It is an effect of all internal and external factors which influence the business. It should keep in mind that both the internal and external factors of business affect each other. There are different types of organizations in which some of them are: Public, Private and Voluntary (NGOs). The private organizations have its stake in private hands, public organizations have its stake in government and the voluntary organization does not have any business purpose. Although, it can be in the hands of public or private (Botha, Kourie and Snyman, 2014). All of the organizations contribute to the world economy and hence contribute to the growth of international business environment. The effect of these organizations in business environment is discussed here:
In private sector organization here, Marks and Spencer is taken into consideration. It is a retailer in United Kingdom and headquartered in London, with over 1380 stores around the world. It operates ion two segments: UK and Internationally. The UK segment includes the UK retail business and the international business includes of Marks and Spencer’s own business in Ireland, Europe and Asia. It deliver its own food brand, clothing and home products in its stores and online. It delivers its products in UK and internationally. The company serves approximately 300 full-line stores and websites, M&S.com. This company opened its first store in Kabul, Afghanistan in 1960. In 1973, it has expanded into Canada, and at one time it has forty-seven stores. But till 1999 only 38 shops were remained. It has many stores across nations. The company has wide scope in different sections of the services it provides to its customers. Some of them are core shops, M&S Food hall, Hospitality, Home stores, Outlet stores and online services. From the above sectors in which company is dealing it can be assumed that company has wide scope in different sections of the society. It has food range, it provides hospital facility, it has home stores to deliver products at home, it has outlet stores to customers who wants to purchase their products from market. In spite of all that it has online stores also which allows customers to purchase their products online.
The company has its mission of providing quality accessible to others. The mission statement is known for providing the information about the concern of administration and what they are thinking of it. This company has a vision of providing quality, service, invention, and trust. The business objective of the organization is to recover its leading vesture and forte nutrients. The company is aiming at its basic factors and things for which they have opened it. The company provides its customers the service for which they are looking for the company (Wetherly, 2014).
M&S follows a flat organizational structure; this type of structure has a limited number of management between the higher and the lower authorities. This structure is followed by organizations to develop decision-making power to the employees. The company communicates with its stakeholders like customers, community, government and etc. This communication is very much requires attention because these external factors are the dependency of the company.
In public sector organization here, Bank of England is taken into consideration. It is the apex bank of United Kingdom and headquartered in London. It is the bank on which most of the central bank’s structure is based. It is established in 1694 having world’s eight oldest bank. It was nationalized in 1946. It became an independent public organization in 1998 holding all the stakes by treasury solicitor. It also regulates the issue of bank notes in Scotland and northern Ireland. The bank has the responsibility of maintaining the monetary policy. Bank has the power of giving orders to committee, if the action will be in the interest of the community but thus orders must have been signed by the parliament within 28 days. As a central bank, it does not allow the consumers to open any type of account in it (Hair and et. al.,2015). But it allows the consumers to change their bank notes if they were torn. The bank is mainly dealing in two sectors of which Monetary Policy and asset purchase facility. Monetary policy has some specific purposes such as confidence in the currency and price stability. Apart from that, the bank also responsible for inflation and different types of rates of interest for the public and the industries. The bank acts as the bank of government and it also maintain the consolidated fund of government. It also manages the country’s foreign exchanges and the gold reserves. It also acts as the bank of the banks, lender to the last resort. The mission of the bank is to promote the good of the people by maintaining the monetary and the financial stability. The bank is viewing in the aim of maintaining the stability of currency and the monetary policy and regulating the other banks. The legal structure of the bank is bureaucratic. This structure follows how a single person is responsible for regulating an organization. That is what exactly happened to the bank. The stake holders of the bank are the government and the bank itself.
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In the voluntary organizations here, Save The Children is taken into consideration. It is an international non government organization which is regulating in developing countries. It promotes itself in protecting children’s rights, providing help and support to the children who are in trouble. It was established in United Kingdom in1919. The main aim of the company is to improve the lives of the children through better education, health caring and opportunities related to economics. Apart from this, it also provides help for the children in natural disasters, wars and other conflicts. The members of this NGO are 29 which are serving across several nations. In spite of that it is also working in 120 countries with its alliances. This organization promotes policy changes to promote more rights to the children. This organization is totally influenced by the UN Declaration of Rights of the Child. There are many campaigns run by this NGO. Some of the campaigns are Rewrite the future, every one Campaign, Every beat matters and If London were Syria (Apăvăloaie, 2014). All members of this alliance are bound by the International save The children alliance By Laws. This law includes child protection law and conduct. The save the children website allows four keys towards which the member organizations should follow.
- To secure quality education for children affected by arms.
- To improve the presence in countries having strategic importance.
- To create more voice for children.
To become the emergency response agency worldwide by improving response capacity so that they can deliver their best (Deasy and et. al., 2016).
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Functions of Organization
The functional organizational structure is a type in which organization is divided into smaller segments of specializations areas such as finance, marketing, management, operation etc. These functions allow great efficiency as key specializations of employees are divided accordingly and this it helps to achieve organizational goal. There are many functions required to operate an organization (business environment. 2018). These functions help the organization in achieving their goal. All of these functions are interrelated to each other, so that they help in achievement of goal. Some of the basic functions an organization performs are:
These are the functions related to financial activities of an organization. Financial functions are generally the management of financial activities of the organization. The task of running an M&S store is broadly categories in different sections which are interrelated with each other. The different departments are divided so that each department is doing its own work efficiently. These functions are interrelated with each other as financial functions operates it gives permission to other functions to operate.
These are the functions related to management activities of an organization. These tar the management of different resources such as human, finance and etc. the task of running an M&S store is categorized into different sections which are interrelated with each other. In this function management is divided into its own sections, so that all functions can work independently. As this function operates it allows other function to operate like marketing etc (Savrul, Incekara, and Sener, 2014).
It brings raw material and allows production process to make the goods which customer needed. It also shares ideas of improving efficiency and cost cutting of the product. These are the functions which are related to the operational activities such as doing a file and operations which are in the office to develop other functions. In M&S, these functions are interrelated with each other as operations and research department helps to operate in other sections such as marketing, management, finance etc (Smith, 2016).
Every product in market which is going to be delivering needs marketing. Without in the knowledge of customers it is not possible to sell the product into its full efficiency. The marketing concept includes the customer’s geographical needs and the area where the product is going to deliver. The marketing always target a specific group of customers for which the product is going to deliver. It helps to operate the other departments such as how much the requirement of the product is? The marketing concept also helps to achieve the organizational target.
Now, how these different sections are interrelated with each other is discussed with chart.
Pestle Analysis of Marks and Spencer
In this report, a discussion is made on the macro factors which effect Marks and Spencer. The factors which are included in this analysis are the political, environmental, sociological, technological, environmental and legal factors (Deasy and et.al., 2015).
These factors include the influence of the government where the business is going to be established. This factor is totally operated by the regulations of the government. The regulations set by government could be Health & Safety regulations and other governmental policies which affect the business. Here, the health & safety standards such as planning for hazard identification, risk assessment and risk control are included (Deasy and et. al., 2015). Including an example, this company is charged by British Standards as they didn’t follow the health and safety regulations. Hence, a door fell on an employee while working.
This situation is concerned with the economic factors a country is facing in which business is operating. By taking an example of such situation, Marks and Spencer have faced an uncertain condition of economy as the retail sector in which the company is dealing doesn’t remain so much market. The company mostly deals in the luxury items, and the people didn’t have so much money to spend on these luxurious items. Since at the time of recession, company allowed a discount of around 20% to compete itself with the recession. But sometimes the economical factors make such condition that makes the market dull.
This factors influence the business very much. In this factor the sociological factors such as cultural, personnel, Psychological factors are included which affects the business in a serious way. For example, once upon a time company wants to increase its business. For that company, included food online to deliver to its customers. This was done to compete itself with the other competitors. As a result of that the company’s supermarkets have increased in a large number and help to achieve the business targets.
Technology plays a crucial role in the increment of any business. In retail market business, a company spends too much to expand its brand awareness. For Marks and Spencer, it is very much necessary to communicate to its customers to create its brand image which they are having. They have a celebrity star, Myleen Class to promote their clothing brands and technology. They also have their website which is very much colorful, maintaining their brand image.
Laws and regulations are always changeable of every government. Therefore to pursue a business efficiently, it is very much necessary to keep itself up to date to the laws and regulations for Marks and Spencer (Cohen and Kietzmann, 2014). For example, a “Fair packaging and Labeling Act (1996)” was introduced for packaging and labeling of consumer goods. This helps to identify the content, quantity and producer of the goods to the customer.
When it comes to the environment it has become necessary to manufacturing the goods as they should not harm the environment at any cost. All companies and organizations are pressurized to change the ways they are used to from past. Marks and Spencer has promoted itself as a Green Policy holder and they call itself as “Plan A” because there is no other plan to compromise with environment (Andersson, Forsgren and Holm, 2015).
SWOT analysis of Marks & Spencer
This analysis includes the internal and external factors which effects the company’s working efficiency. In SWOT analysis Strength, Weakness, Opportunity, Threat is included. Here, Marks & Spencer is taken into consideration for SWOT analysis.
- It provides strong offerings to customers having latest trends in clothing.
- It has strong online infrastructure which attracts customer.
- It has effective corporate social responsibility which creates goodwill in the minds of customers.
- It has good focus on what is needed by the customers.
- The company is not performing well financially.
- It’s too much reliability on UK market makes the company sensitive that any tough economic situation can cost company.
- Future of this company is not expanding in other countries like China which can give it a huge market.
- Recalling of the products frequently makes the confidence low among the customers.
- The company is planning to invest in Asian countries like China, India which can give it a huge market because these countries have a huge population.
- The company’s online presence can boost its market.
- The can make changes to its clothing segment to launch something unique to attracts to its customers.
- By simplifying their model of operation company can find a huge opportunity in market.
- Issue of Brexit could be a huge threat to this company.
- A tough competition in UK food sector can make harder for the company.
- A change of trends in the clothing sector could be a huge threat for this company.
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Interrelationship of SWOT and PESTLE Analysis
In this section, Pestle analysis is going to be done in comparison with SWOT.
The political factors of Marks & Spencer include the governmental issues. The strength of the political factors of the organization is the good stability of government in UK. While the weakness of political factors is the Health and Safety issue which the company already suffered in 2006, when a warehouse door fell over an employee (Botha, Kourie and Snyman, 2014).
These factors include the economic factors of the country in which the business is trading. Since UK has a stable economy, M&S has its strength in it. While weakness is the recession type issue which had suffered the company in last few years ago.
Since M&S is operating its business in UK from a long time. Therefore it has good knowledge of the sociological factors of the people. These factors doesn’t take too much time to change therefore to rely on such market could be the weakness of M&S.
Technology plays an important role in the business exceeding. Since M&S has a great impact of it over customers because it has covered itself in online market. But it has failed a time to keep itself updated with the technological changes happened in UK.
Laws and regulations are always changeable. Since M&S always follows the rules and regulations set by the UK administration but in other countries where it is operating itself, following the regulations is not an easy (Wetherly, 2014).
These factors include environment onto its priority. Although, M&S follows all the guidelines of the authorities but in future what decisions are going to be made can increase trouble for the organization (Apăvăloaie, 2014).
In this report, it can be concluded that how business environment affects the business. Here three types of companies are taken into consideration public, private and voluntary. The company here taken is Marks & Spencer and all the details of the company are discussed as background details, products and services they supply, vision, mission, and objectives. Pestle analysis of M&S is done with negative and positive impacts and relatively examples also shown here. Apart from that, SWOT analysis is done with how it affects the decision making of the organization. In the end, an interrelation is found with the strength and weakness of Pestle and SWOT analysis.
Books and Journals
Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business environment: Knowledge management and knowledge management technology. Elsevier.
Wetherly, P., 2014. The business environment: themes and issues in a globalizing world. Oxford University Press.
Hair Jr, J. F. and et. al., 2015. Essentials of business research methods. Routledge.
Apăvăloaie, E. I., 2014. The impact of the internet on the business environment. Procedia Economics and finance. 15. pp.951-958.
Deasy, S., and et. al., 2016. Controlling use of a business environment on a mobile device. U.S. Patent 9,247,042.
Savrul, M., Incekara, A. and Sener, S., 2014. The potential of e-commerce for SMEs in a globalizing business environment. Procedia-Social and Behavioral Sciences. 150. pp.35-45.
Smith, B., 2016. Nature and Geography: Tragic Voids within Marketing Textbooks and the External Business Environment. In Global Perspectives on Contemporary Marketing Education (pp. 47-64). IGI Global.
Deasy, S., and et. al., 2015. User interface for controlling use of a business environment on a mobile device. U.S. Patent 8,954,050.
Cohen, B. and Kietzmann, J., 2014. Ride on! Mobility business models for the sharing economy. Organization & Environment. 27(3). pp.279-296.
Andersson, U., Forsgren, M. and Holm, U., 2015. Balancing subsidiary influence in the federative MNC: A business network view. In Knowledge, Networks and Power (pp. 393-420). Palgrave Macmillan, London.