Business Environment Analysis Report: M&S, Structure and Functions

This report provides a detailed analysis of the business environment, exploring various organizational types, sizes, and scopes, with a specific focus on Marks & Spencer (M&S). It delves into the different types of organizations, including private, public, and non-profit sectors, and outlines their respective purposes and legal structures. The report examines the relationship between different organizational functions, such as human resource management, marketing, production, and finance, and how they contribute to achieving organizational objectives and structure. Furthermore, it employs PESTLE and SWOT analyses to assess the macro-environment and the internal and external factors impacting M&S. The analysis also highlights the interrelation between strengths, weaknesses, and external macro factors to understand their positive and negative impacts on business operations. The report concludes with a comprehensive overview of the business environment and its influence on organizational performance.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Different types and purpose of organisation....................................................................1
P2: Size and scope of several organisations...........................................................................4
TASK 2............................................................................................................................................5
P3: Relationship between different organisational functions and their link to organisational
objectives and structure..........................................................................................................5
TASK 3............................................................................................................................................7
P4: PESTLE model to determine positive and negative impact of macro-environment........7
TASK 4............................................................................................................................................9
P5: Internal and external analysis of M&S company with another similar organisation.......9
P6: Interrelation of strengths and weaknesses with external macro factors.........................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Business Environment highlight those factors which is outside the business enterprise like
individual, institution’s and other internal factor greatly influence on the overall business
performance and sustainability. The business environment includes following factors governments,
suppliers, consumer groups, competitors, market situations, media, economic conditions,
technologies, trends, investors and various other institution’s. Even though these forces working
outside the boundaries of business but greatly significances for growth organisations. influence the
business even though they are outside the business boundaries. For example, in case governments
increase the tax rate then customer automatically purchase less, hence company need to revised the
prices of products then only company can survive in changes. Now by elaborating the importance of
business environment. UK-based company Mark & Spencer running the business of
manufacturing of clothing, home products and luxurious food. In this project all type of size,
purpose and scope of organisation, structure and function. To understand the factors of business
environment PESTLE analysis and SWOT analysis also specified in this the project. The
importance of interrelation of strengths and weaknesses with external factors included so the
negative or positive impact on business operation clearly highlighted (Reed and et. al., 2013).
TASK 1
P1: Different types and purpose of organisation
Different organisation setup with common objective to earn the profits by providing the
desirable products or services to the customer at reasonable prices. In today’s world various type
of organisation operated to achieve the common objectives or goals i.e. fulfil the demand and
needs of the customer) to some organisation are private, public and non-profit organisation. The
purpose of the organisation briefly specified below:
Private sector organisation:
The main motive of such type of companies to earn or generate maximum profits and run
by the shareholder or nongovernment organisation. The private ownerships may issue the stock
and have shareholders, but with conditions it should be not issued in public like IPO and not
trade in public exchanges (Reinhardt and Stavins, 2012).
M & S is one of the private sector organisation and operate the business in various
countries. In UK it having 978 stores so it becomes first company who earn more than 1-billion-
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dollar pre-tax profit. It also attracts number of candidates to work in company because of having
high value in market and around 84,000 employees working in year 2017.
Purpose of firm:
There are various benefits which could be rightly said that the private organisation is easy
to incorporate in an effective manner. Here are various objectives for an effective manner. This
is to make an effective tool that could be used in order to make in an effective manner. The
purpose of the firm is to make the business objective in an effective manner that could help out
to gain in an effective manner.
 Generate large amount of profits.
 Want to increase the standard of living of customer by providing the quality of products.
 Establish more branches or store in all over the world.
Types of private firms:
Partnership: Partnership firm establish when two or more partners agree to work
together to earn mutual profits. In every partnership there must be a partnership deed which show
the contractual agreement between the partners. In deed all the term and conditions, profits or
loss sharing ration between the partners, liabilities, capital investments and roles &
responsibilities clearly mention and every partner shall work accordingly. The partnership makes
the business feasible if two or more individuals or firms are work together in order to gain the
profits in an effective manner.
Sole trader: When single person decides to establish business and also run without any
interferences of other then such business called the sole proprietorships business. The sole trader
is only decision-making authority in business (Shigang, 2011). All the profits or loss singly bear
by sole trader. The main aim of the sole trader is to make the business profits in an effective
manner that could help out to gain the sustainability for making efficient manner.
Limited companies: The company in which the liabilities are limited either by guarantee
and limited by shares such company consider as limited companies the shareholder. acts as
owner of the company and operates the business functions. The Limited organisation is totally
relied upon the public that can be raised to finance in an effective manner.
Public sector organisation:
The public sector undertakings are the business undertakings which are majorly
controlled by the government undertakings in an effective manner. the government runs these
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entities by way of contributing the business in an effective manner. The government authority
acts as owner or regulator of such companies and responsible to profit or loss of the business.
The companies can issue the share in public through IPO and traded the share in stock exchange
market. Number of public companies originated by private companies Most public companies
originated from private companies by following the all rules & regulations setup the public
companies. The public company offered the optimum quality of products or services to the
consumer at affordable prices.
NHS is well known public sector organisation in UK for the medical services. They
distributing the medical services at the marginal prices to the people having low income. The
main purpose to provide the medical services for the betterment of society (Karagiorgos,
Drogalas and Giovanis, 2011).
Purpose of NHS:
 To sustain the healthy lifestyle of an individual.
 To involve for the improvement of stakeholder.
 To involve in the better of the society.
Non-Profit organisation:
Such organisation setup for the welfare of the society not for earning the profits. The
NPO serve the best quality of services at free of cost for the development of society. The main
motive of such organisation is to improve the lifestyle of needy people by providing the desirable
services at free cost. Every Ngo need the to take the permission or authority from the
governments before establishing the company (Kolk, 2016).
Oxfam is one of the no-profit organisation main to eliminates the poverty from the world. The
organisation provides the basic necessities of life to needy and poor people at free of cost. The
number of volunteer’s show the interest to work with organisation.
Purpose of firm:
 Find out the better solution to remove the poverty from the world.
 Providing the basic necessities to needy and poor people.
Legal structures of different types of organisation:
Sole proprietorship: No need to follow the paperwork as it establishes by sole trader and
it every easily to set up. All the liabilities in hand of sole trader hence he or she bear unlimited
liabilities during company winding up.
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 Partnership: The partnership deed act as legal framework in the deed all the rules &
regulation clearly specified for the partners. Private company: company is not allowed to issue the share in general public hence it
required the general permission from the broad of director’s for trading the shares. Every
private company mandatory to put the ltd word at the end of company name as it holding
limited liability (Nishitani and et. al., 2012).
 Public company: Number of formality are required to fulfil by the public companies like
scheduling the meeting, preparing the reports, and maintaining the statement of account
the complexities is increase due to number of legal paperwork’s involved.
P2: Size and scope of several organisations
Each organization is striving hard to attain the business profits. The more is the size and
scope, profitability would become increase in an effective manner. Every organisation has their
own distinct nature of skill or scopes it includes public, Non-profit organisation and private. The
size defines the scale or diameter of business operations in different countries and whereas Scope
specify the chances or probability of achieving the success and growth in future time durations.
Firms could be elaborated as the groups which are framed out along with aim of attaining
specific targets. The modern organization planet features diverse kinds of firms, each
incorporation to serve a unique aim and to meet diverse kinds of requirements of the societies
throughout which they operate. The simplest way of differentiating between firm which is to
look at their target and aim. Here are few of the organization operations for profits, whilst
another to encourage a social cause for further wellbeing of society. Which are totally between
for profits firms, not for firms and non-profits organizations.
These are further discussed under the below:
Marks & Spencer (M&S):
Size: With the 10000 approx. stores in all over 20 countries of retails industry in clothing
and luxury food products its became one of the largest supermarkets. The company having the
turnover of more than 50 billion dollars. Through large workforce company want to accomplish
the targets. And set goals (Osterwalder and Pigneur, 2010).
Scope: The company providing varieties of products and services in field of clothing,
food, home across worldwide. By offering number of product or services company want to
achieve number of customer satisfaction level.
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NHS
Size: The NHS has its 1.5 million people in present time. Due to their heavy workforce.
The purpose of NHS is offering the medical services to the people of UK at reasonable prices
hence the ideas of expanding the business became big achievement for the company. In medical
services the NHs alone employed over 150,273 doctors, 40548 general practitioners and 314966
nurses which show the clear picture of size (Pikka, Iskanius and Page, 2011).
Scope: NHS organisation acquiring the large market share because of multiple services.
Around the world. The company also providing the additional services like dental, optical etc
which results in achieving thee high sustainability.
Oxfam
Size of Oxfam: The main purpose of organisation is to offering the good quality of
services for the improvement of society. With large number of volunteers, the organisation wants
to achieve main goal i.e. to remove the poverty from the world.
Scope of Oxfam: Main work of organisation to eliminates the poverty, food relief, help
tin disaster and policy research etc. due to which the business is expanding accordingly.
TASK 2
P3: Relationship between different organisational functions and their link to organisational
objectives and structure
The Marks & Spencer (M&S) is famous UK retailer company which offer the various
product and service all over the world. With large organisation it is necessary the work must be
performed at right time, at right way by the right people. Hence the work divided in different
department such as includes marketing, production, human resource operation, and finance
department and department perform their work with same aim to achieve common goals i.e.
organisational objectives (Pulver, 2012). Every department have certain responsibilities and
management of M&S assign respectively to them the functions performed by different
departments in M&S are briefly described as below: Human resource management department: The human resources department deals with
important business functions. The function related to providing labour law compliance,
maintaining the record keeping, hiring and training, compensation, relational assistance
and help with handling specific performance issues. All the above function is necessary
for the smooth running of the business operations without any conflicts. The HRM
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department mainly handling the recruitment, selection, performance appraisal, rewards,
training and development programs etc. The M&S company having large number of
employees it’s crucial that the HRM departments play there respectively role in effective
and efficient manners. The performance of M&S only improved when HRM department
provide regular training and development program for the improvement of performance
of every employee. Finance department: This department which act as platform or we can say the backbone
to every department of the companies. The M& S company operates the finances activity
in such manners, so there will be less chances of wastage of fund and every department
get the funds at adequate time. The Desire gaols or target can only accomplish when all
the fund executes in proper way. The finance managers of M& S essential distribute the
funds according to the requirement of each department so that department easily achieve
the organisation objective. Marketing department: The M&S company properly utilising the online marketing, TV
advertisements and other social media way to again the attention of the customers and
also informing about the products or services. The main function of this department to
give knowledge about the new company product or services to the target customers. The
department need to study deeply the requirements of market and according to that
formulate the strategy and plans. The M&S have multiple products or services line hence
the marketing department required to adopt the effective tools and techniques to reach the
customer and inform about the products price, quality and new features also.
 Production department: As it manufacturing company M&S required the production
department which keep eyes on the production process and control over the wastage of
resources. The production department always work to minimum the operational cost and
increase the production capacity If the production department work under the supervisor
of skilled full employees then all production process will work in smooth manners and
desirable outcome will show (Avramenko, 2012).
Organisation structure:
 Function based: The M& S company covered the different function areas like furnaces,
Human resources, production, marketing etc these are the main division of the company.
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 Geography based: The M& S company before establishing the store it always considers
where they get the maximum number of customers and resources are easily available to
them.
 Consumer based: The main base to forming this structure fulfils the desire of all the
customers by providing the products and services. This structure to require to understand
the consumer behaviours, culture and preferences.
 Product based: When some products are high in demand s then M& S focused on more
production of that products then such structure is formed. It helps in capturing more
market share.
TASK 3
P4: PESTLE model to determine positive and negative impact of macro-environment
As M& S as various stores in number countries there’s is high chances influences by
multiple macro factor of environments. That includes political, economic, social, technological
etc. hence it’s duties of every M&S manager to formed the plans or strategy and properly
execute them also so the both positive and negative aspects handle accordingly impacts. thus,
PESTLE acts shield for the managements because it helps the mangers to take the advantages of
positive factors and overcome the negative factors. These are further discussed as under:
Political factors: Different countries having different political environments sometimes
they are easily in nature and sometime countries they rigid in nature. Hence it necessary to
understand the political environment of countries before establish the business operations.
 Positive impact: when the taxation policy changed by the UK governments the tax rates
is reduces according to that the M& S company lower the prices of the products or
services and as results company earn huge revenues (Bovee, Thill and Raina, 2016).
 Negative impact: But in case the tax policy not in favour of the company automatically
company will increase the prices as results the revenue is decrease accordingly.
Economic factors: This factor includes economy condition of countries like the weather
market in inflation or in deflation, GDP, pay level etc. and effects shown below
 Positive impact: The developed countries generally have high economy conditions when
M& S open the store in that countries then revenues is high because the purchasing
power of consumer is more.
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 Negative impact: When countries facing the inflation the purchasing power of every
customer is less therefore the company earn or generate less revenues.
Social factors: This factor considers the culture, behaviour and level of knowledge or
educations these factors highly impact on decision-making process and per-determined plans.
 Positive impact: Most of the educated people prefer to do the online marketing which
support to increase in sale of the company. Company easily meet the requirements when
customer not like to change the demands.
 Negative impact: If company increase the prices of the products in comparisons to the
competitor’s prices then customer not to prefer to buy the products, hence the sale get
down of the company.
Technological factors: Update technologies play an important role to show the positive
or desirable outcomes but it always has involved high cost and it became may cause to company
to not adopt new technologies.
 Positive impact: The online marketing technology act as main sources of gaining large
number of loyal customer because through technology customer get the desirable
products or services at their door step.
 Negative impact: The new and update technology results in higher production cost so
mainly company not adopt the new technology.
Legal factors: All the rules &regulation and legal laws formed by the governments need to
follow by the company which affects the existence and sustainability of an organisation.
 Positive impact: The company which complying all legal laws and regulations have
strong sustainability and good brand image in market.
 Negative impact: If company not follow the legal laws and legislation then company
can face punishment.
Environmental factors: Environmental factors includes both ecological and
environmental aspects that will affect the company performances.
 Positive impact: The M& S company follow all environmental regulations and improve
the company good image and reputation in market.
 Negative impact: When company not follow the environments laws then chances is of
pollutions as results company face criticism (Cavalcante, Kesting and Ulhøi, 2011).
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TASK 4
P5: Internal and external analysis of M&S company with another similar organisation
To know or identify the actual strengths and weakness of the markets the managements
need to understand the SWOT analysis. The SWOT analysis focus on the all opportunities and
threats while achieving the goals or objectives. The M& S company used SWOT techniques for
formation of strategy or actions. Below is complete picture of SWOT analysis.
SWOT Analysis:
Strengths Weaknesses
 Excellent product with unique features
that are hard to copy
 Loyal customer is always best for
mouth base marketing
 High or large sales always generate
high profit and revenue.
 Limited capital available for expansions
 Delicate presence of firm in China.
 Depend more on UK market make
unsafe market situations in local
country.
 When confident is lack then customer
the products more frequently.
Opportunities Threats
 Diversify the market in south east Asia.
 Focus on more production of clothes
because trend of clothes is higher in
market.
 Adaption of simple operating model.
 Frequently change in preferences of
customer’s need or wants.
 When BREXIT introduced in economy
it became major threat for company.
 More completions in clothing and food
sector.
Porter's five forces model:
 Competition in the Industry: The large number of competitors in market it will surely
affects the ability of companies because the competitor’s also offering same products or
services at same prices or some may offer at lower price. The suppliers and customers
choose other companies products if they deal is not suitable for them. When competitive
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rivalry is less in number the company surely earn more profits and generate huge
revenues.,
 Potential of New Entrants into an Industry: When it is easier to enter in market then
number of new revivals or competitors increase hence it will weekend the company
positions in market. The forces of new entrants also impact the existing company
performances. Those industries have powerful barriers to entry then less number of
competitors available then existing company have high profits.
 Power of Suppliers: This force shows the power of suppliers drive up the prices of
goods and services easily. It represents the bargaining power of the supplier of goods or
services when it increases the price then company automatically shift to other buyer who
offering the goods or services at lower prices.
 Power of Customers: This force shows the power of the customer of the company. It
very simple phenomena when you increase the price of products or services less number
of buyers will agree to purchase the products in comparisons of products having
reasonable price (Hair, 2015).
 Threat of Substitutes: We see number of substitute products in the markets at
reasonable prices and it became harder for M& S company to offers their luxurious food
products and clothing at higher prices. Due to this, it becomes difficult for company to
stop loyal customers to shift to another brand. Hence it difficult task to gain more loyal
customers thus company focus on quality of products. Porter's Five Forces is a model that
recognises and analyses five major forces that directly influences every industry and
helps identifies an industry's weaknesses and strengths. Frequently utilise to identify an
industry's structure to determine corporate strategy.
P6: Interrelation of strengths and weaknesses with external macro factors
The political, economic technology, social and legal are the major macro factors which
includes positive and negative impact on business operations Therefore, it is a M&S manager to
formed the plans or strategy and accordingly execute them also so the both positive and negative
aspects handle accordingly impacts. These are further described as under:
Political: It specify all the laws and regulations formulated by government authority for
taxation which may frequently change due to political conditions. Thus, high impact on the
working of M & S process.
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