Business Strategy: Analysis and Planning for Marks and Spencer

This report discusses the business strategy of Marks and Spencer, a multinational retailer in the retail sector. It analyzes the impact of macro-environment factors, internal environment and capabilities, Porter's five forces model, and strategic planning for the organization.

Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P1 : Macro-environment factors .................................................................................................4
P2 Analysing the internal environment and capabilities using frameworks................................5
P3 : Porter's five forces model ....................................................................................................7
P4 Preparing strategic plan and understanding of theories..........................................................8
CONCLUSIONS ...........................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
Every company have different objectives and to achieve those objectives or goals
business makes strategies. Business strategies is the combination of both decisions and actions
which is taken by the company to gain the market share. Marks and Spenser is the multinational
company dealing in retail sector. The company is having its headquarters in England. It deals in
clothing, food products, shoes, home products etc. it is listed on London stock exchange. This
report will discuss the frameworks which analyse the impact of macro environment have on the
organization and strategies. Further, analyse the internal environment and capabilities using
appropriate models. Analysing porters five forces model for the evaluation of competitive forces.
This study will also analyse the theories and concepts to make strategic planning for the
organization.
MAIN BODY
P1 : Macro-environment factors
This factor can affect profit margin of any company or organization because these are hard to
control, by the management of any company and these directly affect the working of the
company (Künle, 2020). These factors are political, technological, environmental, social, and
legal which impacts the day to day working of the company.
Political
This factor has impacted the business of Mark and Spencer in such a way which help the
company to grow further. As it is multinational retailer it sells the products all over the globe. So
the modern government of UK has made a policy of free trade facility among various countries.
This new rule has benefited the company. This free trade facility acknowledge the M&S to
import its product at fewer prices or on sale in their stores of different countries. The UK
government also reduces the tariff charges and taxes, now the product of M&S can willingly
travel in their different stores of different countries. This factor helps the company a lot and
M&S also believes that they should work closely with the government.
Economical
As it is a British company and operates majorly in UK, the government of UK has properly
developed the Fiscal and monetary policies to avoid the situations of inflation and lower GDP so
here the company survives easily but it has operated in different countries also where the covid

has impacted the market and the preference of people are buying necessity goods instead of
luxurious so the company has to bear loss in most of the countries (Ikiseh, 2020).
Social
M&S has put an eye in the market trends and conditions it always focuses on the preference and
choices, demands and needs of the customer like what kind of product customer want. By
analysing this M&S got to know that competitors are providing cheap products specially in the
clothing segment and people are buying so this factor hits the profit margin of M&S in
unfavourable way.
Technological
M&S decided to use modern technology to enhance the customer experience. It has launched
their online store in their website so that those who are not able to visit the store can puchase
from their. Thus, it has increased the profit as well.
Legal
The laws, standard and regulations of every countries get changed every year so it becomes
necessary that the management and worker should know it for that it provides proper training to
educate the employees about various health and safety rules (Isabelle, 2020).
Environmental
M&S always work to protect the environment there for they have developed the green plan
policy. They work with Better Cotton Initiative for the procurement of cotton and they reduce the
use of cotton in their clothes as well. They work to save the energy also along with they have
decided to use less plastic and paper in their packagings.
P2 Analysing the internal environment and capabilities using frameworks
Internal environment deals with components which are present inside of the business which can
affect the business. SWOT and VRIO is used to analyse this.
SWOT
Strength:
Marks and Spencer have the strong cash flow which provide resources to the company so that the
company can expand in innovative projects (Gilligan and Lowe, 2018). They have strong track
records system. Company has created strong brand portfolio. Good brand portfolio is helpful for
the company when they are planning into expansion or launching new products. Adoption of
advanced technology is very helpful for the company in meeting the market demands. The

biggest strength of the company is they successfully implement the new plan which give good
returns to the company and helps the company in increasing the revenue.
Weakness:
Marks and Spencer should invest more in the new technology because it is the multinational
company, and they have to deal with different geographic location so to conquer more market
share using of advanced technology is must. They should put more efforts on improving their
work culture because a good work culture will increase the productivity of the workforce.
Company should wisely do their financial planning. Lack of using cash effectively can be bad for
the company. Company should give training to their employees so that their employee turnover
rate can be reduced. Company have high employee turnover as compare to other organization.
Opportunity:
New technology is the opportunity for the company to gain the market share. Marks and Spencer
can also adopt different pricing strategy when they enter the new market which will help the
company in getting the loyal customers and also added the number of new customers.
Government green drive is also an opportunity for the company. The transportation costs has
lower down which can be helpful for the company to lower the prices of their products which
give advantage to the company to increase the sales and eventually profits. Inflation rate has
become low which brings the stable market and high sales.
Threat:
Marks and Spencer deals with multiple countries and have to deal with different liability laws of
different countries, and they have to deal with different liability claims. Company have to face
different laws and have to bear the fluctuations regarding standards of the products in the
markets (Simkin, 2016). The biggest threat is imitation of the company's products and selling
them at the low prices this lowers the sales of the company. The pressure of the local companies
are also the threat to the company. Currency fluctuations is the another challenge. The
continuous rising of prices of the raw materials affecting the profitability of the company.
VRIO analysis
It helps the company to know its internal resources and and sustainable competitive edge in the
market.
Valuable

The analysis of VRIO shows the resources of M&S are highly beneficial and valuable whether it
is their financial resources, human and managerial they are hard to copy. Their food products are
again a valuable resource which are liked the most by the customers along with it has a wide
range in all of its products. Their employees are important resources as they are trained and
efficient to perform their job. It distribution network is valuable and the research and
development as well who looks for the preferences of the customer.
Rare
The human resource management and financial department is rare resource of M&S and hard to
duplicate buy the competitors whereas the local product and clothes are not such rare and easily
provided by the other companies., it shows that competitors are using the same resources in the
similar way of M&S and got copied. The patent, efficiency, training and development of
employees are a rare resource of M&S at the same the time the delivery network is very rare and
hard to copy.
Imitable
M&S has very strong presence in UK and hard to imitate its strategy and resources by the
competitors along with this it has strong appearance thorough the world. All the resources of M&
S are highly expensive to imitate. The amount they have invested huge capital in their research
and development and in marketing department which can't get copied same. They can't
compromise with the quality of the product and on time delivery for that they get huge delivery
network which makes them imitable. Patent and copyright is also hard and expensive to imitate.
Organisation
All the valuable resources of M&S are well organised which is hard to duplicate for the
employees they give various incentive offer so that don't think to leave the organization. To
remain competitive in the market they organised their all the products in such a way who can win
the heart of the customers (Hernández, 2018).
P3 : Porter's five forces model
This model helps the company and organization to survive in the market, its five forces shows
competitiveness, threat of new entry and substitutes, bargaining power of suppliers and buyers,
etc. M&S is a British multinational retailer so it has to face huge competition in all over the
globe. This model will help the company to know its key areas, strength & weaknesses as well.
Threat of new entry

M&S is a big brand for that it has invested huge capital in the clothing and accessories sector so
it will be difficult for the new entries to create space for them in the market because it will need
high capital investment, because the products in which M&S is dealing is needed high
maintenance for that new companies has to bear the cost of go downs and warehouses. As it is an
iconic brand so it has a huge distribution network, again it is tough for new entries to create such
delivery web. Thus, M&S has no fear from the new entrance because it is difficult for new
companies to replace the M&S.
Bargaining power of buyers
In the case of M&S, bargaining power of buyers are high, because customer want high quality
and classic products but for that they don't want to pay high prices as well. Here, competitors
want to take advantage of this by providing low prices they want to grab the potential customers
of M&S. Company was focusing on the quality of product as they are following the product
oriented approach whereas the customer want good products at lower prices so instead of using
product oriented approach they should go with customer oriented approach to not let got its
customers.
Bargaining power of suppliers
As it is a British and UK based company so its majority of suppliers are British. So the company
buy stocks and inventories from these suppliers only thus the supplier and company both are
depended on each other. There for the bargaining power of suppliers are low and the suppliers
don't have full control over prices. The products which the suppliers provide have not so high
switching cost and differentiation is also less. The industry in which M&S is operating, the big
part of that industry has been captured by Mark & Spencer, so the profit of supplies is also
attached with the profit of company therefore they can't ask for higher prices because no one
other company can pay such amount sop the bargaining buyer of suppliers are low for M&S.
Threat of substitute
As Mark & Spencer is a big name in the industry in which it operates, along with it is the oldest
and iconic brand its products have very fewer substitutes and hard to replace, and those
companies makes substitute of Mark & Spencer's product are cheap in quality which the buyer
don't want. But in the “clothing” segment it has substitutes because many other companies of
different countries are exporting their product in UK so the customer have option to choose them

over the clothes of M&S. So the company should put more emphasis on the product line and
quality as it is known for to eliminate the competition (Lopes, 2020).
Competitive rivalry
For M&S competitive rivalry is little higher because the various product segment has quite
different substitutes and competitors. Threat of competitive rivalry is also high because the new
companies are trying to enter in the market and want to give the same quality and highly classic
and fashionable product with affordable prices to attract the customer of M&S and have to
develop their own market. Major competitors of M&S are – Gap and Oasis who are providing
similar product at lower prices and setting new trends to draw the attention of customer towards
their product.
P4 Preparing strategic plan and understanding of theories
Ansoff matrix: ansoff matrix is the tool which is used by the company to know the risks and
growth. It have four components.
Market penetration:
In this strategy business sells the existing products in the existing markets. Marks and Spencer
tries to increase the market share in the existing markets by adopting the competitive pricing
strategy, advertising, promotions or personal selling etc. company is able to penetrate the market
with existing products by providing good quality of products which bring loyal customers.
Market development:
It is a technique when company launch existing product in the new market. This will help the
company in creating new customers in the new markets which helps in increasing the sales
(Hague, 2019). New market will give new opportunities to the company. Company can go to in
that country where the purchasing power of the people are more.
Product development:
It is the tool when the company launches new product in the existing market (Katsikeas,
Leonidou and Zeriti, 2019). In this strategy company should come up with the innovative
products which are the demand of the existing market. This will help the company in getting new
customers and retaining the old one as well.
Diversification:
Under this company launches new products in the new markets. It is the risky strategy as the
product and market both are new for the company.

Porter's generic strategy: this strategy is used to know the company behaviour and gain the
competitive advantage. It has four strategies which are:
Cost leadership:
This strategy focus on gaining the market share by taking the cost conscious customers. This is
why the objective of the company is to become the lowest cost manufacturer in this segment.
Company can attain this by reducing the overheads or adopting good strategies, doing mass
production etc.
Differentiation:
Under this strategy company launch the innovative and different products in the market to gain
the competitive advantage. Under this tool companies targets big markets. Marks and Spencer
achieve differentiation by providing good quality products. Company can also adopt effective
marketing technique to attract more customer base.
Cost focus:
Under the strategy company want to take low cost advantage within the market segment. The
products under this would be basic, regular, similar to the rival companies and majority of
customer will accept it providing good profit to the company (Roth, 2017).
Differentiation focus:
In the differentiation focus the company will try to do the product differentiation but with the
smaller market segments. Under this the consumer group is small so the company can focus
more on the needs and wants of the consumers as compare to when the consumer groups are
large.
Vision of the company:
The vision of the company is to provide standard against its competitor which may be measured,
from the customer experience, to care for environment and community and for working
environment of employees.
Mission of the company:
Its mission is to make aspirational quality accessible to everyone, through the depth and range of
its products.
Objectives of the company:
 To increase the sales by 20%.
 To increase the number of customers.

 To increase the overall revenue by 15% in period of one year.
Marketing strategy: under this 4 P's of marketing mix are used for the evaluation which are as
follows:
Product:
The product portfolio of the company is wide. It manufactures clothes for men, women and kids.
The products which they produce for women are clothing, accessories, footwear, perfumes,
cosmetics etc. and also the same for women and kids. The company have furniture and home
section which include full home furniture and accessories. The strategy of marks and Spencer is
to provide wide range of products to attract more customers.
Price:
Marks and Spencer is the clothing brand. So the company has categorized the clothing section
from medium to high price based on the quality and designs of the product. Marks and Spenser
follow competitive pricing strategy because with the increasing competition customer can easily
get same products from the other brands. Company come with sale, discounts and offers to
attract more customers and also to finish their old stocks.
Place:
Marks and Spencer is the multinational brand having multiple stores in many countries. The
company is moving towards the online selling strategy. As they found that through online selling
more sales can be generated and this will help the company in getting more revenues and profits.
Company have their own website which provide easy shopping and payment options to the
customers (Jin, Miao and Park, 2018). Option for international delivery is also provided.
Promotions:
Company chooses the marketing strategy wisely. They do promotion through advertisement
campaign, using digital marketing etc. company also uses social media promotion because social
media is widely used by the consumers so doing promotion on social media is fast, effective,
saves time and efforts and is economical. Company come up with shopping cards is the strategy
to attract more customers.
Success key performance indicator:
Customer satisfaction: marks and Spenser focus on customer satisfaction because it is the
customer who give them sales. For this they had made strategy to collect feedbacks from the
customers.

Cost efficiency: cost performance index ratio is used by the company to reduce the financial risk
by allocating the capital carefully.
Strategic analysis: the competition is increasing day by day and due to recession the income of
consumers are decreasing so company should maintain their business at international level by
using advanced technology. The company should give good quality of services to the customers
by using E business so that they can achieve their goals. Company should also make
improvement in their inbound logistics. Company can adopt market development and cost
leadership as it has global presence so this will give advantage to the company.
CONCLUSIONS
From the analysis of this report it can be concluded that it states about Mark and Spencer which
is a UK based company and operated in throughout the world. This report describes the macro-
environmental who affects the working of the company along with it describes the Swot and
Porter's five forces model for M&S. This report evaluates the VRIO and the implementation of
Ans-off and porter's generic model and various strategies to enhance the profitability of Mark
and Spencer. This report defines the competitors of M&S with the help of Swot and pestle to stay
competitive and survive in the market.

REFERENCES
Books and journals
Gilligan, C. and Lowe, R., 2018. Marketing and general practice. CRC Press.
Hague, P., 2019. The Business Models Handbook: Templates, Theory and Case Studies. Kogan
Page Publishers.
Hernández and et.al, , 2018. The link between a firm s internal characteristics and performance:
GPTW & VRIO dimension analysis. Revista de Administração IMED.8(2). pp.222-235.
Ikiseh, B.N., 2020. The Internal Communication Barriers: A Communication Audit Report of a
Nonprofit Organisation. Global Journal of Management And Business Research.
Isabelle and et.al, 2020. Is Porter's Five Forces Framework Still Relevant? A study of the
capital/labour intensity continuum via mining and IT industries. Technology Innovation
Management Review. 10(6).
Jin, H., Miao, Y. and Park, S.T., 2018. A Case Study of Marks and Spencer lost China. Journal
of Industrial Convergence. 16(2). pp.15-23.
Katsikeas, C., Leonidou, L. and Zeriti, A., 2019. Revisiting international marketing strategy in a
digital era. International Marketing Review.
Künle and et.al, 2020. Macro-environmental comparative analysis of e-mobility adoption
pathways in France, Germany and Norway. Transport Policy.
Lopes and et.al, 2020. Applying Regional VRIO Model to Island Regions: An Evaluation of
RIS3. In Regional Helix Ecosystems and Sustainable Growth (pp. 67-84). Springer,
Cham.
Roth, S., 2017. Parsons, Luhmann, Spencer Brown. NOR design for double contingency
tables. Kybernetes.
Simkin, L., 2016. 11 Segmentation. The Marketing Book, p.271.
1

2