Business Strategy: Analysis of Marks and Spencer

This report analyzes the business strategy of Marks and Spencer, including its mission, vision, objectives, and strategic planning techniques. It also examines the macro and internal environment using frameworks like PESTLE analysis and McKinsey's 7S model.

Business Strategy
1

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 ...........................................................................................................................................3
TASK 2............................................................................................................................................7
P2............................................................................................................................................7
TASK 3..........................................................................................................................................11
P3 .........................................................................................................................................11
TASK 4..........................................................................................................................................13
P4 .........................................................................................................................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
2

INTRODUCTION
Business strategy is related to the actions and collected decisions that helps entrepreneurs
in accomplishing goal as well as predetermined objectives in an effective and efficient way
(Business Strategy: Definition, Levels, Components & Examples, 2020). In simple words,
business strategy is master plan that management team of business firm implements to gain
competitive advantages with market area, pleasing consumers, carrying operations and achieving
desired ends of firm. It is also called long sketch of set direction, image and destination of
business. In this report, two different organisation has been selected where first is Marks and
Spencer which was introduced in 1884 at Leeds, UK. This deals in retail segment and specialised
in clothing, food, home products. Similarly, second organisation selected is JP Morgan founded
in 2000 at United States. It is multinational financial services and investment bank holding
organisation. The main aim of report is to use different approaches along with their effect and
impact of macro environment on business. It has also highlighted internal environment and
capableness of selected organisation by using frameworks. This report has covered Porter's five
forces which help in evaluating competitive aspects of market in best manner. There are several
framework, concepts as well as theories used for strategic planning in effective manner.
TASK 1
P1
Marks and Spenser is major British international retailer whose headquarter is located at
Westminster, London (Amran and et. al., 2016). Respective organisation was introduced in 1884
and its founder was Michael Marks and Thomas Spencer. Mark and Spenser is well known for
selling their high quality clothing, food products as well as home products which they are
offering at worldwide level.
Mission: Mark and Spenser Mission is to provide premium quality products to their customer's
which help them in approaching people within effective manner. Mission statement is “To make
inspirational quality which will be approachable to others.”
Vision: Mark and Spenser Vision is to gain benchmarking which other setted by other
organisation. Vision statement of M&S is “To be the standard against which others measured
benchmarking.”
Objectives
3

There are several key objective of Mark and Spenser explanation of these are as
follows :-
Orientation of staff members - Expectation of company is high in relation of
contribution to organisation because there is need in company for its succession management.
Mark and Spenser have to create way for their employees. It is important for M&S retail
company is to retain their staff, attract them as well as also motivate for conducting business
operations in effective manner and to deliver improved products to customers.
Objectives of company – Objective of M&S is to gain leadership again in clothing as
well as special food items (Budayan, Dikmen and Birgonul, 2015). This organisational objective
accomplish through translation of their authority as well as scale within high quality products,
attractiveness and values.
Objectives related to sales - Respective business firm believes that there are numerous
ways through which sales of M&S can improve. Mark and Spenser saw return per foot as their
operational objectives through which they can go forward.
Strategy
It is the action which an manager take within their organisation with the motive of
accomplishing one or more goals (Cubas‐Díaz and Martinez Sedano, 2018). In simple terms it
can be said that, strategy is general direction which set for business firm as well as there are
several components within it which help in accomplishment of wanted state in future. Strategy
can also explain as knowledge of goals, doubt of events as well as it also require to consider
behaviour of others. In addition to this, strategy in an business firm work as blue print related to
decision making which shows its goals as well as objectives and many more. Several role
performed by strategy in organisation which help in accomplishing objectives as well as goals of
M&S. Description of these are mention below :-
 Strategy is important because without this it is not possible for Mark and Spencer
anticipate the future. With the assistance of effective strategy respective company can
deal with uncertain events in effective manner which take place within business
environment.
 It provide assistance to Mark ans Spencer within their long term development instead of
focusing on their daily basis operations. For instance new methods of production, dealing
4

with new products. This will help in achieving predetermined objectives of company in
proper way.
 While designing strategy probable behaviour of customers as well as competitors both
will consider by Mark and Spenser. In addition to this, strategy which design for dealing
with staff members will predict their behaviour.
Strategic planning techniques
It is the process of developing strategy as well as planning its execution (Evans and et.
al., 2017). There are several strategic planning techniques which Mark and Spenser can
implement within their working. Explanation of these are as follows:
Business model- It is an frameworks which business firm can utilise for capturing their
values within business environment. Strategy generally add products, service as well as
capabilities within existing business model of Mark and Spenser which help them in performing
effectively as well as also in accomplishing their goals and objectives. If company conduct their
strategic planning in relation of business model, as it will help them in gaining competitive
advantages within respective industry.
Benchmarking- It is an process which help Mark and Spenser in measuring performance
of their product, services as well as process. Along with this, Benchmarking provides essential
insights for understanding business by comparing with similar sector companies. There are
several objectives of benchmarking as it will help in identifying what as well as where
improvement is needed. Along with this, also utilise information for enhancing their performance
within business environment.
For Mark and Spenser, it is essential to analyse factors related to macro environment in
effective manner because it have wide impact on working of respective company. There are
several frameworks which Mark and Spenser can implement within their working for analysing
macro environment. Explanation of these are as follows :-
PESTLE analysis
Mark and Spenser is British multinational retailer whose headquarter is located in
London, United Kingdom. Respective company was developed in 1884 and serving at worldwide
level. They have customer base of 32 million and approx. 144 stores across the globe along with
979 in UK. PESTLE analysis is the frameworks which help Mark and Spenser in identifying key
factors that influence macro environment. PESTLE stands for Political, economic, social,
5

technological, legal and environmental (PESTLE Analysis Of Marks And Spencer, 2019).
Explanation of all these factors in relation of Marks and Spenser are as follows:
Political- There are mainly two political facto which affect working of Mark and Spenser
i.e., free trade and Brexit. Free trade is positive aspects within modern days politics as it has been
established within multitude of nations. Mark and Spenser is mainly operating in UK but it is
also located in abroad in relation to this they get several advantages from it. Thus, free trade
allow them to import their offerings at cheaper price in stores. Apart from this, Brexit also have
wide impact working of Mark and Spencer as several policies will no longer applied to company.
Economic- Present market trend of UK is shifting on smaller retail stores (González-
Rodríguez and et. al., 2018). Such small stores gives lower markup price which allow M&S to
keep on premium status. In addition to this, most of the population in United Kingdom is visiting
to their area local retail stores rather than buying premium offering of Mark and Spenser. Thus,
budgeted stores are biggest market threat for respective company.
Social- Mark and Spenser is old chain in UK market and it is known as household name.
Thus, they are loosing customers from latest generation because it is well known as household
company among youngster. So, social factor have wide impact on working of Mark and Spenser
in negative manner.
Technological- In modern days retail stores are adapting latest technology such as self-
checkout services. Mark and Spenser introduced their several self-checkout stores as well as they
are also planning for uses AI based checkout in future. Along with this, they also establish their
e-commerce stores in UK which help customers in finding every type of goods on their website.
As they can save time by shopping on website of Mark & Spencer. Such types of technology
result in making their strong presence within new generation.
Legal- There are several legal disputes within that Mark and Spenser is involved which
create several difficulties for respective company is building their image (Grayson and Hodges,
2017). For example, Frascati landlord was one of such legal dispute. As well as modification in
Britain's trade law post Brexit is also another factors which impact brand image of M&S at wide
level.
Environmental- M&S is promoting themselves as luxury brand within market area
because of that they should have highly concerned about impact on environmental factors which
6

they left. Thus, in relation to this Mark and Spenser promote sustainable retail industry on
several occasions as well as vows to be careful in relation of production procedures.
TASK 2
P2
It is important for business to analyse inner environment as well as capabilities of
organisation in effectual and economic mode by exploitation of different frameworks. This
provide guideline to business to form various strategies and plan firm accordingly to attain
positive outcomes. In aspect of respective organisation, internal situation is analysed with aid of
SWOT model which is described below:
Strengths Weaknesses
Market Experience- M&S is leading retail
organisation in UK market which has started
journey from Penny Bazaar. This works
with many big partners at UK as well as
abroad. This leads to great market
experience which is strength for business.
Brand Recognition- The respective
organisation has good reputation at
marketplace for their quality goods and
services. It is regarded as premium
supermarket and become 2nd best store at
UK.
Sales Decline- M&S has declined their sales in
2019 because of poor quality, less availability of
products at store and out of supply chain. In 2017,
during the time of Christmas, sales of clothing as
well as food both decline (SWOT analysis of
Marks and Spencer (M&S), 2020). This leads
them to close many stores and rise in staff cost
and business rates. This perception has impacted
organisation and their profits margin has decline.
Public Perception- The consumers has
perception that it does not cater need and demand
of young, teenager people as it focus on old
generation and does not manufacture trendy
clothes.
Opportunities Threats
International Expansion- The respective
organisation is large retail sector which has
Competition- There are many competitors of
Marks and Spencer in abroad and UK market
7

already reach countries like Indonesia,
Russia, India and many more. It is the
biggest opportunities for M&S to earn high
profit margins in an effective mode.
Online Opportunities- The online presence
of M8S is good as compared to others. It has
online growth opportunities that
organisation can start for their products and
services.
such as TESCO, Gap, John Lewis, Amazon,
Morrisons and many more. These creates threats
for concern to conduct their act as well as
transaction in appropriate manner.
Strategic capabilities is defined as ability of business to attain harness in each and every
skills and resources for competitive advantages along with surviving and sustaining at
marketplace to increase value over time in best possible manner. There are mainly 6 element
included in capabilities of strategic such as technique for investigation, main strategical
purposes, belief, vision, cardinal end and act program. These are measured with helps of
different tools to get strategic conversation. The respective organisation has to utilise their
resources and capabilities in proper manner so that goal and objectives are attained in best
manner.
There are different types of models utilized by respective organisation for various
purpose. In order to know competitive advantages, resources-based is used and for management
tool, McKinsey's 7S model is applied. They are described in context of Marks and Spencer such
as:
Resource-Based View Strategy
This is defined as model which overview resources as key to superior organisation
performance. It is the model which is used by business for knowing their resources and
capabilities in effective manner (Resource Based View, 2020). The respective model follows
proper sequence where resources are to be viewed which can be tangible as well as intangible
that must be heterogeneous and immobile and possess attributes of VRIO which helps in
providing competitive advantages. Each and every aspect assist M&S to achieve competitive
advantage from marketplace in effective manner. This includes tangible, intangible,
heterogeneous, Immobile and VRIO resources to gain advantage of competitiveness.
8

McKinsey's 7S Model
It is defined as technique that assist in analysing organisation's design by considering
internal elements of business. Such aspects helps to identify firm and allow in achieving end as
well as subjective in an effectual and businesslike mode. This is applied by respective
organisation to know their elements and make plan accordingly for attainment of goal and
objectives (Langabeer and Champagne, 2016). It includes following elements such as:
Strategy- It is plan developed to achieve competitive advantage as well as successfully
competing at marketplace. M&S has to formulate long term strategy for business so that they
work accordingly and attain desired outcomes. The strategy can be short as well as long
depending upon nature and size of business. It is essential to formulate strategy in proper manner
so that positive results are attained.
Structure- This means division of business, their units and departments along with
including who is answerable to whom. It is chart of business where M&S has followed flat
structure and accordingly reporting is made. The respective organisation has flat structure where
every department has their own head manager and they are liable to report them. This help them
in providing clear direction to carry out work.
Systems- It is procedures and processes of business activities on daily basis. The
respective organisation has to make their system to be clear to their working force so that they
can work accordingly (McKinsey 7s Model, 2020). The system should be very clear so that
employees can know how and where to perform work in effective manner for positive outcomes.
Skills- These are abilities of employees performing in an organisation including
competences, capabilities and so on. M&S is retail business so accordingly they should hire
skilled and capable employees for better performance. In order to improve skill of employees,
regular training and development should be provided so that goal and objectives can be attained.
The organisation should ensure about their employees and according to their requirement should
be provided.
Staff- This is defined as type, number of employees required and accordingly they will
be motivated, selected, recruited, rewarded, trained. Respective organisation is large
organisation which required more number of staff for various departments. The staff should be
motivated by providing both financial and non-financial benefits to them so that they work for
longer time period.
9

Style- It denotes the way arrangement is managed through topmost level managers, their
action, human action and symbolical worth. This denotes management style of manager, leaders
and so on. M&S has highly qualified people to manage their enterprise for attainment of end as
well as final output. Each of the members should possess proper style for work performance to
gain set outcomes.
Shared Value- It is called modular and standard that focus on guiding behaviour of
employees, and action taken by them. The respective organisation has to follow shared value for
managing business in proper manner. Activities and operations of business should follow ethical
value and principle for success and growth of business.
Marks and Spencer has to analyse strategic capabilities with help of VRIO framework
(Leonidou and et. al., 2015). This is technique which is utilized for evaluation of beginning of
company and competitory reward. There are four elements of such model which are described in
context of M&S business. They are as follows:
Resources Valuable Rare Inimitable Organised
Design Yes - - -
Employees Yes Yes - -
Financial Resources Yes Yes Yes -
Patent Yes Yes Yes Yes
Valuable- The respective organisation possess design, employees, financial resources
and patent as valuable resources for business (Lieder and et. al., 2017). These are mostly
required elements of firm to gain positive outcomes.
Rare- It means resources which are rare in nature and not possessed by other business.
M&S has employees, financial resources and patent as rare resources which assist business for
attainment of goal and objectives.
Inimitable- It means resources which cannot be copied by other. M&S has design and
employees which are copied by another organisation and financial resources and patent which
cannot be copied by other easily.
Organised- The organised resources of M&S is patent which is for long term where as
design, employees and financial resources cannot be designed in appropriate mode.
10

TASK 3
P3
The competitive unit of organisation can be measured through tool and technique. This
helps to make plan and form policies accordingly to gain positive outcomes in best possible
manner. They are described below:
Balanced Scorecard
This is defined as strategy performance management tool that is used by managers in
keeping track of all activities performed by staff under controlling and monitoring of
consequences arises due to various actions (Malerba and et. al., 2015). It is also called
performance management report applied by team where implementation of strategy or
operational activities are measured. The organisational vision and strategy should be made as per
nature of business which should be measured on regular basis to know whether they are moving
in right track or not in effective and efficient manner.
Porter's Five Force Model
This is defined as tool that is in use to find competitiveness of commercial enterprise and
their profitability level. This model consists of five forces which are described in context of
Marks and Spencer. They are described below:
Threat of New Entrants- The retail market possess high entry barriers due to
requirement of huge capital investment for entering into business and attain economies of scale
and cost efficiencies (Marx, 2015). This can be different from one another as M&S is highly
reputed brand at marketplace. The respective organisation has low threat of new entrants as cost,
capital and investment requirement is high than others.
Threat of Substitute- It is very important for M&S to perform continuous innovation for
keeping brand strong and meeting need of consumers. Clothing business is substitutes as it is
easy to copy design and get same products at less price. In context of M&S, it has low threats of
substitute as design cannot be copied by other. It is also dealing in food line which has advantage
over competitors.
Bargaining Power of Buyers- The power of buyer is high due to many alternatives and
low switching costs available for respective organisation. It is very important for M&S to
provide high quality goods and services to their consumers so that they remain attached to same
products.
11

Bargaining Power of Suppliers- The suppliers of M&S were from British but pressure
forced M&S to do outsourcing and reducing cost weakening. Bargaining power of suppliers are
moderate as they are many suppliers from where organisation can buy their clothing and other
materials.
Competitive Rivalry- There is high competition for M&S as they are many organisation
dealing in same segment providing similar types of products and services which includes
TESCO and others. This create competitive rivalry among each other.
Ansoff Matrix
This is tool which is used for devising strategies for growth in future time period
(Moseley III, 2017). It is used by most of the business for new and existing product and market.
They are described below:
Market Penetration- In this organisation sell their existing product in same market.
M&S sells their existing products such as clothes, food, home goods in existing market like UK
and other parts of the world.
Product Development- It is the strategy where new product is sold in existing market.
The respective organisation has to introduce new product through analysis and provide it in
existing market.
Market Development- This is defined as strategy where existing products are sold in
new market. M&S has to focus on providing their same products in different or new market in an
effective and efficient manner.
Diversification- In this business sell new products in new market (Peng, 2017). Here,
M&S has to think about new product as well as new market to rise their profits margin and sales
in proper manner.
It has concluded that respective organisation has to adopt market development strategies
where they have to chose new market with same product to enhance their profit margin. This
leads to create awareness among consumers regarding brand in different places.
12

TASK 4
P4
There are different strategic directions available to organisation for attainment of goal
and objectives in an effective and efficient manner. This provide guidelines to business to get
positive outcomes. JP Morgan has described following model such as:
Porter's Generic Strategies
This model is defined as profitability of firm which is above or below industry average.
They are described below:
Cost Leadership- It is defined as way in which firm become low cost producer in
particular industry (Porter's Generic Competitive Strategies (ways of competing), 2016).
Structure and cost advantages depend on size of firm. The respective organisation has to focus on
such strategy while making investment plan to clients. They should provide low cost investment
product with high interest rate to users.
Differentiation Leadership- In this firm seeks to be unique or different from one
another. For differentiation, uniqueness is required with premium price. JP Morgan is large
investment and financial business which should possess unique products for their consumers in
effective way.
Focus- This is the strategy which focus on choice of narrow competitive within industry.
Here, they can select segment or group of segments in industry which can be cost focus or
differentiation focus. In cost focus, business get cost advantage for targeted segment while in
case of differentiation focus they seeks different for target segment.
Bowman's Strategy Clock
It is the model which explores options for strategic positioning which denotes how goods
should be positioned to provide competitive position at marketplace. There are eight position of
such model which are described below:
Low Price and Low Value Added- The respective organisation charge low prices for
their financial services by adding low value features in it (What is Bowman’s Strategy Clock?,
2019). Here, product is not different and consumers get low or little value.
Low Price- JP Morgan charges low prices for different financial services and investment
policies to their clients. They are considered as low cost leaders in market as margin is less but
output can provide high profits.
13

Hybrid- It is the combination of low price and product differentiation. Such strategy can
add value to respective business if it is offered in consistent basis.
Differentiation- It is the strategy which focus on high quality product which requires
strong loyalty and brand awareness. There are many policies of respective organisation which are
different from others.
Focused Differentiation- It is strategy which is adopted by renowned or luxury brands
having aim to attain premium prices targeting distribution, segmentation and promotion. This is
important for respective organisation to be different from competitors.
Risky High Margins- It is defined as strategy which charges high prices for goods which
carry high risk (Vlachos, 2016). For value of money, customers look for better quality products.
Monopoly Pricing- Here, organisation offer particular price for specified products at
marketplace.
Loss of Market Share- The customer does not purchase due to high prices of products.
This leads to loss of market share at marketplace.
From the above analysis, it has concluded that respective organisation has to apply
differentiation and hybrid strategies for their business. In this they should provide unique and
different products to users and use hybrid strategies in proper manner. This leads consumers to
provide with low price with different products in best possible manner.
Strategic Plan for JP Morgan
In order to get successfully execution of business plan, MOST analysis has to be used
which is as follows:
Mission- This is defined as significant purpose of business plan. The mission statement
of JP Morgan is becoming best financial services company in world. Similarly, vision statement
of JP Morgan is aspiring to become best, executing superbly, building great and winning culture.
Objectives- This is defined as collection of targets that should be achieve by firm for
conducting different operations and activities in best manner (Yuliansyah, Gurd and Mohamed,
2017). Main objectives of JP Morgan is:
 To become reputed and respected financial services organisation in world.
 To provide financial services to each and every corporation, institutions and others.
Strategy- This is defined as path that should be followed by firm to attain goal as well as
objectives in appropriate manner. JP Morgan has adopted differentiation and hybrid strategies for
14

their business. In context of differentiation, their products should be unique and different and for
hybrid, cost should be low as compared to competitors.
Tactics- This is defined as guideline that is given to business on daily basis for running
business activities and operations in better way. It assist in providing direction to firm to attain
positive results. The tactics made by JP Morgan are as follows:
 Monitor business plan and their products as well as services.]
 Develop partnership with different institutions, corporations and so on.
 Providing training as well as development programs for staff to enhance their skills and
knowledge.
CONCLUSION
From the mentioned report, it has concluded that business strategy is long term plan for
organisation which helps in achievement of goal and objectives. It is significant to analyse
impact of external environment with help of PESTLE analysis and accordingly formulating plans
and policies. The internal and capabilities are measured with help of SWOT and VRIO model to
know about strong and weak points in an effective manner. For competitive force, Porter's five
model is analysed to know about threat for business in terms of new entry, substitute,
competition and so on. The strategic planning has to be made by business in appropriate manner
to attain positive outcomes.
15

REFERENCES
Books and Journals
16

17

18