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Business and Business Environment of Marks and Spencer

INTRODUCTION

The term business environment gives a brief description about internal and external components that affect any company. Present study is based on M& S, it generates a revenue of about $ 10.622 billion, and its net income is of about $115.7 million. It is a globally spread firm. Marks and Spencer (M&S) is a private retailing company which actually deals with products like clothes ,food items etc. Assignment will include the following brief about different types and purpose of organisation, scope and external factors that affect any entity. It also gives detail about relationship with other entity.

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Main body

1 Type and Purpose of Organisation

There are three types of sectors public, private and voluntary. These can be defining according to their purpose and legal structure.

Public organisation: this is also called as state sector. It is known for government provided services to public. This is a part of economy ,composed of both public services and enterprises . This sector include public services like construction of bridges ,tunnels making, police ,public education along with health care related issues(Nuroni, 2016). It not only focuses over an individuals ,it provides its services to the whole society. public section is under control by the government ,so its basic objective is to serve for the citizens of the country and to provide high quality products according to the customers demand . This sector raises its revenue by public taxes etc . benefits in public section is that it provides job security as well as retirement perks also. The main purpose of public sector is to provide there services to the people as well to earn profits . For example (TESCO) British multinational retailing organisation that works as public organisation. The company aims to expand its business and earn more profit.

Private organisation: All the operations and activities are controlled or govern by the owner only . Government doesn't play any role in this department .its main motto is to generate more and more revenue from customers. And this can be done by research and development plans by the organisation. Purpose of private firms is to generate more profit and expand operations.

M&S is a private company which is operates in a multiple areas, specialized in whole sales ( beauty products, furniture’s, home ,clothes). The main purpose of this organisation is to earn profits which can be done by introducing new and different products in the market

for customers(Business environment, 2015).. Through social media these brands can be established over a wider range .through which more people will know there products and buy them which will results in a profitable market .

Voluntary organization : it is a non profitable organisation ,it is related to social activities like charity, faith based organisation, health care programs(DeFusco and et. al, 2015). such firms generate a funds in order to recover its cost and invest further for development .

The purpose of community sector is to give benefits as well as to solve the conflicts of needy people without the mindset of having profits only. For example by using the charity funds many handicapped persons got a new life to live. For example British Red cross (BRC) is an entity that use to work over human well fare, it has organised many campaigns for blood donations. In which they provide information about blood infection there precautions and how to be aware about their health.

2 Size and Scope of Different Types of Organisation 

CREITERIA

PUBLIC

PRIVATE

VOLUNTARY

Size

Tesco generates a revenue of about £55.9 billion (2017)[1], its net income is £(54)million, population of staff working in this entity is 476,000 , it is operating in 6,553 locations which proves that it is widely spread .

M&S has 84,939 number of employees who are working in the company ,it generates a revenue of about £10.622 million, its operating income is £690.6 million, as it is a widely spread ,it has its headquarters in London,united kingdom. It already has 979 stores which are opened at different locations.

British red cross company which is globally spread all over the world and also known to provide its civil services for the needy people, is spread over a location of about 900 it has a staff of about 2,800 ,its income in 2017 was £284.5m

Scope

The main scope of TESCO is to make there products known by the public ,to provide appliances according to clients needs and to get connected with different communities people which will support it to spread widely in different regions. And also will help in genre ting revenue for the organisation (Jinglei, 2015).

M&S is an retailing organisation which provides cloths and food services .the scope of this organisation is that by developing different products for the customers according to there requirement .

It can gain more profit in the market . So by introducing new techniques in there company for making fashionable wears, can improve there productivity . Which will generate a high revenue for there entity. And by advertising its products on social media will support it to establish across the world.

Scope of this BRC is to provide multiple numbers of facility to the people so that they can overcome from there crises . Like by providing first aid to the people in disastrous time , by organising projects for health awareness ,blood donations campaigns ,and by serving them education services which will decrease the unemployment rates and will provide income to the people for there livelihood. By giving there services to the common people it will be able to establish its more and more branches at different locations ,which in turn will help the organisation to communicate to multiple numbers of people.

Vision

To expand over most of the locations and earn profit

To generate more and more revenue with good quality products.

To provide its services to the needy people

Mission and objectives

To establish its entity over a wider area

To promote its company for profit

To communicate with the people ,in order to engage more clients withi9n it

Legal structure

It is run by the government board of directors ,it can sell its shares to the public.

It has a detached legal identity ,it is run by the individuals ,it is not funded by government. It cannot sell its share to the public

This type of organisation is favoured by small groups, this is usually operated by constitution ,legal documents which is govern by the association

3 relationship between different organisational function and there organisation objectives.

An entity performs various functions in order to produce its goods and sale its products in market. These are as listed .

  • production and deigns
  • sales and marketing
  • research and development

with the support of these function, an organisation can target over its goal and objectives.

Production: to produce good products or services to any entity will require to have a combinations of labour, materials and information. These elements together affects the organisation as well as their objectives also.

  • Labour: employees plays a very significant role in an organisation. For example they need to take a valid decision for their products to increase there sales and productivity of an organisation ,what resources and deigns are good for their items ,what new ideas are need to be taken for these products so, that they can establish their brand in the market for customers .
  • Materials : now a days, customers are also curious about what they buy ,its coast ,brand and materials. Employees has the responsibility to select that material for their products which are affordable as well as easily available in the market .
  • Information: there are expertise in an organisation who are involved in design making as well as collect data from the market by researching over it,and then have processing of their products according to that data(Fleisher and Bensoussan, 2015). .by this way they get the surety of whatever items they are selling to their customers are of good quality and the clients will be satisfied by their products.

M&S is a well known retailing company which used to sell products like cloths, furnishers, home appliance as well as food products( Business Environment Types (External Micro and External Macro),2017). So with skilled employees ,good material , and with the relevant information M&S can produce their products according to customers need and want .the leader will analyse the material ,market price as well as collect all the data related to their items and then will share its information with the employees so that they can make their products according to the given information and then sell it in the market .as M&S is a decentralized company which means that whenever any design is made ,it is taken according to the staff as well as team leader, it is not just taken by the higher authority ,all the employees are included in design making ,which always motivate the employees to work with a positive thinking in there mind and support them to achieve there goals within the given deadline . By this the productivity of the company increases and there brand image is established in the market.

Sales and marketing: the marketing department will research over the latest trends and patterns of cloths, customers demand according to their age and gender, it mainly focuses over the type of consumers which make the market ,their preferences .after investigating all the data from the market ,they will set their products according to customers preferences and will design there items, once the products has been designed by production department it will than given to the marketing department(Kirton and Trebilcock, 2017). The main mote of this department is to advertise and promote the product so that the customers will buy there items . And by this they would have a profitable market . M&S by investigating the markets preferences can make products according to customers need which will support entire organisation to increase its productivity as well as to establish new items in the market which they are going to sell . By promoting its clothing products online it will be able to communicate with different customers and to expand across the world. As M&S involve its all employees in design making ,the leader assign roles and responsibility according to the capabilities of person ,this reduces the burden of working in a company which increases the high quality productivity of an entity .for example the marketing department focuses over the promotions and advertisement of the item to increase its sells and the production department focuses over the material ,quality ,processing and cost of the product .through this each of the person is allotted with there individual work which decreases the mistakes in there alliances

Research and development : this department plays a very important role before production of any product as the main process of an item start with this only(Brannen Piekkari and Tietze, 2017). The motto of this department is to research over the existing products, make it more creative than others ,produce new and latest items ,improve production methods and create innovative ideas for organisation to have a profit . By this way M&S will be able to reduce its cost, increase its revenue and can always be on top rankings in the market. This is how any organisational functions are related to objectives of any organisation .the main aim of marks and Spencer is to create more and more revenue for the company by offering good quality products in the market which are design according to the customers need and preferences .

4 impact of macro environment over business and operations

Macro environment is the one which cannot controlled by the firm or any organisation . These are the factors which affect any company are as follows:

political factor: these are the components which cannot be controlled by the company . Government passes many laws and rules, according to these rules and regulation, the organisation needs to work ,if the entity operates as per given rules by the government it will sustain and if not then it will decline soon(Schaltegger Lüdeke-Freund and Hansen, 2016). For example M&S which is a retailing company supply items like cloths , food products ,furniture’s and beauty asseceries . If the government has

increased some of the prices of their products like food items then it is responsibility of the entity to give discount on the prices of food appliances so that it is simpler for the customers to buy them and through this clients have a satisfaction . Which increases the productivity of the company .

Economical factor: this component is related with inflation, deflation, employment rate. It has both positive as well as negative impact over M&S. For example if there is high inflation then consumers will not be able to buy products ,furthermore, it will create issue for M&S also to make investment. This will impact negatively on business. On other hand if employment rate is high and all consumers have adequate income sources then they will buy products easily which may help in raising sales of organisation.

Technological factors: as M&S is a merchandising company , in technical way it has both

positive and negative impact over (Skrbinjek and Dermol, 2016) . As the organisation introduces new techniques in its operations ,it is little bit difficult for the company to implement this suddenly ,so for their simplicity the leader ensures to conduct training for the employees so that latest technique get a little bit familiar for employees to operate it and implement it with their products for manufacturing goods. Its negative impact will be that if the company uses old techniques then it will decreases the productiveness of it and this would affect its financial position.

5 Internal and External analysis of M&S

Internal analysis

SWOT analysis of M&S gives a brief description about the strength, weakness, opportunities and threats .

Strength

  • The strength of M&S is that it offers new trends, latest fashion deigns to the customers of different age and variety, basically it is up to date with the current trends and fashion in the market . Due to which its clients are also very loyal to there products.
  • Its brand presence
  • Skilled employees

Weakness

  • But it has some of the weaknesses like it has low financial presentation.
  • Poor online presence

Opportunities

  • Technological development
  • Globalisation

Threats

  • High competition
  • Changes in government policies

External analysis

Porter’s five to identify the strength and weakness of M&S this model is required. These are as follows

1 threats of new entry

2 threats of substitutes

3 suppliers power

4 buyers power

5 competitive rivalry

Threats of new entry : As marks and Spencer is a retailing organisation, it has no threats from the other organisation because it has already set its empire at higher position by offering good quality products to the customers according to their demands which in turn creates a very powerful image of the brands in the market, so if any other retailing company enters with another products for customers for selling than it will be harder for them to establish organisation in the market as M&S has already launched its good quality products for the customers so there is no threat for the company to be worried about .

Threats of substitutes: M&S is a globally spread marketing organisation which has many competitor with it as so ,the treats of substitutes for marks and Spencer is very high as there are entities like TESCO, Sainsbury and ASDA which sells similar range of food products in the market. so there is a big competition between the organisations to make profit and set a good brand image(Charter, 2017) . Going forward M&S is trying to focuser over its food products and are trying to apply more appliances to it so that they can improve its productiveness .

Bargaining power of buyers: customers bargaining power is important. As it is upto the customers to buy what type and kind of material from an organisation with a affordable cost which they can pay (Kolk , 2016.) .clients have many options to buy different products from different entity with a reasonable price which satisfy them. M&S has to develop its faithfulness for the customers and offer multiple no of products with a reasonable rates according to clients satisfaction so that they can be loyal to the firm .

Bargaining power of suppliers : earlier the company M&S get suppliers from Britain only which means it was having limited suppliers only ,but due to strong competition in the markets it has to take suppliers from outside the Britain which reduces the cost and weakens the power of the suppliers now M&S does not depends upon the particular suppliers only as now it has other means of sources for its supply.

Competitive rivalry: retailing business has a very competitive environment within it . There are many more retailing organisations which is giving a very tough competition to it had implemented low cost strategies for clothing sections , but it resulted in declining of the organisation as their strategies didn't work at all(Ramadani and et. al, 2015). So instead of selling clothing products they are focusing over simply food items . To increase their profit rates.

6 Strength and Weaknesses Interrelated to External Macro Factors.

There is a very huge relationship between external macro factors and strength and weaknesses . As every company has its strength and weakness . M&S has some of the weak and strong points (Jinglei, 2015) . These weakness and strength are related to external macro factors like political ,social , technological in following ways for example ,M&S which is a globally merchandising organisation is spread over most of the location but its online presence is very weak as compare to the other entity ,it has not established its products over social networking sites ,as now a days customers used to shop online rather than visiting to the markets as they find it more easier (Vargas-Hernández and Lerma, 2018) . Due to its online absence its productivity decreases and the organisation is not able to generate more revenue ,this also results in lack of communication to most of the societies and is not able to establish its brand in online marketing . They can prevent this by promoting there items on social networking sites by advertisement and can gain multiple numbers of clients attach to organisation.

According to technological factor ,N&S is developing a lot as they are accepting latest technology or their products which is increasing its revenue . There has been many changes in technologies by the government, which M&S has taken it in a positive way(DeFusco and et. al., 2015) . The leaders of organisation had introduced this techniques to the employees by providing them training regarding it, which has improved the quality as well as material of the products. Due to this implementation, the company has increased their profits in the market and also satisfy the needs of customers .

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CONCLUSION

In the above study it can be concluded that economic, technological factors impact on business unit to great extent. It is identified that there is significant relationship between various organisational functions. if entity develops strong coordination among all department s then it will help in accomplishing its objectives. In order to gain competitive advantage M&S is required to make changes in its pricing strategies and have to provide high quality products. This will help in sustaining in market for longer duration.

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REFERENCES

  • Brannen, M. Y., Piekkari, R. and Tietze, S., 2017. The multifaceted role of language in international business: Unpacking the forms, functions and features of a critical challenge to MNC theory and performance. In Language in International Business (pp. 139-162). Palgrave Macmillan, Cham.
  • Charter, M., 2017. Greener marketing: A responsible approach to business. Routledge.
  • Dawson, C. J. and et. al , International Business Machines Corp, 2015. Dynamic provisioning of resources within a cloud computing environment. U.S. Patent 9,009,294.
  • DeFusco, R. A. and et. al, 2015. Quantitative investment analysis. John Wiley & Sons.
  • Falkner, R., 2017. Business power and conflict in international environmental politics. Springer.
  • Fleisher, C. S. and Bensoussan, B. E., 2015. Business and competitive analysis: effective application of new and classic methods. FT Press.
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