Business and Business Environment: A Case Study of Marks & Spencer

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Business and Business Environment
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Table of Contents
Introduction....................................................................................................................................3
Section 1..........................................................................................................................................4
Section 2..........................................................................................................................................7
Conclusion....................................................................................................................................11
Bibliography.................................................................................................................................12
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Introduction
The aim of this study is to provide a brief understanding of the business environments of
different sectors. The study consists of four different sections, which helps to understand the
business environment from different aspects. The impact of the macro environment on the
business is also analysed followed by the strength and weakness of the business. The
analysis is performed on Marks & Spencer’s.
Marks & Spencer’s is a British multinational retail company. Headquarter of this company
is located at Westminster in London. The company specialises the production of luxury
food, clothing, and home products. The company is currently listed at London Stock
Exchange (Marksandspencer.com. 2019).
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Section 1
LO 1 (P1, P2, M1)
Analyse how the structure, size, and scope of different organisations link to the
business objectives and product and services offered by the organisation.
There are three different types of organisation, which includes public, private and voluntary
sectors.
Public sector: The sectors, which provide the products that, are highly required but do not
aim to generate profits are known as public sectors. The funding of these organisations is
generally collected from taxation from individuals. For example, the local authorities of the
UK are responsible for the investments and maintenance of the infrastructure. Public sectors
often collaborate with the private sectors to improve their services.
Secret Intelligence Service of the UK is a public sector, which is also known as MI6. The
sector deals with the national the security of UK by analysing human intelligence. The
sector was established in 1909 by the secret service bureau of the United Kingdom. The size
of the company is medium as they have 3500 employees in the present (Sis.gov.uk. 2019).
The mission of this company is to work secretly and gather information secretly that will
help to keep the UK safe and prosperous. The company collect information from a foreign
country and use that for protecting the people of the UK. The company operates its works
secretly and the medium size of this company has helped to maintain the secrecy. The legal
structure of this organisation is
Private sectors: This organisation provides services and products to customers with the aim
of generating revenues. The individual or a group of people establishes this kind of
organisation and the government does not regulate these sectors. There are multiple numbers
of legal structures that are used by the private sectors such as partnership, sole trader and
incorporated company and others.
Marks & Spencer’s is an example of the private sector. The mission of this company is to
make products of desirable quality that can be easily accessed by everyone. The company
operates its business in the retail industry and has 1010 stores in the UK. The size of this
organisation is large as the company employs around 84939 employees worldwide
(Marksandspencer.com. 2019). The company has the scope of expanding their business in
other countries where the availability of resources is high. In this way, the company will be
able to cut the extra budget and provide the customer's product at an affordable price. The
large size of this company will be helpful for distributing and providing the same services to
other country markets. The owner of this company started a business as a sole trader and
later the company became a public limited company, as the liability of this company is
limited to the shareholder. The company also uses partnerships for promoting their services.
Voluntary sectors: The group of people who have specific purpose forms these
organisations. Voluntary organisations provide their services to the customers for the benefit
of the wider community. The revenues of these organisations are invested back into the
growth of the organisation instead of being divided amongst the workers.
Oxfam is a voluntary sector, which has the mission of handling the root cause of poverty
and creating solutions for preventing it. The legal structure of this company is partnerships,
as it is created by considering 20 independent charitable organisations. The company has
5000 employees and 20000 volunteers worldwide (oxfam.org.uk 2019). The company
currently has 52 charity shops in more than 34 cities. The scope of this company is to
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provide their services to the rural areas of different countries, as the rate of poverty is higher
there. The organisation is large sized so that the company will be able to attract more
volunteers and increase its area of operation
LO 2 (P3, M2)
Analyse the advantages and disadvantages of interrelationships between organisational
functions and the impact that can have upon organisational structure.
The interrelation between marketing and other departments
The marketing department is responsible for the promotional working operations of a
company. The department interrelates with the finance department to plan such effective
strategies that are cost effective. The finance department of this company manages the cash
flow of the company so the collaboration has helped the department to keep the record of
the investments on the promotional activities. The ratio analysis is an essential part to track
the growth of the company that is performed by the help of these two departments
(Weygandt et al., 2015). The interrelation between the marketing and logistics department
of the company is essential for the development of products and the management of the
supply chain. The employees of the logistics department monitor the feedbacks of the
customers and handle the queries of the customers so that they are more familiar with the
demands of customers. The marketing department works closely with this department to
develop strategies to address the needs of customers. Marketing department works closely
with the Human resource department to plan the recruitment strategies in a way that will
be helpful for promoting the brand name of the company.
List of Advantages and Disadvantages
Advantages Disadvantages
 The collaboration of the marketing
and finance department has helped
M&S to achieve the cost of effective
promotional strategies. The finance
department also have been able to
understand how the money is being
spent that lowers the chances of
misconception
 The interrelationship between the
marketing and the logistics
department has been beneficial for
Marks & Spencer’s as they have
been able to achieve the
development of realistic promises of
the fulfilment of the orders by
using the Just in time process. This
interrelation has contributed to
making the customers happy
(Nakano, 2015)
 The interrelation between the
marketing and human resource
 The interrelationship has also
increased the chances of rising
conflicts in the company that affects
the working process of the company
(Muscio and Vallanti, 2014)
 The marketing department pressurises
the other department for increasing
the productivity and capacity that is
negatively influencing the product
quality of the company
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department has played an essential
role in adding human value to the
brand. Employee satisfaction has
increased the demand for joining this
company
Table 1: Advantages and disadvantages of the interrelationship between functions
(Source: created by the learner)
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Section 2
LO 3 (P4, M3)
Apply appropriately the PESTLE model to support a detailed analysis of the macro
environment within an organisation.
There are macro environmental factors, which influences the business environment of Marks &
Spencer’s. The macro factors are external factors and the PESTLE framework is used to analyze
these factors.
The PESTLE analysis of Marks & Spencer’s
Elements Description
Political The political factors leave a negative
impact on the business environment of the
company M&S. The decision of the British
government on cancelling the membership
of the European Union has shaken the
political stability of the country. The
company will not be able to avail the
facilities of the trade bloc. The company
will lose the opportunity of expanding their
business in the other member countries of
this trade bloc. The political instability will
also disrupt the business process of the
company in the domestic country as new
rules and legislation will be published. The
retail industries of the UK are already
facing multiple challenges due to Brexit as
5500 people of the UK lost the job. The
overheads will also be rising. As a result,
the company will not be able to maintain
employee retention that will create a
negative brand image.
Economic According to recent reports, United
Kingdom has gained the 3rd position among
all the countries in the world. The economy
of this country is market-oriented and
highly developed. The company has earned
revenues of 102 billion pounds as of 2018.
The company also has opened 300 new
stores in the UK. Most of the people of this
country are known for leading the luxury
lifestyle. The company is a luxury product
provider so that they have a chance of
earning a loyal customer base. It is said,
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that the Brexit will influence the economy
of the company, as the unemployment rate
will increase due to it. The price of the
commodities will go up so that the company
may have to foresee a lower amount of
customer’s footfalls in their stores.
Social The country is one of the highly populated
countries. The population of this country is
around 66 million as of 2019 (Ons.gov.uk.
2019). The company has the chances to
attract teenager customers by providing
them with unique products. M&S has the
chances of generating more revenues by
increasing the sales of the latest products.
The company can also expand their
business in other regions of this country
and position their products based on the
chosen demographic segments. The
demands of the customers vary according to
the region so the company will be able to
introduce new product lines based on the
demands.
Technological According to a report, the teenagers of the
British are the extreme users of the internet
in the whole world. This clarifies that the
company has the opportunities of attracting
customers and build the customer base by
taking the help of social media marketing.
Teenagers are more likely to shop on the
internet. The online stores of this company
are highly developed so it will be able to
generate online customers. The concept of
the R&D technology is popular in the UK
so that the company will be able to develop
its infrastructure with the help of this
technology. The latest technological trends
in the UK has been beneficial for the
company as this company has been able to
provide access to 2000 and more enterprises
with the help of live network
(corporate.marksandspencer.com, 2019).
The brand has also developed a new
technological operating model and
transformed the previous models by
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adopting digital expertise. As a result, the
technological roles of this company will
transfer under TUPE.
Legal The legal factors leave a major impact on
the business environment of this company.
The employment and consumer legislation
empower the customers and employees to
fight back against any unfair trade or
treatment. The employment laws such as
Equity act 2010, working time regulations
act and other acts protect the right of the
employees in the workplace (Conley, 2014).
The health and safety act is responsible for
protecting the rights of the consumers of
the UK. Any means of violation will leave a
negative impact on the business of M&S.
The other acts such as copyrights acts are
beneficial for the company as these acts
give the rights to take actions against the
copying of products for commercial use.
Environmental The availability of renewable energy
resources is more than any other country.
The company will be able to reduce their
extra expenditures by using renewable
energy resources. The company has been
rewarded by the Freight Transformation
Association for contributing to the
reduction of the carbon emission
(foodmanufacture.co.uk. 2016). The
wastages will also be less. The company
has the chances of expanding their business
and availing different facilities by operating
their business in an environmentally
friendly. The biodegradable packaging and
recycling of goods have helped the
company to earn appraisal from FTA for
reducing the uses of airfreight product. The
company also demonstrates environmental
sustainability.
Table 2: PESTLE analysis of Marks & Spencer’s
(Source: created by the learner)
LO 4 (P5, P6, M4)
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Determine the internal strengths and weaknesses of specific businesses and explain
their interrelationship with external macro factors.
SWOT analysis of M&S
Strength
 The brand has global recognition and
clear brand image worldwide
 The brand has more than 1000
stores in the UK and employs
around 84000 worldwide
 Marks & Spencer’s has differentiated
its products from other brands as
luxury products
 The company has stores worldwide
 This company collaborates with the
popular designers that have helped
them to attract customers
 The company has the multichannel
existence and offers the franchising
offers
 The company has been able to
achieve employee satisfaction by
their high-quality human resource
management
Weakness
 The company only manufactures
luxury products
 The company has inefficiently
penetrated some foreign markets
 The international distribution chain of
this company is managed inefficiently
 The international market share is
limited as this brand has achieved bad
publicity as non-trendy stores
 The brand has not taken any initiative
to protect their products from being
copied
Opportunities
 The company has the opportunity to
increasing their sells by developing
its official website
 M&S can conduct research on
targeting new market segments based
on the income of the customers that
will unlock opportunities for gaining
new customers
 The brand has the opportunity of
expanding their business in the
foreign markets by developing its
supply chain infrastructure
 The company also has the chances of
launching new traditional design
clothes and other products by
conducting research on the respective
country’s traditions
Threat
 Marks & Spencer’s has big brands
such as H&M, ASDA, and Tesco as
their competitors. This poses the
threat of losing market share
(Senftleben et al., 2014)
 The company is a global retailer so
that the company has the threat of
being negatively influenced by the
political and legislation of that
country.
 The poor management of the supply
chain in international marketing is
another threat to the company as the
company may foresee loss.
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Table 3: SWOT analysis of Marks & Spencer’s
(Source: created by the learner)
The interrelation between the external and internal factors
The political factors of the UK such as Brexit have increased the rate of unemployment in
the UK that poses a threat for the company, as the buying behaviour of customers will be
affected by unemployment. The company has more than 1000 stores in the UK and the
population of the UK is high so that the company will be able to handle the sudden increase
in demands for any product (Schaltegger and Burritt, 2017). The company has adopted a
new technology model and developed their technological infrastructure that opens the
opportunity of growing the online business and grab the market share online. The violation
of legislation will pose a greater threat to the company as the business environment of this
will be negatively influenced. The copyright acts will help the company to protect its
authentic products. This will unlock new opportunities, as the company will be able to earn
the trust of customers and avoid the causes of bad publicity.
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Conclusion
The study concludes that the business environment of a company depends on multiple
different factors. The sizes, scopes of different organisations are discussed. The
interrelationship between different departments is discussed here followed by the
advantages and disadvantages of the interrelations. Different frameworks are used for
analysing the macro and microenvironments of the company. The discussion on the relation
between these two environments is included in this study for providing a better
understanding. Moreover, the study shows that the retail company Marks & Spencer’s is a
private sector and the company has the chances of unlocking new opportunities by planning
strategies based on the research of external and internal factors.
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