Business Environment Analysis: Marks and Spencer Organization Report

This report provides a comprehensive analysis of the business environment, focusing on Marks & Spencer (M&S). It begins with an introduction to the concept of the business environment and its influence on business practices, followed by an overview of M&S as a multinational brand. The report then delves into the different types, purposes, and legal structures of organizations, including public, private, and voluntary organizations, with examples like the NHS and Oxfam. The size and scope of these organizations are discussed, alongside the relationships between various organizational functions, such as marketing, human resources, research and development, production, and finance. The second part of the report examines the positive and negative impacts of the macro environment on M&S using PESTEL analysis, covering political, economic, and social factors. Finally, the report discusses the company's strengths and weaknesses, particularly in relation to external macro factors, and concludes with a summary of key findings. The report aims to provide a detailed understanding of how external factors influence the operations and performance of a major retail organization like Marks & Spencer.

BUSINESS AND BUSINESS

TABLE OF CONTENTS
INTRODUCTION.....................................................................................................................................3
PART 1.......................................................................................................................................................3
Different types, purpose and legal structure of organization.................................................................3
Size and scope of different types of organization.................................................................................4
Relationship between different organization function..........................................................................5
PART 2.......................................................................................................................................................7
Positive and negative impacts the macro environment has upon business organisation.......................7
Strength and weakness of Marks and Spencer......................................................................................8
Strength and (Recica and et.al, 2019.)Weakness interrelated to external macro factors.....................10
CONCLUSION........................................................................................................................................11
REFERENCES.........................................................................................................................................12

INTRODUCTION
Business Environment is basically a set of all the external as well as the internal factors
that influence the business practices. These Influence the various business activities and they
must be monitored through the process of environmental Scanning. Marks and Spencer is a multi
national brands which operate in more than 40 countries. Marks and Spencer generally deals in
premium clothing,household products and food products. They have more than 40 variety of
products with more than 1450 stores worldwide. In this report, various type and purposes of
different kind organisational structures with their scope and size. This report will also discuss
about the relationship between the different organisation functions and their interrelation with
each other. Moreover, the positive and negative impacts the macro environment has upon
business organisation of Marks and Spencer. Lastly the report will discuss about the strength and
weakness and also about their interrelation with macro environment(Ayios, 2018.)
PART 1
Different types, purpose and legal structure of organization
Organization is a body consisting of multiple people, like an institution, that serve a
particular purpose. An organization is made to achieve organizational goals, every person has
their work assigned and with it required authority and responsibility is given to perform that
work. There are 3 types of organization:-
Public Organization possessed and run by government and their purpose is to provide
services to citizens are called public sector organization. Their prime motive is not to generate
profit. For example- NHS(Barr, Reid, Catska, Varona,and Rout, 2018.) National health service
(NHS) is the example of public company. It is publicly funded national health care system based
in England. It was constructed on 5th July 1948. NHS is the largest single-payer healthcare
system across the world. The primary source of fund for NHS is government funding. It provide
healthcare facility to their legal residents with most facilities non chargeable at the time of use.
Purpose: NHS provides facility to each and every person without discriminating
irrespective of gender, sex, race, age, disability. It believes in respecting the human rights. It
believes in social duties like promoting equality by the services that they give and they pay equal

attention to that section of society where development in healthcare is not matching with rest of
the citizens. NHS services can be accessed on the basis of their needs and not on one's ability to
pay. NHS is answerable to public, a section of people and patients who they serve(Beatty,
Samuelson, and Abril,2018.)
It is directed by the UK Government by Department of Health and Social care which took
care of political responsibility. Resource allocation was hand over to NHS England. The Clinical
Commissioning Groups(CCG) undertake services including hospital and community based
healthcare. NHS trust provide services in some areas like NHS acute trust control treatment
centers and specialist care in 1600 NHS hospitals.
Private Organization possessed and run by private individuals and their purpose is to
generate profits. For example Marks & Spencer. It is a British MNC headquartered in London,
known for delivering quality clothing, home and food products. Founded 135 years ago. Marks
and Spencer has 959 stores across U.K. That includes 615 stores that only provide food products.
Purpose:They provide products of high quality. Everything found there is made for M&S.
They believe in “Making every moment special” and every assistant there is told to find a way
to impress the customers in such a way that makes their experience special. Their purpose is to
serve the needs of middle and lower upper class, by producing quality products like clothing,
home and food. The company is listed on London Stock Exchange(Calabrese,Iandolo,
Caputo, and Sarno,2018.)
Voluntary Organization is a set of people who volunteers to form an agreement to achieve
a specific purpose. Trade unions is a form of voluntary organization. For example- Oxfam It is
named after Oxford committee for Famine Relief and was founded in 1942. It is coalition of 20
charitable organization that focuses on removing global poverty.
The organization focuses on working to make an end to poverty. They believe that
poverty is not an unavoidable fact and should be (Cepel, Stasiukynas, Kotásková, and
Dvorsky,2018.) removed by handling its root causes. It is governed by 3 Board of Directors. The
company's director found charity, follow laws and make rules, policies and decisions by majority
votes.
Size and scope of different types of organization
National Health Service Size and scope - It is a large scale organization. It covers

consulting firms, clinics, health insurance organization, hospitals, healthcare associations, mental
health organizations, public health department. Company is committed to work together as a
CCG and to provide the best possible care within the given resources. The company attempt to
make sure that views of the patients are heard and that their time through the company's local
health system is smooth through working in a team(Gaganis, Pasiouras, and Voulgari, 2019.).
The company's see itself developing as a team including patients and clinicians that come
together to deliver quality health services, that matches with the money value and fulfills the
needs. The company makes sure that every baby has the best beginning of life, prevent
conditions to expand the length and quality of life and minimize health inequalities, improve the
mental health and well being of patient, and deliver best with available resources.
Marks and Spencer is a large scale organizations. It covers retailing in the world, IT and
internet in retailing, supply chain management in retailing, understanding service marketing,
luxury and lifestyle retailing, visual merchandising and space planing. The company's mission is
to make impactful quality available to others, bringing new change. The company's vision is to
increase its sales by 50% and profits by 20%. The company's objective is to continuously bring
change in its product, as new trend attract customers. Technological up gradation helps in
bringing change(Hamilton and Webster, 2018).
Oxfam is a large scale organization. It covers campaigns , labour rights and fund raisers.
Mission – Company's mission is to generate solutions to the problem of poverty. Company wants
to bring change globally, encouraging people to have a future that is secure and poverty free.
Company work for removing poverty locally as well as globally. Company's wants a world that
is free from poverty. They want equal and fair treatment for all the citizens so they can enjoy
their rights and can change those factors that affect their living. They believe that necessary
actions with political will can change the world. People have the right to live their life freely and
securely, have a identity and to access basic social services. Company has 4 main criteria to
focus that is economic justice, essential services, rights in crisis and gender justice.
Relationship between different organization function
There is relationship between Marketing Department with Human Resource Department .
Company's marketing (Hansen and et.al, 2018.)department coordinates with the HR department
and ensures that they are hire the right skilled person for the job. Through this the company have

the complete information and can grow faster. Marketing Department of Marks and Spencer has
to make sure that they provide HR department with proper information about the person required
with respective skill set. And HR department of Marks and Spencer should properly analyze the
requirements and provide the best candidates with required skills asked by Marketing
department. In this way they can achieve company's goals and objective on time.
There is relationship between Marketing Department with Research and Development
Department. The work done by marketing department directly links with the result of research
and development department. Marketing department of Marks and Spencer plays the lead role
for the company's growth. Marketing department of Marks and Spencer helps in the analysis of
market, get new ideas and help the company to maximize profitability and increase customer
satisfaction level, in this way it helps research and development department. Today's customers
want new, trending, fashionable yet comfortable and this is expected from the research
department that they introduce new thoughts or innovated ideas for the products and for its
maximum sale it depends on the marketing department of the company.
Marketing with Production are interrelated. The coordinate between production department
and marketing department is must needed if the company want to fulfil the customers need and
increase the satisfaction level of the consumers. The strong and healthy relationship between
both marketing department and production department helps the company to boost their
performance in the market. It is necessary for every company to listen to their consumers and
design products to fulfil their needs. Marks and Spencer do a detail research on the need of
consumer and design their product that fulfill the needs of consumers Moreover the production
department of Marks and Spencer design good quality of products which is very much helpful
for the marketing department of the firm to promote the product whereas the marketing
department is responsible for providing the relevant information to the production department
about the customer reviews, information about the competitors products and market trends this is
helpful for the production department to introduce new product or modify the old one(Pérez-De-
Lema and et.al, 2019.)
Marketing Department and finance department impact on each other as they are
interrelated. It is necessary for finance department and marketing department to work very
closely together because the finance department have the complete detailed information about

the organisation and all the operation running in the organisation is within the financial budget.
The finance department of Marks and Spencer instruct all the department of the company to
work in the budget provide to the respected department . The marketing department of Marks
and Spencer major focus is to enhancing the sales of the company, increasing the market share
and the revenue generation of the company whereas the financing department of Marks and
Spencer main focus is on cash flow of the company, paying back the investment and covering the
cost as early as possible. Marks and Spencer follows a flatter organization structure. The
company through the process of delayering reduces the level of authority. Now employees have
more responsibility and this helps them to make quick decisions. Now employees have more
accountability.
PART 2
Positive and negative impacts the macro environment has upon business organisation
PESTEL ANALYSIS
Political factor : The first part of pestel analysis, is all about the government interference in the
economy. This include all government policies, trade policies, taxation, stability or instability of
government etc.
Positive impact - United Kingdom government is among the most politically stable governments
among the world, they also have great relation with other countries that helps a lot to Marks and
Spencer to easily trade their product to other countries.
Negative impact - The exist of UK from European Union, this increase the cost of sourcing
because UK is not in free trade agreement with other European countries any more.
Economical factor : This factor is all about the economical growth, exchange rate, inflation,
income of customers and etc.
Positive impacts - The economical growth of increasing UK which increase the income level of
the consumers, which eventually increase the sales of Marks and Spencer
Negative Impact - Due the the 'brexit' the firm is facing lot of conflicts with small retailers due to
rise in the price of the products.
Social factor : This factor is also known as socio-cultural factor, this includes, population
growth, gender distribution, age distribution and etc. This factor have direct impact on company.
Positive Impact - The company is supporting surrounded communities which is helping them

decrease the internal costs.
Negative impact - Due to lack of introduction of new styles the company has receive negative
social reviews from the consumers that decrease the goodwill and the market share of the
company
Technological factors : An organisation must understand the need of technological development
and innovations that could affect the firm.
Positive impact - Increase in online shopping had increase the sales of Marks and Spencer.
Negative impact - The technology of the company is not updated as the competitors that have a
negative impact on the firm.
Environmental Factor : Environmental factor consider all the factors and rules related to the
rules related to the environment.
Positive Impact - Marks and Spencer contribute in CSR scheme, won various awards in positive
environmental impact this eventually increase the goodwill of the company.
Negative impact – The company doesn't participate in any save environment campaigns.
Legal factors : Legal factor include health and safety, consumer rights, government policy.
Employees rights and etc.
Positive impact – The firm protects the data of employees and the customer of the company, that
increase the trust of the company among customers as well as the employees
Negative impact - Marks and Spencer was fined 1 million due to the violation of health and
safety right of the employees. M&S were also charged for tax frauds. This decrease the goodwill
and market share of the company. This ultimately lead to decrease in sales of the Marks and
Spencer.
Strength and weakness of Marks and Spencer
SWOT ANALYSIS
Strength :
Globally recognised Brand : Marks and Spencer is among the leading brand in its sector in
United Kingdom. It is among the giants of United kingdom which is known by everyone for
providing quality products
Wide range of products : Marks and Spencer deals in huge variety of products such as premium
quality clothing, food products and home products. The firm deals in more than 400 various

products.
Larger number of outlets : The firm is having more than(Quinlan, and et.al2019.) 1400 outlet all
around 40 countries, with more than 700 stores in Europe.
Weakness :
Bad publicity as non trendy stores : One of the biggest drawback of Marks and Spencer is that it
has been non trendy and out fashioned. Even after Marks and Spencer deals in huge range of
products with various brands. Even the management of the company failed to impress the
existing customers and attract new customers. The new generation shows very little interest in
the brand.
Increasing cost due to manual work : Marks and Spencer still follows the old tradition
technologies rather than switching to the new techniques. Switch to new techniques can save a
lot of money, manual work, time and etc for the company.
Dependence of UK : The major revenue generation of Marks and Spencer in from United
Kingdom.
Opportunities :
Enhancing global presence : Marks and Spencer has a huge presence in Untied Kingdom and
European market but the presence in Asian market is very little. Marks and Spencer can
concentrate more on Asian market to increase their Global recognition in the global market,
Diversification of Market : The firm is having a good market share in European countries and
the company is totally dependent on European countries. Entering market of new countries can
help them to increase their revenue generation and profitability of the company
Diversification of Product : Marks and Spencer can introduce new product to the existing market
as they are highly recognised by the people of United Kingdom and having a good image in the
market about their quality. This will increase the market share as well as the profitability of the
company.
Threats :
Increasing competition : Increasing competition in the biggest threat for the scope of business for
Marks and Spencer, the increasing competition in retail sector is a big problem for the company.
The other retail competitors are expending themselves as Marks and Spencer still dependents on
the Mega store. If Marks and Spencer doesn't change itself then there is risk of losing their
reputation.

Strength and (Recica and et.al, 2019.)Weakness interrelated to external macro factors.
Strengths :
 Stability of United Kingdom government is one of the biggest strength of Marks and
Spencer because of that they don't have the need to change/modify their policy and
structure because of change in government.
 Global Presence and operating worldwide which deals in more than 400 variety of
products with around 1450 outlets . It means the company is not dependent on any singles
country, which means the economical disturbance in the economic of a single country
wont affect the business activities of Marks and Spencer more.
 Marks and Spencer has won various awards in being environmental impact. The company
mostly deals in environment friendly products, the company also contribute in CSR
scheme, which create a positive impact of the company on the consumers.
 The company is having the strict policy of data protection. The company doesn't provide
any information to the third party of the customers as well as the employees, which
protect the company from many legal lawsuits.
 The Increase of e-commerce and development in new technology for shopping has
increase the revenue generation of the company
Weakness :
 The political issues between the United Kingdom and European Union that lead to the
Exit of UK from EU. No longer being the part of free trade agreement the sourcing cost
of products has increased.
 The bad publicity of the company as non trendy and non fashionable had a negative
social reviews. This decrease the interest of new generation in the company.
 Marks and Spencer is facing lots of trouble with the local retailer as the cost of the
products are increased and the economy is not stable due to brexit and the company is
mostly dependent on United Kingdoms market.
 Marks and Spencer Still uses the Tradition aspects of technology, that eventually increase
the cost of products whereas the competitors are updated with their technology.
 Marks and Spencer are having many legal law suit against them as the company voluted
health and protection act, taxation fraud and financial disputes with landlords.

CONCLUSION
From the above research conducted, it can be summarised that the environment
surrounding the operational environment of business affect the various business activities a lot.
This report also explained the various internal as well as the external factors affecting the
company Marks and Spencer through Pestel analysis and Swot analysis. Moreover this report
discussed briefly about all the interrelation of the various functional departments of Marks and
Spencer company and its significance. It will also present the Swot and Pestle analysis. Lastly,
this report will discuss about the macro factors interrelation with the Strength and Weakness of
the company.

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