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INTRODUCTION
The business environment is considered as the sum total of internal as well as external factors that directly influence the performance of the business. The business environment is also referred to as the combination of various factors and forces which affects an organisational ability to maintain or build an effective customers relationship. The concept of business environment is determined as the most important aspect of an organization as each activity of the firm is managed as per the organized business plan. In this particular report Marks and Spencer is the selected firm, which mainly deals n luxury food products, clothing and home products. This report contents a study about the different types and purposes of the organizations, a proper description of the size, scope and type of business are discussed. A clear vision about the internal as well as the external factors that influences the performance of the business in a positive as well as negative manner. The internal and external analysis can be done by analyzing the strength and weaknesses of the firm in an effective manner.
TASK 1
P1 Types and Purpose of private, public and voluntary organisations and their legal structure.
In this modern and competitive business era, organizations are work for attaining some goals and objectives which are predetermined in nature. The major purpose of each small as well as large business enterprise is to attain high growth and profitability through satisfying the needs and wants of people at the market place. There are different kinds of organizations whose purpose, scope and mission are different from each other in the terms of profit and service aspects. The growth and development of small and large business organizations are connected with the economic development of the country’s economy. The organizations are categorized among three major types like public, voluntary and private business firm, that are described as under:
|
Basis of Comparison |
For Profit |
NPO |
NGO |
|
Meaning |
These kinds of organisations are based on generating more profit through offering variety of services to their potential customers. The major purpose of this type of firms is to attaining high profitability by satisfying customers needs. |
This sort of organisations is work for social welfare in these organisations is not concern about the profit. |
It considered as a non governing body which are focused on offering effective health care facilities to the people. In this volunteers firms, NGO’s are included. |
|
Area of Operations |
It operates its business activities as a large business firm in terms of capturing a wide area of market. |
These organisations are rare and work for providing significant growth. |
This is large in nature. |
|
Objectives |
The major objectives of the firm are to gaining the attention of customers by offering variety of products and services. |
It is set up to providing social welfare services to the people and works by charity. |
Their potential objective is to rendering proper services to the people in respect to reaching at potential goals. |
The purpose and the legal structure of the firms are described as under:
Public Sector organizations:
These sort of organizations are concern on offering appropriate products and services to the people without any consideration of profit and growth. These kinds of firms are work as global level and widely operated and controlled by government bodies. National Health Services is considered to be the popular public organisation within UK, the company is concerned on offering health care services globally.
Purpose of NHS:
- Provide better or beneficial services to the needy individuals of society.
- Work for improving economic and social situations of public.
- Offering wide range of social insurance training facilities to patients.
Legal Structure:
- State government- In this organizations are needed to be follow all kinds of provision that have been organized by the government and along with providing a proper management and some of the other products within the market place as to economic development of country.
- Local government- It is looking for essential elements that are required for the welfare of local people.
- Central government- This segment helps to the functions that are specified by the departments of state and central government bodies.
Private Sector:
In this the major motive of each small as well as large business enterprises is to attaining higher profitability and growth through attracting large number of customers towards the firm or its offered products and services. Marks and Spencer is a multinational retailer organisation, which is founded in the year of 1884 and operates its business functions in luxury food products, clothing’s and home items.
Purpose of Marks and Spencer:
- The significant purpose of M&S is to capturing a wide area of market by offering variety of products and services to their customers.
- Generating higher profitability through attaining higher competitive edge within the market place.
Legal Structure:
- Sole Proprietorship: It is the most popular form of business and these are controlled and maintained by the individual owner who is lastly responsible for conducing the activities of the firm.
- Partnership: In this two or more than two organizations or individual people are connected through an agreement and share some common goals and objectives.
- Multinational company: This sort of organizations is operating their business functions at large level and their headquarters are located in some specified countries. In this kind of firms whole activities are handled by the main headquarters.
- Global Company: In this organizations are markets their wide range of products and services in different geographical areas with a single brand name.
Voluntary firm:
This sort of firms is created by the group of people or volunteers that are come into a specific agreement which is based on similar purpose. These kinds of organizations are work for providing social services at the place of attaining profit or growth. These are also known as non-profit firm. This sort of organizations needs permission from the government bodied before conducting its operation in a country. Oxfam is a popular voluntary organisation in UK. The firm has started its operations from the year of 1942 within UK.
Purpose of Oxfam:
- Concern on providing proper services as to eliminating poverty that are arises through any kind of disaster.
- Focuses on saving living of people by offering required treatment and facilities.
Legal structure:
- Trust: This type of structure doesn't required membership and can be created by a group of people.
- Association: In this people with common interest are involved who works for providing services instead of profit.
P2 The Size and scope of a range of various types of organizations
Each business organisation has their own scope, size, vision and mission but their purpose and aims are different from each other in terms of profit margin. In an organisation stakeholders are considered to be the essential aspect which is effective in attainment of organisational goals and objectives in proper manner. The size, scope, vision and mission of the firm are described as below:
Marks and Spencer:
It is a privately owned multinational company which mainly works for attaining high growth and profitability at market place. It is a largest retail firm which is owned and controlled by individuals and partners. The company has its business operations all over the globe and has around 84,939 employees who work for attaining high growth and profitability. The net income of the firm is around £115.7 million.
Size: It is a large multinational retail organisation. The company majorly operates from it’s headquarter which is in UK. The company has around 959 stores within UK and more that 1433 across the world.
Scope: The Company has grown so fast as to making changes in their policies and norms. The potential growth of the firm was depend on the efforts of Michael Marks and Thomas Spencer. The major scope of the firm is to attaining higher growth and profitability through capturing a wide area of market.
Vision: As a leading retailer company Marks and Spencer wants to be on top and become the major priority of their buyers. Thus for this company is majorly deals in luxury and high quality products and services.
Mission: To convert their visitors into final buyers through grabbing their attention by satisfying their needs and wants.
NHS(National Health Service): NHS is national medicinal services framework and it provides compelling wellbeing related services to legitimate occupants of Britain with offering a few administrations free for people and in this guests are involved.
Size: The NHS operates globally and provides health benefits of the people. The company has around 1.5 million employees, who work for providing social wellbeing. The has around 111,127 dental doctors, 314966 health care takers and 18,862 staff members who are providing ambulance and other services to the people.
Scope: The significant scope of the firm is to providing wide range of free services to developing the wellbeing of people without considering the aspects of profit.
Vision and Mission: The Company has wide range of employees who are engaged in offering health care benefits to the people by considering the appropriate norms and policies. Company wants to offer high quality services without taking any kind of charges.
Oxfam: Under this, firms are worked by supporters, institutions or funders. Oxfam firm goes under deliberate area and it is enlisted in United Kingdom and work under 15 titled trusts. T operated its business at wide scale for the purpose of enhancing social wellbeing.
Size: Oxfam is one of the greatest associations of UK which comprises of more than 20 charity trusts to guarantee the enhancement in welfare of individuals. Oxfam has in excess of 1200 stores in different nations with more than 20,000 volunteers working for enhancing the financial states of society.
Scope: The extent of Oxfam is connected with accomplishment of destinations and objectives in a foreordained period which can be accomplished through legitimate utilization of workforce and assets.
Vision: Oxfam needs to convey quality administrations to the practical in reverse individuals by giving work to expel the destitution from the UK's economy.
Mission: The organization means to give vital offices to the subjects so they can live with proper facilities and security.
TASK 2
P3 Interrelation between different organisational departments and their link to objectives
Each small as well as large business organizations are work for attaining their own goals and objectives. In the modern business environment competition is so high at market place and organizations are widely concern on attaining higher growth and profitability by segregating their business operations in well planned and systematic manner (Cai and Yang, 2014).
. The business activities of small and large business organizations are categorized among different departments and the growth and development of the firm are relay on the effective operations of each department. Marks and Spencer is an extensive private constrained organization which operates its business activities everywhere throughout the globe and the organization operates in various divisions like luxury food products, high quality clothing’s and attractive Home apparels. so it is basic for association or its higher specialist to keep up a decent relationship among different authoritative heads and organisational employees. The upper level include Board of Directors, CEO and shareholders who are answerable for providing information and guidelines to middle and lower level employees by implementing suitable strategies and policies. So, it is necessary for Marks and Spencer to settle on the efforts of various departments for achieving the shared goals of organisation. As a vast business affiliation Marks and Spencer has classified their business activities in various divisions as to keep up proper interrelationship among every one of the department and these are portrayed as under:
Marketing Department: This comprises to be a most imperative part as it is framed for upgrading deals and income of firm at Marketplace (Chavis, Klapper and Love, 2011). At the time of delivering another item or a new product Marks and Spencer is for the most part worried towards investigating the new market Trend and client’s needs and this make an incentive in fulfilling the requirements and needs of individuals at market region.
Finance Department: This is likewise an essential component of firm and it has an immediate connection with the momentary aspects of the firm. it is fundamental for an association to have a viable and great budgetary foundation as to execute all business tasks in most ideal way. This segment is effective for Marks and Spencer in making proper arrangement of funds and capital so that all the activities of the firm can be conducted in appropriate manner. In this division different exercises are included, for example, proper arrangement of funds and decreasing liabilities and so forth.
Production: This comprises to be the essential division of firm as the development and accomplishment of firm depend on its production function. It alludes as a procedure in which arranging, coordinating and controlling are included. As an expansive retail organization Marks and Spencer is generally worried on delivering excellent items and administrations in regard to keeping up its effective brand image in the mind set of customers.
Human Resources: The major concerned area of this segment is to developing the strength of employees within the work place so that appropriate growth can be attained. The major obligation of human resource manager is to maintain appropriate flow of knowledge and skills though recruiting right and highly skilled employees within the work place. As a well known firm Marks and Spencer is concerned on hiring well skilled and talented human resources for long term operations of the firm.
TASK 3
P4: Positive and negative impact of macro environmental factors upon the business.
The business organisation who is operating in different segments or wide range of geographical areas has already analyzed the influence of macro environmental factor. As a well known and well reputed company Marks and Spencer operates in different countries and faces various kind of issues related with external environmental factors (Commander and Svejnar, 2011). These factors have some positive as well as negative influence on the operations of the firm. PESTLE analysis is the best suitable way to analyzing the external macro environmental factors for Marks and Spencer, the significant elements and its positive and negative impacts are described as below:
|
Factors |
Meaning |
Positive |
Negative |
|
Political |
This considered as the primary aspect of PESTLE analysis. This incorporates the political aspects of a country. Under this, all policies are designed and created by the government of United Kingdom. In addition to this, if government will created new legislation or policies for producing new and innovative products then it will have impact on the activities of business firm. |
The major positive influence of politics is that, the company Marks and Spencer has reached at the higher competitive position by considering all the aspects of government norms and policies. |
The major negative influence is that it is tough for Marks and Spencer to implement all the changes at constant basis because it affects the operations of the firm in extreme level. |
|
Economical |
This is also an essential aspects which is required to be considered by the organization or its authority in respect to maintain the business operations in effective way. Under this, if the economic condition of a country goes down that it may affect the growth of business organization. In this way, it is required for Marks and Spencer to make a decision in regards to the economic condition of a country so that appropriate growth can be attained. |
After Brexit the economic condition of UK has changed and it is required for the firm to know about the inflation rate and different income levels. The major positive influence of this is that the proper up gradation in inflation the reserve stream will be expanded and bring more cash (Cuervoâ€ÂÂCazurra, 2011). |
On the other hand the major negative influence is that the chance in which condition will change on ceaseless premise, at that point conflicts will be arises by the change in inflation rates as the low income condition of buyers may influence the overall performance of the Mars and Spencer. |
|
Social |
This factor is basically based on the behavior, attitude and perception of the people. This is related to the social environment, as the perception and requirements of people are changed as per the change arises in the market trend. It is necessary for Marks and Spencer to provide satisfactory products and services to their potential buyers in order to sustain them for long run of business operations this also create value in attaining long term profit and growth for the firm (Gebauer, Paiola and Edvardsson, 2010). |
With this Marks and Spencer is required to determine the new trends so that satisfactory services can be offered to their potential customers. The firm is also able to capture a wide area of market which creates value in attaining growth and success. |
Lack of appropriate knowledge and skills among buyers has a direct influence on the development of the firm. Due to large market reach sometime Marks and Spencer is not able to fulfill the requirements of buyers. |
|
Technological |
This factor is widely incorporated with the implementation of advancement in the operations of the firm. Under this Marks and Spencer is concern on using advance and high tech technologies as to conduct its business operations in effective manner. The business firm utilizes diverse innovation with a potential end goal to influence change in its business and additionally activity to process. |
It develops value within the firm to create appropriate changes in their production functions. This cause high benefit for the firm to produce more qualitative products and services. |
This enhances the extra cost of firm, which considered to be the major negative influence on the profitability of the firm. |
|
Legal |
It is mandatory for each small and large business enterprises to follow the rules and legislations which are created by the countries government or its bodies. Marks and Spencer is consistently following the rules of government as to achieving growth without facing any kind of issue and conflicts. |
The major positive impact of legal factor is that the company is able to recognize all the legal norms that are beneficial for the growth of firm. Government legislations are effective in protecting the rights of employees as well as customers. |
collapse in proper implementation of strategies which are created by the government will cause legal penalties and fine, thus this creates issue for Marks and Spencer and affects its brand image. |
|
Environmental |
This aspect comprises those factors that are recognizing by the surroundings of a domain. This is also an effective element which has direct influence on the growth of firm. The government of a country has created some norms and policies in regards to protect the environment form various environmental issues. |
Marks and Spencer has concern on using eco friendly sources that reduces environmental issues and Red- tapism will be reduced and firm can easily implement its operations in viable manner (Halbert and Ingulli, 2011). |
The major negative impact of environmental factor is that the brand image f the firm is reduces and this cause issue in expansion of business at global level. |
TASK 4
P5 Internal and external analysis of particular organizations
Internal as well as external factors plays vast role in effectively maintaining the business activities of the firm. The appropriate management of these two factors are required for each small as well as large business enterprises to effective functioning of organisational operations. These two factors has direct or indirect influence on the operations of business. It is the major obligation of the higher authority and management of the firm is to consider all the factor that has direct or indirect influence on the operations of the firm in effective manner (Hamilton and Webster, 2015). Appropriate internal and external analysis can be done through considering the element of SWOT analysis in appropriate manner. The internal and external analysis of Marks and Spencer are described as below:
SWOT Analysis of Marks and Spencer:
|
Strength |
Strength is incorporated as the power for firm which plays effective role in the development of firm or its operations in effective manner. The major strength of Marks and Spencer is that company is operating at global level and has a good and effective brand image in the mind set of people within the market place and the brand image creates value in grabbing the attention of buyers towards the firm or its offered products and services. Strong portfolio and wide range of products are the another strength of the firm. |
|
Weakness |
Weakness create downfall in the operations and progression of the firm. The major weakness of Marks and Spencer is that the cost of labour is high which has a direct influence on the productivity and performance of the business. Due to less knowledge in some emerging markets in which Marks and Spencer is planned to expand (Hilton and Platt, 2013). |
|
Opportunity |
This is also considered as the external strength for the firm, this has direct influence on the development of the firm or its operations. As a large retailer company Marks and Spencer has the opportunity to develop their own website as to making organisational transactions more easy and effective. The website provides easy and reliable facilities to its customers who are not able to visit the stores. |
|
Threats |
This also considered as the weakness of the firm. Threat causes the direct downfall in the growth and operations of the firm. The major threat of Marks and Spencer is the High competition within the market as it cause issue in business expansion. Chaining needs and preference of buyers is also another issue of firm. |
P6: Interrelation of weakness and strengths with macro environmental factors
The business activities of the firm are affective with the internal as well as external factors. Marks and Spencer operates at global level and the growth and development of the firm is based on its internal as well as external factors. Marks and Spencer has a couple of characteristics and furthermore inadequacies which is essential to choose by organization for betterment of its business operations. In United Kingdom, this organisation has extensive number of clients and has strong brand image in overall market. Moreover, outside factors taking off upgrades for firm so there is a need to invest in organisation production functions in order to satisfying the new needs and wants of the customers.
Marks and Spencer has effective brand impact which is required to be maintained as to lifelong function of the firm. This firm is entering later on business areas, for instance, China. Money related enhancement of this nation is most dumbfounding and acquiring limit of people of United Kingdom is furthermore redesigning. The pay of Marks and Spencer is overhauling well ordered after defied various political and likewise productive issues (Prajogo, 2016). The salary of this business firm is enhances consistent preface and moreover opening new stores in a bit of exchange countries like in the case of India and China. Concerning this, outside segments should overview Marks and Spencer to take after practical methodology of worldwide and in addition to fast improvement.
PESTLE Analysis of Marks & Spencer
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FACTORS |
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Political |
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Economical |
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Social |
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Technological |
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Legal |
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Environmental |
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CONCLUSION
From the above-given analysis, it has been concluded that the business environment is considered to be the most essential element which has a direct impact on business operations. Each business organisation has their own purpose and they work to reach their desired aims and objectives. It is required for each business organization to develop an appropriate strategy so that all the business activities and operations are implemented in the right manner and growth can be attained inappropriate manner. Macro and micro environmental factors are also required to be maintained so that growth can be attained by analyzing the internal and external sources of the firm.
REFERENCES
- Chavis, L.W., Klapper, L.F. and Love, I., 2011. The impact of the business environment on young firm financing. The world bank economic review. 25(3). pp.486-507.
- Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm performance. The Review of Economics and Statistics.93(1). pp.309-337.
- Cuervoâ€ÂÂCazurra, A., 2011. Global strategy and global business environment: the direct and indirect influences of the home country on a firm's global strategy. Global Strategy Journal.1(3â€ÂÂ4). pp.382-386.
- Gebauer, H., Paiola, M. and Edvardsson, B., 2010. Service business development in small and medium capital goods manufacturing companies. Managing Service Quality: An International Journal. 20(2). pp.123-139.
- Halbert, T. and Ingulli, E., 2011. Law and ethics in the business environment. Cengage Learning.
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