Business Strategy Analysis of Marks and Spencer: A Comprehensive Study

Business Strategy
Marks and Spencer

Table of Contents
Introduction...................................................................................................................................2
Part A............................................................................................................................................. 3
P1 – Analyzing the capabilities of M & S by applying appropriate framework and highlighting
macro environment and their impact on the organization............................................................3
PESTLE analysis.......................................................................................................................... 3
SWOT Analysis........................................................................................................................... 7
M1............................................................................................................................................... 10
P2 – Analysing the internal environment and capabilities of the Marks and Spencer Company by
using appropriate frameworks.................................................................................................... 11
Strategic Capability Analysis.................................................................................................... 11
VRIO analysis............................................................................................................................12
M2............................................................................................................................................14
Part B........................................................................................................................................... 15
P3 (M3) – Analysing the Retail Sector..........................................................................................15
Porter’s Five Forces Model...................................................................................................... 15
References................................................................................................................................... 18
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Introduction
The main aim of this report is to understand all the business strategies that are used in the
Marks and Spencer’s retail company (M&S) in the operational, strategic and tactical
management. The company is one of the retail-based organizations in the UK and its
headquarters are located in the Westminster city (London). The company is providing services
like clothing, food and home products to its customers at a good quality. The founders of the
company are Michael Marks and Thomas Spencer and they started the company in the year
1884. Currently, the company is providing services to the people of the UK by opening 950
stores in the country, out of all these, 615 are only dealing with the food products as the
demand is high. The company is focusing on getting the position of the most sustainable
retailer. In addition to this, there are few reliable suppliers that are providing high-quality
services to the company’s customers. The company’s stores also exist in many others; around
41 other countries in the world and the company is also having a workforce of around 70,000
employees. The company is in a good position in the market as it has achieved a benchmark in
the international market with the profit of approximately 116 million Euros in a year.
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Part A
P1 – Analyzing the capabilities of M & S by applying appropriate
framework and highlighting macro environment and their impact on the
organization
The macro environment can be defined as the external factors that are responsible for
influencing the decision making of an organization and are also uncontrollable. These factors
are also affecting the performance and strategies of the organization to a high rate. So, the M
& S Company applying some frameworks that are appropriate for analyzing those factors and
will also help the company to make changes according to the demand of the market. Following
are the two frameworks that are adopted by the company in order to stay ahead of its
competitors and to react according to the changing environment.
PESTLE analysis
This analysis contains all the factors that are affecting an organization as it includes the political,
economic, social, technological, legal and environmental factors. The impact of macro
environment can be easily calculated by analyzing all these factors. The result of PESTLE
analysis is used in evaluating the strengths and weaknesses of the M & S Company.
Figure 1: PESTLE MODEL
[Source: https://www.professionalacademy.com/blogs-and-advice/marketing-theories---
pestel-analysis]
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Political factors
Under this factors, all the rules, regulations, policies and guidelines come, that is set by the
government of the country and which have to be followed by each of the organization. The
activities of the organizations are directly affected by these factors, as it is not able to control
the political development. But, the M & S Company is observing the changes and also adapting
it according to its working structure. The European Union Development has enlarged the
number of customers by 50million due to which a large number of opportunities and threats
has also been created for many retail companies like M & S (Marks & Spencer, 2016). hence, it
can be concluded that the UK’s political stability is responsible for the growth of many
companies and business as they are affecting them directly.
Economic factors
The UK’s economic channels are at an unpredictable stable hence, the retail company is the one
which is the most affected one due to this. This is because the people who are living in the
country do not prefer spending money in buying luxury items, but they prefer to save this
money. On the other hand, there are many companies that are working in the positional
markets hence are receiving a good customer satisfaction, even if the company like M & S is
facing economic issues. This is only possible because they are importing foreign products at a
very low rate. On the other hand, the M & S Company is not accepting this concept because
they believe in serving their customers with only high-quality products.
Social factors
The company is offering high-quality and high-priced products to their customers which
become a problem because there is a change in the economic channels. Today, the customers
are ready to compromise with the quality of products in order to get the products on low
prices, hence the retail company like the M & S is facing the problem as it is offering high-
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quality products at high-prices (Woods and Linsley, 2017). The other competitors are getting
the advantage of this strategy.
Technological factors
The technology has developed in the recent years and all the companies are now providing
their products online. So as the M & S, Retail Company is also providing their products to the
customers online and through which the company's brand position and revenue are increasing
with a constant rate (Kew and Stredwick, 2017). On the other hand, the company has also
updated its advertising and marketing strategies as per the technological changes in the
country. Hence, the technological factors are responsible for affecting the M & S’s business in
terms of competition and asset.
Legal factors
All the factors like the risk control, assessment and hazard identification are some of the
standards that are made in the country in order to safeguard the working employees. The
companies that are not following these regulations have to pay the fine. The rules and
regulations are changing in very few intervals so the M&S is also adapting the legal changes and
hence updates its policies every year. For example, the company also provides training to its
employees when an act named “Fir packaging and labelling” in the year 1996 has come into
consideration in which quality and maker’s name have to be labelled on every product (Marks
& Spencer, 2016).
Environmental factors
All the manufacturing processes and products materials of all the UK based companies are
changes due to environmental factors. The UK’s government is making many policies and laws
through with the companies’ activities will not affect the environment. Hence, many of the
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