Marks & Spencer Business Environment: A Post-Brexit Impact Assessment

This report provides an analysis of the business environment of Marks & Spencer, focusing on the impact of Brexit. It begins with an introduction to the concept of the business environment and the significance of Brexit, followed by an examination of the micro and macro environmental factors affecting Marks & Spencer's operations. The report includes a PESTLE analysis, assessing the political, economic, social, technological, legal, and environmental factors, and a SWOT analysis, identifying the strengths, weaknesses, opportunities, and threats facing the organization. It further explores the relationship between the internal strengths and weaknesses with the external macro environment factors. The report also includes a reflective statement from the perspective of a Business Development Manager, discussing the strategies needed to address the challenges and opportunities presented by Brexit. The analysis considers the impact on suppliers, competitors, customer confidence, investment, and the regulatory landscape, ultimately aiming to provide insights for strategic decision-making at Marks & Spencer.

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Title: Business Environment of Marks & Spencer
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Executive Summary
The business environment of an organization keeps changing due to the various factors
which cause some changes in the organization internally or externally. The United Kingdom is
going to witness a very big change due to the implementation of Brexit. The Brexit has been
formed from the words Britain and Exit, indicating the exit of the United Kingdom from the
European Union. The same thing which happened in Greece too and it was known as Grexit. In
this assignment, as the business development manager at Marks & Spencer, the analysis and
impact of Brexit on the organization is conducted to analyze the positive and the negative effects.

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Contents
1. Introduction..............................................................................................................................2
2. The Impact of Business Environment Factors on Business Operations...................................4
3. PESTLE & SWOT Analysis of Marks & Spencer...................................................................8
3.1 PESTLE Analysis..................................................................................................................8
3.2 SWOT Analysis...................................................................................................................10
4. The Relationship between the Strengths & Weaknesses with the External Macro
Environment Factors......................................................................................................................11
5. Reflective Statement...............................................................................................................12
6. Conclusion..............................................................................................................................14
7. References..............................................................................................................................14

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1. Introduction
The business environment of an organization is determined through the various internal and
external factors that are affecting the business objectives by influencing the organizational
functions of the employees, management, customers, business regulations and also the supply
and demand aspect. With the application of Brexit in 29th March 2019, there are some changes
which have already taken place in the working of many organizations, these are the micro and
the macro environmental factors which are affecting the business environment of the
organization. In this assignment, an analysis is conducted on the current business environment of
Marks & Spencer and the impact of Brexit on the organization. Brexit is the decision of the
United Kingdom to leave the European Union and this decision was taken through a poll in
which the people of the United Kingdom gave a verdict of leaving the European Union, with
51.9% people voted in the favor to leave.
Image source: (blog.politics.ox)

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2. The Impact of Business Environment Factors on Business Operations
The business environment has two main factors which are internal environment and external
environment, that is, micro environment and macro environment. With the occurrence of Brexit
all these environmental factors will witness a change that will have a positive and a negative
impact on the organization’s operations (Bakker, 2017). The micro environment factors affecting
the factors which are closer to the organization which directly affects the abilities to fulfill the
customers need. The macro environment factors affect the micro environment and also the
factors which are outside the organization, but still matters a lot to the organization (Bogdanor,
2018).

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Image source: (www.learnmarketing.co)
The effect of all micro environmental factors are not the same. They have both the
positive and negative impact on the organization. Some of them are-
 Supplier
The suppliers have different approach towards a small organization and a big
organization. Marks and Spencer is a huge organization with more than thousand outlets
all over the world. The suppliers offer them raw materials at a relatively lower price than
the small organization (Chalmers, 2017).

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 Competitors
The competitors have different approach of dealing with their competition,
depending upon the size of the organization. Marks & Spencer are being a global
organization also has many competitors, but its competitors will never start a price war
who have the knowledge that the organization has the capabilities to retaliating to them.
With the application of Brexit the biggest impact that will happen in the organization’s
micro environmental factors is the suppliers, competitors and the public. The Brexit has
already started affecting the confidence of the customers which have affected the sales at
the Marks & Spencer outlets (Dallago, 2016).
The positive and negative impact of macro environment factors on the business operations,
though the macro environment is severely affected by the Brexit, thus showing will less positive
impact. The impact on-
 Political Environment
The political factor affects the working of the Marks & Spencer. The investors
will be affected by the new changes which will occur due to Brexit and many would like
to withdraw from the organization due to the effect on the profits of the organization. The
decision making of the organization is also affected due to the new regulations which will
be implemented after the withdrawal from the European Union (de Witte, 2017).
 Economic Environment
The negative impact that will take place on Marks & Spencer due to the changes
in the abilities to spend on international and national land due to the Brexit (Ewing,
2017).
 Social Environment

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The connection with the European Union has helped the Marks & Spencer to get
access to a bigger market and the leaving of this market will affect the overall functioning
of the organization (Finck, 2017).
 Technological Environment
With the growth of the e-commerce there is a large growth that has been achieved
by many organizations. The Brexit will affect the e-commerce profits of Marks &
Spencer, with the change in the preference of the customers. The customers will shift
their focus from Marks & Spencer to another organization (Herbert, 2017).
Image source: (i.pinimg.com)

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3. PESTLE & SWOT Analysis of Marks & Spencer
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3.1 PESTLE Analysis
The external environment of the organization is made up of several components that
determine the essential elements which the organization need to fight in their respective
organization (Koch, 2017). The PESTLE analysis helps in examining the factors which will
affect the business operations at Marks & Spencer-
 Political
Till now the organization has the chance of investing in the European market
through the European Union and the Free Trade agreements, providing the organization
with numerous opportunities. The M&S has suffered with the industrial relationships and
the labor law. With the implementation of the Brexit, there will be more infringement
which the organization has to deal with due to the labor laws (Kundera, 2017).
 Economic

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The retail sector of the UK is very recession prawn and have a sensitive nature
towards the changing rates of interest. With the application of the Brexit, the economic
factor of the retail sector will be massively affected, bringing the profits even more down
for Marks & Spencer (Martonyi, 2017).
 Social
The organization Marks & Spencer has continuously struggled with the issues of
gaining a big market share of its customers. With the leaving of the European Union there
is a huge change which the organization will witness in the market share of M&S (Ohr,
2017).
 Technological
The internet has become a huge part of many organizations over the years. This
has helped in the expansion of Marks & Spencer too. The e-commerce will be affected
the least by the Brexit (Titmarsh, 2017).
 Legal
The legal restriction that has been imposed on the organizations for the health
safety of consumer rights and also for the generation of natural renewable energy, have a
strict observation of the activities of all the organizations. With the application of Brexit,
this is going to get even more severe for M&S (De Vries, 2017).
 Environmental
Marks & Spencer have already struggled a lot to maintain their market share and
with the use of environmental friendly resources for production the company is having
even greater struggles. With the implementation of Brexit, the organization has to be
even more careful with the use of raw materials and fabrics.

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3.2 SWOT Analysis
The SWOT analysis of M&S-
Strengths
 A wide range of products like food, furniture, financial products, clothing, home and
wine.
 One of the largest retails in UK by sales.
 Have a position of strong flow of cash.
 Increase in trading profits and turnover.
 Have a huge brand awareness (Ellison, 2016).
Weaknesses
 The growing customer disinterest
 The low share of market
 Assumption of high prices
 Substitute products
 Environmental issues like renewable energy (Farrand, 2017).
Opportunities
 Innovation for new products.
 Alliances in UK & European market.
 The changes in the demand of customers with value for money products.
 A new and better supply chain overseas (Howarth and Quaglia, 2017).
Threats

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 Volatility in the raw materials prices.
 New legislations.
 More competition in UK.
 The low cost of retails (Priest, 2017).
4. The Relationship between the Strengths & Weaknesses with the
External Macro Environment Factors
The above analysis, which shows an impact on the Marks & Spencer organization due to the
Brexit. Also, the strengths and weaknesses identified has a connection with the external macro
factors, as the changes which will be incurred on them will result in many strengths and
weaknesses.
 The strength of the Marks & Spencer of being the largest retail organization of sales, will
be affected by the political factors which will change after Brexit, helping the
organization to build more dominant in the UK market due to a more focused approach
(Saraceni, 2017).
 The strength of the Marks & Spencer brand awareness in the market will get better after
the political changes as the customers knows the high credibility of the organization.
 The weakness of the Marks & Spencer is directly related to the political changes which
have affected the interest of the people in many organizations. The customers have lost
interest and confidence in making purchases from even the most prominent brands.
 The main weakness of Marks & Spencer that is affected even more due to the Brexit is
the lowest share of the market that will further increase due to the legal and social factor
of the macro environment.