Assessment 2: Environmental Analysis of M&S Business Model

This report provides a comprehensive analysis of Marks and Spencer's (M&S) business model within the context of the global business environment. It critically examines the changes M&S has implemented in recent years to self-regulate and adapt to stakeholder concerns, particularly those related to sustainability within the fashion industry. The report delves into M&S's sustainability strategy, including its Plan A initiative, and its commitment to reducing environmental impact through packaging, food waste reduction, and operational emission reductions. It assesses M&S's competitive advantage and position through SWOT and PESTLE analyses, and utilizes Porter's Five Forces to evaluate industry attractiveness. The report concludes with recommendations for M&S to further enhance its competitive standing, address challenges, and attract a new generation of customers. The analysis highlights the impact of factors like Brexit and COVID-19 on the business and the importance of adapting to the changing market dynamics.

The Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Critically analyse the changes that Marks and Spencer have made in the last few years to their
business model to self regulate and adapt to some of the concerns raised by the different
stakeholders............................................................................................................................3
Critically evaluate is changes give Marks and Spencer some form of Competitive advantage
and position............................................................................................................................6
RECOMMENDATION...................................................................................................................8
CONCLUSION................................................................................................................................8

INTRODUCTION
Global environment generally means the environmental factors which could create a great
impact on World. Global business refers when an organisation operates its business activities in
many countries around the World. Thus, global business environment can be described as
environment in different countries with various external factors that could affect the company’s
decision on resource capabilities and uses (Hamilton and Webster, 2018). A Firm faces many
challenges and opportunities while running business operation in the social, political, business
and economic environment. The External environment includes surprise, uncertainty,
discontinuity and turbulence. The business environment consist the activities of competitors and
customers, technology development, social and cultural context and government policies.
Fashion industry is known for manufacturing, designing, retailing, marketing, advertising and
promoting all type of apparel products of different genders. But fashion industry is also known as
one of the polluted industry due to global carbon emissions. The Industry generates lot of
greenhouse gases due to energy which is used during manufacturing, producing goods and
transporting products purchased each year. The garment which is produced creates untreated
toxic wastewaters while manufacturing garments are dumped directly into rivers. Wastewater
contains various toxic substances which include mercury, arsenic and lead among others that are
harmful for the life and health of people (Hampden-Turner and Trompenaars, 2020). The project
is based on fashion industry for continuing this report; the chosen organisation is Marks and
Spencer. In this report, changes which company have made in the last few year to their business
model to self regulate and adapt some of the concerns raised by the different stakeholders are
analysed critically and also the company’s competitive advantage position is also discussed.
TASK
Critically analyse the changes that Marks and Spencer have made in the last few years to their
business model to self regulate and adapt to some of the concerns raised by the different
stakeholders.
Marks and Spencer is a multinational retailer organisation which is located in London,
England having specialised in selling home products, food products and clothing. The Company
was founded by Michael Marks and Thomas Spencer in 1884. Marks and Spencer is known for
most sustainable retailers in World, they have launched their ambitious sustainability strategy

which was named as Plan A, and it was a strategy to completely restructure the supply chain of
organisation. They have also relaunched their sustainability strategy to reflect on the changing
social and environmental needs globally. The strategy was made to target packaging of products
which they are going to recycle; the company is also working on reducing food waste and
operational emission (Bhagra and Sharma, 2018). The strategy was updated to reflect the
acceleration of the climate crisis and also exceed its science based target initiative. Marks and
Spencer also gain an Ethical Consumer Best rating in different environmental policy areas
including wood sourcing, environmental reporting and palm oil sourcing. The Organisation did
not use triclosan in their personal care products and own brand households and also they don’t
use parabens or phthalates. Marks and Spencer is also improving its sustainability strategy by
taking a three pillar approach to the future, they focus on colleague and customers well being,
caring for World and transforming lives and communities (Rezaee, 2019). The Company is
working to become a truly sustainable retailer by focusing on sustainable sourcing, reducing food
waste and raising charity. Marks and Spencer has sets science based target and also adopt zero
waste model by making packaging recyclable, ensuring that products are made by using recycled
materials and they are focusing on reducing greenhouse gas emission by cutting emission in its
supply chain.
SWOT Analysis of Marks and Spencer
Strength
One of the main strength company have is its brand value and varieties of products and
different outlets which helps in increasing growth and productivity. The Company have their
own brand labels and serves products by perceiving as value for money. Marks and Spencer is
leading towards sustainability agenda by creating Plan A which helps in building a sustainable
future by focusing on providing customers a positive impact on their well being. The strength of
Organisation is to scaling up environmental development and global socio economic and also
improving the lives of its customers and employees.
Weakness
Weakness of Marks and Spencer is that they have faced many criticism and draw backs
in market due to their non trendy fashion clothes. The Company deals with wide range of
products, even though customers have perception that they offer products for aged people rather

than for teenagers and young people. Organisation is failing to attract new customers from last
year’s which create an impact on its performance and profit (Xie and Redding, 2018).
Opportunity
The opportunity which Marks and Spencer can grab is by expanding its branches in
different countries. The company already have its online store but they need to more focus on
increasing its presence in public. Marks and Spencer must focus on new technology as it
provides an opportunity to differentiate pricing strategy in different Market.
Threat
Threat can affect the functioning of business and leads to decrease in performance and
productivity of Company. High Competition is one of the threats which can be faced by Marks
and Spencer. As, World is getting competitive which influence the profitability of organisation,
the competitors of Marks and Spencer are Tesco, Sainsbury, John Lewis, Amazon, etc. For
competing with its competitors, it is necessary to change strategy as if company doesn’t make
any changes in its plan they cannot survive for a long period of time. COVID 19 has also created
a huge impact on the performance of business through which company have shuts their store in
many countries due to facing heavy loss (Wei, Thurasamy and Popa, 2018).
Pestle analysis of Marks and Spencer
Political factor
Political factor are develop, changed and run by government, the factors contain the level
of anticipation by government in different business and trade. The Company believes that it is
necessary to work under the guidelines of government to protect legitimate interest. The political
factors create an impact on the long term profitability of Organisation. Brexit has created a huge
impact on the operations of Marks and Spencer due to the separation of United Kingdom from
European Union. The situation of Brexit has increased production cost of Company which
affects its profitability.
Economical Factor
Economic factor are the factors which include inflation rate, economic growth patterns,
interest rate and foreign exchange rates, etc. The Current market trend of UK is focusing towards
small retail stores which influence Marks and Spencer to lower their price and retain premium
status (Berman and Dalzell-Payne, 2018). The Stores with low price creates a threat to

Company’s target market which affects its growth and profit. Due to the crisis, organisation had
cut jobs of employees and also affected the ability to provide discounts and other benefits.
Social factor
Marks and Spencer has faced many challenges to uplift their brand vale and reputation
even though they failed to impress youth generation. The Company have longstanding existence
due to which it is not represented as a brand of Youth. Marks and Spencer also comes in a ready
meal sector as it is more palatable and advance in food technology.
Technological Factor
As in food sector, one of the biggest trends is self checkout that helps in saving money
which company spent on cashiers. The checkout process increases profitability and sales of
Organisation as it attracts more and more customers to avail the food without waiting in a line
for food. Marks and Spencer has implemented the technology in their stores so, that customers
experience gets improved. In retail Industry, another big trend is online shopping; the company
already has presence on social media sites and offers products and services from clothing to
home products. Marks and Spencer is also focusing on creating new technology operating model
which helps in exploiting new technology by adopting Industry agile method.
Legal Factor
Marks and Spencer get involved in many disputes which created an impact on its image.
The Company conducts training session on health and update them in order to keep themselves
updated with current legislations. When the Organisation was renovating in Broad Street, ceiling
tiles were was fell down to floor due to cancer causing material. Company was convicted for a
charges based on Health and Safety at Work Act 1974 and also fined for offences.
Environmental Factor
Marks and Spencer is highly concerned about the environmental affects which is created
by producing and manufacturing garments. The Organisation has promoted their own green
policy through which they are working on increasing sustainability (Aerni, 2018). Marks and
Spencer also works on promoting fair value of trade, reducing use of energy and removing Trans
fats from food.

Critically evaluate is changes give Marks and Spencer some form of Competitive advantage and
position.
The Changes give Marks and Spencer become form of Competitive advantage and position
as they increase their brand image and value by working on sustainability. Customers are
becoming more loyal and attract towards the sustainable products. For giving more clarity,
Porter’s five Forces is best tool which helps in explaining the aspects in clear manner.
Porter’s Five Forces
Porter’s Five Forces is a tool of strategic management that analysis the attractiveness and
profitability of Industry. By using this model Marks and Spencer cab assess the how the forces
will helps in increasing competitive advantage.
Bargaining power of Buyers
Bargaining power of buyers is high their price sensitivity can influence the performance
of Company. The Customers have alternatives options with low switching cost. Marks and
Spencer has built its loyalty and provide unmatched value to people that increases its reputation.
The Company has attracted many people by its sustainability strategy as it helps in protecting life
of employees and customers by reducing harmful effects while producing garments which
improve its profitability (Kwon and Cho, 2020).
Bargaining power of suppliers
The Bargaining power of Supplier is low as Marks and Spencer is renowned company so
suppliers also want to look out their products on Organisation’s shelves to grab the attention of
large number of audiences.
Threat of new entrant
The threat of new entrant in fashion industry is low due to the huge capital investment
and building customer loyalty to run successful chain of store. The Fashion industry is mature, if
new entrant will enter they need to offer something innovative and unique from existing players.
Threat of substitute product
Marks and Spencer have a high threat of substitute product as it become easy to copy the
designs and other features of apparel and food menu even the similar design can be purchased at
low cost.
Rivalry against existing Firm

The Competition is high in Fashion Industry, Marks and Spencer is competing with many
competitors due to which they are focusing on bringing unique products that attract the
customers. The Company is also increasing its online presence by offering sale and discounts.
The loyalty membership cards and highly personalised Sparks Loyalty program gives benefit to
Marks and Spencer in attracting more customers towards store (Ernst and Haar, 2019).
RECOMMENDATION
The Company faces many challenges and also face many criticisms from Society. To
overcome the challenges it is necessary to develop a new strategy which could to attract new
generation and overcome from bad reputation by giving competition to its competitors. Due to
COVID 19, Organisation is facing many problems so; company must create a proper strategic
plan which helps in increasing its growth and profitability. Marks and Spencer must focus on
reshaping their clothing segment and also simplify operating model which helps in maintaining
and creating a strong customer base.
CONCLUSION
From the above information it is being concluded that fashion industry must work on
reducing the harmful effects as it car create a huge impact on the health and lives of people. The
Company faces many challenges and problem even though they overcome difficulties by
creating new plans and strategy that helps in uplifting its profitability and growth. By applying
Porters’ five forces, the Organisation can gain a complete picture of its competitive position and
profitability.

REFERENCES
Books and Journals
Aerni, P., 2018. Global business in local culture: The impact of embedded multinational
enterprises. Springer.
Berman, S. and Dalzell-Payne, P., 2018. The interaction of strategy and technology in an era of
business re-invention. Strategy & Leadership.
Bhagra, A. and Sharma, D. K., 2018. Changing paradigm of employability skills in the global
business world: A review. IUP Journal of Soft Skills. 12(2). pp.7-24.
Ernst, R. and Haar, J., 2019. Globalization, competitiveness, and governability: The three
disruptive forces of business in the 21st century. Springer.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hampden-Turner, C. and Trompenaars, F., 2020. Riding the waves of culture: Understanding
diversity in global business. Hachette UK.
Kwon, K. and Cho, D., 2020. Developing trainers for a changing business environment: The role
of informal learning in career development. Journal of Career Development. 47(3).
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Rezaee, Z., 2019. Business sustainability, corporate governance, and organizational ethics. John
Wiley & Sons.
Wei, L. H., Thurasamy, R. and Popa, S., 2018. Managing virtual teams for open innovation in
global business services industry. Management Decision.
Xie, E. and Redding, K. S., 2018. State-owned enterprises in the contemporary global business
scenario: Introduction. International Journal of Public Sector Management.