Report on the Business Environment of Marks & Spencer (M&S)

This report provides a comprehensive analysis of the business environment of Marks & Spencer (M&S), a British multinational retailer. The report begins with an introduction to the business environment, emphasizing internal and external factors influencing organizational functioning, including political, economic, social, technological, environmental, and legal (PESTLE) factors. It provides an overview of Marks & Spencer's history, organizational structure (flat structure), and key personnel. The core of the report is a detailed PESTLE analysis. The political section discusses government regulations like health and safety standards and their impact on M&S. The economic section examines factors like exchange rates and education levels. Social factors include cultural influences and demographics. Technological factors focus on the importance of technology adoption and competitor strategies. The report concludes by summarizing the key findings and implications of the business environment analysis for Marks & Spencer.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................9

INTRODUCTION
Business Environment is the collection of internal as well as external factors which
primarily includes employees, supply, demand, customers’ needs as well as their expectation.
Furthermore, it also includes activities which are undertaken by government in order to
understand social trends prevailing in the market and several other factors. These factors affect
the overall functioning of an organisation and determines how a company actually carry out its
business related activities (Battisti and Deakins, 2017). However, business environment helps in
identifying the several opportunities which the company can adopt in order to improve its overall
performance, profitability and growth of business. This report is based on Marks & Spencer
which is a British multinational retailer organisation. It was founded by Michael Marks in 1884.
The company is specialised in selling out high quality clothing, food products as well as home
based products. Moreover, the outcome of this report will be based on structure which the
respective company follows, effects of external environment factors.
MAIN BODY
Overview of the company:
Marks & Spencer Plc is a British based retailer. The company was founded by Michael
Marks and Thomas Spencer in the year 1884. It is headquartered in Westminster, London. M&S
is a public limited company. Moreover, the company is also listed on London stock exchange.
Marks & Spencer primarily deals in providing high quality clothing, foods and home based
products online as well as on offline platforms. Furthermore, food provided by Marks & Spencer
is known for quality, freshness and innovation credentials. Clothing and home based products are
wearable, contemporary style at great value. Some of the most common brands of the company
are classic, per una, autograph, M&S collection and many others. The company also provide a
range of financial services which also includes current and saving account, insurance as well as
mortgages. M&S bank also provides credit cards. It operates its business operation in two
segments that is UK marketing and internationally. M&S carry out is business operation through
franchising. Currently the company has around 1463 stores which are spread all around the
world. M&S has a total number of 80787 employees who operates the company business
operations in several parts of the world (Boddewyn, 2016). The retailer organisation is market
leader under UK market.
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History
Marks & Spencer business operation was started in 1884 by two partners namely:
Michael Marks and Thomas Spencer. The company's business operation of the company was
started as Penny Bazaar. M&S opened its first Asian store in Afghanistan 1960. Furthermore, it
also expanded its business operation in Canada in 1973. The stores under Canadian market were
smaller as compared to British outlets. Unprofitable stores of M&S were closes. In 1999 the
company opened its online shopping website. Furthermore, in 2001 M&S first simply food stores
were opened in Twickenhan and Surbiton which was designed by George Davis. In 2016 Marks
& Spencer expanded its business operation under European market (Chaffey, Hemphill and
Edmundson, 2015).
Members of Marks & Spencer on board
Name Designation
Archie Norman Chairman of Marks & Spencer
He was appointed as the in September 2017.
Archie has great experience with regard to
retail organisation.
Steve Rowe Chief executive of Marks & Spencer
He has extensive experience across several
field under Marks & Spencer. In January 2016
he was given the post of Chief executive. He is
under the operating committee.
Humphrey Singer Chief finance officer of M&S
He was given this post in July 2018.
Andy Halfordmembers on board Senior Independent director of M&S
He was appointed in January 2013 who has a
very strong finance background.
Stuart Machin Food managing director of the company
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He is the who has spent around 30 years in
fashion, food and home retail sector.
Katie Bickerstaffe Non executive directors of the respective
Marks & Spencer.
She was given this position in July 2018. Katie
have extensive experience with regard to retail
organisation.
Alison Brittain Non-executive director of M&S
He was appointed in January 2014.
Andrew Fisher Non-executive directors
He has substantial experience of international
consumers and technology.
David Guise HR director of the company
He was given this position in October 2016.
Paul Friston International Director of Marks & Spencer
Victoria Mckenzie Gould Corporate communications director
joined Marks & Spencer in January 2019.
Justin King Non Executive Director
Justin joined Marks & Spencer plc board in
January 2019. he has a experience of thirty
years working in leading large business
organisation.
Pip McCrostie Non Executive Director
McCrostie joined board of Marks & Spencer
on July 2018 with strong experience of finance.
Jeremy Pee Chief Digital and Data Officer
Pee joined the company in 2018 December. He
started off his career with Deloitte
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Melanie Smith Strategy Director
She was a partner at McKinsey, a global
strategy consultancy. Melanie joined M&S in
May 2017.
Nick Folland Group general counsel and company secretary.
He is in operating committee.
Sacha Berendji Retail, operations & property director
he appointed to this position in November
2012. He joined M&S through graduate
training program in 1994.
Organisational Structure:
Marks & Spencer follows a flat organisational structure. This organisational structure
usually have limited management between the front line employees and the top management.
Through this structure M&S employees are encouraged in making decision regarding the
business operations (Dawson and et.al., 2016). Furthermore flat organisation basically decreases
the bureaucracy and helps in masking employees more skilled. Flat organisation structure usually
follows pyramid shape structure. This structure usually flows from top level to low level.
PESTLE ANALYSIS
Pestle Analysis is basically a framework which is used to monitor and identify the macro
environmental factors of an organisation. However, in order to understand each and every aspect
of a company's external factors in detail conducting Pestle analysis is necessary. Because due to
this evaluation, the exact situation related to business is made clear. Moreover, PESTLE
Analysis stands for political, economic, social, technological, environmental and legal factors.
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Political Factors: These factors basically helps in determining the extent to which
government policies impacts the overall functioning of an organisation. In context to Marks &
Spencer the government of UK has set several regulations which impacts positively as well as
negatively (Fineman, 2017). It has published health and safety standards which primarily
includes identification of hazards, risk control and risk evaluation. Furthermore, if the company
do not follow these regulations which are established by an organisation then they would be
charged. Furthermore, political factors play a very significant role in determining several factors
which impacts Marks & Spencer's long run profitability. In order to carry out business operation
in dozen countries the company have to diversify risk in a systematic way. Marks & Spencer
makes close analyses of several factors before entering into aboard. Some of these are mentioned
below:
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Illustration 1: PESTEL analysis
Sources: What is PESTEL and how does it help your organization succeed, 2019.

 Taxation Policy: Taxes incurred by government usually shows dedicates the level of
sales. Retailers like Marks & Spencer profitability are highly impacted with taxation
because if government intervenes high taxation and the overall sales tends to fall.
 Employees Benefits: Marks & Spencer should effectively aim at satisfying employees of
company. They shall be provided with wage legislation that is minimum wage as well as
fixed amount of overtime. Such policies are usually implemented by government of the
respective country and the company have to extensively follow it in order to provide
productive business operations.
 Bureaucracy: Marks and Spencer basically includes different sub-sector and each them
faces its own unique regulation which are implemented government (Forrer and Katsos,
2015). Therefore, these implementations made by government have positive as well as
negative impact.
Moreover, several other factors are also considered under political factors which are: pricing
regulations, intellectual property protection, product labelling, trade regulations, enforcement
contract and others.
Economic Factors: These factors basically impact the performance which directly or
indirectly affects the overall profitability of an organisation. It basically includes employment or
unemployment rates, cost of raw materials and several other factors. However, economic outlook
under retail organisation always remains uncertain. With reference to Marks & Spencer the
company has been hit by economic condition due which number of stores have closed off.
Furthermore, the company shall make use of growth rate, inflation rate in order to determine the
factors which forecast the profitability of organisation (Greenwood, 2016). Following are the
factors which Marks & Spencer must consider:
 Exchange Rate: Economic condition is highly impacted due the exchange rate which
an organisation follows in order to export company's potential products in several parts
of the world.
 Education Level: Education level also determines the growth of organisation because if
the consumers of the respective company are highly educated then potentially their
purchasing power would be high. Therefore, the will potentially aim at purchasing the
products which are manufactured by Marks & Spencer.
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There are several other factors which are considered under economic factors. It primarily
includes: business cycle, interest rates, unemployment rate, labour cost and their level of
productivity in the economy, infrastructure quality and etc.
Social Factors: These factors usually helps in identifying the emerging trends. Through
this factor marketer is able to effectively customers needs as well as their wants. Factors included
are: demographics, eduction levels, cultural trends, lifestyle and others. However, after
evaluation of customers needs and wants the company usually aim at providing products
according to expectation lead down by potential customers (Ifinedo, Pyke and Anwar, 2018) .
This is because customers purchasing power is highly influenced by cultural, social and personal
characteristics. Furthermore, shared beliefs as well as attitudes of the populations play a high
degree of role for Marks & Spencer. Following are some factors which shall be considered
during Pestel analysis:
 Culture Factors: Culture factors followed by the people of respective country highly
impacts the overall sales of an organisation. This is because the production made by
Marks & Spencer is usually on the basic of culture which the consumers follows.
 Demographics: Demographics estimation is also essential for Marks & Spencer. This is
usually because production of goods as well as services is also based on the
demographics. If the country has more population of women that huge variety of products
are manufactured accordingly.
Social trends which impacts the functioning of Marks & Spencer also includes many other which
are: leisure interests of customers, attitudes, structure followed by society and etc.
Technological Factors: These factors usually consists of rate of technology as well
innovation which an organisation adopts in order to effectively carry out business operation.
Accurate technological adoption play a very vital role under retail market. With regard to Marks
& Spencer in order to effectively communicate with potential consumers the company requires
to heavily invest into advertisement so that more and more customers are attracted (Leonidou
and et.al., 2017). Therefore, in today's highly advanced world, before implementing any sort of
technology Marks & Spencer should effectively analyse the strategies adopted by competitors
and then select the best technology. Technology analysis involves the understanding of following
factors:
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 Competitors Strategy: This is one of the most important factors which is considered
under technology (Tukker and Tischner, 2017). This is because these factors are easily
adopted by competitors brands. With references to Marks & Spencer the company shall
adopt the most affected strategy.
 Cost: Huge amount of cost is required in order to adopt technologies. Therefore, Marks
& Spencer shall perfectly evaluate its economic conditions in order to adopt the
technology which do not impacts the functioning overall business operations.
Technology factors also impacts the value chain structure with respect to consumer services.
Moreover, technology external factors enormously helps an organisation in increasing its overall
revenue.
Environmental Factors: These factors basically influences the surrounding which
impacts the ecological aspects. Factors includes are: climatic condition, waste disposal and
others (Llopis and et.al., 2015). Marks & Spencer usually faces pressure with references to raw
materials collaboration which is faced due to environmental conditions faced under United
Kingdom. Different markets have several norms as well as environmental standards which
highly impacts the profitability of an organisation. Therefore, before expanding Marks &
Spencer shall aim at carefully analysing the surroundings. Some of the major environmental
factors which are required to be considered are mentioned below:
 Climatic Condition: Climatic Condition extensively impacts the manufacturing process
of an organisation. Due to change in climatic all type of raw materials is not available at
right period of time. This usually tends at reducing the overall profitability of Marks &
Spencer.
 Law regarding pollution: With respect to Marks & Spencer, the company has to follow
several laws regulating environment pollution. This law is introduced by UK government
in order to protect the environment.
Furthermore, these environmental factors shall also be considered in order to effectively carry
out business activities: attitude of company towards renewable resources, air as well as water
pollution regulation prevailing for retail organisation.
Legal Factors: These factor basically overlaps with political factors, but these are more
specific. It includes consumer protection laws, copyright law, patents law and several others.
Marks & Spencer keeps them updated with regard to the legal implication made by government.
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The company regularly measures health and safety measures in order to protect the respect
organisation from any sort of legal issues (Pattanayak and Roy, 2015). A firm should carefully
evaluate each and every business aspects in detail to effectively under all the regulations lead
down government. Following are the factors which shall be effectively considered:
 Copyright, patents and trademark: All rights, including copyrights and other
intellectual property rights in M&S stores as well as online are licensed and owned by
them. Furthermore, the material displayed on company's website is solely for promoting
company's product.
There are several other legal factors which the company have to follow in order to carry out
business activities effectively (Strupeit and Palm, 2016). If M&S fails to work according to the
legal policies framed by UK government than the company would be sued.
However, it can be concluded that Marks & Spencer is highly successful and competitive
company which provides potential customers with high quality products as well as services.
Moreover, in order to effectively fight with company's competitors it shall primarily aim at
implementing several strategies.
CONCLUSION
From the above report it has been summarised that environmental factors have a potential
impact upon the business activities of an organisation. Environmental practices are classified in
two different aspects as internal and external, both these factors impact decision making of firm.
internal environmental factors are controllable thus they did not affect aversely upon
organisation at extent level whereas external environmental factors are beyond the control and
having a direct impact upon business practices. For them, organisation requires to make different
strategies in order to manage overall impact of different factors upon business operations. In this
regard, firm needs to conduct different analytical activities so that they can manage each and
every activity in effective manner. All these activities and approaches are play an essential role
in firm through which higher authorities can take effective decision.
REFERENCES
Books & Journals
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Abdelkafi, N. and Täuscher, K., 2016. Business models for sustainability from a system
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Battisti, M. and Deakins, D., 2017. The relationship between dynamic capabilities, the firm’s
resource base and performance in a post-disaster environment. International Small
Business Journal. 35(1). pp.78-98.
Boddewyn, J.J., 2016. International business–government relations research 1945–2015:
Concepts, typologies, theories and methodologies. Journal of World Business. 51(1).
pp.10-22.
Chaffey, D., Hemphill, T. and Edmundson-Bird, D., 2015. Digital business and e-commerce
management. Pearson UK.
Dawson, C.J., and et.al., International Business Machines Corp, 2016. Optimizing cloud service
delivery within a cloud computing environment. U.S. Patent 9,274,848.
Fineman, S., 2017. The business of greening. Routledge.
Forrer, J.J. and Katsos, J.E., 2015. Business and peace in the buffer condition. Academy of
Management Perspectives, 29(4), pp.438-450.
Greenwood, J. ed., 2016. The effectiveness of EU business associations. Springer.
Ifinedo, P., Pyke, J. and Anwar, A., 2018. Business undergraduates’ perceived use outcomes of
Moodle in a blended learning environment: The roles of usability factors and external
support. Telematics and Informatics. 35(1). pp.93-102.
Leonidou, L.C.,and et.al., 2017. Internal drivers and performance consequences of small firm
green business strategy: The moderating role of external forces. Journal of Business
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Llopis, J.A.S., and et.al., 2015. Good times, bad times: entrepreneurship and the business
cycle. International Entrepreneurship and Management Journal. 11(2). pp.243-251.
Pattanayak, S. and Roy, S., 2015. Synergizing business process reengineering with enterprise
resource planning system in capital goods industry. Procedia-Social and Behavioral
Sciences, 189, pp.471-487.
Strupeit, L. and Palm, A., 2016. Overcoming barriers to renewable energy diffusion: business
models for customer-sited solar photovoltaics in Japan, Germany and the United
States. Journal of Cleaner Production. 123. pp.124-136.
Tukker, A. and Tischner, U. eds., 2017. New business for old Europe: product-service
development, competitiveness and sustainability. Routledge.
Online
What is PESTEL and how does it help your organization succeed. 2019. [Online]. Available
through:<https://blog.v-comply.com/pestel-organization-success/>.
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