding
as well as knowledge regarding marketing theories and approaches which are applied
effectively (Hamilton and Webster, 2018). It will help company to attain marketing
objectives of capture large market and enhance growth rate.
 Research and Development with Marketing department: In this, major function of
Research & Development is to determine market trends and examine existing
competitors, products, demands and preferences of consumers. This function of Marks &
Spencer work towards analyse abilities or capabilities of competitors and need of
consumers which are used to marketing function for make changes in targeting as well as
promotional strategies. It will aids in make the position of company strong at market
place and gain competitive advantages.
 Finance with Operation department: Finance is major function of an organisation as it
analyse requirement of money of various other functions and also formulation of budget
in an appropriate manner. Proper Allocation of adequate fund gives each department to
use resources in an effective manner (Hillary, 2017). Fund allocation proved as better
financial help by which the operation function of Marks & Spencer company is able to
introduce new features in its products. It will help in satisfying the demands of
consumers and attaining set objectives also.
Organisational structure
It is explained as system that outline the activities which directed to attain objectives of
firm. The activities can consist the roles, responsibilities and rules. There are various kinds of
organisational structure mention below:
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Functional- This structure is mainly used to organise the workers. They are basically
gropes according to their particular knowledge and the skills. In this, workers are supervised
through functional manager with the expertise in similar area.
Flat- This organisational structure is with no management level among the staff level
workers and management. Flat organisation is supervise the minimum staff members while
promoting enhanced involvement in process of decision making.
Bureaucratic- It is a kind of management form that has the pyramid command structure.
Under this, organisation is properly organised with high formality degree in way it operate the
business.
Among all the organisational structures, Marks & Spencer uses the flat organisational
structure. It has the limited management level among front- line employees and administrative.
This company is mainly followed to encourage its staff members in the decision making process.
It helps in reduce bureaucracy and also make staff more capable as well as skilled.
TASK 3
P4 Negative and positive impacts the macro environment has upon business operations
PESTLE analysis refers to framework of macro environment factors which are mainly
used in scanning of environment components of the strategic management. This tool is helpful in
monitor as well as analyse macro- environmental factors which may have to profound affect on
performance level of company. It will help in provide the effective opportunity to Marks &
Spencer to determine situations at marketplace and develop strategies. Negative and positive
impact of the different macro environment on the business operations mention below:
Political factor- Under this, government set the different regulations for organisation to abide
through Health & Safety British Standards like risk control, risk assessment etc. The government
of United Kingdom is stable and protective (Hilton and Platt, 2013). Marks & Spencer firm has
been impacted through free trade agreements of European Commission which made the product
import more easier and reduce sourcing costs.
Positive impact: Protective nature and stability of government develop positive affect on
Marks & Spencer because it will aid in give opportunity to execute strategies.
Negative impact: The negative impact is that Exit of United Kingdom from European
Union.
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Economical factor- Economic situation of United Kingdom is strong as comparison to the other
countries. In context to Marks & Spencer, economic outlook is uncertain and likely impact retail
sales because people do not have spare cash to purchase luxury items.
Positive impact: Presence of the higher economic floe gives better opportunities to Marks
& Spencer to expand its business operations easily (Lee, Kao and Yang, 2014).
Negative impact: Negative impact on business is slow recovery from the economic
recession as it provides the luxurious items.
Social factor: People of United Kingdom have the high living standard. Marks & Spencer deals
in retail industry and the cheap sector supermarkets have enhancing over last years caught up
with the fashion trends. In United Kingdom, dependency ratio is high and enhancing the
education cost.
Positive impact: There is less availability of labour and people have high living standard.
It develop positive affect on the business and make improvement in business activities.
Negative impact: The High education cost and dependency ratio impacts in negative
manner.
Technological factor: It is necessary in retail sectoer and firms should manage their brand in
careful manner. Through technology, company can able to make innovation in existing services
and products. In United Kingdom, there is less development of technology as comparison to
United States.
Positive impact: Innovate quality products which helps in provide better opportunities to
attract customers and earn higher profit.
Negative impact: Growth opportunities is not high because in United Kingdom there is
less technological development (Savrul, Incekara and Sener, 2014).
Legal factor: Legislations are changing always. Laws persists in United Kingdom has high
standard and it is necessary for all the organisations to follow the set regulations. Marks &
Spencer organisation carried out the re- training every year so that employees can keep up to date
about new legislations.
Positive impact: Its positive impact on Marks & Spencer business is to gain loyalty and
trust of customers as well as government.
Negative impact: It will be arise in condition when company not follows the legislations.
In this case, government can file the case against company or charge some fine.
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Environmental factor: It consists environmental related regulations which are developed
through government of UK and this is necessary for company to follow government regulations.
 Positive impact: Marks & Spencer organisation follows the environmental regulations at
the time of performing its business operations.
 Negative impact: UK country is strict in terms of environmental aspects. If company
will not follow the regulations then it will face some consequences in context top
discontinuation (Sena Ferreira and et. al., 2012).
TASK 4
P5 External and internal analysis of organisations
SWOT Analysis refers to strategic planning technique that is mainly used to aid an
individual or company to determine strengths, weaknesses, opportunities, and threats concerned
with project planning and business competition. There is a requirement to company to keep
analysis accurate through neglecting pre- conceived beliefs instead of focus on the real- life
context. An application of SWOT analysis towards Marks & Spencer mention below:
Strengths
Clear Brand Image- In this, M & S company keep itself as high- end value product that
target premium segment (Shenkar, Luo and Chi, 2014). It is mainly specialise in selling of
clothings of high quality. It has to be result in clear branding.
Innovation- Across 150 years of the operations, company has been in race due to
innovation spirit. In Marks & Spencer company innovation is related with creativity. Innovation
is helpful in make the products as well as services more attractive and better.
Weaknesses
Bad publicity as non trendy store- Main disadvantage for Marks & Spencer is that it is
non trendy as well as out fashioned. This firm has wide range of goods with high quality. Some
people has wrong assumption that women and men wear only for the aged people not for young
people.
High attrition rate in work force- As compare to other company, Marks & Spencer has
high attrition rate and spend more than its rivals in provide training and development to its staff
members.
Opportunities
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Online opportunities- The online presences of M & S organisation is good. In context to
this, there are some of the better online growth related opportunities which an organisation
should be pursue (Siewiorek and et. al., 2012).
Opening up of new markets- Under this, government free trade agreements and new
technology standards has provide Marks & Spencer organisation a better opportunity to enter in
to emerging market.
Threats
Competition- Under this, company faces more competition in United Kingdom and in
other countries. Sainsbury’s, Tesco, John Lewis, Morrisons etc. are biggest rivals of M & S. Due
to high competition, fim face threat of losing scope.
P6 Strengths and weaknesses interrelate with external macro factors
There is an effective interrelation among external factors with weaknesses and strength of
company. These are interrelate with the external macro factors which are mention below:
Political: This factor is about the degree of government intervenes in an economy. It consists
government policy, corruption, tax policy, trade restrictions, labour law etc. Government may
profound affect on education system of nation, health and infrastructure related regulations
(Bansal and Hoffman, 2012). This factor have affect on the organisations and in what manner
they conduct their business. The political situation of United Kingdom is stable and better. On
the other hand, it also implied the strict regulations to staff members.
Strength: The main strength is political stability of government and it will help company
in developing policies and take any necessary decisions.
Weaknesses: The Strict labour laws affects activities of Marks & Spencer as it require to
be needed to check them otherwise company can face the difficult situations.
Economical: Economic position of UK is strong relatively other countries. It has high GDP rate
as well as diverse economy. Main issue is that it has high interest rate.
Strength: High cash flow is become strength as it will help in increase funds from the
marketplace.
Weaknesses: High interest rate develop negative impact on purchasing capacity of people
and will develop negative impact on earnings of Marks & Spencer.
Social: United Kingdom has big consumer market (Cai and Yang, 2014). Focus of this factor is
one social environment and also determine emerging trends. It will help marketers to understand
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wants and requirements of consumes. Under this, different factors are include such as cultural
tends, lifestyle changes, educational level etc.
Strength: Higher demand of the young people about designer and high quality of
clothings is become strength for Marks & Spencer.
Weaknesses: Approach related to the career centric for United Kingdom people develop
negative impact on their behaviour in order to expand retail business.
Technological: This factor is related to make innovation in technology that may impact on
operations of an industry and also make market unfavourably or favourably. It considers rate of
the technological development and innovations that can impact on market (Savrul, Incekara and
Sener, 2014).
Strength: In this, Advance technology aids company to develop the innovate and high
quality of services or products.
Weaknesses: Modification in processes as well as training of staff members become as
negative point as more expenses they have incurred.
CONCLUSION
From mention report it has been concluded that there are public, private and voluntary
organisations which conduct activities or operations of company in the external business
environment. These all organisations have their various purposes and legal structure which needs
to be followed at the time of operating their business functions. PESTLE analysis has been used
to analyse affect of the external factors on the business functions. It will help in provide better
opportunities to management for company to re- structure their strategies and develop better
future plans. SWOT analysis has been conducted to determine strengths and weaknesses which
help in analyse internal environment of company and grab better opportunities for business.
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