Business Environment Analysis: Marks and Spencer's Report (BUS101)

This report provides a comprehensive analysis of the business environment of Marks and Spencer (M&S), a leading retail company in the UK. The introduction sets the context by defining the business environment and highlighting key factors such as customers, suppliers, and workplace culture. The main body delves into the impact of business, culture, and the natural environment on M&S, emphasizing organizational culture, economic factors, and non-economic influences like cultural, technological, and legal aspects. The report examines the influence of economic factors like tax rates and unemployment on business operations and customer purchasing behavior. Furthermore, it explores the role of cultural and technological factors in M&S's success. The report also incorporates PESTEL and SWOT analyses to evaluate internal and external factors affecting M&S. The conclusion summarizes the key findings, and references are provided for further reading. This report offers valuable insights into M&S's strategic approach to navigating the complexities of the contemporary business landscape.

Contemporary Business
Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................4
Impact of Business, Culture and Natural Environment...............................................................4
PESTEL and SWOT Analysis.....................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
A business environment is basically a set of many business aspects. The business
environment is an environment where a business conduct various business related activities to
gain high profit in the respective market. There are many factors has included in a business
environment. Customers, products, suppliers, employees, management, owner, government,
climate change, natural environment, workplace culture etc. are some major factors within a
business environment. Currently each business or company is trying to make or develop a happy
and healthy environment in their business environment to remove different conflicts within daily
business operations. This type of environments it too necessary to build an effective relationship
between employer and employees. Top-level management of a business always need to remove
such elements from their business environment which can negatively impact it. It is really too
necessary task to management to run their business always on progressive path. This report
discusses business environment of Marks and Spencer (M&S).
Marks and Spencer, it is one of the leading retail companies in the United Kingdom,
which currently has very large customer base in UK’s retail industry. Currently it has an
effective business expansion plan, because it is very successful in expanding its business
operations in different countries. It has very wide range of retail products and services, in which
most people in this country are really like to buy products and services from M&S (Alotaibi,
2016). The top-level management has very clear vision that, the brand will achieve very large
market share in international retail industry in upcoming time. Currently other retail companies
of the United Kingdom, like; Tesco, ASDA and Sainsbury etc. are giving very tough competition
to this company. But with support of its product differentiate strategy, it is gaining huge
competitive advantage in the market.
The management of company always takes various decisions to maintain a positive work
culture in their business environment. Sometimes it faces some errors in their workplace, but it
always deals with those errors with support of their problem solving capabilities. On the other
side, natural environment is highly influencing people behaviour in this company, because
existing management is always responsible to follow all legal and ethical environmental
consideration. The management takes different decisions to avoid such activities in their business

operations which can harm natural environment. Many times company provides huge fund as a
charity or donation to different environment protection organisations. There is business, culture
and natural environment etc. are completely shape the people behaviour in M&S.
MAIN BODY
Impact of Business, Culture and Natural Environment
Business Environment
Organization culture refers as a personality of the business which encompasses
assumption, values, regulati0n and its mission. It is crucial for organization because it supports to
draw a positive portray of the business. It is not only supporting business to analyse business
opportunities and risk but also builds good relationship between organization and staff. A
successful organization culture helps business to lead positive change around the company which
raises brand positioning in global market (Nankervis, 2016). A well-organized culture of
organization introduces various benefits within business such as maintains wellbeing of staff
within workplace as result gets high productivity within company. It leads self-actualization in
employees for their job so they help company to meet their mission over the period. Organization
supports business to determine change which can affect revenue of company. A well-organized
organization culture supports business to copying with changes which occurs due to ongoing
changes in business environment i.e. technological changes, demographical changes, political
changes, emerging trends and environ mental changes. Where it supports organization to lead
changes for dealing with these changes.
An organization which has good culture then manager can easy to motivate employee to
organize skill and development class. Even staff also give high participation in the class for
improving their skills rather resist for attending classes. Business environment supports company
to organize strategic plan which can uplift brand positioning and generate high revenue within
company. There is an example to understand concept of the business environment. For example,
business environment helps organization to analyse internal and external business environment
so can easy to identify strengths and weaknesses. Based on the analysing parameter can measure
that which plan can overcome weaknesses and threats by organization. On the other hand,

opportunities and strength helps to create SMART objectives which assist to generate high
revenue within business. Good organization culture supports management to inspire employee to
give high performance as compared offering money as rewards to motivate them. As well it
helps organisation to integrate overall employees to increase their shared value towards common
defined aim of the business for accomplishing their Smart objectives.
A good organization culture assists to maintain productive working environment of the
workplace and improves quality of working performance while coordinate with ethics and
morals. It also supports manager to become good leader and understand employee’s psychology
for job responsibility. Marks and Spencer is major British multination retailer company which
operates cross the world and offers its products and services to the customer (Finnegan, 2018).
So, company understand role of culture, power and politics within organization. Management of
organization organizes strategic plan for determining power, culture and politics. M&S has
vision to gain high brand positioning and offers high quality products and services so that easy to
generate high profit margin on their products. The major concept of business organization to
evaluate overall factors which is important to implement decision and enhance quality of its
action effectively. Marks & Spencer has high product portfolio i.e. clothing, homewares,
furniture and groceries but have to face competition. The reason behind is that most of the
companies like Aldi, Lidl, Morrison, Waitrose, Primark, Tesco and Sainsbury retails similar
products as like M&S. so, it become more difficult for company to become cost leader in market
and generates higher profit margin on products.
Economic environment
Economic environment can be defined as the sets of economic factors which gives impact
on economic infrastructure and purchasing behaviours. It encompasses overall macro-
environmental factors i.e. tax rate, unemployment rate and changes in disposable income which
affects business operations. So, it is essential for company to identify overall factors which can
expand its business in global market. It also supports to gain high profit margin on products.
Generally, economic factors are not controlled by company that directly reduces power of
business in market (Hussainy, Tariq and Khan, 2017). It helps company to identify market
opportunities by implementing effective marketing strategies which can boost purchasing
behaviour of customers. Environmental factors are not only givers impact on financial

performance of company but also declines growth opportunities in the local and international
market. Currently retail companies get negative impact of economic factors in UK. Due to Brexit
occurs change in policies, tax rate, trade relation, disposable income of people, inflation rate
overall reduces cash liquidity in retail market. Due to high cost of employment rate and shortage
of skilled employees in the market declines turnover of employees within workplace that directly
gives impact on organization performance.
Such kind changes directly lead change in buying behaviour of users. The reason behind
is that they avoid to expend money on their lifestyle. Due to the reason gets impact on
company’s selling decision. Global economy impacted in 2008 during recession period where
most of SME unable to sustain their business due to high losses in economy. To re-establish
business needs high investment for continue ongoing operations in business market effectively
which is not possible for SME companies. So, it is crucial for Marks and Spencer to examine
economic environment so that can redesign products on the basis of current and forecasting
situation for improving profit margin. In addition, organization can easy to influence purchasing
behaviour of customers by offering desirable products that automatically wide growth of
economy. Such kind changes can help company to sustain in market and upgrade brand
positioning by enhancing market share of certain products (Passaro and Salomone, 2017).
Economic factors play essential within organization because it helps to improve standard quality
of products by determining economic factors. Banks of UK enhances interest rate of loan which
direct affect profit margin of products while offering products services in UK’s market but
enhance brand image as well.
Non-economic factors
It encompasses cultural, natural, technological, demographical, technological, political
and legal laws affects business performance in retail market. These factors are not only giving
impact on users buying behaviour but also supports to create growth opportunities in business
market. Marks and spencer is famous for giving standard quality products. So, it is crucial to
understand impact of non-economic environment which can apply to improve goods and its
services efficiency in international market (Irtelli, 2018).
Cultural environment

M&S has strong brand power in both markets i.e. local and international market. Due to
good cultural environment has good strategic management within company who helps to
implement better decision that can lead profitable outcomes. Manger and leader of company
coordinate to each other before implementing decision which influences effectiveness of
decision by desiring that they will receive value added results within business. M&S has aim to
keep employees happy from the job so they give value to company as like family which
automatically enhance their efforts towards common goal of company. To maintain organization
culture offers employment policies like health insurance policy, compensation policy and job
security policy to staff. In addition, manager gives friendly working environment and open
communication so that any type of crisis doesn’t take place in company. Manager offers flexible
working hours’ facilities as well festival leaves. Company involves performance management
system to analyse employee’s performance while performing task at workplace. Based on the
evaluation parameter introduces training and development classes by manager for the staff.
where leader plays great role because they promote employee to identify their weakness and
improves their skills which improve their working personality and efficiency as well. Thus,
company prepares them to comply in each situation either current or future (Kozłowski and
Kuchciak, 2019). Technology performance is higher in UK which helps organization to access
its customer in minimum time and aware them about new products or it’s services. Organization
has high stability in retail market because it has high brand image and wide product line as well.
It gives power of organization explore its products and services in global market. Apart from
this, organization includes customer relationship management (CRM) which supports company
to understand customer attitude for products and its services that makes easier for company to
fulfil demand f users in minimum time. By the above discussion can be interpreted that M&S has
well-organized organization culture which supports to achieve long-term and short-goal over the
period.
Natural environment
Up to 70% retail industries affects through weather of UK because it leads loss in
economic infrastructure. For example, climate change which impacts on customer buying
behaviour and performance of business as well. There are fewer resources or capabilities which
is available in the world which organization uses effectively for sustaining in market. to

understand role of climate has a example such as when winter season is there that enhance
purchasing behaviour of customer because they will buy foods in high quality while summer
season declines buying behaviour of customer because they don’t prefer to buy large quantity of
products to think that it will waster within two days or a day. As same concept implements for
employees as well when climate is good automatically improves their selling behaviour at
workplace. Basically, M&S finds optional resource which they can restore and reuse them as per
requirement (Holotiuk and Beimborn, 2017). UK’s government also discloses several policies to
keep climate maintain where organization takes initiatives to introduce sustainable products a d
reusable packaging which builds loyalty of customer on company’s products.
PESTEL and SWOT Analysis
PESTEL and SWOT analytical tools are very supportive to the M&S, because
management can easily find our major internal and external factors of their business
environment. There are PESTEL and SWOT two different tools, in which the first is helpful in
knowing major external factors and the second one is helpful in knowing major internal factors
of business environment. Analysis of business environment factors is too necessary for this
company to make or develop some specific strategies for deal dealing with impact of these
factors. There is factors which has included in these analytical tools are influencing company in
both ways positively and negatively. Factors of both analytical tools has been discussed below;
PESTEL Analysis
Political Factors: Political factors are highly affecting business environment of M&S, because
top-level management of company is always responsible to fulfil those all formalities which has
imposed by the government of United Kingdom on different business. There is taxation is one
major example of political factors, because the company always takes various steps towards
fulfil this taxation formality.
Economic Factors: The Marks and Spencer is able to take huge advantages from economic
factors of the UK, because this country is one of the richest countries in the world (Bashir and
Verma, 2017). That’s why most people in this market place comes from high income groups, so
they can easily afford product and services which this company has offered in market.

Social Factors: Social factors are too favourable to the company in this country. Reason is, most
people of the United Kingdom believes in buying products and services from those companies
which has provided quality products to customers. The M&S is also providing quality products
and services in retail industry, so it has great opportunity to attract lots of customers towards
brand through its excellent product quality.
Technological Factors: These factors can help to company for improving its all over
performance in the UK’s retail industry. Currently those all technological machineries, gadgets,
tools etc. are available in the market of United Kingdom, which if company implement in their
workplace, then it will able to improve its all over performance in the market. There is digital
marketing tool is also an example of technological factors, so company is able to increase its
sales ratio by using this digital marketing tool.
Environmental Factors: Currently environmental factors are highly affecting M&S, because
existing management always need to avoid those all activities and attempts in their business
operations which can negatively impact natural environment. The company is responsible to
adhere and follow all legal and ethical considerations in their business environment which has
passed by local government. It is really necessary task to this company to protect natural
environment.
Legal Factors: The government of United Kingdom has passed different business legislation,
regulations and standards (Kuula and Haapasalo, 2017). The top-level management of M&S
highly need to adhere each business legislation in their daily operations to maintain an ethical
zone in their business environment. There is employment law, contract law, environment act etc.
some major legislations under business law, in which company should adhere each of them.
SWOT Analysis
Strengths: The Marks and Spencer has very large market share in retail industry. Its business
expansion process is also too effective, because currently it has many stores and supermarkets in
different countries. This company has an effective workforce as well.
Weaknesses: Currently supply chain or distribution channel of company is become some poor
now. Many times a customer not able to buy a selected product in company’s stores because of

poor distribution channel. The management should take some productive steps towards
improving existing distribution channel.
Opportunities: It has great opportunity to attract lots of new customers towards brand by
implementing digital marketing tool in their marketing functions. Currently this company still
has opportunity to more expand their business operations by entering the new market segments.
Threats: Currently there is very high completion in the UK’s retail industry, it is the main threat
to company (Roy and Singh, 2017). Many existing retail companies like; Tesco, ASDA,
Sainsbury are giving very tough competition to M&S in retail industry. Many new entrants are
also coming in this industry, so it is another threat to company.
CONCLUSION
It can be concluded that currently different external and internal factors are highly
affecting Marks and Spencer in both ways positively and negatively. However, most external
factors of the company are positively affecting business, because top-level management is easily
able to take huge advantages from these factors. Some major strengths, weaknesses,
opportunities and threats of company also has discussed above through SWOT analytical tool.
Currently this company has very high market reputation in the UK’s retail industry. Local people
really like to purchase products and services in company’s stores and supermarkets, because it
always provides quality products to customers. It still has full opportunity to more expand their
business operations in different market segments. The marketing manager should implement
digital marketing tool in their marketing campaigns to gain effective response from various
market segments. The M&S really has great opportunity to attract lots of new customers towards
brand through digital marketing strategy.
Top-level management of company is highly responsible to take various decisions
towards marinating an ethical and positive work culture in their business environment. if
company always maintain an ethical work culture in their business environment, it will able to
achieve an effective workforce. Reason is, this type of work cultures always give opportunity to
existing people or employees for improving their skills and talent. The management should

adhere each and every legal and ethical considerations in their daily operations. It is necessary to
management for marinating an ethical work culture in their business environment.
On the other side, natural environment always put very high impact on people behaviour
within marks and spencer. Reason is, the management takes various steps towards protecting
natural environment. For example; it always tries to avoid such activities in their business
environment which can negatively affect natural environment. This is really great initiative by
management, because protect natural environment is the first priority of a business or company.
Managers and leaders within company are responsible to never conduct such attempts which can
harm natural environment. When company adhere all business laws within their business
environment, then it will able to build an ethical work culture for their employees. These all
factors will contribute in improving people behaviour within the Marks and Spencer.

REFERENCES
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