Analysis of Business Environment and its Impact on M&S (Coursework)

This report offers a comprehensive analysis of the business environment, focusing on Marks and Spencer (M&S), a major UK-based multinational retail store. It begins by defining different types of organizations, including public, private, and voluntary sectors, along with their respective purposes and legal structures. The report then delves into the size and scope of various organizations, categorizing them as micro, small, medium, and large, and highlighting their objectives and market reach. A significant portion is dedicated to examining the relationship between different organizational functions, such as HRM and marketing, and their alignment with organizational objectives, using M&S's flat organizational structure as an example. The impact of the macro environment on business operations is analyzed, considering both positive and negative influences. Furthermore, the report includes an internal and external analysis of M&S, incorporating SWOT analysis to assess its strengths, weaknesses, opportunities, and threats. Finally, the interrelation between strengths, weaknesses, and external macro factors is discussed in the context of M&S, providing a holistic view of the business's operational environment.

Business and the Business
environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK1.............................................................................................................................................3
P1 Different types and purposes of organisations.......................................................................3
TASK 2............................................................................................................................................7
P3 Relationship between different organisational functions and its link with organisation
objectives ....................................................................................................................................7
TASK 3 ...........................................................................................................................................8
P4 Positive and negative impact of Macro environment on Business operations.......................8
TASK 4..........................................................................................................................................10
P5 Internal and External analysis of Marks and Spencer..........................................................10
P6 Interrelation of Strength and weakness with external Macro factors in context of M&S. . .11
CONCLUSION ............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Business environment consider as one of the important tool or component which affect
the various activities of business at the time of running different function of organisation. In
today dynamic environment changes are coming at rapid fast speed due to drastic changes in the
choice, thinking and perception of customers because of advancement in technology, innovative
features in products services that affect their purchasing power and habits of alternating brands.
Apart from it, there are different number of companies and have fix their process in various
divisions through which operations has been conducted which has been affected by internal
external source. Under this assignment the company which is preferred I.e. Marks and Spencer
which is UK based largest multinational retail store deals in grocery items and retail clothes.
Further, it discuss about the different types and purpose of organization, size and scope of range
of different range of organisation, relationship between different organisation functions, positive
negative impact of macro environment and strength weaknesses interrelation with environment.
TASK1
P1 Different types and purposes of organisations
In external market there are different kind of companies who running their business and
perform their functions within their sectors with an motive or objective of earning profits and
fulfilling the desire of large audiences with their products and services (Boons and Lüdeke-
Freund ,2013). Further, in reality there are two sector who operate their business I.e. public and
private sector which stated below:-
Basis for comparison NGO NPO Profit based
organisation
Meaning NGO described as non
governmental body
whose major aim is to
get properly establish
on the basis of which
they bring welfare for
the whole society. This
type organisation is
There are various
number of goods and
services which has
been sold with an
objective or aim of
enhancement and
profit they earned is
not distributed among
This sector consider as
private organisation
whose main aim is to
earn huge amount of
profits by selling their
products and services
and maintain market
share and goodwill

generally set up by
people who are
independent.
members of
organisation.
also.
Area of operations Operate on large scale Operate their business
at limited sector.
Expand their business
at global level.
Objectives The main objective of
this of division is to
develop that kind of
society that help in
enhancing living
standard of
community.
The main objective of
this kind of
organisation is to
promote art,
commerce and
science.
Earning huge amount
of profits by provide
multiple varieties of
products services
which attract large
number of audiences.
Three main sector of business are described below:-
 Public sector:- This kind of organisation is generally establish by government
organisation under which structure, policies and objectives are defined by members of
government only. Further speculation is being planned by people in general in type of
assessment and various instalment. For example M&S operate by large number of people
whose main target is working class audiences.
Purpose:- Main target of this kind of organisation is to provide such type of facilities to people
that help in increasing the welfare of society and also enhance their living standard.
 Private sector:- This kind of sector is generally establish with an association of private
people in which all the decision related to framing of policies, strategies and procedures
are formulated by them only so that they easily accomplish their objectives with define
structure. For example TESCO one the largest MNC offers different products and
regulate it all around the world.
Purpose:- The major objective of this kind of organisation is to offer varieties of products
in their segment so they earn huge amount of profits along with sales maximisation and standard
quality of goods and services.

 Voluntary sector:- This type of sector is generally establish with the thinking of offering
welfare to different social and monetary attributes. For example Oxfam one of largest
international business operate at global level.
Purpose:- This sector gives main priority to uplift the living standard of people who are needy
and not able to satisfy their basic needs and wants.
Legal structure of the sector
Private sector:- Under this type of sector private association can be sole trader and having
partnership type of business. Sole proprietorship:- This kind of business is generally establish by single individual
only who frame all the policies and bear all the profit losses by their own only. Partnership:- Under this kind of business all the partners decided terms condition related
to capital amount, profit sharing, profit loss bearing limit and working hours which has
been legally prescribed in partnership deed.
Public sector:- These are large organisation whose standards and objective are set by
government authorities only and these describe below:- State government:- This is consider as effective organisation whose main aim is to
maintain the standard of government and subsequently along with keeping the
administration proper and others items in the commercial centre for the advancement of
economy. Local government:- This type of government mainly focuses on providing all the
essential items and satisfy the local needs with their products services.
 Central government:- This type of government generally focuses on maintaining the
administration of whole central division and also controlling all the operations of both
local and state government (Cantwell , Dunning and Lundan ,2010).
P2 Size and Scope of various types of organisations
Their are different kind of companies which are being defined on the basis of size and
structure. The size of organization is basically divided into various sizes like small, micro,
medium and large size. Size and scope of these kind of companies which describe below:- Micro scale:- This kind of organisation are mainly all kind of businesses who are small
in nature and generally carried out their operations with an aim of satisfying their

minimum needs and secured business in financial terms. This comprises of less
employees so turnover is low. Small scale:- Under this kind of business sector business are large in size as compare to
micro level business and it consist of around 50 members so the revenue they are going
to generate in this type of organisation is less than 5 million dollars. This type of
organisation acquiring large amount of market share because of operating from many
years. Further these type of businesses give main priority to expand their business
activities and task on large scale at global level. Medium scale:- Under this kind of scale employees which has been comprises around
500 to 250 and amount of profits they generated will be around 5 to 23 million dollars.
For example Exponential-e which is consider as world class digital company covered
under this category (Cavusgil and et. al. ,2014). Large scale:- This consist of around 250 workforce who work within the boundary line
of company and revenue they are going to generate is around 250 or more million
dollars. For example TESCO which is dealing at both local and international level and
comprises of at-least 1500 employees.
Objective differentiation
Micro Small Medium large
The major objective of
this kind of
organisation is to earn
such amount of profits
from which they
satisfy their basic
needs.
Under this kind of
sector the main
objective is to keep or
maintaining healthy
and good safety
lifestyle which help in
grabbing the
opportunities in
external market.
This kind of business
sector the main aim is
to diversified or
expand the business all
around international
level and become
global players of
business.
This kind of company
main focus is to
structure and maintain
the sustainability in all
over the world.
Scope of different types of organisation Micro scale:- Under this level of businesses there is limited scope for the growth and
expansion of business which is limited up-to city and region.

 Small scale:- Under this sector scope of diversification is limited but they use different
type of tools and mechanism under which their main objective is to shift their status from
small to medium sized industry. Medium scale:- Under this scope of development is high due to expansion at global level. Large scale:- They got the huge scope of acquiring the economics in which they are
ready to establish because of complex legal issues and economic conditions.
 Transnational company:- These kind of organization is immense in which all the
activities and task of business is divided into different nations and their income level is
more high then some economy of nation and from above articulation one might say that
transitional kind of organisation has to coordinate with the conserve impact of economy
(Chavis , Klapper and Love ,2011).
Public firm: It is the organization which can generate more revenues and its main
objective is to develop the society. There is a private firm that is Marks and Spencer.
Size: It sells grocery products to all users. It is a private form which consists of 84839
employees approximately. It has revenues of approximately 690.6 million.
Scope: It main vision and mission is to guide all managers so that they can take decisions
and they have high standard of their products and services so that they can sell products and can
earn huge revenues.
Private firm: This is the company which can sell products and its main goals is to earn
more revenues. For example Tesco
Size: Tesco is a private firm. It sells grocery items such as microwaves etc. to all
customers. It has various employees around 476000. It has earned revenues of around 54 million.
Scope: Its vision is to satisfy the customers so that it can earn more revenues. It's vision is
that it can capture many opportunities so that it can grow their business.
Voluntary firm: In this company has to perform activities which directly uplifts the
society. For example Oxfam.
Size: It is charitable institution and was established in 1942 in U.K. It performs various
activities such as giving food so that poor people can be relieved from famine, promote various
campaigns so that they can easily capture many people.

Scope: It has various activities and tasks. It's vision and mission is to provide rights and
they also give various rights such as right to livelihood, right to live and security etc. Their main
vision is to remove poverty from the country.
TASK 2
P3 Relationship between different organisational functions and its link with organisation
objectives
It has been known that every organisation is different in respect of size, structure
and purpose at the time of operating business in successful manner. Therefore, it is
essential for them to design such type of organisation structure so that goals and
objectives can be accomplished within specified time period. Marks and Spencer is
largest public limited company comprises of more than 85000 employees. Further,
this company consider as largest multinational retail store engaged in different
segment like clothing and retail food items. Apart from they require large amount of
money in order to carry out operation in effective manner.
Source: Organisational structure, 2018
Apart from it, Marks and Spencer used flat organisation structure because of less
level of management and employees are effectively communicate with top level
management. Further, different types of functions which has been performed by
Marks and Spencer like HRM, marketing, finance, accounting and sale department
and they are carry out various functions in effective manner in order to achieve
better position in market place. Therefore, there is better interrelationship of
organisation structure along with functions that has been performed by Marks and
Spencer which described below:-

 Marketing department:- Under this department whole marketing team divide
all the work and activities among different marketing department in which
they plan to marketed various products and services by using various tools
and mechanism like social media, e-marketing and internet modes also. For
example marketing department of M&S need to plan these marketing
strategies in such manner that leads to higher sales and profits. Human resource department:- This department plays an essential role at the
recruiting and selecting all the candidates for the purpose of fulfilling vacant
job position. Therefore, M&S HR management perform function to maintain
coordination and cooperation among team members (Chow and et. al. ,2012). Production and operations:- This function has been performed at initial level
of organisation and because of it they consider as important element of
company and functions they are going to perform must properly linked with
structure also. Marks and Spencer first convert raw material into finished
products and later sell it to retail stores and it is done on the basis of needs
demand of customers.
 Accounting and finance:- This function of organisation is discuss about the
function which has been connected with monetary functions which are
calculated on regular basis and funds are distributed among different
divisions through which task are performed. Proper budget, applicability of
accounting rule and creation of asset done under this division.
Therefore it is mandatory for M&S to consider all the above function of
organisation in order to carry out all the operation and task in better manner so that
objective can be achieved in effective and proper manner.
TASK 3
P4 Positive and negative impact of Macro environment on Business operations
There are different types of factors and elements that must be present in business
environment who are having good impact on overall activities which are being
performed and executed by organisation (Cuervo‐Cazurra ,2011). Although company is
not having proper control on external factors because they are not under the control
of management. Internal and external factors both having positive negative impact

in overall operation perform by company. Marks and Spencer require to perform
various type of activities and task according to rules regulation fixed for that
organisation. In order to understand all actual position and current trends PESTEL
analysis has been conducted to know the positive negative impact of external
environment and it has been conducted on the perspective of Marks and Spencer
which discuss below:-
Political factors:- Their are different types of political factors and policies which
has been enforced by government for the benefits of company and various laws and
regulations at the production of goods and services for customer but if any changes
made will affect production activities.
Positive impact:- Introduction of free trade policy is beneficial for M&S in order to
reduce their cost of sourcing.
Negative impacts:- Fluctuation in tax rates will affect M&S production because of
availability of resources at higher cost.
Economical factors:- These factors include inflation, deflation, growth rate and
other condition of business and these elements are distinct in every country so it is
important for M&S to consider all the elements at the time of operating at various
countries, therefore at the time advance technology and slowdown in economy
affect their sales also.
Positive effects:- In situation of inflation purchasing power of individuals has been
increase because of large availability of funds.
Negative effects:- Negative impact has been arises in economy because of disputes
with small retailers because of huge availability of products due of currency impact
of Brexit.
Social factors:- Every company is taking resources from the environment so it is
utmost responsibility of them to take back to them also in proper manner. Further,
company must focus on CSR concept in order to provide social welfare to business.
Positive effects:- The positive factors or elements that are associated with M&S in
order to linked with customers for establishing long term relation with them.
Negative factors:- The negative impact may be related to product segment company
uses introduced by M&S sometime it give negative impact on social communities.

Technological factors:- Advancement in technology and new creative features in
products services by rivalry affect sales of business.
Positive effects:- If M&S introduced and developed technological and digitalise
products then they able to complete all the task and objectives in specified time
period.
Negative effects:- Costlier and failure in technology leads to heavy losses to
company.
Legal factors:- there are various legal laws and regulation enforced by government
which need to adhere by company.
Positive factors:- Proper adherence of laws regulation by M&S will lead to ethical
code of conduct.
Negative impact:- In-adherence of laws and legislation leads to heavy penalty to
company operations.
Environmental factors:- Different factors and elements that affect the environment
on positive and negative basis both.
Positive effects:- Red tapism decrease and work conduct effectively.
Negative effects:- Emission carbon footprints leads negative impact on overall
goodwill and operation of business.
TASK 4
P5 Internal and External analysis of Marks and Spencer
In every organisation decision making of company it is essential for company
it is essential for whole management to find out strength, weaknesses of whole
organisation in order to decide what is good for them and and what is not and M&S
require to conduct SWOT analysis through which they easily identify strength,
weaknesses, opportunities and threats. Following is the SWOT analysis describe
below:- Strength:- M&S is comprises with too many strengths on the basis of which
they operating their business successfully and this organisation is diversified
their business at global level and because of great brand value they easily
attract large number of target audiences and having 600 stores across UK
(Gecevska ,2010).

 Weaknesses:- Everything is not perfect in every company so M&S also face from various
drawbacks and one of them is related to drastic changes in fashion will lead to face the
problem of failure or out of fashion of company products and services. They deal in
clothing segments but it has been observed that they manufactured clothes for older
group of people and fail to attract large number of audiences for buy the products from
their store which affect their sales also. Opportunities:- M&S is one of the top retailing store in grocery store
comprises of 600 stores and planning to expand their market at global level.
Company comprising of large customer base because of dealing in multiple
varieties of products services through which they earn huge profits and easily
maximise their sales.
 Threats:- Their is huge competition in global market and changing needs and
perception of customers due to advance technology and up-gradation in
feature and price of products services induces M&S to come with innovation
that help them to sustain in market for longer period.
P6 Interrelation of Strength and weakness with external Macro factors in context of
M&S
In every organisation M&S comprises of various strength and weaknesses and
external factors include those component and elements which company has no
control and put both positive negative impact on overall growth of business. M&S
largest multinational retail store expand their business at global level and earn huge
amount of revenue from UK only (Hamilton and Webster ,2015). Further, it is effected
by Brexit regulation which is known as political incident which may prohibited this
association at the accomplishing goals for rapid expansion. M&S is generally
having their international presence specially in the area of Europe but under post
Brexit there are many difficulties at the time of expanding their operations at
different regions of business. Apart from it there are different challenges which
require to face by M&S in future and require to spend more amount of money, cost
and time for accomplishing various responsibilities.
But is facing failure in the area of food segment and their sale has been
decreased over period of time because of not betting all the challenges of rivalry

and there are different types of legal restriction that become hurdle in their
operations of food sector and put huge financial burden on business. Beside this
company is focusing on contributing in CSR activities so that they put good
example in eye of society for their welfare and developing living standard of society
which help in improving the goodwill and brand equity of company.
Although TESCO is one of the prestigious brand in organisation and use different
advance technology in their products and service that help them to gain competitive
advantages over competitors.
CONCLUSION
It has been concluded from above assignment that business environment will
effect on overall operation and at the time of running functions and purpose of
business. Further, SWOT analysis and PESTEL analysis is done in order to
understand the internal external factors of environment so they grab all the
opportunities and help in enhancing goodwill and profitability of business. This will
help in expanding the retail market at global level for higher sales.

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Online:-
SWOT Analysis of Marks & Spencer.2017.[Online].Available
through:<https://businessteacher.org.uk/swot/marks-and-spencer.php >.