Marks & Spencer: Impact of Internal & External Factors on Business

This report provides a comprehensive analysis of the internal and external factors impacting Marks and Spencer (M&S) Group, a multinational retailer headquartered in London. It employs SWOT and PESTLE analyses to evaluate the strengths, weaknesses, opportunities, and threats, as well as the political, economic, social, technological, environmental, and legal influences on the company. The report highlights M&S's brand image and diverse workforce as strengths, while weaknesses include challenges in foreign markets and supply chain scalability. Opportunities for expansion in China and India, along with online development, are identified. Threats include competition from other retailers and the need to adapt to changing market dynamics. The PESTLE analysis examines the impact of political factors like EU trade agreements, economic factors such as inflation rates, social factors including changing consumer preferences, technological advancements in retail, environmental concerns, and legal compliance. The report also discusses how M&S impacts the external environment, emphasizing the importance of strategic planning and adaptation to maintain a competitive advantage. This document is available on Desklib, a platform offering a wide range of study resources for students.

Business in Practice
INTRODUCTION
Internal and external factors are the forces which affect
the business organisation. The internal environment is directly
linked with the business organisation. While the external factors
are outside the organisation and impact the operations, decision-
making, profitability and many more in the organisation.
The report covers the impact of internal and external
factors in reference to Mark and Spencer Group. It is
multinational retailer, headquartered in London, England. Report
describes both internal and external factors through SWOT and
PESTLE analysis and how those factors affect the business
organisation. It also reflects how the business organisation and
its operations impact the external environment.
Mark and Spencer Group is multinational retailer, headquartered in London,
England. It is engaged in selling the clothes, food product and household
products.
EXTERNAL AND INTERNAL FACTORS
AFFECTING THE ORGANIZATION
The internal and external factors which affects
the business or Marks and Spencer are described with
the help of SWOT and PESTEL analysis and with the
help of this the main aim of the organization will be
achieved which will help in analyzing what are the
factors which have been affecting the business both
internally and externally

SWOT ANALYSIS
Strengths: Marks and Spencer holds clear brand
image which helps the company in analyzing that
the brand has value in the market and that it helps
in promoting effectively its products and services
to the customers. Marks and Spencer has its own
labels under which it sells the products and
services in the market. The organization makes
and creates innovative ways through which the
company is able to reach to the customers and
provide them the products and services as per
their requirements and needs. There is diverse
range of employees within Marks and Spencer
which becomes its biggest weakness and through
Weaknesses
— Marks and Spencer is unable to
penetrate in the foreign markets and this has
created major weakness to the organization. Even
if Marks and Spencer tries to reach out to the
customers at effective scales and fulfills their
needs and demands then also the company is
facing problems with lower satisfaction levels of
the customers which is due to the return policy
which the company has created. The Biggest
weakness which Marks and Spencer faces is the
poor scalability of the supply chain in which the
company is trying to provide the products and
services online but the company is failing to
Opportunities — Marks and Spencer should
involve new segments into the products and
services lines so that the company is able to
provide various and vast sources of products in
which the customers are able to create value for
the products which are being produced at large
scale. There are future opportunities which
should be paid attention to by Marks and Spencer
through which they can expand their brand into
China and India. Marks and Spencer can also
develop their website so that the customers can
buy the products and services through online
platforms and the brand value is being effectively
Threats — Due to high competition in the
market, Marks and Spencer faces high criticism
and competition within the market structure. This
becomes problem for the Marks and Spencer as
there are various competitors in the market. The
competitors are as follows — Sainsbury, GAP,
Next, Morrison, Zara etc. This creates threat in
market for Marks and Spencer and through this
the main aim that is the goal to be achieved is
lost. This is the major threat which the
organization or business is facing right now.
Apart from this, Marks and Spencer has been
shutting its stores in the UK, France and China.

PESTEL ANALYSIS
Political Factors: – Marks and Spencer has had the benefits of EU’s trade
agreements which further led to decrease in sourcing the costs. Marks and
Spencer has the large benefit of the EU markets where the products and service
travel around the world without restrictions and tariffs. These are the aspects
which are to be taken care of in the political factors whenever considered for
Marks and Spencer. Marks and Spencer believes that it is very important that
the government should know what the important aspects through which all
possible facts are and information is considered effectively and at large scale.Economic Factors: Economic factors include inflation rates, foreign exchange
rates, economic growth patterns etc. These are the factors which have been
considered as important in analyzing and knowing more about the economic
scales. This has helped the company in verifying and denoting the major
aspects which helps in delivering the positive impact to the society and the
economy through the business. Fiscal and monetary policies of UK are helpful
in denoting the financial structure which is contributing towards the business of
Marks and Spencer within the economy. This helps in creating the value
through which the profits and losses are recognized.
Social Factors: Society culture leads a wide impact on the business operations.
The attitude and belongingness play a great role while designing the marketing
message. Marks and Spencer is not a new name in the retail segment. It is the
trusted name among the youth, elders and among everyone. The new and
trendy retail chain comes every year, it impacts M&S to become less trendy
brand for consumers and mainly for younger customers. M&S appeal the
different set of market in terms of social class and demographic. The rapid
increase in consumption of ready-made meals all over the world, will help it in
capturing huge market base as it one of the top multinational provider of ready-
made meals.
For external factors to be analyzed, PESTEL Analysis is being performed which helps in
creating value and helps in knowing what are the major changes in the business which
have taken place. PESTEL Analysis is explained as below

Technological Factors: The advancement in technology leads the retail store in
changing and adapting the new technology. The self-check out points has really
taken the current industry. Marks and Spencer has also introduced the self-
check points and planning to increase the usage of artificial intelligence for the
future prospect. It also has a strong e-commerce presence and offers all most all
goods from clothing to home products. They have taken a traditional approach
to online shopping, they do not deliver food items like other food stores. Marks
and Spencer has also announced the Technology Transformation Programmed;
Environment Factors: Mark and Spencer promote themselves as a luxury brand,
and due to it they are highly concerned about the environmental effects. They
followed the concept of sustainable retail industry and cares about their
production process. It also sells fair trade products. It incurs less production
cost and enable environment friendly production methods. Marks and Spencer
also have their own green policy which refer to Plan A. They work on variety
of areas like; removing the fats from food, the reduction in use of energy and
fair vale of trade.
Legal Factors: The legal formalities and legislations is ever-changing, in order
to keep updated with current laws and legislations Marks and Spencer conduct
the training programed. In his journey till now it is involved in legal disputes.
At that time, it becomes hard to hold it images in long existence. The company
failed to understand the entire issue and covered under the several charges
under the Healthy and Safety at Work Act 1974. they are fine with 500,000
pounds for each issue. That why it continuously keeps conducting the training
on health and safety factors, in order to keep updated themselves with laws
regarding those factors.

Different ways in which organisation can impact on
external environment
External environment refers to factors which are present
outside the organisation and managers of company should
make plans to control these factors. It is important to
identify factors that can affect performance of business
and make strategies so that goals and objectives of
organisation can be accomplished. There are different
ways in which organisation can impact on external
environment like, managers of Marks and Spencer is
identifying market situation and making plans or
strategies accordingly. this helps in gaining competitive
advantage and more revenue can be generated
(Baldassarre and et.al., 2020).
External environment consists of political, economic,
social, technological, legal and environmental factor.
Managers of Marks and Spencer are facing these factors
and make plans to generate more revenue. Nowadays,
competition is increasing and it is important to face
challenges and make better plans than competitors so
that business can run smoothly and goals & objectives
of company can be accomplished. An organisation has
to face challenges and issues to earn profit and to
increase sales of firm. It is the responsibility of
managers to determine factors which can affect
performance of company. In this digital world,
managers are using different ways to face challenges
and make plans so that business can run smoothly and
profit can be earned.

Political factor
Impact of organisation on Political factor
this factor is present outside the organisation and affect
performance of company. It includes, tariff barriers, trade
restriction, tax policy and other elements which affect
working of an organisation. To face this factor manager of
Marks and Spencer utilise benefits of large EU market. It is
the area where Marks and Spencer can sell its products
freely and there is nor trade restriction. Government has
made policies and procedures which companies has to
follow to do business like, they have to pay tax and for
trading in other countries they have to some amount
(Caldera, Desha and Dawes, 2018).
So, managers of marks and spencer use
benefits of EC’S trade agreements and it
lead to decrease in sourcing cost. They are
selling their product in the country where
there is no trade restriction, tariff barriers
and tax issues. Mangers are making plans
and strategies in advance. Political factor is
controlled by government and managers
make plans so that goals and objectives can
be accomplished.

Economic factor
It means factors that affect economy. It includes law, policies, wages and activities which are
controlled by the government. It is the responsibility of managers of an organisation to apply proper
laws and make policies after analysing market situation so that goals and objectives can be
accomplished. Nowadays, people want good quality product at low prices. Managers of marks and
spencer are providing good quality products to customers and prices are low as compare to
competitors (Huntington Gordon and Plamping, 2018). This is a strategy which is used by managers
to attract people and this helps in increasing profit of company. When profit of organisation is
increased then it improves overall productivity and helps in economic growth of country. There are
many challenges which an organisation has to face and find creative solutions so that issues can be
solved.
Managers can make better plans than competitors and focus on accomplishing target of organisation.
Economic factor includes interest rate which influences investment value in the future. It is essential to
make plans for future so that goals can be accomplished.

Social factor- social factor means things that are affecting lifestyle of people. It
includes, wealth, religion, buying habit of customer, education level,
population density etc. These factor affect working of company. Managers of
an organisation should determine choice of customer and on the basis of that
plans should be made. Managers of marks and spencer are identifying trends in
market and determine choice of customer so that product can be made
accordingly (Schallmo, Williams and Boardman, 2020). This helps in
satisfying need of customer and better plans can be made for future. In
different country people are having different choices and it is essential to focus
on need of people. Marks and spencer is one of the fastest growing company
and they are providing good quality products to customers. This is beneficial in
generating more profit and increase sales of organisation. If company want to
expand their business ten they have to identify choice of people, lifestyle in
other country, culture followed by people etc. After analysing all these factors
planning should be done and it helps in taking decision.
Social factor
social factor means things that are affecting lifestyle of
people. It includes, wealth, religion, buying habit of customer,
education level, population density etc. These factor affect
working of company. Managers of an organisation should
determine choice of customer and on the basis of that plans
should be made. Managers of marks and spencer are
identifying trends in market and determine choice of customer
so that product can be made accordingly (Schallmo, Williams
and Boardman, 2020). This helps in satisfying need of
customer and better plans can be made for future. In different
country people are having different choices and it is essential
to focus on need of people.
Marks and spencer is one of the fastest growing company
and they are providing good quality products to customers.
This is beneficial in generating more profit and increase
sales of organisation. If company want to expand their
business ten they have to identify choice of people,
lifestyle in other country, culture followed by people etc.
After analysing all these factors planning should be done
and it helps in taking decision.

Technological factor
this factor affects performance of company because technology is changing day by day and it is
essential to take necessary steps so that more profit can be earned. Nowadays, competition is
increasing and to gain competitive advantage in market company should use new techniques so that
better products can be made. This helps in achieving targets and increase overall productivity of firm
(Zellweger, 2017). Managers of marks and spencer identify market situation and apply new
technology like, social media tools for promotion and it helps in determining choice of customer.
Nowadays, people are more active on social networking sites and share their views regarding what
type of product they want, price they can spend to buy a particular product and many other things.
This is beneficial for mangers because they can make plans as per the choice of customers and more
revenue can be generated. It is essential to apply new techniques and tools to identify market trends
and goals of company can be accomplished. It is the responsibility of managers to make plans for
determining choice of people and satisfy their needs. Technology plays a crucial role in increasing
profit of organisation and helps in achieving target.

Legal factor- it means to apply rules and
regulations in an organisation so that work
can be completed on time. It is important to
make policies and procedures so that
employees can work properly. This is a
factor which affect performance of
company. To face this challenge manager of
marks and spencer apply rules and
regulations within the organisation. This is
an important factor which affect
performance of company because if rules
and regulations are not applied within the
organisation then it creates negative
environment and employees are not
satisfied. Different countries has different
laws, rules and regulations, polices and
procedures. It is difficult for managers to
apply rules and regulations (Palo, Åkesson
and Löfberg, 2019).
So, to face this issue manager of marks and
spencer conduct market analysis and
determine policies and procedures, laws,
rules and regulations which is applied in
another country. This helps in making better
plans and goals can be accomplished. It is
essential to apply proper laws within the
company so that employees can work
efficiently.

Environmental factor- environmental factor includes, temperature, amount of sunlight, climate,
weather etc. This factor affects performance of company because in different country weather is
different. It is not easy for an organisation to run business smoothly in other country. To face this
issue manager of marks and spencer conduct market analysis and determine weather conditions.
After analysing market situation plans are made for making product (Lüdeke-Freund and Dembek,
2017). To protect environment, marks and spencer are not using plastic bags and do not use
harmful chemicals for making product. They are also taking care of pollution and did not harm
people living in the society. Marks and spencer is one of the well-known company which provides
good quality product and they are making product which can be reused or recycled. Resources are
used efficiently because there is scarcity of resources.
External environment affects overall performance of
an organisation and it is important to make plans or
strategies so that goals and objectives can be
accomplished. It is the responsibility of manager to
find solution of problem and make plans which is
beneficial for growth and development of company.
It is important to face external factors and run
business smoothly. Competition is increasing
nowadays and to gain competitive advantage it is
important to provide good quality products to
customers and satisfy need of people (Karpenko and
et.al., 2019).

CONCLUSION
From the above discussion it can be concluded that, it is essential for an organisation to identify
internal and external factors that affect performance of company. Internal and external factors are
affecting performance of an organisation. Internal analysis which include SWOT analysis (strength,
weakness, opportunity and threat) has been discussed. External analysis include, PESTLE
(political, economic, social, technological, legal, technological and environmental) has been
described. These factors affect working of an organisation. Further, different ways in which Marks
and spencer has impact on external environment has been discussed.