Marks & Spencer: Analyzing Internal & External Business Environment

This report provides a comprehensive analysis of the global business environment of Marks and Spencer, focusing on various aspects critical to achieving organizational goals. It begins by discussing different types and purposes of organizations, including public, private, and voluntary sectors, and their legal structures, specifically in the context of Marks and Spencer as a private sector multinational retailer. The report evaluates the size and scope of Marks and Spencer, highlighting its extensive presence in the UK and internationally, and examines how the organizational structure, size, and scope contribute to achieving its objectives. It further explains the relationship between different organizational functions and their alignment with the organization's goals and structure, evaluating the advantages and disadvantages of interrelation between organizational functions and structures. The analysis extends to identifying the positive and negative impacts of the macro environment on Marks and Spencer's business operations, utilizing the PESTLE model for a detailed analysis. The report also conducts an internal and external analysis to identify strengths and weaknesses, interrelating them with external macro factors, and applies SWOT/TOWS analysis to demonstrate their influence on decision-making. The conclusion summarizes the key findings and their implications for Marks and Spencer's strategic direction.

Business and
Business Environment

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1- Discuss different types and purposes of organisations whether they are public, private and
voluntary sectors and also explain their legal structures.............................................................1
P2- Explain the size and scope of the organisation. ....................................................................2
M1- Evaluate the structure, size and scope of the organization to achieve its objectives and
also explain the products and services offered by the firm. ........................................................3
P3- Explain the relationship between different organizational functions and how they are
related to the organization's goals and structure. .......................................................................4
M2- Evaluate the advantages and disadvantages of interrelation between organizational
functions and structures...............................................................................................................4
P4 - Identifying the positive and negative impacts the macro environment has upon business
operations.....................................................................................................................................5
M3 - Apply appropriately the PESTLE model to support a detailed analysis of the macro
environment within an organisation.............................................................................................6
P5 - Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses.............................................................................................................7
P6 - Strengths and weaknesses interrelated with external macro factors....................................9
M4 - Applying appropriately SWOT/TOWS analysis and justifying how they influence
decision-making...........................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Global business environment referred as the environment in different sovereign countries which
affects the decision making on the use of resources and its capabilities(Dede, 2019). The
company has to understand or identify the social environment of the host country where they are
operating to function effectively and efficiently. The company has to adapt the external
environment and take advantage of opportunities offered by the external environment. And
control threats to shape the success of the organisation. The company has to adopt the language
and culture of the host country. The firm can enter into the global market through international
investments and by creating a strategic alliance with a business in other country. It is the best
way for a firm to introduce new markets for their products and invites new customers which
increases the revenue of an organisation. The report discusses the global business environment of
Marks and Spencer to achieve their goals.
MAIN BODY
P1- Discuss different types and purposes of organisations whether they are public, private and
voluntary sectors and also explain their legal structures.
Marks and Spencer is a multinational retailer in the private sector and offers variety of products
to its customers such as home products, food items, footwear, ready-made garments, alcohols,
etc. The firm also sells its products online through various regionalized e-commerce sites. The
purposes or mission of Marks and Spencer are-
 it is the main aim of the organisation to inspire or attracts customers to visit their shops
which increases their sales and leads to huge profit.
 The firm plans to become a sustainable, international, multi-channel retailer which
maintains high level of customer trust and employee engagement(Thal and Shahady,
2018).
 Their mission is to make high-quality products that will attract more customers.
 The company wants to establish itself as a eco-friendly firm to satisfy their customers.
 Their aim is to improve local environments and build a socially connected communities.
 Their aim is to increase collaborations, partnerships and behave frankly with their
customers.

Marks and Spencer has to follow the legal structure to run their business. The firm has to
determines the tax rates, management and paperwork requirements to maintain the smooth
running of their business(Turner, 2022). In their legal structure, there are some factors that need
to be consider-
 Taxes- Marks and Spencer is a partnership firm and their owners has to categorize their
business income as personal income. The firm has to pay the tax rates mentioned for
business and pay different tax rates for their personal incomes. This helps to remove the
tax burden.
 Liability- The owner can separates its liability from their firms and can protect the
personal assets in the event by LLC. The structures of LLC has not recognised by the
federal government but it is recognised by the state government.
 Paperwork- If the owner has to structure their company as a corporation, they has to
submit articles of incorporation and regularly file certain government reports. To start a
business partnership, owner needs to file special paperwork.
 Registration- To start a business enterprise, owner has to register their business in the
state and makes a business structure so that they can apply for an employer identification
number(EIN).
P2- Explain the size and scope of the organisation.
Marks and Spencer has a long history in the UK market. Recently, there are 1037 stores located
in the UK and 472 other stores located around the world. The firm employs approx 70 thousand
people in their stores. The largest shop is at Marble Arch, on Oxford Street in London which is
the largest Marks and Spencer in UK. The scope of the organisation is to-
 to satisfy the individual needs or wants by providing a variety of products on the basis of
online or offline mode.
 Provide training and development courses to their workers which improves their
productivity(Atiku, 2019).
 The organisation has to clearly define their goals to the employees which reduces
misunderstandings.
 The company has to provide better quality and large variety of goods and services at the
right time in the right place which improves the standard of living of people.

 The firm has to employ people in the organisation which reduces the poverty and
unemployment problems in the country.
 By exporting their products to foreign country, it encourages national image and can
participate in international trade fairs and exhibitions which creates an achievement of its
own country around the world(Suriyaprakash, 2018).
 The organisation has to innovate their products by investing in research and development
programs which attracts existing as well as new customers.
 By adopting promotional techniques, the firm can introduce their existing products in to
new markets.
 Establish good relationships with their employees which helps to accomplish their goals.
 The company has to formulate effective marketing strategies which leads to success.
 The firm has to follow the rules, policies and procedures developed by the government.
 Marks and Spencer has to launch or set their main store where they can make the entire
plans for whole stores.
 Needed to make a trade licence that helps to maintain the laws and regulations of another
country for their business.
M1- Evaluate the structure, size and scope of the organization to achieve its objectives and also
explain the products and services offered by the firm.
Marks and Spencer offers a variety of products to its customers such as food, clothing, home
products and financial services also. The firm is providing a best quality of its products and
services with the unique features and sells their products through various e-commerce sites.
Marks and Spencer is a large multinational company and a joint venture partnership firm. The
firm has many advantages as there is little paperwork to file their business and can obtain a
business loan with more than one owner. The organization has the benefit to pay special tax but
they do not has to pay income tax. The scope of the organization is to invest in research and
development programs that gives uniqueness to their products and attracts existing as well as
new customers which leads to increase the revenue (Gogokhia and Berulava, 2021). The firm has
to also invest in training and development programs of their workers which improves their
productivity and performance that results in achievement of organizational goals.

P3- Explain the relationship between different organizational functions and how they are related
to the organization's goals and structure.
The organizational structure discuss the relationship and interactions between the parts of the
firm and also explains that how certain activities are directed to accomplish organizational goals.
If the firm is not setting their functions and structure properly, it will influence each other. The
organization does various functions which accomplish their objectives and these are discussed
below-
 Separates departments- The firm separates their different functions to different
departments which reports to different managers or leaders. Through this function, the
organization has the benefit of clear lines of authority and the decision makers in their
departments who sets the mission or aim for their employees. This function helps the
employees to focus or concentrate on their goals(Donald, 2022).
 Divides different functions into different branches- Marks and Spencer has to divide
their functions across different branches which benefits that each division of the firm has
to carry their functions properly which accomplish their objectives. The firm has to focus
on that there is no duplication or repetition of functions across their branches.
 Provides flexibility- Through the functions of the organization, it provides a flexibility to
the employees and they can work in their function-based departments. It also gives an
advantage to the employees that they can assigned to projects under different leaders and
operates different functions in the organization.
 Visualize with organizational charts- The firm has to visualize their employees with the
organizational charts which will reduce the trouble of the employees and improves the
management efficiency. The company has to make a well-designed chart which will
make the best decisions and divides the operating functions. It also shows the lines of
authority and control which runs between different departments and their levels of
management.
M2- Evaluate the advantages and disadvantages of interrelation between organizational functions
and structures.
While interrelating organizational functions with the organizational structures, it gives many
advantages and disadvantages to the business. There is an interrelation of sales and marketing, as
the business has to increase their sales, they has to provide better marketing strategies in the

market. There is also an interrelation between finance and production or expansion. If the firm is
investing in research and development programs, this would expand their business and leads to
success. By interrelating organizational functions with the organizational structures, it provides
an opportunity to the firm to achieve its objectives. Through this, the firm can operate its
function smoothly and in a proper way to accomplish organizational goals(Saviotti, 2018).
P4 - Identifying the positive and negative impacts the macro environment has upon business
operations.
Various macro environmental factors can impact business operations positively or adversely. To
analyse these factors and understand the market dynamics PESTLE analysis can be used. This
framework is imperative for companies like M&S and help them to make their business better. In
this analysis organisations evaluate various external factors like political, social, economical,
technological and legal factors which impact their business.
PESTLE analysis of Marks and Spencer.
Political Factors :- Multinational organisations like marks and spencers can easily get effected
with political factor. They are trading in many countries hence, they are exposed to many
political systems and environments. Free trade agreements and policies have been a huge benefit
for Marks and Spencers. Political stability and importance of their market sector in country's
economy can also impact the company (Grishko and et.al., 2020). If a country gives importance
to the retail sector for their economic growth than automatically it creates a suitable environment
for a retail company. Taxation policies also impact businesses, if the government increases the
tax rates then the prices of company's products and service also increases which which can have
a negative impact on their sale.
Economical Factors :- Marks and Spencer can use economic factors like inflation, growth rates
and interest rates to predict the growth trajectory of their industry in the country. The UK
government has maintained a low inflation rate successfully and it is one of the largest
economies in the world. Marks and Spencer believe in providing high quality products to their
customers. Demand of their high quality products can decrease during financial crises because
customers start seeking low cost products when they have low disposable income in hand.
Efficiency of financial market can also impact business operation. Some other factors like
infrastructure quality, stability of host country currency and labour cost also puts an impact on
business's overall productivity.

Social Factors :- Marks and Spencer is now a household name in UK, they are in the market
since 1800s and due to their long existence people associate the brand with the brand of the past.
So many new and trendy retailers are popping out every year and society's thinking that Marks
and Spencer's is a non trendy brand can impact the company very badly. Society's culture
impacts the organisations. Understanding belief, attitude and culture of population can help the
company to make effective marketing strategies. Value perception and quality or customer
service expectation of consumers also impacts business operations.
Technological Factors :- Retail industry is changing rapidly and adapting new technologies.
The company always look to introduce new technology in their operation system, which helps
them to create a effective and efficient operating model. Increasing use of e commerce platforms
by customers also impact their business. There established online store is very effective in UK
customers can find their every product online. The company is using AI based tools to manage
its food deliveries and warehouses.
Legal Factors :- Every country have a different legal structure and companies need to study
these structures carefully to minimise the chances of any future legal conflict. Marks and
Spencer provide training to their employees in order to keep the updated about current laws. The
company have been involved in various legal disputes and these disputes made it hard for them
to hold their brand image at a constant (Nag and Chatterjee, 2018). The changes in trade law
after Brexit is also a legal factor which effected their business. Business strategies can not
minimise the harm which a legal factor can create but analysing the legal structure can help a
organisation to follow every law.
Environmental Factors :- Marks and Spencer wants to maintain their image as luxury brand
and that why they have taken a vow to become a sustainable organisation on multiple occasions.
They have promoted the concept of sustainable retail industry and also they sell fair trade
products which gives most benefits to small producers who follows sustainable business practice.
They worked with better cotton initiative to develop a practice to support sustainable practice for
procuring and processing cotton.
M3 - Apply appropriately the PESTLE model to support a detailed analysis of the macro
environment within an organisation.
Various environmental factors effects business organisations. Marks and Spencer is working in
different countries and they are exposed to so many different political structures. Different

governments have different policies and priorities, any change in government can impact
business. Tax and trade policies also makes it harder for organisations to make better profit.
Economic factors such as financial market and exchange rates also influences business
operations in efficient financial market like UK's market easy availability of liquidity help
businesses to expend their business. Social factors can influence Marks and Spencer's business
because theirs target market is the customers who seek for quality and factors like financial crisis
can decrease the demand of their products. The company is tackling technological factors very
well they always want to introduce new technology in their business operations and their E
commerce website works really well in the UK. Also they are using AI in various aspects of their
business. The company has been involved in various legal conflicts over the years. They should
critically analyse the legal environment of the place they are trading (Ghosh and Rajan, 2019).
Sustainability have been company's unique selling point they promote themselves as a luxury
brand and that's why they always try to become a sustainable organisation.
P5 - Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses.
SWOT analysis of Marks and Spencer can be used to identify strength and weaknesses of the
organisation.
Strengths
Recognised Brand :- The company is in the
market for more then 130 year and it is one of
the leading retailers in the UK. The company
have a brand value in the market and they
provide quality products to their customers.
Global Presence :- The company operates in
many countries and their global presence is
their strength. They have a expended business
world wide and have a big and diverse
customer base which leads them towards
profitability.
Customer Service :- M&S provide best
customer service to their consumers. Their
Weaknesses
Manual Process :- The company relies mainly
on manual processes and manual processes are
costly and time consuming which reduces their
productivity. The company should adopt latest
technology so that they can increase their
productivity. Manual process also increases
the time in production which effects their
supply chain.
Public Perception :- M&S is working in the
UK market since 1800's and there long
existence in the market have created a thinking
in customers mind that it is a brand from the
past and hence, it is not trendy. Many people

employee are skilled and trained to handle
customers and solve any query raised by them.
They always try to make customers feel
comfortable and that has been their strength
because it attracts more customers.
Variety of Products :- The company offer
variety of products to their customers. The
company offer so many different types of
prepare vegetables and fruits to the their
customers. They have a very wide range of
apparels, home and food products in their
portfolio.
thinks that the company only serves older
peoples and don't offer products for teenagers
and youngsters. This brand image of the
company is restricting them to expend their
customer base.
Foreign Market :- The company is failing to
make a mark in different countries. Their
product portfolio mainly contain western
products. The company is facing difficulty in
Asian markets where people prefer ethical
products more.
Opportunities
Online Store :- The company have a
established e commerce website which is doing
well in UK. But as compare to the leading e-
commerce retail giants Marks and Spencer is
falling far behind. The company should invest
in there online stores because e-commerce
retail is the future of shopping.
Market Segmentation :- It is a process
strategy of dividing similar customers in
groups. This strategy can help Marks and
Spencer in many ways. The company follows
the policy of opening mega stores, if they will
follow the customer segmentation policy then
they can open stores as per customers
demands. Also this strategy can improve their
image of being brand only for elderly peoples.
Threats
Competition :- Retail market around the world
is very competitive. Market leaders like Tesco
and Amazon area the biggest threats for the
company. They provide discounted prices and
offers to customers and can cost M&S to lose
their customers (Khajeheian, Friedrichsen and
Mödinger, 2018).
Different Policies Globally :- The company is
trading all around the world and different
countries have different laws and policies.
They must follow all the different laws to
avoid any lawsuit.

P6 - Strengths and weaknesses interrelated with external macro factors.
After the above SWOT analysis we know the strength and weaknesses of Marks and Spencer.
Strength and weakness of the company are linked with the external macro factors because
sometimes companies get effected by the outside factors. As we know that Customer service is a
strength of Marks and Spencer and they have a very good brand reputation of providing the best
quality products to the customers. This strength has made the company strong and helped to
increase their customer base. This strength of the company creates a good social environment for
the firm. Their global presence is also one of their biggest strength. Being an experienced and
multinational company, the company is able to handle an economic shock with their good
financial backup. Hence, their strength of being an recognised multinational brand with variety
of products effects. Also UK has one of the best economy in the world overall, economical
environment for M&S is very positive.
Weaknesses of the company are also linked with the macro factors. The company follows
manual process in their manufacturing and operations while their competitors are using more
advance technological processes. The firm failed to adapt changes with changing technological
environments. The high cost because of manual processes also reduces their profits (Supriyanto
and et.al., 2018). Social factor like peoples perception about the company that they are not trendy
and only make products for elderly peoples creates a weakness for Marks and Spencer. Both
strength and weaknesses of the company are linked with the macro factors in one way or another.
The analysis of correlation between macro factors and strength and weakness should be taken
into consideration when examining the business.
M4 - Applying appropriately SWOT/TOWS analysis and justifying how they influence decision-
making.
Knowing strengths and weaknesses of the business and how they are interrelated with the macro
factors can help Marks and Spencer's management to take effective decisions. The management
team of the company can make effective strategies to take a competitive advantage in the market
by using their strengths (Marimuthu, 2018). This analysis help the management team to make an
effective action plan to protect the organisation from any unpleasant surprise in the future. The
strengths of Marks and Spencer are impacting macro factors positively that will boost the
motivation of their manager. SWOT analysis also helps to identify any opportunity that a

business can use to grow, the managers of M&S can identify these opportunities and can make
strategies to make full use of these opportunities.
CONCLUSION
In this report it is concluded that business and business environment analysis is important to
make decisions regarding business. Different business structure and size of a organisation have
different effects on the business and scope of business operations. We also discussed various
scopes of Marks and Spencer and analyse how different organisational functions are interlinked
with each other to achieve organisational objective. With PESTLE analysis we saw how various
macro factors like political, economical, social, technological and legal environment effects the
business. The strength and weakness of Marks and Spencer were evaluated by SWOT analysis.
The analysis of correlation of strength and weakness with macro factors was done, which helped
us to understand how they influence decision making in a business.