Ideal Business Environment: A Case Study of Marks and Spencer’s

Desklib provides past papers and solved assignments for students. This case study analyzes Marks & Spencer's business environment.

IDEAL BUSINESS ENVIRONMENT: A CASE STUDY OF MARKS AND SPENCER’S
Name of the Student:
Name of the University:
Author’s Note:

IDEAL BUSINESS ENVIRONMENT: A CASE STUDY OF MARKS AND SPENCER’S
Table of Contents
Introduction......................................................................................................................................4
LO1: Different types, size and scopes for organizations.................................................................4
P1: Different types and purpose of organizations........................................................................4
P2: Size and Scope of Different Organizations...........................................................................5
M1: Discussion of how structure, size and scope links with business objectives.......................6
LO2: Interrelationship in between organizational functions and how they link with organizational
structure...........................................................................................................................................7
P3: Relationship in between organizational functions and how they link with organizational
objectives and structures..............................................................................................................7
M2: Advantages and Disadvantages of relationship in between organizational functions.........9
LO3: Using contemporary examples to demonstrate both positive and negative impacts of macro
environment...................................................................................................................................11
P4: Using specific examples to demonstrate positive and negative impacts of macro
environment...............................................................................................................................11
M3: Application of appropriate PESTLE Analysis...................................................................12
LO4: Determination of internal strengths and weaknesses and interrelationship with macro
factors............................................................................................................................................14
P5: Conduction of internal and external analysis of specific organization to identify strengths
and weaknesses..........................................................................................................................14
P6: Explanation of strengths and weaknesses interrelate with external macro factors.............16
M4: application of appropriate SWOT Model...........................................................................17
Conclusion.....................................................................................................................................17
References......................................................................................................................................19
2

IDEAL BUSINESS ENVIRONMENT: A CASE STUDY OF MARKS AND SPENCER’S
Introduction
Organizations in the modern day business industries can consist of different types of structures
and different types of functions that generally help them in creating a particular identity for
themselves. In this case it is mentionable that there are different types of organizations and the
sizes, scopes provide different organizations with different sets of opportunities. The functions in
different types of organizations can interrelate with each other and thus it can be said that
functions in organizations can often determine the objectives of a particular firm (Namada,
2017).
In the following study, the organization of Marks & Spencer Group plc has been chosen to
demonstrate the different aspects related to business and business environments. It is expected
that the discussion points will provide clarity to the readers and make sure that all points are
presented in detail for better understanding of the main topic.
LO1: Different types, size and scopes for organizations
P1: Different types and purpose of organizations
Different types of organizations are bound to have different sets of features that are important for
setting goals. There are mainly three types of organizations in an ideal business industry and they
are Public, Private and Voluntary. The Public organizations are created with the objective of
serving a public purpose. It can be said that government organizations create public
organizations to take care of a particular objective that might serve the people of a particular
region. It can be said that there organizations generally are run by government officials or
departments of governments (Vega Valero, 2017).
3

IDEAL BUSINESS ENVIRONMENT: A CASE STUDY OF MARKS AND SPENCER’S
The purpose of such firms are not directed towards the obtaining a desired amount of profit.
Although there are situations where a particular amount of profit is generated or it is deemed that
a profit will be generated. Rather it is directed towards making sure that the government
resources are used in ideal situations and for the cause of ideal outcomes that will serve the
public positively. The resources in this case are used very carefully.
Private organizations, on the other hand are created by making sure that there are particular
objectives in place and the resources are generated towards obtaining a desirable amount of
profit. These organizations are always operating towards making sure that there are particular
targets markets that are in the position to be served. Target markets are chosen by analyzing the
different types of capabilities that the firm has (Fey, 2017). The private organizations in this case
are operated by using the resources that are invested by the owners, investors or shareholders.
The purpose of such organizations is to make sure that there are particular amounts of profit that
can easily be helpful for guaranteeing that the firm maintains its existence in the market and the
profit will also be invested in the business again for further development.
In case of voluntary organizations, the main goal is to always make sure that any particular
public interest is served effectively. It is always important for these organizations are to make
sure that no returns are gathered from operations as the main objective is to serve without
making an income.
P2: Size and Scope of Different Organizations
There are different types of organizations present in any particular business market which have
different scopes due to their variety in size. Any business organization that has less than 50
employees and has a turnover fewer than 2 Million Euros can be deemed as a micro organization
4

IDEAL BUSINESS ENVIRONMENT: A CASE STUDY OF MARKS AND SPENCER’S
and in this case, the scopes are very much limited. It can be said that an organization that has
such small employee base, will be unable to serve to a large consumer base and thus there will be
situations where the firm will lack in ability to serve according to the demands (Lewin, 2017).
Micro firms however do not set objectives to serve a large consumer market as there are limited
amount of resources. These firms create their own consumer base which is based on a local
market.
Medium or Small organizations are also part of any particular business organization and it can be
said that these organizations are always taking themselves towards opportunities that can help
the business to grow at very rapid rates. In this case it can be said any firm having more than 50,
but less than 250 employees will qualify as a small or medium sized organization. A medium
sized organization can easily serve a large target market if it has the capacity to make sure that
the all consumer demands are fulfilled.
Large organizations in the market are generally consisting of more than 250 employees and such
organizations have a turnover of more than 50 Million Euros. It can be said that any organization
that has such a massive amount of workforce will be able to supply to any size as far as
consumer markets are concerned. Large organizations generally stand out as market leaders and
these sort of organizations are always making desirable amounts of profits due to their
outstanding market reach (Häner, 2017).
M1: Discussion of how structure, size and scope links with business objectives
Business objectives are generally a guideline for any organization as far as operations are
concerned and in most of the situations it is seen that organizations that have a simple
organizational structure have business objectives that are intended towards serving particular
5

IDEAL BUSINESS ENVIRONMENT: A CASE STUDY OF MARKS AND SPENCER’S
market within a limited period of time. This is possible for the organization as the organizational
structure is less complicated and thus there will be less time taken as far as decision making is
concerned. A complicated any detailed organizational structure can mean that there will be
several stages as far as decision making is concerned. This delays the organizational operations.
As far as size is concerned, there are chances that an organization that is larger in size will have
the ability to serve a much larger amount of consumer market and in this case it is mentionable
that the firm will have the objectives to globalize more effectively and grab hold of any
opportunities that are on offer. An organization which is smaller in size is deemed to have less
chances of setting optimistic objectives or goals due to the limited amount of resources at their
disposal.
LO2: Interrelationship in between organizational functions and how they link with
organizational structure
P3: Relationship in between organizational functions and how they link with organizational
objectives and structures
Organizations in ideal business markets generally have different sets of functions and thus it can
be said that the objectives and structures will be designed according to the organizational
functions.
The ideal organizational functions in this case are of four different types such as Production
Function, Marketing Function, Training and Development Function, Distribution Function. The
organizational functions in this case are closely related to each other (Lardón-López, 2018).
6

IDEAL BUSINESS ENVIRONMENT: A CASE STUDY OF MARKS AND SPENCER’S
The organizational production function can be closely related to the marketing function and in
this is justified by the following reason. The marketing function is known for gathering data that
are closely related with consumer demands. Thus it can be said that, in order to align the
products or services with consumer demands, marketing data is effectively used. This forms an
interrelationship as production functions also creates chances for marketing functions to reach a
particular size of consumer market.
The distribution of functions can also be linked with the production function. Production
function creates products or services for the consumer market which needs to be distributed
effectively in different situations towards different regions. Distribution function in this case is
the main stakeholder as far as operations is concerned. The more that the production function
produces, the more there is chances that a distribution function has to work effectively in order to
fill the organisational objectives.
The production function can also be linked with the training and development function as,
production functions can be responsible for protecting different strengths and weaknesses of
employee bases. However this information can be incorporated to the training and development
function and in this case it is important that the employees are trained well.
Different organizational functions are also related with organisational objectives as the capability
of such functions determines the firm’s ability to serve a particular target market. The production
function can be responsible for supplying information about the organisation’s capability to serve
and in this case organisational objectives are set based on the capability of production (George,
2017).
7

IDEAL BUSINESS ENVIRONMENT: A CASE STUDY OF MARKS AND SPENCER’S
Reaching out to particular target markets are also and other objective of Ideal business
organisations and in this case it can be said that the marketing function is related with the
objectives. Marketing activities also depend on capabilities and if marketing functions of a
particular department is desirable enough then and the organisation takes decisions.
Employees are regarded as one of the most important stakeholders of any organisation and
organisational success is heavily dependent on capabilities of the employees. If the employees
are well capable of executing any sort of activity to reach any target, then it can be said that the
workforce is very much capable. Based on this sort of effective performances, the organisations
take decisions and if there are situations where organisational workforce is not capable enough
then, the training and development function comes into action and for it can be said that this
function and organisational objectives are closely related. If the performances of the employees
are not desirable enough, then measures should be taken and thus this interrelationship serves the
organization very effectively (Arenas, 2015).
M2: Advantages and Disadvantages of relationship in between organizational functions
There are different shots of advantages when there is effective inter relationship in between
different organisational functions. The advantages are very beneficial to any organisation and
therefore firms try to establish the inter relationship in between search functions.
There is effective flow of Information and skills as far as interrelationship between different
function is concerned. Different functions include different employees and the employees
generally have different sets of skills on knowledge. If the activity of any function is related with
the activities of other functions then it is possible that the knowledge will be effectively supply
towards employees who will use it to revamp their capabilities or skills.
8

IDEAL BUSINESS ENVIRONMENT: A CASE STUDY OF MARKS AND SPENCER’S
Interrelationship in between different organisational functions also makes sure that any process is
on the verge of effective completion. The interrelationship creates a situation where decision
making activities are flowing through different departments and by this any operation is injected
with pace. The mobility in such activities makes sure that organisational objectives are easily
obtained due to the effective response from the firm.
Having in relationship in between organizational functions creates an advantage for any firm
where organizational efficiency is guaranteed. Organisational efficiency can be defined by the
process in which the resources inputted into organisation are effectively transformed into
effective amount of outputs. If there is inter relationship in between different functions then it is
also obvious that any single activity which is closely related to one or more functions can be
effectively executed by implementing necessary amount of resources. This particular activity
will serve the interests of different functions of departments and thus there are chances that
organizational effectiveness can be reached (Bhanugopan, 2017).
However in talking about disadvantages it can be said that interrelationship in between functions
also create situations where individuals are groups within the organisational environment are
confused by the constant flow of information. It is obvious that different functions and different
departments can have large number of activities and please activities can be providing different
sets of data. Situation of interrelationship creates the chance for this data to roam around the
organisational environment for the use of different groups or individuals. However, there also
chances that data which are not relevant for different functions will flow aunty Sunil create
confusion among employees which can ultimately lead to situations where desirable outcomes
are not reached.
9

IDEAL BUSINESS ENVIRONMENT: A CASE STUDY OF MARKS AND SPENCER’S
LO3: Using contemporary examples to demonstrate both positive and negative impacts of
macro environment
P4: Using specific examples to demonstrate positive and negative impacts of macro
environment
For Marks and Spencer, the macro-environmental factors have positive and negative on the
business operations of the company. As such, the positive and negative impacts are:
Positive Impacts
Due to the demographical aspects of UK, Marks and Spencer have been able to gain a variety of
customers. Each year, Marks and Spencer gains an increase of customers by 5% with the 60% of
it consisting of males and the rest being females and with 75% of them being from age groups 15
to 40 years and the rest being from 40 to 65 years. The economic growth of the UK has helped in
the growth of the revenue generation of the company by 5% from the purchases of the customers
and moreover, the revenue generation is expected to grow by 10% by the end of the current year
(Schaeffer and Esbenshade, 2018). Furthermore, due to the advancements of technology in the
UK, Marks and Spencer have been able to successfully integrate modern technological methods
and approaches. This has helped in their sales, revenue generation and growth as 70% of the UK
customers prefer to shop online, and Marks and Spencer have witnessed that 45% sale of the
company being done through their official website and other online retail sites (Pankova and
Borst, 2016).
Negative Impacts
10

IDEAL BUSINESS ENVIRONMENT: A CASE STUDY OF MARKS AND SPENCER’S
Due to the unstable political condition of the UK because of Brexit, the laws and policies of the
country pertaining to business have changed to meet the new standards. As such, Marks and
Spencer have been faced with issues in trying to comply with the new policies and laws. This has
affected their sales and profitability as well as hindered their growth in the market. As a result of
this, the company has been unable to achieve their desired goals and objectives within their
specific timeframe (Onyusheva and Seenalasataporn, 2018).
M3: Application of appropriate PESTLE Analysis
The PESTLE is one of the most important components that help in the effective and efficient
analysis of the external business environment for the Mark and Spencer PLC in an effective and
efficient manner.
Political factors: In the UK market, the political situation is little bit stable as the new
government has established themselves in the country. The political situation is a little complex
considering the parameter of Brexit .Thus this might affect the business process of Marks and
Spencer’s. On the other hand, in the opinion of Thompson, and McLarney (2017), the new
government is taken measures to stabilize the situation and that may improve the business
environment for the organization. Good relationship with the present government may help to
increase the business of Marks and Spencer’s in foreign soil as well this may enhance the holistic
business by almost 10 %.
Economic Factor: The present GDP of UK is almost 2890 billion dollar. In the resent past UK
was facing economic instability due to the reason of the Brexit. That had an effect in the business
process of the Marks and Spencer’s PLC (Velásquez, and Meunier, 2017). Due to economic
instability, the sales rate of the company declined by almsot5 % (Lindegaard et al., 2017). At
11

IDEAL BUSINESS ENVIRONMENT: A CASE STUDY OF MARKS AND SPENCER’S
present after the economic measure of the new government, the GDP may rise to 3170 billion
USD that may help to strengthen the market of the UK. Thus, the revenue generation and sales of
Marks and Spencer should enhance by almost 10 %.
Social factor: The social factor is to some extend related to the economic factor. At present, the
Unemployment rate in the UK is almost 4%. If Marks and Spencer’s use this unemployed
individual to develop the human resource for the organisation then it may enhance the brand
image of the company in an effective and efficient manner. On the other hand, it is explained
that the social factor is dependent on the economy as well.
Technological factors: According to the stats it is identified that technology has a major impact
on the over business process of Marks and Spencer’s. As 70 % of the UK, consumers prefer
online mode so developing the online mode should be suitable for the Marks and Spencer PLC.
The Technologies like data base management and CRM those are available in the UK market
may enhance the business and consumers relationship for the organization (Schyns, 2016)
Legal Factors: The legal factors include compliance with the employee laws and the corporate
tax laws of UK. Almost 20 % of the profit is being taken as revenue by the Government.
Therefore, Mark and Spencer’s have to comply with this to effectively perform business process
in a prominent manner.
Environmental Factors: The environmental factors as if environmental foot print and green
energy promotion are formulated the UK government. Marks And Spencer PLC must comply
with the environmental policies to create a brand image. The CSR activities should be done in an
efficient manner (Velásquez, and Meunier, 2017).
12