Business and the Business Environment: Marks & Spencer Case Study

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BUSINESS AND THE BUSINESS
ENVIRONMENT
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Table of Contents
INTRODUCTION............................................................................................................................. 4
LO1.................................................................................................................................................5
P1 EXPLAINING VARIOUS TYPES, DIFFERENT PURPOSES OF THE ORGANIZATIONS...................5
P2 EXPLAINING THE SCOPE, SIZE AND VARIOUS OTHER FACTORS OF THE DIFFERENT
ORGANIZATIONS........................................................................................................................7
M1 ANALYSING HOW SIZE, SCOPE ETC. SHARE A LINK WITH THE BUSINESS OBJECTIVES AND
ALL THE PRODUCTS & SERVICES OFFERED TO THE CUSTOMERS...............................................9
LO2............................................................................................................................................... 10
P3 EXPLAINING THE INTERRELATIONSHIP BETWEEN THE DIFFERENT FUNCTIONS OF
ORGANIZATIONS AND THEIR LINK BETWEEN THE STRUCTURE SAND OBJECTIVES OF THE
ORGANIZATION........................................................................................................................10
M2 analysing the disadvantages and the advantages of the interrelationships of the
functional departments and their impacts on the business structure.....................................12
LO3............................................................................................................................................... 13
P4 EXPLAINING THE NEGATIVE AND THE POSITIVE IMPACTS THAT ARE BECAUSE OF THE
MACRO ENVIRONMENT FACTORS ON BUSINESS.....................................................................13
M3 WITH THE HELP OF THE PESTLE ANALYSIS MODEL EXPLAIN IN DETAIL DIFFERENT
FACTORS OF THE BUSINESS IN THE ORGANIZATIONAL CONTEXT............................................15
LO4............................................................................................................................................... 18
P5 CONDUCTING EXTERNAL AND INTERNAL ANALYSIS OF ORGANIZATIONS IN ORDER TO
IDENTIFY THEIR STRENGTHS AND WEAKNESSES......................................................................18
P6 EXPLAINING HOW WEAKNESS AND STRENGTHS OF MARKS AND SPENCER ARE
INTERRELATED WITH THE EXTERNAL MACRO ENVIRONMENTAL FACTORS............................19
M4 Applying SWOT analysis and justifying how they affect decision-making process at marks
and Spencer............................................................................................................................. 21
CONCLUSION............................................................................................................................... 25
REFERENCES.................................................................................................................................26
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INTRODUCTION
The assignment will be discussing the different factors that are related to the business and the
business environment, the business environment is the set of all the inter factors as well as
external factors which are responsible for affecting various operations of the business.
In this assignment, the company that is chosen is Marks & Spencer. The business includes
different factors in its environment and those factors are as follows, customer, technology,
suppliers, government, latest trends in the market etc.
The assignment will focus on the different areas of business and in that the first section includes
an explanation of the different type of organisations, their structure and their size and how
they differ from each other. The next section will explain the different interrelationships
between the organizational functions and how these interrelationships have advantages and
disadvantages to the business. The other section of the assignment discusses the impact on the
business of the macro-environmental factors and with the help of PESTLE analysis, this will be
clearer. The last section will explain about the various factors that affect the business internally
and the explanation will be clearer with the help of the SWOT analysis that will help the
institution in analysing the whole of the business environment thoroughly.
FIGURE 1: MARKS & SPENCER
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LO1
P1 EXPLAINING VARIOUS TYPES, DIFFERENT PURPOSES OF THE
ORGANIZATIONS
The different types of business organizations are discussed here and some of their examples
include non- governmental organizations, privateorganizations and the public organizations.
FIGURE 2: TYPES OF ORGANIZATIONS
PRIVATE ORGANIZATIONS:
All the private persons and individuals and the private bodies usually run these types of
businesses and the objective of this business is to earn a profit, create goodwill and expand
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their business operations for the further future growth. In these private organizations, there is
no role of the government in the functioning of these organizations (An et al., 2019).
EXAMPLE:
John Lewis Partnership is private organization, which is the famously private company in the UK
and they are working hard for the higher results by higher profit margins (Rahman et al., 2016).
NON- GOVERNMENT SECTOR ORGANIZATIONS:
When a large number of people forms the group for the same purpose and the same benefit
that is the interests of the society and others then that organization is called the non-
government organization (Bryson, 2018). In this organization, they invest money and earn
money and again they use for the wellbeing of the society (Hillary, 2017).
EXAMPLE:
The famous and the best suitable example of the NGO is the Wellcome trust whose members
are working in a group for the good cause of the society and the citizens of the company.
PUBLIC ORGANIZATIONS:
The public organizations usually work with the objective of the benefit of the society by serving
the best quality and the best standard products as well as the services (Hillary, 2017). In public
companies, they not only have the purpose of earning profit bust also have other motives (An
et al., 2019). Government interferes generally in these types of the organizations and they are
also operated and owned by the governmental bodies (An et al., 2019).
EXAMPLE:
Sainsbury’s is the entity which falls in the category of the public organization. The products and
services of the company are focused on offering the quality and standard and they are working
on the goals of providing satisfaction to the customers of the company.
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P2EXPLAINING THE SCOPE, SIZE AND VARIOUS OTHER FACTORS OF THE
DIFFERENT ORGANIZATIONS
SAINSBURY’S:
COMPANY’S BACKGROUND: Sainsbury’s was established through John James Sainsbury's in
time 1869. The company come underneath the group of public company and whose purpose is
to provide its people through income creation. The word use in these company is the Public
limited company.
SERVICES & PRODUCTS: There are a variety of goods of company and these are such as shop of
the open space, supermarket stores, and hypermarket.
SIZE & SCOPE: along market examination, the fact that is record that there is hard struggle in
market among manyorganizations (Todorov and Akbar, 2018). Explanation of the scope, size
and various other factors of the different organizations The Company have the competence to
develop as well as enlarge its trade operation through fetching-up the accessible market
opportunity to enlarge in trade market. Company’s revenue is £28.456 billion (2018) and the
number of employees is 1, 86,900 (Todorov and Akbar, 2018).
COMPANY’S MISSION: company’s undertaking include helping their consumers by way of the
finest value goods, along with ensure the protection and wellbeing of the general public and
also shielding the surroundings for the accomplishment of consumers trust.
COMPANY’S VISION, the company's vision includes gaining customer's trust so that they love to
work and shop with the company.
OBJECTIVES OF COMPANY
The main objective of the company is to provide quality products for their citizens with what
they want to a trustworthy company in the UK (Todorov and Akbar, 2018).
LEGAL STRUCTURE OF COMPANY
It includes that the company is the public limited company.
MAIN STAKEHOLDERS of business comprise Mike Coupe along with David Tyler.
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MARKS AND SPENCER
COMPANY’S BACKGROUND: this is the multinational company which deals in the retail sector.
SERVICES & PRODUCTS:the company offers various products in the retail sector.
SIZE & SCOPE: the employees working with the company are 80,787 (2018)and the revenue
generated by the company is £10,377.3 million (2019).
COMPANY’S MISSION
The company's mission is to satisfy its customers by providing the best quality products and to
earn a lot of profit.
COMPANY’S VISION
Companies want to be a leader in the retail industry.
OBJECTIVES OF COMPANY
The objective of the company is to plan strategies that will help the company in future growth
and success.
LEGAL STRUCTURE OF COMPANY
The company is not public and the company has its many partners.
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M1 ANALYSING HOW SIZE, SCOPE ETC. SHARE A LINK WITH THE BUSINESS
OBJECTIVES AND ALL THE PRODUCTS & SERVICES OFFERED TO THE
CUSTOMERS
The entity’s objectives are affected and influenced by the structure, size scope etc. this can be
said that because when the institutes a large number of employees they try to set huge
objectives but this is the opposite situation in the small organizations. Thus the employees in
organizations are given their job role according to the size and scope of the business. If the
company has huge investments then their vision and mission will also be huge and the vice
versa in small organizations.
But the satisfaction of the customers for earning more profits may be the common goal in every
organization. The same is the case in the scope of the organizations, when the organizations
have to serve to customers in the international level they will set higher goals and objectives
but when a company has to serve at the smaller level their goals will be smaller.
Thus this can be said that the company's size and range with structure have an impact on the
objectives of the company.
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LO2
P3 EXPLAINING THE INTERRELATIONSHIP BETWEEN THE DIFFERENT
FUNCTIONS OF ORGANIZATIONS AND THEIR LINK BETWEEN THE STRUCTURE
SAND OBJECTIVES OF THE ORGANIZATION
The organizational functions are dependent on the various other functions of the business and
they share a relationship with each other. Various functions of company are as follows HR,
finance, marketing, IT, research & development, operations and production etc. The marketing
function is known to be the most important function in the company marks and Spencer
because this function helps the company in satisfying the need and requirements of its
customers.
The company also states that the decision-making process in the company is affected and
influenced by the different functional departments of the company. Also, the company's whole
structure is affected when any changes take place in any of the functional departments.
The departments of the marks and Spencer are interconnected to other and their
interrelationship is being explained in this section.
The interconnection of the functions in the company Marks & Spencer among the various
departments
There are the entity has the three major functions in the organization:
Role of the finance function in the company
Finance function in the entity plays an important role because, without the help of finance
function, the company's activities cannot be done effectively. This function is the support for all
other functions in the organization. The finance functions help the entity in many ways, the
company marks and Spencer uses finance function in taking decisions related to the financing,
liquidity, dividend and investment decisions. When the company wants to make changes in the
size of the business then the finance department helps in modernizing, diversifying and
expanding all the activities that are related to the business. Thus in this manner, the
department of finance plays an important role in the functioning of marks and Spencer (Wirtz
et al., 2016).
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Role of the marketing function in the company
The marketing function is another important area in the whole functioning of the business
environment. The marketing function also influences activities in the other functional
department. For the company marks and Spencer marketing is very important because it helps
in building relationships with the customers. The marketing function also helps in making a
clear mission and vision statement for the company. The brand value of the company is
maintained with the support of the marketing function. The company marks and Spencer try to
show the value of the products with the help of marketing activities and strategies. Other
activities related to the promotion and marketing of the product are done with the help of the
marketing function. Thus this function is very essential for the functioning of the activities in the
organization.
Role of the human resource function in the company
HR function also has an important role in the functioning of the business activities of marks and
Spencer. The HR function is responsible for hiring employees according to the needs and
requirements of the company. The company takes the help of the HR function because without
the HR function or HR Staff Company would not be competent to perform any operation and
activities. The other departments in the company have a link with the HR function and because
human resource is the core of the organization, without human resource a company cannot
work. Also when decisions are taken on the other departments that influence the entire
functioning of the HR department and other departments also need to take permissions of the
HR manager when they make any major changes in the company.
Thus from the above discussion, this is very clear that all the functional departments in the
company share a link and they are interdependent on each other.
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M2 analysing the disadvantages and the advantages of the interconnections of
the functional departments and their impacts on the business structure
The different advantages and the disadvantages of the various functional departments are
discussed here in the organizational context:
ADVANTAGES
 Work efficiency of all the staff members at the
 position of work will increase
 The productivity of the various functional department will improve
 The activities that are undertaken with the interconnection of the functional
departments will also help in improving the effectiveness of the department heads
because the heads will be able to increase their innovation and creativity
 When the functional departments will share information with each other this will also
help in increasing the organizational profitability (Meredith et al., 2017)
DISADVANTAGES
 Control may be lost within many different departments
 Many individuals of various departments may have conflicts between them
 The information that is shared from one department to another can be used immorally
by the other persons
 The competition among different departments may increase because of the
interconnection
Among themselves (Meredith et al., 2017)
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LO3
P4 EXPLAINING THE NEGATIVE AND THE POSITIVE IMPACTS THAT ARE
BECAUSE OF THE MACRO ENVIRONMENT FACTORS ON BUSINESS
The risk factor is stated by the very famous author as the constant factor and it is a very difficult
task to analyse the risk involved in the operations of the business. The company that is
discussed in this report is the marks and Spencer that deals in the retail sector industry. It is
also analysed in the market analysis that there are very frequent changes in the retail sector
and these changes are negligible and the company has to accept those changes for the growth
and development of the company (Grublješič and Jaklič, 2015). The factors that leave an
impact on the business forces are the factors related to the macro environment of the business.
These macros environmental are, technological, governmental, environmental and societal etc.
the technological factors of the business have various negative impacts and also the positive
impacts on the business activities.
With technological advancement, there are many different changes in the company's
operations and that have a positive impact. The company can make use of the technology in a
positive manner for providing many other services to the customers by the use of technology.
The company can also offer online services to its customers and with the use of this, they can
also provide many offers online to the customers. Providing online delivery and services will
also help the company in increasing its sale boundary and thus they will be able to i9ncrase its
profitability. It will also be easier for customers to make payments with the online mode of
payment and thus there will be more positive impacts on the business (Grublješič and Jaklič,
2015).
With the positive impacts there is furthermore the harmful side to the technological
advancement of the company, that is most of the retailers in the market are used to the offline
selling and they have built trust with their customers and they have built a strong name the
customers and thus for them it is very difficult to switch to the online system for buying and
selling their products.
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