Marks & Spencer: Business Environment Analysis & Strategic Review

This report provides a comprehensive analysis of the business environment surrounding Marks & Spencer, examining the aims and legal structures of private, public, and voluntary organizations, with specific references to Marks & Spencer, NHS, and Oxfam. It assesses the size and scope of these organizations, delves into the relationship between organizational functions and objectives, and evaluates the positive and negative impacts of the macro environment on business operations using a PESTLE framework. A SWOT analysis of Marks & Spencer is included, interrelating strengths and weaknesses with external factors. The report aims to provide a thorough understanding of the internal and external factors influencing Marks & Spencer's business strategies and performance.

Business And the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Aim of private, public and voluntary organisation and legal structure..................................1
P2 Size and scope of private, public and voluntary administration............................................2
TASK 2............................................................................................................................................4
P3 Relation between certain functions of the organisation and its objectives............................4
P4 Positive and negative impact of macro environment on business operations........................6
P5 SWOT analysis of Marks and Spencer..................................................................................7
P6 Interrelate with strength and weaknesses with external factors.............................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
In an organisation, business environment should be analysed for identifying external and
internal factors which help in smooth running of business operations. There are many workers
who assist in achieving company target goals and objectives in an efficient manner. A firm
managers always look on each activity and functions of an employees and motivate them to
doing maximum work for growth and success of an organisation. In business organisation there
are some key persons such as sellers, customers, manufacturers, producer, sales managers,
marketers, management people etc (Commander and Svejnar, 2011). At that respect, there are
different forms of enterprise who have their own motive and purpose which need to be fulfilled
in any manner. Such organisation are public, private and voluntary sectors. Marks Spencers is an
multinational organisation which headquarter is situated in London. Their products such as home
items, luxury food, clothing etc. It has approx. 1433 stores in around the world. The primary
purpose of this report is to understand different kinds of organisation scenario that includes
Marks & Spencer, Tesco and Oxfam.
TASK 1
P1 Aim of private, public and voluntary organisation and legal structure
Private organisation- It is run by individuals not by government. These organisations run
with a purpose of making profit. This type of firm may issue stocks and shares but their share do
not trade on public dealing. Business comes from stockholder, borrowers and preserved income.
Any profits are usually distributed to shareholders in the form of dividends, apart from profits
maintained in the enterprise as working capital. Rules and regulations are maintained by the
company's owner (Cordes, Richerson and Schwesinger, 2010). Organizations in the private
sector sometimes choose to partner with a government body in a public-private partnership to
jointly deliver a service or business venture to a community. Marks and Spencer's is a private
limited company.
Legal structure of private organisations Sole Trader : A person who runs an unorganized company or business on his or her own.
He is personally liable for the debts of the business, but also owns all the profits.
 Partnership : It is an organisation of two or more people which settled for the aim of
carrying on a business. Therefore partners are liable for any debt of the business.
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Normally partners share equally in profit or according to ratio mentioned in there
partnership deed.
Public organisation- NHS is a public organisation which is situated in England, Scotland
and Wales. It is owned and operated by the government. It is a non-profit organisation (Cronan
and et. al., 2011). It exists for providing services to their countries citizens. It stands for National
Health Services (NHS) which provide health services to their people. There are approx. 1.6
million people whop works for achieving set goals and objectives of company. Its annual
budgets is almost 136.7 billion.
Legal structure of public organisations :
1. It is a limited liability company whose shares may be freely sold and traded to the public,
with a minimum share capital of £80,000.
2. Public limited company requires a minimum of 4 directors and two secretory.
3. It can be either listed or unlisted company for stock exchange.
Voluntary organisation- Welcome Trust is a voluntary organisation. It is the second
largest charitable foundation in the world and co-founder of Human Genome Project is dedicated
to medical research and new drug discoveries This type of organisation have a group of
individuals who enter into an agreement to accomplish a non-commercial purpose such as club,
society, local group or community association (De Jonge, 2011). It's aim is to benefit and enrich
society, often without profit as a motive and with little or no government intervention. It can also
make profit but the money raised or earned by an organization in the voluntary sector is usually
invested back into the community or the organization itself. It aims to create social wealth
instead of material wealth. It is often suitable for small scale activities which do not involve
employing staff and leasing premises.
1. It is governed on its own rules.
2. If it is charitable it will be subject to charity law so it must be approved by OSCR.
P2 Size and scope of private, public and voluntary administration
Marks and Spencer- This is one of the leading merchandised firm in UK and they have
various kinds of commodities such as domestic products, clothing and luxury food items. They
have approximately 959 stores in UK and among these mainly 615 stores are only sale food
products. In 1998, Marks and Spencer get the first retailer company which earn almost 1billion
profit. Their global market is analysed for looking where they can invest the money for regular
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earning of revenue. They usually search that place where firm open the stores and attracts more
customers towards their products or services. Not only in UK they have other stores which are
based in other countries such as Turkey, India, Ireland, Poland, Spain, Russia, Greece and
France. An organisation also introduce their first online service in 1999 that will provide online
shopping facilities (Erving and et. al., 2011). This will aid company in reaching large number of
buyers among whole population growth. They try to expand their business in other countries and
also target potential customers who interested to purchase these kind of items. Presently, they
have to operating revenue is approx. 640 million and it has almost 82,900 employees. Firm have
income of 10,620 million.
(Source: Key retail and food-service players, 2017 )
NHS- This is one of famous company of all over the world which is also a health service
industry and it hold large number of market share. It is largest service provider firm who help the
needed people for caring their health. It is the public health services which is based in UK. They
also develop Labour parties who help in solving society major issues and problems (Fernando,
2011). Mostly they provide dental service, treatment of disease, optical care service. They has
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Illustration 1: Key retail and food-service players, 2017

almost 1.6 employees who works for reaching with set target goals and objectives of
organisation.
Oxfam- It is the non profit organisation who will doing works for welfare of people.
Their business operations start in 1942 and the main aim of firm is to help poor persons. They
also provide information to the needed individual for their rights and when they face some
difficult they will use them. This organisation ensure poor people to get their advantages and
they also ask authorities for providing policies and schemes which are made by them to the real
needed person. Some companies, organisation, government authorities will provide funds to that
kind of sector and these firms give that amount to charity and donate in welfare work. All the
money which were collected by the organisation are used for social actions.
TASK 2
P3 Relation between certain functions of the organisation and its objectives
Firm structure defined as a system which has certain policies and rules that should be
designed for managing and controlling particular work. It is also examine that which data can be
passed to one level to another level within an organisation. In centralized structure, information
flow from top to down, and in decentralized structure decision are decided at each step. This is
hierarchy structure which is used in firm for smooth running of business operations. The
effective firm structure help employees for know whole system of company policies. By this
they will easily reach their target goals and objectives and all workers are specialised in their
works (Gebauer, Paiola and Edvardsson, 2010). They also analyse and examine functions which
is helpful for achieving goals and objectives in better manner. Marks and Spencer are allotted
some responsibilities and duties to their employees by which they increased productivity and
profitability. The proper relation are operate business operations and of company and provide
accurate outcome. The cited firm will focus on each and every activity which assist in attaining
desired goals and targets. The functions of organisation that includes planning, hiring, selecting,
recruiting and supervising their employees. If they wants to improve their operation functions,
they required to make proper coordination among organisation structure.
Marks and Spencer firm has to analysed and adopt basic structure. By the help of
organisation structure, an enterprise required to provide adaptability and effectiveness among
different departments that will help in doing task which is allotted by managers and finish within
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given time period (Guglielmetti, 2011). A firms functions are connected with each other and it
will provide equal opportunities to their workers.
There are some department which are part of Marks and Spencer and its functions are
also discussed are under:
Finance- It is that department which help in managing money in sufficient time period.
They prepare budgets and balance sheet that assist in analysing accurate current position of
business. By doing organisation audit that will help in giving basic idea for which they know
how to control their managing activities and capital in proper manner. The annual report of rog
show the actual position of company which help in attracting large number of customers. The
management analysed this report and it will take chance to make decision according to firm
growth and development. They also research whole market structure and in which area they need
to cover for selling their products.
Marketing and Sales- It is that department which managing and controlling selling goods
and services to potential buyers. Marks and Spencer company will properly offer their products
in the market place. Marketers is the key persons who convince for purchasing items to
customers. This department play an important role for analysing buyers need and wants and
provide all information to other functional department that will aid them to know the customers
desires (Robbins, Judge and Campbell, 2010). Marks and Spencer arrange marketing campaign
which help to aware all potential buyers towards specific products and services. They promote
their goods in different way that will attracts more people and increase profitability and
productivity.
Customer service- Cited firm has attracts those people who interested to purchase their
products and Organisation try to satisfy all customers needs and demand in appropriate manner.
This department will help customers regarding their goods and services which were buy from
Marks and Spencer. They need to listen problems and issues of their customers and try to solve
them in proper way. A firm will take reviews and feedbacks about their goods and then
according to this they will done changes in the products.
P4 Positive and negative impact of macro environment on business operations
Some factors which directly or indirectly affects business operation by internally and
externally basis. In these external factor badly impact on firm performance and activities. Marks
and Spencer also not control their environmental factors. Political, economical, social,
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technological, legal and environmental are included in external factors (Siewiorek and et. al.,
2012). There are many negative and positive impact on these factor which totally depends on
different situations. The firm should take necessary steps which help in identify all external by
PESTLE analysis. They also adopt strategies which assist in changing plans and policies that
attracts large number of buyers. Political- An organisation manage their business in other countries so this will provide
opportunity to state for facing any political stableness. In this factor, government parties
will control and manage the company rules or regulation and identify all resources which
should covered in an organisation. The positive impact is to take accurate decision for
their firm and on the other hand its negative impact is to increasing various risk factors
which directly effects the business operations and functions. Economical- All business activities are framed the economy of the country so that they
provide improving situations which is favourable for them. For maximise selling their
products, cited firm required to increase purchasing power of their customers. And when
financial level is enhanced of the buyers, they buy products only from Marks and Spencer
stores. Positive impact on economic factor is to analyse the behaviour, relation among
customers and employers that will effected the whole scenario of firm and negative
impact is directly affected the economic growth rate which does not managed by firm. Socio-cultural factors- This is most common factor which mainly affects customers
value and choice of choosing specific products. Trends are always changes with the
regular change in marketplace (Teece, 2010). Company need to know consumer
behaviour that will assist in attracting more buyers towards their products. Marks and
Spencer focus on latest trends which gain attention of potential buyers and provide
growth to the firm. An organisation develop some marketing strategies which help in
searching consumers who really interested to purchase products or services in effective
manner. In social factor, positive impact is that they easily promote their own products
and services in the large market and negative impact is to old technology which create
hurdles among changing in trends according to the demand of customers. Technological factors- Every organisation has to use latest techniques and methods
which assist in increasing growth and development to them. By adopting new
technologies company will sale their products on online and reach large range customers.
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The fashion will be changed according to the demand of customers. The online shopping
provide various benefits such as convenient, less expensive, etc. and also home delivery
of particular products (Trkman, 2010). Marks and Spencer usually give different types of
facilities to their customers such as online shopping, reasonable price, quality items etc.
Company will analysed whole market and then they are adopt suitable technologies
which increased their profitability and productivity. Positive impact on technological
factors is that they can develop new goods and services and distribute these in whole
market place and on the other side negative impact is new technology has long process
for solving issues of customers which effects business operations. Legal factor- Marks and Spencer has to analyse government rules and regulations which
has to be followed by them. It directly affects firms business operations in effective
manner. The legal department of cited company has to solve these types of problems and
issues. Business activities are helpful in dealing with some legal issues which occurs
outside organisation and it create problems. They required to take necessary decision
which change basic rules and also trade good at one place to another. Positive impact of
legal factor on business operations is that if company adopt all government made acts
which provide security to their employees so this will increasing their firm image in the
international market and on the negative side if organisation can merger with other small
enterprise and they will not gives all related assets which are necessary during merging
and acquisition period so that this will create negative legal act for the firm.
 Environmental factors- In UK, there are some restrictions regarding business functions
and activities which need to be controlled and managed in proper manner (Welford,
2013). The international company need to investigate their goods and also make accurate
strategy which help in attracting more customers in the market place. Firm can not waste
resources which directly affects environmental factors. They should reduce wastage of
things and deal in different situations. The positive impacts is make stableness, enhancing
the business resources and also build strong relation with consumers and negative
impacts on environmental factors is that wastage of papers and damage materials within
an organisation. It can directly affects the business operations and its functions.
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P5 SWOT analysis of Marks and Spencer
An organisation has to doing SWOT analysis which aid in identifying its strength,
weakness, opportunities and threats in better manner. It is the internal factor which directly
affects business operations within a firm. This is done with proper strategic planning. Swot
analysis discussed as under: Strength- Marks and Spencer is the world largest chain of retail market and it is
developing in global areas. They expend their business in many other countries. They
provide high quality products to their buyers that enhance growth and goodwill. It
includes fresh items, foods, meals etc. Customers usually attracts with them only for their
goods quality but also their customers services which help in providing information
regarding specific products (Aula, 2010). The cited firm tries to make easy and healthy
environment. They also provide consumer directed policy which will give great
experience to their customers and offer profit to them. Weakness- The firm try to reduce their weak points in proper manner. The company has
not cover different market segment where they can attracts large number of buyers.
Enterprise will not change price and quality of products and services according to the
demand of customers. There are lack of resources which create problems in managing
stocks and products which deliver to their users in given time period. Marks and Spencer
has large space of keeping goods and other items but they can manage that its approx.
75% space is wasted in the stores. Opportunities- Firm need to expand their business in other countries. The latest
technology can be adopted to increase growth and development of company. They can
offer various online products to the long distance people (Belás and et. al., 2015).
Customers usually demand for different types of goods which satisfy their needs. All the
buyers always choose quality products and this is a chance of organisation for attracting
more customers towards their commodities. They are willing to open more stores in
different countries which increased growth and reputation of firm.
 Threats- Cited organisation income are highly affected at the time of recession in 2009.
In this time, there was badly reduction in the marketing of products of Marks and
Spencer. It is the one of the leading company of cloths but at the time of recession they
will lose its position in the large market place. Its down with the third position after
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ASDA and PRIMARK and these are continuously growing. There are many competitors
which arises challenge for company such as Tesco, Safe-way, Sainsbury and Asda. Also
environment change is majorly affected to the customers taste, choice and preferences.
Economic imbalance is stately threats to the growth of firm.
P6 Interrelate with strength and weaknesses with external factors
The strength and weaknesses of firm has interrelated with various external factors are
discussed as under: Political- The external environmental factors will directly affects political instability (Bill
Pasmore PhD and CMC, 2010). If political situations of the country will not good then
they get low productivity and their abilities or capabilities will also decreased in each
manner. Economical- this is that factor which help in maintain country policies and plans. The
enhancing inflation rate and deflation change Marks and Spencer firm price and
according to this they will change their business trends. They also hold market policies
that assist in protecting share of company which occurs in the market. Organisation also
required to decrease price of such products and services. Social- The external factors directly affects socio and cultural environment which help in
increasing growth and development (Blanchard, Tolbert and Mencken, 2011). In this
company has to examine motive of employees of Marks and Spencer which is not
satisfied with dispersion of salary by the managers. Technological- Firms required to adopt various latest techniques and methods which help
in enhancing growth and profitability. Customers basically wants to use innovative
products which more fulfil their needs in an effective manner. Marks and Spencer has to
make original innovative goods and services. It is external environment factors which
will assist in improving old techniques into new methods. This will attracts more
customers towards cited enterprise products. Legal- External factor directly affects legal structure of company that slow the process of
business operation. Some firm will hire few person who analyse legal situations of
outside market and deal with better manner (Cantwell, Dunning and Lundan, 2010). The
rules and regulations will change according to government policies.
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 Environment- The company will analyse wastage of resources that directly affects
business income. They usually use renewable resources which can not provide negative
result to them. In replace of electricity organisation will also use solar force.
CONCLUSION
From the above report it can be referred to that business environment should be analysed
for identifying external and internal factors which help in smooth running of business operations.
The legal structure of different organisation such as private, public and voluntary sector that will
understand the purpose of their profit. The size and scope of these firm help in identify market
share of them in the large market. Also describe interrelation between various department that
includes marketing and sales, finance and customers services which assist in analysing the
functions and objective of these department in the company. In this project, analysis of SWOT
and PESTLE will aid firm in identify internal and external factors. It directly affects internal and
external environmental factors on business operations. The interrelationship among strength and
weakness with external factors will analysing how it affects company functions and activities in
effective manner.
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