Effective Business Strategy for Organisational Success

This assignment is focused on devising an appropriate business strategy for organisational success. It requires the use of internal and external analysis frameworks to understand a company's capabilities, strengths, and weaknesses. The assignment also covers competitive edge tools like Porter's Five Forces and the formulation of effective strategic management plans. Additionally, it discusses the importance of business process management systems in achieving organisational targets. The document provides references from various books and journals that support the analysis.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Apply appropriate framework to identify macro environment of the given company..........1
TASK 2............................................................................................................................................3
P2 SWOT analysis to understand the internal capabilities and environment of an organisation
.....................................................................................................................................................3
TASK 3............................................................................................................................................5
P3 Porter's five force model to evaluate competitive forces of given market sector for
organisation.................................................................................................................................5
TASK 4............................................................................................................................................7
P4 Range of concepts, theories and model to devise strategic planning for given company......7
CONCLUSION.............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Business strategy is defined as a set of competitive actions and moves which are used by
a business organisation in order to attract clients, strengthening performance and achievement of
organisational goals. It helps in formulating a strategic plan that will benefits the company in
reaching its desired objectives. Strategies related with a particular business are defined as
business level strategy (Akter, S. and et. al., 2016). This assignment is written in context with
Marks & Spencer which is a Britain based multinational retailer dealing in clothes, home and
food products. Company is headquartered in Westminster, London. At present company is
operating more than 980 stores worldwide. This report covers appropriate framework to evaluate
macro environment for given company along with this an analysis will be carried out so that
internal capabilities of an organisations can be acknowledged. Beside this, to acknowledge
competitive edge, porter's five forces are implemented. At last, a strategic management plan is
prepared which will benefits company in achieving their desired targets and objectives in an
effective manner.
TASK 1
P1 Apply appropriate framework to identify macro environment of the given company
To formulate a desired business strategy, it is very important for the company to
acknowledge external business environment in which business activities are carried out. In this
respect, PESTLE analysis is very beneficial for the company. PESTLE analysis is a framework
which will helps an organisation in understanding political, economical, social, technological,
environmental and legal factors associated with a particular market. In this respect, PESTLE
analysis for M&S is carried out below:
 Political factors: These factors are related with political stability, laws, tax rates,
corporate rates etc. UK consists of Scotland, England, Northern Ireland and Wales. UK is
one of the powerful nation around globe and politically stable due to which it is
beneficial for business organisations to operate there. There are some uncertainties and
issues which have taken place due to Brexit but as UK is a famous destination for FDI,
organisation prefer to invest there (Amran, A. and et. al., 2016). Corporation tax rate of
firm is 19% which is a stable rate. If UK will not be political stable, then rules and laws
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will change on a regular basis and company can face loss of profitability and less
revenues.
 Economical factors: These factors are related with GDP, interest rates, inflation rate,
fluctuation of currency etc. UK is a economically stable nation and people residing their
have disposable income. In terms of GDP, UK is fifth largest economy but due to
economic recession that takes place in 2008, UK get severely impacted. Hence, it is
beneficial for M&S to operate business activities in UK. If inflation and interest rates will
be high or currency will fluctuate in UK on a regular basis, then it will became difficult
for company to manage their market share and revenues which will result in loss of
profits.
 Social factor: These factors are related with the belief and attitude of people, as UK
posses a big consumer market with a population of 65.6 million people. As per latest
reports, around 21% of people are more than 65 years and half of the population consists
of young and teenagers. Due to which, M&S have a big opportunity to gain attention of
customers by offering them products according to their demand. If company will product
products that are not needed by population in UK, then company will ace loss of
reputation & revenues and brand popularity will also reduce (Chang, 2016).
 Technological factor: As UK is a technologically advanced country and London is a hub
for technological & financial institutions, people prefer to use modern and advanced
products. As present business market is largely based on digital and online media, M&S
needs to update their technology and production machines such as Virtual or augmented
reality according to required advancements. This will help the company in expanding
their customer base. If company will not invest in technology, then customer will shift
their preference towards another company which will cater their needs in a better way.
 Legal factor: UK government have formulate several laws and legislations such as
equality act, health and safety act, non-discrimination act etc. so that welfare of
employees and company can not be avoided (Chen and Jermias, 2014). If any company
will not follow these laws then they have to pay heavy taxes and penalties which will
results in heavy loss of revenue. Following these laws will benefit the company in
sustaining a positive image within marketplace due to which sales and revenues will
expand in a desired manner.
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 Environmental factor: It is associated wit weather, nation, climate which can
considerably impacts the sustainability and growth of the company. As M&S posses a
good brand image and prefer to follow all environmental norms which are formulated by
UK government due to this company enjoys a sustained customer base. If company will
not follow these laws then they have to pay heavy penalties and fines that will tarnish the
reputation of company in market.
TASK 2
P2 SWOT analysis to understand the internal capabilities and environment of an organisation
To acknowledge the internal capabilities of an organisation in a desired manner, SWOT
analysis framework can be used. SWOT stands for strengths, weakness, opportunities and
threats. It will help the manager in M&S to understand their strengths and weakness so that
company can attain their objectives in an expected manner. Also, this analysis will tells about
opportunities and threats that can considerably impacts the company and its business operations.
In case with M&S, a SWOT analysis is performed below:
Strengths weaknesses
 Marks & Spencer is popular for its high
recognition of brand and company is
known for its high quality of products
& services.
 Organisation offers several products in
every store that will help clients to
choose best product for themselves. To
offer high level of satisfaction and
customer experience, company
formulate different kinds of tests before
introducing a product into market.
 In total company has around 960 stores
globally, in which more than 600 stores
are present in UK only. Due to this,
products of company are easy
 Company has considered as non-trendy
and unfashionable, in case of clothing
sector as people claims that their
products are suitable for aged people
only.
 Company follow old techniques for
production and manufacturing due to
which costs of their products are high
as compared with rival companies
(Chen and Jermias, 2014).
 Customer satisfaction is low due to
complex return policies. This has
resulted in decreased brand loyalty.
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assessable for customers.
 Company has both online and offline
stores, franchising options that benefits
the customers worldwide to enjoy
products and services offered by them.
 Company posses poor scalability of
supply chain. As company tries to
operate at a global level, supply chain
system of company is not robust due to
which company in not capable to do
timely delivery.
Opportunities Threats
 Company can expand its business
presence in other regions such as Asia
and Africa which promises high
revenue and profitability due to high
population density.
 Company can segment customer on the
basis of their needs and requirements.
This will helps the company in
analysing specific preferences of
people having same interest. By this
sales of company can expand
exponentially.
 Rival companies operating in same
sector such as Aldi, Tesco, Zara etc. are
performing very well which is a big
threat to the revenues and profitability
of M&S.
 Government norms and policies are
getting strict for retail companies.
 Company is exposed to different
political debates and instabilities due to
operating at global level.
Review of SWOT analysis: As company is popular for its better product quality, it is
analysed that company can implement new strategies related to pricing and discount so that sales
of company will expand. Due to wide range of products, customers have wide choice to choose
suitable product for them. This means that company have a strong product line. As company
have both online and office mode for shopping, customers can purchase commodities according
to their time schedule. But products offered by company are considered as outdated and non
trendy and customers feel that products are high rated. To overcome this, manager in company is
required to adopt modern technology and machines for production process so that prices of
products can be reduced (Chu, KrishnaKumar and Khosla, 2014). Change & return policies and
delivery system of company is poor due to which customers are changing their preference
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towards other company. To enhance their profitability and customer base, company can expand
in regions like Africa and Asia. Due to high population and good quality of product, company
will get desired outcomes. There are different retail companies like Zara, Tesco which are giving
tough competition. To reduce their impact on sales of M&S, manager in company can formulate
an effective strategic plan.
TASK 3
P3 Porter's five force model to evaluate competitive forces of given market sector for
organisation
It is essential for a company to acknowledge market competitiveness in order to operate
at local, national or international market. In this respect, Porter five forces is a powerful tool
which helps a company in understanding its competitive edge in market in which it is operating.
It will helps in determining principles that can impacts business in either a positive or negative
manner. In context with M&S, manager can use porter five force to identify market so that
competitive advantage over rival companies can be gained in a proper manner.
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Porter's five force model: This model is widely used to keep a eye on the five competitive
forces that helps to shape every single firm and determine strengths and weaknesses. It's useful to
adjust strategy to fit in competitive environment and directly improve potential profits. Here are
some of the forces described below:
Competitive Rivalry: When the rivalry is high, companies can pull customers with
assertive high marketing campaigns and cut down cost. Whereas if the competitive rivalry is
minimal and no other competitors is doing what Mark and Spencer is doing than it can be a
golden chance to earn huge profits from the customers. If there are too many rivalry in the
market then buyers and suppliers both has the option to switch to some other rivalry who is good
in it's dealings.
Suppliers power: The degree of supplier power is high when there is less option for
buyer to purchase in the market. Whereas the power reduces or decreased when there are huge
number of suppliers available in the market for Mark and Spencer raw material and customers
can easily switch some other who is very cheap in rate. If the power is more in the hands of
suppliers they can charge huge amount of money and generate good amount of profit.
Buyer 's power: The king of the market is customers or the buyers. They have the power
to pressurize the suppliers to lower the cost of the product when the bargaining power is too
strong. If the prices are low in the market then revenue generation is not possible and firm can
not grow and expand nor they can innovate new product in the global village. This indirectly
hamper the Marks and Spencer purchasing power. Buyer's has strong bargaining power when the
buyers are few in the market and switching costs to other suppliers is less.
Threat to substitutes: This particular force is more threatening when customers are
offered with best prices product in the market and they switch immediately without twice
thought in their mind. Mark and Spencer is dealing in clothing and they need to work day and
night on design, style, colour etc. so, that they can retain customers and does not switch to other
companies product. Firm decided to make cloths for every age group so, that customers are
attracted to them by any means. They deal in men cloths, women clothes, kids wear, teenagers
cloths.
Threat to new entrants: In the company is profitable and there are less obstacles to
enter into the market then threat to exit from the market is less. If same type of organization is
compete with each other like Marks and Spencer and Burberry than the market share and
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customers fall down tremendously. Threat to new entrant is high when low finance is required to
enter into the market, currently serving firms do not have trademarks, patent rights etc.
Strategies to improve competitive edge and market position
M&S can use Porter five forces to acknowledge their market position and competitive
edge. Organisation can use innovative feature and aspects so that product of rival companies can
not outpace them. To expand business in different regions around globe, company can go for
joint business venture. Other than that company can update their production process and
machines so that cheap products can be manufactured. Other than that, manager in M&S is
require to be in contact with different suppliers so that timely supply of resources and raw
materials can be managed. If company will be in contact with different suppliers then price hike
form one supplier will not impact the profitability of company (Eaton and Kilby, 2015).
Company can implement new pricing strategies which will helps them in increasing their
customer base and sales. By all these measures competitive edge and market position of
company can be improved.
TASK 4
P4 Range of concepts, theories and model to devise strategic planning for given company
Management in M&S can implement Porter's generic model to develop an appropriate
strategic management plan which will help the company in achieving their desired objectives. In
case of M&S, the model is mentioned beneath:
Porter generic model
This model specifies the way in which a firm can achieve competitive advantage within
marketplace in which business activities are performed. There are four strategies associated with
this model i.e. cost leadership, cost focus, differentiation, differentiation focus. Strategic position
of M&S in industry will describe if profitability of firm is below or above then expected
outcomes. Various aspects associated with Porter generic model are mentioned below:
 Cost leadership: In cost leadership, a firm develops a strategy so that prices of products
can be reduced. This will helps them in increasing sales and company will become
capable to gain competitive advantage over rial companies due to enhanced revenues. As
company will offer good quality products in less price, brand loyalty for M&S will also
increase. This will helps the company in enhancing their market shares due to which
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organisational goals can be achieved in a desired manner (Higgins, Omer and Phillips,
2015).
 Differentiation: It denotes that M&S needs to produce their products & services with
innovative and unique features that will easily differentiate the products of company from
their competitors. To differentiate their products and services offered, manager of M&S
can offer special or festive discounts to their consumers so that sales can increase
accordingly.
 Focus: This business strategy is of two kinds i.e. cost focus and differentiation focus. In
cost focus, entire emphasis is given to reduce the price of products offered by company.
This will benefits the company in gaining competitive advantage over rival companies.
By this sales and market shares of company will increase (Klettner, Clarke and Boersma,
2014). In differentiation focus, company will try to incorporate new and innovative
features in their services & products so that their offerings can became unique and
customer can differentiate and choose their products against the products offered by
rivals.
Form all these strategies, M&S is going to use cost differentiation in which company will
formulate and implement different strategies that will results in reduction of prices. This will
help the company in achieving higher sales and revenues.
Strategic management plan
It is a kind of document or plan which contains information associated with objective and
aims of the company. This plan is formulated by the manager of concerned company and helps
in acquiring desired success. An appropriate, strategic management plan will benefits the
company in achieving their targets and goals in a profitable manner.
Summary: Main emphasis of M&S is to provide modern and good quality products to
their customers so that brand loyalty will enhance. Company is planning to expand its market
presence by differentiating customers according to their choice and preference so that their needs
can be catered properly.
Aim: The main aim of company is to increase the product quality so that the satisfaction
level of consumer can be enhanced. Company wished to introduce new and trendy products to
attract attention of wide customers.
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Objective: Main objective M&S is to achieve high market-shares in retailing sector with
the help of existing and new products & services (Leonidou and et. al., 2017).
Management structure: As company operates at large scale, management structure
followed by company is hierarchical in which all the decision and actions progresses from high
level to lower level departments.
Mission: Mission statement of M&S is to produce aspirational quality which is
accessible to all of its customers.
Vision: Company wishes to create a benchmark against which other companies will
measure and evaluate their performance.
Costs: To successfully introduce new and trendy products in market, organisation has
estimated 2,00,000 pounds. This amount will help them in accomplishing their tasks desirably.
Time: To accomplish goals and objectives of expanding market presence in an
appropriate manner, company has estimated the time period of 1 years.
Scope: The scope of this business expansion is very wide as M&S is a big company and
successfully operating at different regions. Introduction of new product line will benefits the
company in achieving high revenues and profitability (Pisano, 2015).
Quality: Company can use six sigma, lean manufacturing or TQM to ensures that
minimum wastage of resources and material will take place and the produced product will be of
high quality.
Budget: The budget for this expansion process is described below:
Equipments 135000
Raw materials 60000
Human resources 76000
Infrastructure 120000
Marketing 30000
Problems: Considered company i.e. M&S is facing issue of high priced product and non-
trendy clothes according to the perception of customers. Also, production and manufacturing
machines of company are also old due to which product manufacturing is more time consuming.
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Strategies: To achieve desired outcomes, company is going to reduce the price of its
products. Due to which more number of customers will get attracted towards the commodities of
company and higher sales & revenues will be achieved.
Measure the progress: It is essential for the manager of M&S to measure the
performance of workers and departments in a proper manner so that required improvements can
be carried out in a timely manner.
Modify the long term strategies into short term tactics: Manager in M&S needs to
modify action plan and decisions in accordance with the situations. By this firm can use their
existing resources in a proper manner (Razak and et. al., 2016).
Get everyone on Board: It is the responsibility of manager in a company to engage their
workforce in business activities by encouraging and guiding them. By this, every employee will
be able to deliver its best performance.
Put a Strategic Document to Serve as Your Compass: Manager in M&S is require to
write policies and strategies on a single document so that all the work can be performed and
evaluated in a proper manner. Also, the manager of company can convey these strategies in a
proper manner.
CONCLUSION
From above mentioned report, it is concluded that to sustain a firm position in market and
expand business in a proper manner, it is important for a company to devise an appropriate
business strategy. There are internal and external analysis framework which will benefits the
company in acknowledging their capabilities, strengths and weaknesses. To analyse competitive
edge, a firm can take help of tools like porter five forces and to achieve organisational target, a
company is require to formulate an effective strategic management plan.
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