The Importance of Strategic Planning in Business

This report evaluates the importance of strategic planning in business, focusing on the case of Marks and Spencer. It explores key business strategy terms, the varying aims of internal and external stakeholders, and the impact of these aims on business operations. The report also discusses techniques used by businesses to influence decision making, such as SWOT analysis and the Porter's Five Forces model. Additionally, it explains different strategic methods that businesses can adopt to attain their strategic objectives.

AN EVALUATION OF
THE IMPORTANCE OF
STRATEGIC PLANNING
IN BUSINESS

Table of Contents
Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
An explanation of key business strategy terms...........................................................................1
Explanation of how aims of internal and external stakeholders vary.........................................3
Impact of different stakeholders aims on business operations....................................................3
How businesses use techniques to influence business decision making.....................................3
Explanation of different strategic methods businesses can adopts to attain strategic objectives6
Explanation of effects that different approaches to strategic decision making on business
ability to attain strategic objectives.............................................................................................8
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic planning refers to the process of setting and documenting the direction of the
business enterprise that is useful to examine “where you are and where you are going”. It is a
outline framework that can record mission, vision, values, action plans, long term objectives that
are useful to accomplish the goals and objectives. This term is vital for business organisation
because it provides the direction to measure the goals that can attain for sustaining longer period
of time. This report undertakes Marks and Spencer that is largest retailing multinational company
in UK that deals in food, Clothing, home wares, financial services etc. This report involves key
strategic business terms including stakeholders, internal, external factors, porters five forces
model, swot analysis to examine the company objectives so that plans can give the successful
results in their long term survival (Bryson, 2018).
MAIN BODY
An explanation of key business strategy terms
Business strategy defines the long term strategies that is useful to provide the direction
for attaining huge profit margin and sales. In terms of Marks and Spencer, manager can focus on
elaborating the key business strategy terms that are stakeholder matrix, mission statement,
corporate culture below:
Stakeholder matrix
It defines the number of people who can impact and also get affected due to operations of
business enterprise. It is useful for Marks and Spencer to examine different stakeholders that can
presented below:
Firstly, manager of Marks and Spencer, can prepare a list of stakeholders that are essential for
company. It involves customers, employees, government, suppliers etc.
Secondly, manager of an organisation can rate the stakeholders as per their concerned power and
interest that helps in maintaining the work and properly maintain their participation level
(Pessima and Dietz, 2019).
High power, high interest- This type of stakeholders are vital for Marks and Spencer
due to them organisation can function their operations smoothly. It includes shareholders,
directors etc.
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High Power, Low interest- It includes customers because they contains power of influencing
working of organisation but cannot contain high level of interest in activities of Marks and
Spencer.
Low power, High interest- It includes employees, workers that are highly interested in working
of Marks and Spencer and attain the work on time. As they cannot contain high power in
operations of organisation that mainly involves decision making (Kerzner, 2019).
Low power, Low interest- It includes low power and low interest in company but affect the
operations of Marks and Spencer including rules, regulation etc. That are government, suppliers
etc.
LEVEL OF INTEREST
LEVEL OF POWER HIGH LOW
High Shareholders Customers
Low Employees Suppliers
Lastly, manager of Marks and Spencer can communicate and transfer the information to their
stakeholders as per their needs and requirements so that objectives of business can be attained on
proficient manner.
Mission statement
The mission of Marks and Spencer is to offer the inspirational quality that can attracts the
number of people globally. This helps in building the sustainable enterprise by meeting the
requirements of stakeholders (Byrne and et. al., 2019).
Corporate culture
It refers to beliefs, values that is useful to determine organisations employees and
management interaction that is useful to handle the outside business transactions. In context of
Marks and Spencer, they can adopts the customer driven culture where every employees make
full efforts to develops and improve customer service, researching the market, hiring suitable
candidate and offering training so that employees are to be satisfied within the working
environment so that they attracts the large base of customers to gain profitable results.
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Explanation of how aims of internal and external stakeholders vary
Stakeholders are vital for company that are of two two types i.e. internal and external
stakeholders. They are vary from each other on the basis of their size, interest, power,
participation etc. that affect the operations of an organisation. For instance- Internal stakeholders
of Marks and Spencer includes employees, shareholders, board of directors etc. whereas external
stakeholders involves customers, suppliers etc. Both contains different aims as per their power
and interest. In this the major aim of internal stakeholder that are employees is that they highly
focus on seeking positive working condition, pay rewards, job security so that they feel satisfied
and attracts large base of customers. In this shareholders wants high returns, transparency so that
they can invest lots of amount to enhance their market growth and position. On the other hand,
external stakeholders i.e. customers would highly focus on quality good at reasonable price,
getting best service etc. so that firm will enjoy more profits and revenues. In this suppliers aim is
to offers the quality material to organisation so that firm can produce their products and services
proficiently (Coggburn and Llorens, 2020).
Impact of different stakeholders aims on business operations
Within organisation different stakeholder can impact distinctly on operations of
company. For instance- In Marks and Spencer customer can impact operation of business
majorly because customers are the one on the basis of which company can take decision to do
their task properly. On the basis of customers organisation can design their products so that
profitable results can be enjoyed. In this manager also impacted the company operation if they
cannot satisfied with their working culture than productivity of firm is negatively effected. In this
Marks and Spencer can focus on offering best culture so the operations can done appropriately.
In this if shareholders cannot invest the amount within company that operations cannot be be
perform properly. In Marks and Spencer, shareholders can invest the money so that effective
results can be enjoyed.
How businesses use techniques to influence business decision making
SWOT Analysis
Strength Weaknesses
 The main strength of Marks and
Spencer is strong e-commerce
 The major weakness of Marks and
Spencer is high fluctuations in
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infrastructure that is very effective for
gaining profits in present digitalisation
world.
 The company is famous for providing
the best experience to customers so that
they will retain for a longer period of
time.
government laws and legislations.
 Sudden recalls of goods and services
leads to loss in confidence of customers
that a weakness of company (Schiffer
and Walther, 2018).
Opportunities Threats
 In this opportunities for Marks and
Spencer is online market that enhance
the market position and share in global
market.
 Reshaping and improving their clothing
sector enhance the customer base so
that high profits can be enjoyed.
 The major threat of Marks and Spencer
is their competitors that highly affect
sales and profit margin in negative
manner.
 Frequent changes in market trends
related to clothing sector affect brand
image and their sustainability.
PEST Analysis
This is one of the best strategic techniques that is adopted by Company Marks and
Spencer to take decisions effectively and efficiently. It can be elaborated below:
Political factor It includes government stability, trade policy etc. In terms of Marks and
Spencer, UK political condition is stable where company can trade
proficiently but at the same time due to Brexit, organisation can face
issue of dealing with suppliers on reasonable cost that affect operations
and production.
Economic factor This aspect includes interest rate, spending power of nation and their
people that will impact Marks and Spencer working and profits. In UK
growth rate is high that helps organisation to gain profitable results due
to high purchase of goods by customers. On the other hand due to
increment in inflation rate profit margin is impacted negatively (Ali,
2018).
Social factor This includes perception, beliefs of customers within society. In UK
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people are modern and attracts towards new trends frequently that will
negatively affect Marks and Spencer clothing sector. At the same time
due to this firm will focus on improving their research and offers best
quality products so that profitable results can be enjoyed.
Technological factor It is very famous aspect in present time. UK is highly focused on
adopting advanced technology where Marks and Spencer can enjoy the
success as they adopts digitalisation in promoting their offerings due to
which more and more customers are to be attracted.
Porter five forces model
It refers to a strategic tool which supports the business organisation to take decisions
accurately so that firm will gain competitive advantage within business industry. In case of
Marks and Spencer, that is leading retailing company focus on examine the risk and threats by
using five basic elements that can effective for influencing decision making. It can be elaborated
below:
Bargaining power of customers It is vital framework for success of industry. In retail
industry bargaining power of customers is weak because of
large number of consumers are present within market. In this
individual buyer cannot impact the overall revenues of
company. This helps Marks and Spencer to gain profitable
results because of low bargaining power of customers. This
will influence the organisation decision making positively
(Andrade and et. al., 2018).
Bargaining power of suppliers In retail industry there are large number of buyers are present
due to which they contain low power on bargaining. In terms
of Marks and Spencer, due to huge number of suppliers are
present within market resources can be available to
enterprise at their own cost that helps in gaining profitable
results in their long term survival. This helps in influencing
decision that gives positive outcomes.
Threats of new entrant In retail industry, threat of new entrant is moderate as it
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includes profitable scope by conducting business. In terms of
Marks and Spencer that is large retail company in this threat
of new entrant is difficult because concerned firm has good
brand image, huge capital invested with efficient market
position etc. that is highly difficult for new firm to match the
resources and attracting large base of customers.
Threat of substitutes In case of retailing industry the threat of substitute is more
because within this industry companies can deal in several
types of products range that are food, clothing, financial
services, home wares and many more. In terms of Marks and
Spencer they can deal in several segments on high price due
to which customer can switch stores to fulfil their needs.
This will influence decision making of company because in
this they can analyse the market properly so that they can
sustain for longer period of time.
Rivalry of the firm Within retail industry, this aspect contain high power and
major risk because number of competitors are to be present
within marketplace. In terms of Marks and Spencer, there
are number of competitors present in market such as ZARA
etc. that will impact profitability of company. This factor
influence decision making as in this manager can analyse
properly the strategy of their rival firm that helps in
increasing market position (Sholihah and et. al., 2019).
Explanation of different strategic methods businesses can adopts to attain strategic objectives
Marks and Spencer main objective is to build the sustainable business by offering quality
products and services so that profitable growth can be enjoyed. To fulfil this objectives manager
of concerned company can adopts the use of Ansoff matrix, porter's generic model that can
elaborated below:
Ansoff matrix
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It refers to an strategic tool that provides future growth to company by fulfilling the
strategic objectives. In terms of Marks and Spencer, ansoff matrix can be shown below:
Product development In this company can develops new products to attracts more customers
within existing market. In terms of Marks and Spencer, this strategy is
useful because it helps in gaining profit and new customers within
exiting market so that they will survive for long time.
Market development In this strategy Marks and Spencer can developed their market with
their existing products. It is useful for capturing new market by
developing growth, profits and sales (Hanlon, 2019).
Market penetration In this Marks and Spencer can reduce their price of goods to capture
the customer attention. It only effective to gain short term profits. As it
is not effective for concerned company because it impact the brand
image.
Diversifications In this manager of Marks and Spencer can focus on diverse their
market and product range so that more new customers are to be
attracted in their long term survival.
From above analysis, Marks and Spencer adopts market development because it helps in
gaining their objectives related to building sustainable business with high profit growth. In this
more and more customers are to be attracted that helps in attaining objectives.
Boston Group
STARS
In case of Marks and Spencer their star
products are men and women cloths
QUESTION MARK
In this aspect Marks and Spencer food products
are included in this category
CASH COWS
Nightwear and Lingerie are the cash cow
products of Marks and Spencer.
DOGS
Marks and Spencer children wear are the
indulge in the dog category.
It influence the decision making of company to invest highly in men and women clothing
by de invest the amount in children wear. In this manager can develops their market by focusing
on this matrix so that profitable results can be enjoyed.
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To achieving goals and objectives of Marks and Spencer company focus on different
functional department because without effective working of these departments firm cannot attain
their objectives successfully. In this finance department can develops budget so that cost can be
used optimally without wastage. In this marketing department creates awareness in new market
related to company offerings so that more people are attracted towards it. In this human resource
department can hire a professional candidate who can handle situation within new market
appropriately that helps in providing profitable results. Collaborating working this department
helps in achieving overall objectives on specify period of time (Srinivas and Rajendran, 2019).
Explanation of effects that different approaches to strategic decision making on business ability
to attain strategic objectives
In this report of evaluation of strategic planning, company can adopts the several models
and techniques to achieve objective and revenues. In this preparing a stakeholder matrix is
beneficial as it provides the power and interest of several stakeholders that helps in completing
operations effectively but at the same time it is very time consuming. In this adopting the use of
PEST and SWOT analysis helps in providing internal and external knowledge that is useful to
take decision effectively but at the same time using these models contains professional candidate
that includes high cost. Due to which overall cost of firm will affected. In this ansoff matrix is
very useful as it provides the information related to take strategic direction so that profitable
results can be enjoyed. But if selecting strategy i.e. market development cannot implement
properly than it affect company cost due to which employee morale is to be negatively impacted.
In this every department can work effectively by understand their task so that objectives can be
attained successfully. If they are not working effectively it create a challenge for organisation in
gaining profitable results within their long term survival.
CONCLUSION
From the above explanation it is concluded that strategic planning is a prominent term
that is useful to outline the direction and measuring performance so that high profitable results
can be enjoyed by the business organisation. It includes the several terms that assess strategic
framework so that strategic planning can be done effective and proficiently. It inculcates the
analysis of stakeholders that helps in examine their impact on business operation so that it
provides the proficient results. In this several strategic methods that are porter's five forces model
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are to be useful to gain the competitive advantage within marketplace. It helps in gaining
profitable results.
REFERENCES
Books and Journals
Ali, A.A., 2018. Strategic planning–organizational performance relationship: Perspectives of
previous studies and literature review. International Journal of Healthcare
Management. 11(1). pp.8-24.
Andrade, D.J. and et. al., 2018. Space–time variability of citrus leprosis as strategic planning for
crop management. Pest management science. 74(8). pp.1798-1803.
Bryson, J.M., 2018. Strategic planning for public and nonprofit organizations: A guide to
strengthening and sustaining organizational achievement. John Wiley & Sons.
Byrne, N. and et. al., 2019. Strategic Planning in Health Professions Education: Scholarship or
Management?. Academic Medicine. 94(10). pp.1455-1460.
Coggburn, J.D. and Llorens, J.J., 2020. STRATEGIC PLANNING FOR YOUR
PROGRAM. The Public Affairs Faculty Manual: A Guide to the Effective Management
of Public Affairs Programs, p.29.
Hanlon, A., 2019. Digital marketing: strategic planning & integration. SAGE Publications
Limited.
Kerzner, H., 2019. Using the project management maturity model: strategic planning for project
management. John Wiley & Sons.
Pessima, J.D. and Dietz, B., 2019. Global Strategic Planning. The Wiley Handbook of Global
Workplace Learning, pp.141-154.
Schiffer, M. and Walther, G., 2018. Strategic planning of electric logistics fleet networks: a
robust location-routing approach. Omega. 80. pp.31-42.
Sholihah, Q. and et. al., 2019. Evaluation and Strategic Planning of Playground for Kids to
Reduce the Accident Risk (Case Study it Immanuel Kindergarten Batu City). Indian
Journal of Public Health Research & Development. 10(2). pp.467-472.
Srinivas, S. and Rajendran, S., 2019. Topic-based knowledge mining of online student reviews
for strategic planning in universities. Computers & Industrial Engineering. 128. pp.974-
984.
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