Analyzing the Impact of Macro and Micro Environment on Business Strategy of Marks & Spencer

This assignment analyzes the impact of macro and micro environment on business strategy of Marks & Spencer. It includes frameworks like PESTLE, Ansoff's matrix, SWOT, McKinsey's 7S model, and more.

Business Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Apply various frameworks to evaluate the influence of macro environment on an
organsiation & their business strategies......................................................................................3
TASK 2............................................................................................................................................7
P2 Evaluate the capabilities and internal environment of a company by using appropriate
frameworks..................................................................................................................................7
TASK 3............................................................................................................................................9
P3 Implement porter's five forces to evaluate competitive forces of a market sector for a firm.
.....................................................................................................................................................9
TASK 4............................................................................................................................................9
P4 Apply different models, theories and concepts to interpret strategic planning for a
company......................................................................................................................................9
M4 : Strategic management plan that includes strategic priorities and objective.....................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy is process of the framing certain actions and the operation so that all the
work can be completed in an appropriate manner and also retain the effectiveness of it. It is the
master plan which needs to be implemented within the business organisation by which they can
sustain in the competitive market(Drnevich, . and Croson., 2013.) . This particular assignment is
based on the Marks & Spencer, which is UK based retailing organisation which is operating in
manufacturing of cloths, food and certain home items. This particular project will analyse the
impact of micro-environment factors on the overall business strategy of an organisation.
Moreover, there are different analytical framework that help in acknowledge macro-environment
that is discussed. Moreover, Internal capability and the business environment also the use of
Porter's five forces. Lastly, this will cover the concept and methods to understand the strategic
directions for the business.
TASK 1
P1 Apply different certain frameworks to analyse the impact of macro environment on an
organsiation & their organsation strategies.
Vision: As the Marks and Spencer is the global standard against other global business and
measure their operations.
Mission:Marks and Spencer is having the mission to have the inspirational quality that is
accessible to the consumer. As the company is enhancing their market due to that they will
attains will more profits.
Objectives: In context to Marks and Spencer, they are working with the objective to have
the leadership in their clothing and food industry. This assist them to become the leading global
company by which can complete with their competitors by effective means.
Strategy refereed to the action that is being taken by the manager of the company by
which the organisational goals can be rightly achieved. This is the basic directions that is being
followed by an organisation by which they can ensures the higher revenue and profitability so
that results can be attained. Achievement of certain goals and profits with the help of various
business action plan will assist the M&S to achieve their goals and certain objectives. They can
further implementing various strategies which allow them to work more so that they can achieve
the goals ad objectives. They can further implement different strategies within the organisation

by which they can taught the certain follow-up and actions within the organisations. They are
bale to achieve the huge success in the local and international market.
Different strategic planning methods:
 Benchmarking: This is basically defined as the making comparison with its rivals within
the sector. With this, M&S will be able to acknowledge their market position by
understanding the comparing with the performance with its market leader. This also leads
to assist them to formulate the certain strategy for generating more revenue.
 Business analysis: By analysing the business strategy, M&S will acknowledge their
strengths and weaknesses by better means by which they can have the effective decisions
that can be taken by the Marks and Spencer to have better outcome.
different analytical framework to acknowledge external environment
Stakeholder analysis
Stakeholder analysis if defined as the procedure of analysing the such individual that can
hurdle or influence the overall performance of the company as before they are initiating any
given project. This respective model helps the M&S in grouping their stakeholders as they can
have the interest and level of working and the overall influence in the company. Following the
certain steps which conduct the analysis that are given:
Step 1: Analysing about the stakeholder by enlisting the relatable possible individuals
that can be potential stakeholders for the business. In relation to M&S, there are sales
department, executive staff, customers, suppliers, government and the shareholders which are
fulfilling the overall functionality of the business.
Step 2: As after analysing the overall stakeholders, the manager of the company needs to
make priorities as per the various categories that includes the influence, interest rates and the
level of participation etc.
 High power, high interest: These are the stakeholders which are the most vital for M&S
and they are basically prioritising them so that they can well perform in the given
organisation in an appropriate manner.
 High power, low interest: Such stakeholders that influence the overall working of an
organisation as they do not have the major interest in the given task.
 Low power, high interest: They are the aspects which need to be informed as it is related
to the given to the given project of M&S as they do not create nay issue for them.

 Low power, low interest: such stakeholders that are not that much involves in the given
task & do not have the limited power which can influence the business.
Step 3: In this step, the manager of the M&S, they will have communicate with such
stakeholders as per their priority which help them from various stakeholders in order to
accomplish the given project. (HoejmoseBrammer. and Millington., 2013)
PESTLE analysis
It is the model which analyse the macro aspect s which is that the overall working of the
organisation. In relation to M&s, Following factors are given below:
 Political factors: These are the factors which includes the government legislation, rules
and the tariffs and the stability of the government. In UK, they are working with the
stable government so this is helpful for M&S. Free trade policy have the massive political
benefit to the Marks and Spencer and they are operating its almost 1500 stores around the
world. On other hand, Brexit will be followed by certain tax embargo which basically
affects the brands shipping out of England.
 Economic factors: It includes the growth rates, interest rates, inflation and the overall
purchasing power of the people that re the resident of UK. They basically generate the
disposable income due to which the people can have the capacity by which they can
purchase the given products which is offered by M&S. The current market trends of UK
is shifting towards the small retail stores as they are offering lower markup prices and
thereby allowing the Marks and Spencer to retain its premium status.
 Social factors: There are certain aspects that is linked with the attitude, beliefs & the
attitude of the individual who are living in UK. The people are living with open mind set
in which people usually prefers to have the modern & advanced offerings. When the
M&S is manufacturing high quality goods then they will leads to have more revenue and
profitability. (Chen, and et. al., 2018). Marks & Spencer is projected to lose a majority of
customers from their latest generations. However, they can counter this factor by
dominating the ready meals industry as the rise in the consumption of ready meals all
over the UK and world as well.

 Technological factors: As it is known that modern word is sustaining in the market as
the organisations are compiling and implementing the modern business techniques so that
they can have the higher revenue and profitability so that they can have more profits
within the company. M&S is using the online platform to grab the large customer base
so that they can have more revenue. Marks and Spencer is introducing the self-checkout
retail and food joints which is really taken to the account of current industry. They are
enabling to usage of AI based checkout in the near future.
 Legal factors: In this, M&S is following the legal laws for say, employment law so that
they can operate their business in the market and also having the higher consideration in
the market as well. Marks and Spencer is having various legal disputes which make hard
for the brand to hold its image constant in long run. Moreover, change in the Britain's
trade laws post Brexit will be another legal aspect which affects the overall brand hugely.
 Environmental factors: Such factors are related to protecting ecology and balance
within the environment from the certain activities of business firms. There are following
environmental laws that are helpful for M&S and this leads to have positive image in the
market. Marks and Spencer is promoting themselves as the luxury brand and due to this
there is the major concern for the environmental effects as the brand leaves behind.
Ansoff's matrix
It is defined as the business strategy tool which is be used for planning the right strategy
so that an organisation can used that for ensuring more revenue and growth. In context to M&S,
following are the strategies which are as follows:
 Product development: In this strategy, an M&S can launch their new products in the
existing market with the aim of grabbing more diversified needs of the customers.
 Market development: M&S can use this strategy and sell their existing product in the
new market by which they can rightly establish the overall functionality of the business.
 Market penetration: It is strategy which is being used by the M&S in which they tends
to have same product to be sell in the existing market so that there is rise in the overall
revenue.
 Diversification: This considered as the most risky process in which new products is
being launched to the large buyrs in the new market. If when the M&S fails to offer the

products and services so that they can rightly offer the given products in the target
market.
In this, M&S is recommended to work with the market penetration strategy so that they
can exit in the market for long period of time and offer discount rates to their potential
customers.
SWOT framework
It is the framework that analysing the internal factors which is impacting the overall
functionality of the business and understand the overall working of the company as well as the
opportunities and threats which are impacting the business. In context to M&S, following are
given below:
Strengths Weaknesses
 As the brand recognisance of M&S is
high as they are having premium goods
to sell.
 Organisation is having the huge
products line that are clothing for men,
women and kinds, home products and
so on.
As the people in out region and UK believe
that M&S is not the trendy store for adults and
youth in context to clothings. (Ghezzi., 2013)
 They are charging high prices of their
products an using traditional methods to
operate their business.
Opportunities Threats
An organisation can expand its business in the
given presence of Africa and Asia. (Noe, and
et. al., 2017)

 They can invest more in promotion
activities in order to grab the large
marketplace.
 Making change in the political
environment due to the overall presence
of the business in which they can act as
the hindrance in the betterment of the
the company.
 There are rivals such as Zara who is
giving cut tough competition to their
rivals.

TASK 2
P2 Analyse the capabilities and micro environment of a company by using appropriate
frameworks
Strategic capabilities and their key components
It is describe as the method in which the certain strategies are shaped up and keep into a
action of an organisation by which the can have the competitive benefit within the market. They
are having the six capabilities which are the main components and includes the strategy, purpose,
key goals, value, vision and the action plan of the business. There are the following benefits
which must be implement within the organisation so that they can have the competitive
advantages within the organisation. (Maté., Trujillo. and Mylopoulos, J., 2012)
Resource based view strategy
It is the managerial framework which ensures the proper working within the company
and they are determining the overall strategic resources of the company which can be exploited
by the business so that they can have the sustainability and growth in the market. Basically there
are two type of resources which are intangible that can not seen or touched as these are the
goodwill, trademark and the patent right of the company. On other hand, tangible includes the
physical resources that includes the machinery, building, capital and equipments.
McKinsey's 7S model
These are the framework which leads to help in analysing the overall organisational
design of the company and they identify the seven key internal factors. Following are the
components which are needed to aligned by identifying the various seven key internal
components of M&S that are given below:
 Strategy: This is the action plan which is framed by the M&s so that they can right work
in an appropriate manner. When the company will not robust the strategy then the
organisation have to face various issues and leads to reduces the sales and customer base.
 Structure: As when the company is operating its business in the market then they tens to
have the business so that they can rightly ensures the huge success in the market. When
the M&S fails to so then they tends to reduces the effectiveness within the market.
 Systems: it includes the basic operations and the activities that are being performed on
daily basis. Maintaining appropriate system will help the manager to implement the
certain organisational strategy in an appropriate manner.

 Skills: this basically includes the capabilities of the employees which help the M&S to
operates its business in an appropriate manner.
 Style: These are the leadership style of the company which is being used by the firm so if
the M&S do not follow the appropriate strategy then it leads to ineffective management
within the team. M&S is using the participative leadership style.
 Staff: It is basically related to the number of employees that are working within the
company. M&S working on the staff training and their retention so that they can rightly
work. (Ghezzi., 2013)
 Shared values: It is the major part of this model as it includes the standards and the norms
of the company such as M&S is maintain the overall management within the company
and offering better working environment t the employees.
VRIO framework
It is the framework which is abbreviated as the value, rarity, immutability and
organisation which is used by the company so that they can rightly analyse and identity the
available resources and the capabilities within the company. In context to M&S, these aspects are
explained as follows:
 Valuable: It is vital for the M&S to have the better use of the their valuable resources by
which they an take the competitive advantage. They are employees, supply chain as the
value sources of the company.
 Rareness: It includes the uniqueness of the goods offered by the Marks and Spencer and
they have the unique production and manufacturing machines by which they are offering
the premium goods.
 Imitable: They basically require to have the products and services which can not be
copied by other firms and with this, they can retain in the marketplace. M&S have
imitable raw material for better production by which they can offering better goods that
are imitable for other firms.
 Organisation: It is important for the company to have the organised structure and proper
working and if they do not have the systematic working in M&S then it become difficult
for the company to meet the needs and wants of their potential customers. (Scholes2015)

M2 Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities.
From the above discussion, it can be said that distribution channels that involves the
merchants and ensuing the effective brand image of Marks and Spencer are the strength of the
company. The main advantage of such strategies is that they basically attracts their large
customer base for their company. For this sole purpose of analysing and maintaining the
strengths, company needed to make some investment and technically along with the human
resource.
Moreover, trust issues of the buyer and the rapidly increasing in the prices of the food
products are considering as the weakness of marks and Spencer and they have the good
opportunities to do the business in new market segment.
TASK 3
P3 Implement porter's five forces to evaluate competitive forces of a market sector for a firm.
This model of porter’s five forces analyses and indentifies the competitive forces which
can shape the business enterprise and also help in determining the weakness and strength related
to the company. In context to M&S the porters five forces is discussed below which helps the
organisation to realize their competitive level in their market field and increase their long term
profitability-
 Threat of new entrants: - It is the ability of an organisation to be influenced by a force of
new market entry. The threat of this force to M&S is low because establishing a new
brand might take a long time, money, and formalities, which is not feasible for any
company.
 Bargaining power of suppliers: - It considers the likelihood that suppliers will influence
input costs. Customers' material demand, rise in raw material are some kind of factor
related to this element. The organisation will be able to function properly if they get the
proper knowledge of their customers demand. Its power is moderate since supplier power
is determined by the market and fluctuates between medium and high. (Moseley III.,
2017)
 Bargaining power of buyers: - It refers to a buyer's capacity to push down the price. This
force has a lot of clout for Marks and Spencer since customers have a cheap switching

cost and there are a lot of alternatives, so the corporation is under pressure to keep prices
low. Marks and Spencer must continue to attract and keep loyal customers by introducing
fresh deals and discounts on a regular basis. Clients have a lot of options these days to get
the items that M&S sells, so they have a lot of bargaining power thanks to large
competitors like Burberry and others in the market who provide products to customers
with fresh offers. (Oldman. and Tomkins2018)
 Threat of substitutes: - It entails the organization's access to alternative offerings.
Because the retail business consists of products with readily available substitutes, the
power of this force is moderate in respect to Marks and Spencer. As a result, Marks and
Spencer must constantly innovate in order to maintain its strong brand position. It is
relatively simple to copy clothes designs and sell them for a low price. As a result, the
organisation faces a greater risk. Because numerous first and second copies are being sold
on the market at lower prices, this may have an impact on M&S's brand image, as
imitation is easy for the styles and designs in which the company works.
 Rivalry among existing competitors: - It is concerned with the number of competitors and
their capacity to pose a threat to the company's market position. Because there is fierce
competition in the retail industry, and firms' online presence has rattled Marks and
Spencer's market position, this force has a lot of power for Marks and Spencer. To keep
clients, the company must give fresh deals and discounts on a regular basis. The clothing
and retail industry has a large number of rivals, which increases the potency of this force
because clients have many options to choose from. (Köseoglu. and et. al., 2013)
TASK 4
P4 Apply different models, theories and concepts to interpret strategic planning for a company
Porter generic model was set up by Michael Porter in the year of 1985. It is a generic
competitive strategy for straitening and planning in a business There are three porter plan of
action “Cost leadership” “Differentiation” and “Focus”. In the context of Marks and Spencer the
company strategic options can be set on by thoroughly and constructively analysing the industry.
Using three strategy for Marks and Spencer. (Yoffie. and Cusumano., 2015)

 Cost leadership strategy: In this porter generic strategy it is about gaining the edge in the
market in which company can reduce or lowers the price by providing the refine quality
products. The company sells the products at minimum rate of the trade cost all this is
done for captivating the higher share of a market . In this way M&S can draw a large
share of a market by declining the price of a products.
 Differentiation strategy: This strategy encompasses where the product or the peculiarity
of merchandise should be different it should not be offered by competitors. The
distinctive product which company can offer by doing research of a market in the similar
way the M&S can bring the innovative and exclusive design in the market can raise the
higher profit. The company can target the particular section of a generation as they love
experimenting.
 The Focus Strategy: In a focus strategy the company needs to focus on the niche market.
In depends on what company can focus on its cost or in the differentiation. If M&S
focuses on its differentiation strategy it will help the company to stand out in the market
with their ingenious products and cal so raise profit without reducing much of trade
price.
Bowman's strategic clock
Bowman strategic clock is a method which allow a commercial enterprise in investigate
suitable plan of action for market positioning i.e. the process through which M&S can build a
strong position in the market with their product so that they can enjoy high benefits over other
rivals and can achieve their set goals in a decorous way. Elements affiliated with this framework
are as follow:-
 Low price and low value added: This element refers that the M&S has less competitive
position in their market field. As their products are not distinguished, consumers realize
less value for products even if their price will be less.
 Low price: In this factor, M&S can position as low cost leader in market by developing
price reduction strategy by themselves only. Here, profits in all product's will be low but
due to broad sale volume, total net income will be more.
 Hybrid: This plan of action consider factor of depressed price and product discrimination.
In context to M$S this is a positioning strategy for the organisation.

 Differentiation: Inside this scheme, M&S is needed to develop concentration on
providing advanced subject matter to their customer so that gross revenue can be
increased substantially.
 Focused differentiation: In this strategy, company placed their product at high price level
that's why consumer can purchase product due to its high perceived value. Most of the
luxurious brand has adopted this techniques.
 Risky high margins: In this strategy, institution have to face high danger which can also
results in commercial enterprise failure. Here, M&S can set high price without providing
anything spare in detected value.
 Monopoly pricing: In market monopoly, only one commercial enterprise which offer
products. In this strategy, a marketplace enterprise is not afraid about the price or
progressive characteristic. If a client needs that good, they have to buy it even if prices
are too high.
 Loss of market shares: This action of position is a tragedy in competitive market. In this,
a institution is needed to set modular price range for the product. Due to which, market
shares earned by organization are less.
In context to M&S, after analysing these 2 models of strategic positioning, the
management of this company can adopt differentiation strategy where new and unique product
will be offered to customer so that company can attain high profit and capture new customer
base. With the help of this strategy, innovative product will be given to customers due to which
their interest will increase. This will allow the company to gain their income and revenues due to
which market portion of institution will raise.
M4 : Strategic management plan that includes strategic priorities and objective
Vision. : Marks and Spencer's vision is to make the retail clothing sector better for everyone by
offering a variety of textile designs to all customers.
Mission: Its mission statement is simple that they want to be the market leader and build a
strong position in comparison with other brand. They put their customers at first priority and
make the best use of technology in order to capture the new customer base.
Strategies: M&S can adopt a market development strategy, in which it enters new markets with
its existing product or service, in order to attract more customers and make its existence count.
Tactics:

Product Marks & Spencer's has a diverse product portfolio that they serve to all kind of
gender and of all ages. Blazers, cardigans, cashmere, jeans, linen, shirt, skirt, and
many other component are available for women at Marks & Spencer.
Price The M&S provides products of superior quality, due to this it falls between
between the medium and higher price categories. Clients now have much options
to choose from as a result of greater contest, so M&S continues to utilise a
competitive pricing strategy.
Place Marks & Spencer is a multinational retailer with more than 1000 locations in
more than 50 countries. Customers can purchase things and have them delivered
to their homes through Marks & Spencer's website.
Promotion Marks & Spencer carefully chooses marketing strategies to align its advertising
campaigns with digital marketing and in-store strategies. M & S attaches great
importance to delivering a joint message to all communication media. Marks &
Spencer uses print media, television advertising, mobile advertising and other
social media campaigns. (Lehmann, 2016)

CONCLUSION
From the above report that, it is being concluded that without adopting right strategy
business strategy, it is not possible for the business to have their desired goals and get success in
the given field. For analysing the internal and external environment, PESTLE Analysis, SWOT
Analysis. Moreover, VRIO is being used in order to understand the internal capabilities of the
business. Porter;s five forces is being used so that an organisation can acknowledge the
competitive advantage in the market.

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