Analyzing Macro Environment and Internal Capabilities for Business Strategy

This report analyzes the influence of macro environment on organization's business strategy and evaluates the internal capabilities of the organization. It also discusses the implementation of different frameworks and models for strategic planning.

BUSINESS
STRATEGY

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Apply of different frameworks for analysing influence of macro environment on
organisation and their business strategy.................................................................................3
TASK 2............................................................................................................................................8
P2 Evaluation of internal capabilities of organisation through utilising appropriate
frameworks.............................................................................................................................8
TASK 3..........................................................................................................................................10
P3 Implement of Porter’s five force model that is used for evaluating competitive forces in the
market...................................................................................................................................10
TASK 4..........................................................................................................................................11
P4 Implement of different models, theories and concept to interpret strategic planning for
organisation..........................................................................................................................11
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business strategy refers to a process set of actions, decisions and tactics which benefits
all individuals who are engage in achieving organisation operations. This is also defined as an
effective plan that is formulated with motive of accomplishing organisational goals and
objectives in specified time period. The main motive to implement business strategy is to attain
top position in market. This report is written from perspective of Marks & Spencer that operates
its business in retail industry and capture high market share in clothes, food and home products
(Anwar and Hasnu, 2016). Moreover, this report highlights on business strategy of organisation
which is used to compact with macro environment under which organisation manage its
operations. Different analytical frameworks are also acknowledge that offer to deal with macro
and micro environment. Internal capabilities will also be focused in the upcoming report with use
of different models and in last different theories and concepts are also included for making
strategic directions.
TASK 1
P1 Apply of different frameworks for analysing influence of macro environment on organisation
and their business strategy
Vision- Management of Marks & Spencer formulate the vision of become top global
organisation for satisfying needs and wants of all consumers.

Mission- Mission statement of Marks & Spencer is to provide similar quality of goods
among all retail outlets through delivery parallel quality of goods at local as well as international
store.
Objective
 To attain top position in clothing and food sector.
 To enhance organisational goodwill as a global brand.
 To formulate effective strategy for compete with rivals by developing competitive
edge with other organisation.
The term strategy refers to all those actions that are undertaken by manager of respective
organisation to attain all goals in an organised manner. This refers to guidelines that are followed
by management for performing and managing their task in proper manner that leads to gain high
position in market. Moreover, with implement of right strategy it is easy for organisation to
increase their sales and revenue that directly enhances profits for firm. With implementation of
right strategy the respective organisation allow management to follow right strategic direction
that leads to gain huge success in local and global market (Chen and et. al., 2018).
Different strategic planning techniques
 Benchmarking- This refers to make comparison about metric that is related with
competitor and entire industry under which organisation is operating its business.
Along with this Marks & Spencer are able to achieve top position which helps them to
become top leader in decided industry.
 Analysis of business- With analysis of all business activities and assemble them in an
appropriate way, the respective organisation focuses on its strength and weakness to
make right and strategic decisions in order to gain desired outcomes from its
operations.
Framework to acknowledge macro environment
Stakeholder analysis
The term stakeholder analysis refers to procedure that is used for identifying those
individuals which impact on initiation and completion of project. With this analysis all
organisation get benefits that leads M&S to complete work as per stakeholders that demonstrate
interest and power with its impact on each project. Steps of stakeholder analysis are as follow:

 STEP 1- With determining of different stakeholders it is used to prepare a list of
possible individuals that work as a potential stakeholder for organisation. Form
perspective of M&S sales department, executive staff, customers, employees and
supplier are potential stakeholder of organisation.
 STEP 2- After listing of essential stakeholder it is analysed that manager of an
organisation must categories of interest, influence and participation of stakeholders.
o High power, high interest- According to this level the stakeholders and
managers interact with each other on regular basis (Chu, KrishnaKumar and
Khosla, 2014). This results all business activities are performed by management
in a smooth manner.
o High power, low interest- This stakeholders influence on working conditions of
organisation but due to less interest individuals are not active for functions of
Marks & Spencer.
o Low power, low interest- Stakeholders are not interested for activities of
organisation and also not in power for making changes in activities.
o Low power, high interest- This stakeholder required to inform about business
that individuals are high interested and it not generates problem for organisation.
 STEP 3- According to this step managers of Marks & Spencer communicate with all
stakeholders that leads to perform work as per priority of organisational goals
(Drnevich and Croson, 2013). This results management complete all project with less
barrier in its projects.
PESTLE Analysis
The term PESTLE analysis work as a strategic tool that is used by organisation for
acknowledging and understanding aspects of external business environment for marketing all
items in proper manner. From perspective of M&S, Pestle analysis is as follow:
Political factor- The term political aspects relates with rules, regulation and tax that is
charge by ruling government. This impact on organisation as it is essential for store of Marks
& Spencer to complete all task and operations in proper manner. Along with this UK is a
political stable country and M&S is a British origin based company so it work as positive
aspect for company.

Economic factor- It involves growth rate, GDP, inflation and interest rate that is related with
purchasing power of individuals within UK (Evans and et. al., 2017). The existing growth
rate of UK impact on strategy of M&S because of Brexit it is mandatory to complete all task
as per current economic conditions.
Social factor- All aspects of society impacts on organisation this refers that all individuals
follow different opinion, belief, and attitude. So products of Marks & Spencer must not
impact on any society perspective. In context of business strategy it is used by management
for managing and completing their task and operations as per current strategy that leads to
works in effective manner.
Technological factor- The term technology aspect of UK is highly advanced due to which it
also influence management of Marks & Spencer for managing and completing their work as
per current technology aspect. It is also used by management for distributing advanced
options with also their implementation.
Legal factor- With the macro environment aspect as per legal rules and regulations there are
various norms are introduced by government of UL that secure welfare of employees
(Ghezzi, 2013). Along with this manager must formulate strategy by undertaking legal
aspects in each country. Moreover, legal aspects of political aspect impact on organisation
because it is complex to follow all legal rules and regulations.
Environmental factor- Environment safety is major concern for each country which is
placed at global level. It refers that it is also mandatory for each organisation to follow all
environmental laws that benefits management of M&S to complete all work in profit manner
and it also improves goodwill of organisation.
Ansoff’s matrix
The term Ansoff’s matrix can be defined as a tool that is used for planning and it is
implemented by supervisor or manager of firm in order to implement right strategy for growth.
From perspective of M&S, framework that is used to deal with external environment is as
follow:
 Product development- According to this strategy, an organisation introduces new
product in market so that it is utilised by new customers in large quantity. Moreover,
with sales of new product the revenue for organisation is also increased that leads to
complete all work in proper manner.

 Market development- With market development strategy, existing products of
organisation are introduced into new areas that is used for enhancing market area and
it also increase customer base. This also benefits organisation to increase their sales
and profits.
 Market penetration- According to this strategy, organisation focused to increase their
market share with assist of existing products in existing market share (Köseoglu and
et. al., 2013). Moreover, the major impact for this is to reduce price of products that is
beneficial to raised its market share.
 Diversification- This considers as a risk related strategy among which new products
for organisation are offered in market. Moreover, it is a major risk strategy for Marks
and Spencer that influence business strategy for managing and completing their task
with new products within new market.
With prominent study of above mention strategy, it is analysed that manager of Marks & Spencer
must recommend for adopting those aspects which is related with existing products and it offers
discount aspects to customers (Holotiuk and Beimborn, 2017).
SWOT framework
It refers to analysis of all tool that helps M&S to acknowledge strength and weakness for
a particular organisation within a detail manner. along with this with SWOT it is easy to analyse
threats and opportunities in market. SWOT analysis from perspective of M&S is mention as
follow:
Strength Weakness
 Goodwill and brand value of
organisation is too high that leads to
generate positive perception among
individuals.
 Organisation provide wide variety of
products due to which it is easy to
satisfies needs of customers in proper
manner.
 Most of the sale of M&S products is
earned from market of UK. So the other
global stores are not offering high
profits to organisation.
 Organisation are focused to produce its
products that are high in price due to all
customer are not able to afford this.
Opportunities Threats

 Company is expanding presence at
international market so developing
counties provides large market area to
all companies.
 Most organisation invest its amount
among marketing activities which
results more individuals are attracted
towards organisation.
 With changes in political conditions of
market globalisation generates
hindrances in market.
 Tesco, ASDA etc. are major competitor
which is reducing market share and due
to regular innovation it is complex to
compete with rival organisation.
TASK 2
P2 Evaluation of internal capabilities of organisation through utilising appropriate frameworks
Strategic capabilities with its key components
The term strategic capabilities refers to an effective procedure that is used by
management for shaping different strategies and all of this action are involved by organisation.
this results high benefits are attain by management and this strategic capabilities refers to six
different components that are strategic purpose, key goals , tools for analysis, action planning
and mission (Kossyva, Sarri and Georgolpoulos, 2015). This components provide benefits to
organisation that is useful for implementing all strategy in an effective manner.
Resource based View strategy
Resource based view strategy can be defined as a managerial framework that is used by
business organisation for determining essential strategic resources which is used for exploiting to
gain sustainability in market for longer market. From perspective of Marks & Spencer it is used
by management to differentiate between two different sources which are tangible and intangible.
The term tangible resource undertakes physical aspect which is machinery, lands, capital etc.
Whereas, intangible resources refers that products are not present physically but they perform an
essential role for M&S such as copyright, trademark and goodwill.
Mckinsey’s 7S model
McKinsey framework work as an effective tool that helps organisation for analysing right
decision for a firm by monitoring and identifying seven different components which are based on

internal basis. Moreover, it results M&S obtain its goals and objectives by using 7S model that
are mention as below:
 Strategy- This refers to a plan that is formulated by organisation for accomplish
competitive advantage. Its results it is complex for competitors to monitor methods of
M&S and strategy also leads management to perform all work within an organised and
systematic manner (Langabeer and Champagne, 2016).
 Structure- The term structure depict those manner under which business unit as well
as its division are organised for sharing all information with each other in minimum
time period.
 Systems: This is the procedure of organization that intends to delineate the consistent
schedule exercises and dynamic of an organization. Keeping up suitable frameworks
will benefits a business chief in actualizing authoritative change appropriately (Yoffie
and Cusumano, 2015).
 Skills: It includes skills and capacities of representatives in M&S while
performing authoritative work. Proficient staff of M&S will permit them in managing
complex circumstances in powerful way (Moseley III, 2017).
 Style: This speaks to the way where a firm is overseen by the executives and top
level chiefs and the manner by which they collaborate with their representatives. In
M&S, participative style is utilized where assessment of representatives are given
contemplations.
 Staff: This component is connected with the sort and number of representatives
which are working in M&S. It includes the way where required representatives
employed, prepared, compensated and roused.
 Shared values: It is the center of McKinsey\'s 7s model as it includes the measures and
standards which directs the activities of associations like M&S and conduct of
representatives in an appropriate way.
VRIO Model
VRIO examination is abridged as worth, irregularity, imitability and association. It is a
strategic instrument that is utilized by organizations to distinguish their accessible assets and
interior abilities. This will help them in accomplishing high upper hand over adversaries. In
setting with M&S, VRIO examination is mention beneath:

 Valuable- This is essential for manager of Marks & Spencer to utilise all valuable
resources so that it is not possible for other organisation to compete with firms properly.
In context of M&S management possess those valuable resources which helps to earn
more profits (Scholes, 2015). For example- Valuable resource of M&S are its employees
and distribution network.
 Rare- With this aspects of VRIO framework it is analyse that understanding of product
that is prepared by them are rare. Rare products which are offered by M&S leads
management to gain customer loyalty that helps to enhance sales and revenue in an
organised manner. Machines which are installed in production and manufacturing units of
M&S are rare which helps to generate creative and innovative products.
 Imitable- M&S requires all those products that is copied by competitive firms for
offering better products that leads it is complex for another organisation to sold them and
develop loyal customer base. Raw-material that is used by management of M&S among
all products leads to formulate those products which are not copy rival organisation.
 Organisation- This is a vital option for business and it helps to manage all functions and
operations of M&S for managing all work with existing use of resources. Moreover, all
resources which are collected must be used to complete task in systematic manner. it also
reduce work challenges for organisation (Soltanizadeh and et. al., 2016). Along with this
stakeholders such as supplier, investor, employees, distribution etc. are major
stakeholders which is used to perform all task in proper manner.
TASK 3
P3 Implement of Porter’s five force model that is used for evaluating competitive forces in the
market
Porter five force work as a strategical framework that is used for making right and effective
decisions for organisation and it consider that to gain future outcomes management analyse all
present competitive aspects. There are five different aspects are present in this framework which
are mention as follow:
 Threat of new entrants- The term threat for new entrants is not major or high because
in context of UK retail industry, M&S ASDA, Aldi etc. are major player which

impact on organisation functions and operations due to which it is not beneficial for
new business to invest such huge amount for competing with other organisation.
 Bargaining power of supplier- M&S is operating their business at global platform
and specifically clothing and food market covered by management at a wide level.
This results bargaining power of supplier is low and if other organisation invest good
quality and quantity of goods then it is easy for management to switch towards other
supplier.
 Bargaining power of buyers- From perspective of buyers they are king of market and
all business organisation are performing their work with motive of satisfying
customer needs and wants. Moreover, due to intense competition in market it is
essential for organisation to perform all task as per needs and wants of customers. So
bargaining power of customers is high in market.
 Threat of substitutes- As by conditions of market it is analysed that there are various
substitute firms for food and clothes are present in market. But in context of M&S
strategy it is analysed that threat of substitute is moderate because management is
already established themselves as an effective brand which assist to increase market
share.
 Rivalry among existing competitors- There are various retail organisation operated by
management within UK at local and global level (Yoffie and Cusumano, 2015). The
threat from rival companies is too high and from point view of M&S due to changes
in product variety. This is also complex to provide same quality of goods at all places.
So competitive firms power is high which reduce customer base for Marks and
Spencer.
TASK 4
P4 Implement of different models, theories and concept to interpret strategic planning for
organisation
Porter Generic strategy
Generic strategies that are related with Porter helps for identifying various ways through
which management is able to accomplish competitive edge in market. In simple terms, there are
three different strategies are formulated as per Porter Generic terms which is mention as follow:

Cost initiative- With the assistance of this system, value delicate clients can be handily
focused by a business association. In this procedure, M&S can offer their items to clients in less
cost. Likewise, organization can give offers and limits to their reliable clients because of which
their trust in organization will upgrade and they will prescribe contributions of M&S to their
loved ones moreover. This will help the organization in expanding their deals because of which
high benefits can be earned.
Differentiation- In this methodology, an organization offers new and creative items to
their clients so they can be separated from different organizations managing in same division.
Inside this technique, M&S can offer inventive and new items to their clients with the goal that
deals can be improved in an appropriate way.
Focus- This procedure includes two perspectives for example cost focus and
differentiation focus. In the event of cost centre, M&S will be required to give those items in less
cost with the goal that greatest number of individuals will get them. In separation, organization
will be expected to offer present day items so individuals can get them without being value
petulant.
Bowman’s strategic clock
The term Bowman’s strategic clock work as an effective model that help business
organisation for exploring appropriate strategic positions. This helps to identify way that leads
management to gain high position in market. All aspects which relates with framework are
mention as follow:
 Low value and low price- It provides a less competitive position to M&S as it is
complex for organisation to differentiate its products, due to which consumer perceive
low value of products as price of this aspects is low.
 Low price- According to this aspect, M&S position all of its products as an effective cost
leaders through utilising cost minimisation technique. So profits for each product are low
but due more sales of products revenue and profits are increased.
 Hybrid- The Hybrid strategy includes elements related with low price and product
differentiation (Lai, Melloni and Stacchezzini, 2016). So the hybrid positioning strategy
is effective for Marks & Spencer.
 Differentiation- From perspective of differentiation method, M&S focuses on providing
innovative offering for its clients that increases sales of products easily.

 Focused differentiation- As per focused differentiation strategy products are placed for
high level consumers that purchase products and provides luxury value to all customers
for establishing organisation as an effective brand.
 Risky high margin- Under this strategy, organisation face regular challenges that is
impacting on organisational goals as high risk leads business towards failure of
organisation. In this M&S set high price by implementing innovative feature within
company products.
 Monopoly pricing- In all terms as per market monopoly , business offer different
products that concern about innovative feature through increase its customer base with
help of innovation aspects.
 Decrease in market share- With the analysis of strategic position in a competitive
global market. An organisation must set some benchmark that are required for
completing all task with a quality perspective.
In context of M&S after analyses two model related with strategic direction are required which
are adopted by organisation through implement of differentiation strategy. In this new and
unique products are offered by customers that is used by organisation to attain high profits and
revenue. It allow organisation to increase their market share at global place.
M4 Strategic management plan that undertakes strategic priorities and objective
Strategic planning leads an organisation for identifying various set of objectives, focus
and priorities that is used to ensure all individuals perform its task towards accomplishing
common goals. Strategic plan of Tesla for implementing right strategy is as follow:
Vision- The vision of Marks & Spencer is to attain top position in food and cloth market at
global level through making regular innovation in products.
Mission- Mission of organisation is to deliver good quality of food and clothes products that
match with needs and wants of customers.
Strategies- Market development strategy is implemented by M&S for making regular and
constant innovation in products. So it is easy for management to gain top position which also
leads to ensure that environment offer regular innovation in its products to accomplish vision in
decided time period.
Objectives- The main objective of organisation leads to enhance its customer base with 15%
through entering into developing with in a time period of 15 months.

Tactics- There are various short term efforts are implemented by M&S for its new strategic
objectives. Tactics which followed by respective organisation helps customers to work with right
dealership by establishing own service station. Moreover, the tactics of marketing mix also
consider for formulate of strategy related with market development.
Product According to this perspective it is analysed that Food and Cloth items
are formulated with motive of implementing innovation almost in all
products.
Price The brand value of M&S is to high due to which management
decided to complete their work through offering high product value
in market. Therefore, management decided to implement premium
price strategy for its products that leads to earn more profits as
compare to rival companies.
Place Organisation owned various stores as well as outlets at central place
with in a market. This leads companies to distribute all of its products
to large number of customers by selecting desired and appropriate
location for all retail outlets.
Promotion Social and digital marketing strategy is implemented by management
by M&S to perform its work in effective manner. Moreover, the main
motive to implement social and digital marketing strategy for
innovative products is to approach large number of customers in
minimum time period.
Implementation- The most important part for management is to implement right plans and
strategy that are formulated by management to complete their task with motive of allocating
resources in proper manner. This is also used by management to allocate all funds through help
of marketing budget that helps to work as an internal audit for all departments. Moreover, with
technique of Total quality management products are also formulated with an effective quality
bases that improve performance measure for organisation.

Evaluation- It is last step for evaluating and collecting all information perspective for
formulating a better flow for phase that is included in plans. Along with this barrier by which
organisational goals are impacted also evaluated so the actual performance of organisation is
improved through utilising marketing plan within an organised manner.
CONCLUSION
In the last, with the analysis of above report it is concluded that with formulate and adopt
of appropriate business strategy it is easy for organisation for accomplish desired positions in an
international market. Different models are also analysis by management such as PESTLE,
SWOT, Porter Generic strategy that is used to acknowledge external business environment with
in an accurate manner. Moreover, VRIO analysis is also covered to perform all task and
objectives with understanding internal environment of organisation. In the last, with develop of
marketing plan management also enter into new market to increase market share and company
profits.

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