This assignment discusses the key challenges facing M&S in the UK's external environment, analyzes the internal business situation and resources, and examines the competitive environments. It also explores strategic options and directions for future growth.
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Organisational Strategy 1
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Contents INTRODUCTION...........................................................................................................................3 MAIN BODY..................................................................................................................................3 Key challenges facing the M&S in the external environment in the UK....................................3 Analyse the internal business situation and resources of the company in the UK......................5 Analyse the competitive environments of the M&S in the UK and International market..........7 What strategic options and directions could the M&S pursue for the future growth both in the UK and international Market.......................................................................................................8 CONCLUSION................................................................................................................................9 REFERENCES..............................................................................................................................10 2
INTRODUCTION An organisational strategy is based on the sum of different actions in the organization which intends to take a better decision and achieve long term goals. Different actions which make an up by M&S through effective strategic plan, involving the requirement from all enterprise levels. This assignment will discuss about the key challenges facing the enterprise because of external environment factors in United Kingdom. This report will analyse the current internal business situation,resourcesofenterpriseinUK.Furthermore,itwilldescribethecompetitive environment of business and its international market. However, examined the different kind of strategic option and directions that could be organisation pursue for future growth in local as well as international market. MAIN BODY Key challenges facing the M&S in the external environment in the UK. Marks and Spencer is based on the retailer which has been changed dramatically in a few short weeks. In 2020, retail sales declined for first time on record, with the British Retail Consortium reporting a 0.1% contraction across because of the instability in political aspect. In additional, it is also increased the consumer caution. External environment means that different factors directly or indirectly affects on the internal function and perhaps the business strategy. In most of external factors that consists of political, social, economic and technological (Al Maazmi,2021). These are totally related to the control or manage the M&S, but company could be able to take an essential steps and overcome these challenges. As per consider the Pestle analysis in which identify the different common factors as follows:- Political Factor- Nowadays, it has been rapidly increasingly the political instability because of COVID-19 situation or condition. It is not only affect on the investor but also reduce the entire business profitability as well as productivity in marketplace. Second thing is related to the government 3
trade policy, either it is flexible or hard. M&S is basically operates under the government policy and legal framework. Usually, M&S has been covered the different areas such as tax rate, employee benefits, trade regulation etc. Due to COVID-19, it has been reduced the level of business revenue in marketplace. Supplier, consumer and other competitors are also affecting by political environment. Economic Factor- The economic condition is also affect M&S external environment. in regards of economic factorthatisinfluenceentirebusinessbecauseoftaxes,inflation,governmentneedor requirement (Alblooshi,Shamsuzzamanand Haridy,2020). Due to COVID-19, growth of economic rate is low and tendency to spend at local as well as international levels. Social Factor- In context of social factor, potential consumers are following their tradition and demand of specific product as well as service. In every transaction product quality which matters a lot. But it is also easily beaten by putting some good pricing of same brand. As per analysis, it has been identified that M&S prefer some fashionable style over classic trends. This can be seen by M&S where they are still struggling to get a bigger market share because of COVID-19. Technological Factor- In recent times, a large number of population could use the internet. It means that increasesthedemandofe-commercesothatM&Salreadygainedmorepopularityin marketplace (Argusand Samson,2021). Various kind of business operations are majorly performed by M&S in order to increase the business performance and efficiency. Nowadays, COVID-19 has been impacting the entire business of M&S but it is also increasing the importance of online business. during lockdown, potential consumers are used the online website of M&S to place an order. Thus, it is gaining more competitive advantage. 4
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Analyse the internal business situation and resources of the company in the UK. An Internal analysis is defined as exploration of M&S competency, price or cost position and competitive viability in the marketplace. Generally, it has been conducted the internal analysis which often incorporate measures in which provide the all essential information regarding strength, weakness, threat and opportunities. SWOT analysis is based on the framework or tool for analysis the internal environment of enterprise. For M&S, it has been generated the strategic alternative from a situation analysis. SWOT analysis can light on the M&S strength or weakness (Nienaberand Martins,2020). Marks and spencer is used the effective strategy that supports for representing the clear definition of enterprise mission, accurate assessment of internal analysis. Strength- The strength of M&S is to maintain the excellent and quality of product as well as service. Sometimes, it has been developed the effective relationship with staff members. M&S has been treated as employee and also paid more than its actual sales assistant in other enterprise. M&S is a leading brand in which always maintain a strong reputation with quality of product as well as service. Weakness- In context of weakness, M&S was completely reliant on the particular British Suppliers and also compare with other competitors. Sometimes, it can use different suppliers for lower the cost or price of products. The biggest weakness of M&S is a lack of marketing strategy (Tripathi and Kumar,2020). A poor advertisement concept which means that M&S neither has offered the sales to its potential consumers, especially at the time of Christmas and Easter occasion. Poor consumer service is also affecting on the entire business profitability as well as productivity in marketplace. Threat- A major threat of M&S is intense high completion because there are already major competitors such as ZARA, Sainsbury, ASDA and TESCO. The clothing industry is consider as 5
mature and market which are not saturated and indicate that consumer always looking for new fashionable cloths. Internet related technology is always enabled potential consumer to shop from home. in order to focus on the expansion into international marketplace. Through this way, it has proved that M&S become less successful in marketplace. Opportunities- Whenever, keep in the line with potential competitors, M&S is always tried to enter into e-business which means that targeting the different consumers. Sometimes, M&S has been offering the potential client as option from shopping through online website. in this way, It become easier for M&S to handle the problem of operating store in term of high price or cost localities. Nowadays, it has been rapidly increasingly the demand of modern technology, which is always supports for enterprise to keep ahead of its competitors. Sometimes, it is also focused on the cloths market segmentation according to the age wise such as women’s, men’s and other children clothing. M&S has been gained the more opportunities to diversify their business and achieve desirable goal or objective. Resource of Marks and Spencer- Physical stores- M&S has been owned 375 UK stores, 155 physical stores managed under specific franchise in 28 different territories. Through this way, M&S has been identified the suitable identical procedures, design, layout and image (Zulkifli,NurhayatieWidodoand Junaidi,2020). In this way, it help for increasing the change in the physical existence according to the need or requirement. Human- M&S has always tried to maintain the loyalty, friendly environment, hardworking and other experienced staff members. Company will support for improving the knowledge managementprocess.Afterwards,itwouldbeadoptedthegreenenvironmentorstyle. Sometimes, it has been developed a poor good communication between head quarter because of enterprise bureaucratic culture or tradition. 6
Financial- M&S has been declined the profitable rate. In this way, it indicate that M&S do not have handle the healthy sign of cash flow availability. At certain level, M&S has been stopped the expansion programme in Europe, America. But M&S has acquired the proper financial resources. Intangible- the potential consumer loyalty has been decreased because of change of market fashion and other product price. M&S brand as consider as high quality of standards which are undervalued. M&S does not have knowledge of management system such as consumer and other supplier database. Analyse the competitive environments of the M&S in the UK and International market. A porter’s five force is based on the framework for analysing the enterprise competitive environment or culture. There are large number and power of enterprise company competitive rivals and new market entrants. These are influencing the overall business profitable rate in marketplace. Porter five force model is basically used to determine the essential source of competition in M&S. Bargaining power of Supplier- In M&S, this company has been directly affect on the UK supplier which perform the significant roles in their stock or supply chain management. Whenever, it has been created the tough situation where supplier was consider the reliant on M&S. As per consider the problem of particular approach in order to overseas suppliers produced the item on low price or cost. The bargaining power of supplier is low and in 2020, it has been declined the sales, and also reduce the price or cost of product. As a result, the bargaining power of supplier can be reduce. 7
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Bargaining power of Buyer- The bargaining power of buyer is high. The potential consumers are seeking the traditional or classical clothing. It became consider the suitable price or cost of particular products. M&S has focused on the competitors in order to provide the best product quality of their consumers. In additional, UK consumers are not willing to pay more money on premium items because of COVID-19. Therefore, potential consumer can easily switch from one brand to another. Threat of new entrants- In M&S, it has been faced the high competition level and lower the end of its current market. ASDA with established own brand but it offers the high quality of clothing at low price or cost (Zulkifli,NurhayatieWidodoandJunaidi,2020). The competitors of M&S such as Zara, Gap, Next BHS, these are offering high quality of clothes in which attract young consumers. In this way, it has been identified that threat of entrants is higher. Threat of Substitutes- In M&S, threat of substitute is high. Nowadays, it is mainly increasing the operational cost of enterprise with foreign imports. Usually, many potential consumers are prepared to pay a premium for label. In this way, it is always tried to purchase the items with low price or cost. Competitive Rivalry- M&S has been operated their business in competitive environment. in this way, it is important to identify the specific need or requirement for enterprise. In UK. There are no exit as well as entry barriers but market is mature. At certain level, it is not easily identified the bounce for new enterprise. M&S has been already experienced of exit barriers. What strategic options and directions could the M&S pursue for the future growth both in the UK and international Market M&S is based on the leading retailer in UK, which is always tried to use as innovative idea in their business growth and development. In context of strategic options and direction. M&S has been used the generic model for strategic plan. 8
This type of strategic generic model can be divided into different ways:- Cost leadership, Differentiation, Focus. M&S is basically fascinating the case of enterprise which has been lost its strategic focus. Due to Covid-19, M&S has lost the way in term of growth and development. This can possible when potential consumer avoid to purchase items. Another way, it is also increased the competitive pressure due to existing or new players (Zulkifli,NurhayatieWidodoandJunaidi, 2020). M&S has changes its own strategic direction to handle the complex business situation in proper manner. In general, M&S has been used the cost leadership, differentiation and focused strategies in their business to improve entire business performance from local to international marketplace. CONCLUSION From above discussion, it has concluded thatn organisational strategy is based on the sum of different actions in the organization which intends to take a better decision and achieve long term goals. Different actions which make an up by M&S through effective strategic plan, involving the requirement from all enterprise levels. In this report, it has been discussed about the key challenges facing the enterprise because of external environment factors in United Kingdom. Analysis the current internal business situation, resources of enterprise in UK. Furthermore, it can be identified the competitive environment of business and its international market. However, examined the different kind of strategic option and directions that could be organisation pursue for future growth in local as well as international market. 9
REFERENCES Book and Journals Al Maazmi, J., 2021.The impact of strategy diffusion on organisational performance of project- based organisations(Doctoral dissertation, The British University in Dubai (BUiD)). Alblooshi, M., Shamsuzzaman, M. and Haridy, S., 2020. The relationship between leadership styles and organisational innovation.European Journal of Innovation Management. Argus, D. and Samson, D., 2021. Organisational (Business) Strategy. InStrategic Leadership for Business Value Creation(pp. 47-88). Palgrave Macmillan, Singapore. Book and Journals Nienaber, H. and Martins, N., 2020. Exploratory study: determine which dimensions enhance the levelsofemployeeengagementtoimproveorganisationaleffectiveness.TheTQM Journal,32(3), pp.475-495. Tripathi, R. and Kumar, A., 2020. Humanistic leadership in the Tata group: the synergy in personal values, organisational strategy and national cultural ethos.Cross Cultural & Strategic Management. Zulkifli, Nurhayatie, T., Widodo and Junaidi, M., 2020. Improving organisational learning, strategicquality,organisationalperformance:energisingintellectual approach.International Journal of Learning and Intellectual Capital.17(3). pp.297-308. 10