Business Strategies of Marks and Spencer

The assignment provides an in-depth analysis of Marks and Spencer's business strategies, including a SWOT analysis to identify internal factors affecting the company, a PESTLE analysis to assess external factors, and an application of Porter's Five Forces to understand the competitive environment. A strategic plan is also proposed for product development, which includes introducing a new range of products with moderate returns and offering home delivery services.

Business Strategy for
Marks & Spencer

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
EXECUTIVE SUMMARY.............................................................................................................3
BACKGROUND STATEMENT....................................................................................................3
ORGANISATIONAL STRUCTURE.............................................................................................4
MISSION STATEMENT................................................................................................................4
VISION............................................................................................................................................4
VALUE............................................................................................................................................4
MARKET ANALYSES...................................................................................................................5
COMPETITOR ANALYSES..........................................................................................................2
SWOT ANALYSES........................................................................................................................4
PORTFOLIO ANALYSES.............................................................................................................6
KEY STRATEGIC GOAL..............................................................................................................6
SMART OBJECTIVES...................................................................................................................6
RESOURCE IMPLICATION.........................................................................................................7
EVALUATING AND MONITORING THE PLAN.......................................................................7
SUITABILITY, APPROPRIATE AND Feasibility........................................................................7
CONCLUSION................................................................................................................................8

INTRODUCTION
Business strategy is the organizations working plan for attaining the goals set up by them
and also the strategy helps firm in achieving its vision and mission. It assists company in meeting
out the financial goals. Report will lay emphasis on Marks and Spencer. It is a British
multinational company whose headquarter is in Westminster, London. Company has been
specialised in selling luxury product such as clothing, food or home products. It has also been
listed in London stock exchange. Currently company has 957 stores operating in UK. Firm has
been trying to expand their business globally. Report will lay emphasis on Macro environmental
factors that affects company’s decision making. It will also analyse strength and weakness of
Marks and Spencer. Study will present the competitors' analysis of Marks and Spencer through
Porters five forces. It will also lay focus on strategic management plan that will assist
organization in achieving goal and objectives of firm. It also describes the vision, mission and
objectives of the company (Prajogo, 2016)
EXECUTIVE SUMMARY
This strategic plan focuses on Marks & Spencer group Plc to develop new product in the
existing market in which it deals. The plan will include history of the company and details of
supporting partners or agencies. Also, the organisational structure will be emphasised in the plan.
The plan will highlight mission and vision of Marks & Spencer. After that market analysis will
be done with the help of Ans off Matrix. Then strategic goals and smart Objectives of new
product development will be highlighted. Resource which will be used in development of new
product used by the company will be discussed. In the end, Plan will be evaluate and monitor by
SAF model. This model includes Suitability, appropriate and feasibility test of the new product
development which will be highlighted in the plan.
BACKGROUND STATEMENT
History of Marks & Spencer group Plc
The company was started as a stall by Michael Marks in 1884. His aim was to sell
durable products at moderate price. In 1894, Thomas Spencer joined the company. The company
was dealing and supplying clothing and food products(Bapat and Mazumdar, 2015.). Marks &
Spencer became Public limited in 1925. Till 1998, there were almost 500 Marks & Spencer
stores in the world.
Supporting Partners or Agencies of Marks & Spencer

 UK Franchise Partners are WHSmith, MOTO, COMPASS Group, SSP(Select Service
Partners), BP.
 International Franchise Partners are Al-Futtaim Group, Alhokair fashion retail, Central
Group, Creasey's Limited, FIBA Group, Galloway SL, Lagardere Travel Retail,
Marinopoulos Group, Martel Group, P.T Mitra, Reliance Retail, Rustan Marketing
Specialists Inc.(RMSI), S Group, Sandpiperci, SGH, Supermarkets Ltd and Retail
International, Symeonides Fashion House, The english sports shop Ltd., Voici La Mode
Group of Companies, York Ltd.
ORGANISATIONAL STRUCTURE
Figure 1Figure 1: Organisational Structure
(Source: organizational structure of the company,2019)
MISSION STATEMENT
To provide cost-effective, innovations, and the best quality of service to customers.
VISION
To become best brand of UK for luxurious products.
VALUE
Marks & Spencer group Plc donates business surplus and clothing to new life and shelter
also donates foods to Fare share. The company also raised fund for cancer.
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MARKET ANALYSES
Ansoff Matrix
Market Penetration Strategies
In this strategy of Ans off Matrix, Company with their existing products which are
Clothing, home products and Luxury food items. This is possible when market in which
company deals in is growing. The company Marks & Spencer group Plc can also apply price
discounting techniques and other promotional activities like advertisement on TV and in
newspaper or sponsors various programmes of UK to gain attention of customers(López-
Cabarcos, and et.al., 2015). By this company can increase its customer base. The company need
to manage all these to maintain its competitive advantage so that they can give tough competition
to other rivalry industries in UK.
Market Development Strategies
Marks & Spencer group Plc is using these strategies of market development for exposure
of their existing products (clothing, luxury food range and home products) to new market. This
strategy is riskier than market penetration as different markets have different problems in which
company need to deal with. Marks & Spencer group Plc can use marketing mix which includes
place and promotion. The company can opt for new routes and channels. It includes areas which
are outskirts of UK or company can also deal in different countries in which they haven't start
exporting. Then comes to promotion through local newspapers of different countries and
company can sponsor different programmes or sport teams of that country to gain customer
attraction as well as awareness of the product range(Holmes Jr and et.al., 2018).
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Product Development Strategies
The company can also deal in new products to existing segment of market. Marks &
Spencer group Plc has already established various range of products. But for more exposure they
can opt to start supplying furnitures. Marks and Spencer has already deals with high profile
customers by supplying them luxury food items. So, to target that customers of luxury food they
can launch ' Luxury sofas ' in various ranges of Velvet in attractive soft colours like Beige, Light
brown and Peach. Customers are highly satisfied with the food range of Marks & Spencer group
Plc. Therefore, they easily trust the new product launched by the company. As they know the
quality of the products of Marks & Spencer group is utmost and perfect.
Diversification Strategies
The company following this strategy has to deal with new products in the new market.
This strategy is the riskiest of all because the company need to launch new product to a new
market which means they suffer complications from the market as well as new product(Deans,
2015. ). Company can also expand its new product range (Luxury sofas) to different countries in
which they haven't supplied yet. Marks & Spencer group Plc is a big brand which is popular all
over world. So it is not a big deal for the company like Marks & Spencer to open stores in
various countries of the world.
(Source: Ansoff matrix, 2019)
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Figure 2:Ans off Matrix

Marks & Spencer group Plc should follow 'Product Development' Strategy for which they should
develop a new product that is range of Luxury Sofas. The company has already a huge customer
base in luxury food items. So, targeted them for new product range can be profitable for the
company(Deans, 2015. ). Marks & Spencer Luxury sofas will be launched in existing market
they deal in so that they gain attraction from customers easily. Because the consumers of luxury
food items easily trust the quality of new product which saves time of the company to identify
customers.
 Marks & Spencer group Plc enters with new product by which they gain new experience
and also different set of customers.
 The company increases its sales by supplying to existing customers.
 They can also gain customers from competitors by supplying them better quality which
tends customer to shift towards Marks & Spencer.
 By developing new product Marks & Spencer earn more revenue and profitability.
 Company also gain competitive advantage by entering into same market but with new
product.
 The company also gain trust of existing customer as they have a reason to buy and retain
with the retail company like Marks & Spencer group Plc.
Company by entering with new product builds a reputation among public that they are
continuously innovating according to preferences and needs of customers.
COMPETITOR ANALYSES
Porter’s five forces
Marks & Spencer group Plc is facing many threats for which the company need to be
attentive in their working. Here, the threat of Marks & Spencer group Plc is explained by Porter's
five forces model and how company overcomes these threat for their successful functioning will
be explained below.
Bargaining power of Suppliers
Marks & Spencer group Plc buy raw material from many suppliers. These suppliers use
negotiating techniques to consume higher prices from the company. Though the company need a
huge quantity of raw material and they have to accept to buy at same negotiated price because no
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other supplier offers this huge quantity in limited time. Marks & Spencer group Plc tackles
power of suppliers by making a supply chain with multi-supplier(Bapat and Mazumdar, 2015.).
They also try to design products with different materials so that company shift to another if price
of one material rises. The power of suppliers are moderately high but company uses effective
techniques to overcome them.
Bargaining power of Buyers
Buyers are dominating in nature. Thus, they demand the best quality in minimum price. The
buyers put pressure on Marks & Spencer group Plc for long term profitability. Marks & Spencer
group Plc has a large customer base which is its strength. It also innovates new products like,
selling their products online which saves time of customers attracts more customers. Therefore,
by this bargaining power of buyers gets limited. So, the company Marks & Spencer group Plc is
facing relatively high threat from buyers but because they are continuously making efforts to
overcome this threat they are successfully establishing a good customer base with a category of
loyal customers.
Threat of substitutes goods
Marks & Spencer group Plc deals in clothing, home products and luxury food products. As
they are dealing in basic needs of humans like clothing and home products whose substitutes are
not available. The consumer may shift top other brands but they need to consume these products
to satisfy their livelihood. Therefore, threat of substitutes are very low for the company as they
deal in the products which satisfy basic needs. But they also deal in luxury food products which
is not a basic need. So, there is a possibility that consumer shift from their luxury food habit to
normal. In times of unemployment or inflation in UK. Therefore, threat of luxury food products
are high.
Threat of new entrants in the market
New entrants put pressure on Marks & Spencer group Plc by entering in their market
segment. New entrants bring innovation by cost reduction techniques and strategies of lower
pricing. Marks & Spencer group Plc overcome this threat by developing new products and
services so that the company can increase their customer base. The company also lowers its fixed
cost by concentrating on economies of scale. Marks & Spencer group Plc also makes
improvement in research and development. Although, the company is facing high threat from
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new entrants and Marks & Spencer group Plc successfully managing these challenges and
safeguard its competitive advantages by building effective techniques.
Threat from Competitive rivalry
As Marks & Spencer group Plc deals in retail sector. Thus, they are facing huge competition
from other rivalry industries. Most common competitors are TESCO, Wal mart, etc. Marks &
Spencer group Plc builds better scale and differentiation of products like in 2018, Marks &
Spencer combined with Octopus energy to introduce a new product of M&S Energy in different
market segment. So that company retains its image of big brand and can compete to rivals better
than earlier. So, the threat of competitive rivalry is high but Marks & Spencer group Plc is
managing their threat with an ease
SWOT ANALYSES
Swot analysis is the strategy to use the different techniques or identify the strength,
weakness, opportunity, threat of the organization. So that is help for company to mange or makes
a planning for increase the growth of the company.
Strength
Wide variety of product
Marks and Spencer group plc have a variety of product like food product, luxury fashion
stuffs, home products etc.(Hsu Moore and Neubaum, 2018. ). So which is help for the customer
to choose the best product in different varieties for example; customer want to purchase the
vegetable in their stores. So they have a many choices to choose the best and fulfils their need.
Such as Canary tomatoes, avocados and English apples, carrots etc. So company will maintain a
good relationship with their suppliers they have 1200 suppliers with provide 400 different
varieties. So this is a big strength of the company.
Large Number of stores
Marks and Spencer group plc have many stores in the worldwide. They have 900 stores in all
over the world. So company have a big advantage to increase their product range in all over the
world(Hsu Moore and Neubaum, 2018 ). So large stores make a company wider and help to
increase the costumes base which is help to increase the Market share of the business.
Popular designer brand
Company have a variety of product and they provide the branded product to their
customer. For example Marks and Spencer group plc is provided the different product like
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women brands Autograph, Classic, Indigo collection, Limited collection, Per Una, Portfolio, etc.
so these is the variety of branded product and customer want to purchase the branded product so
this one of big strength of company(Thomé and Medeiros, 2016).
Weakness
 Unbalance stock and informational technology system
Marks and Spencer group plc cannot maintain their stock they cannot perform well in the home
delivery. Sometimes customer cannot like this type of product because many times firm provide
defect product so customer complain their delivery services. There is big disadvantage for the
Marks ans Spencer.
 Increase the cost of production
Because company have many stores or some stores are not performed well so company cannot
generate the huge profit. Due to this condition they have increase the cost of production or which
is created the negative impact on the Marks and Spencer group plc. Also, they follow the new
techniques or ideas which increase the different expenses such as money, time etc. But company
focus on the new technologies for increase the Market competition. Now these days firm are
prefer the both mechanize or automated machinery so that is help to achieving the goal of the
company. But this is generated the huge expenses so the cost of production is increase.
Opportunity
 Expand the Market: Company can expand their Market in worldwide through their
different product. Company open their stores in Hongkong and Ireland and there has a
131 franchise stores in different countries or they operate through a network(Deans,
2015). So in future Marks and Spencer can expand their Market in different area.
 Internet technology: Now these days the generation of internet technology increase day
by day. So Marks and Spencer group plc is increase their business to use this technology.
They provide the product to their customer through online platform. So this an
opportunity for customer as well as company or purchase product in online is become a
new trend(Deans, 2015). And this platform is provide the huge success in the future or
customer easily purchase the product through online.
 Provide healthy product: Marks and spencer can provided the healthy product to their
customer. Because customer wants the organic food and they concern about their health.
So customer are easily attracted to these products. Company provide low callory, organic
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food which is help for company to increase their customer base. Also, the advantage
because competitors are not aware about this strategy so Marks and Spencer take the
advantage or increase the competition.
Threat
 Increase the competition : Competition is the biggest threat of Marks and Spencer. For
example in the food Market they have many competitors like tesco, sansburry and
safeway these all are had a good Market or they work in specify products. So this is the
biggest threat of Marks and Spencer (Adner, 2017). Because they cannot work only in
specific product they have a variety of product. Like in clothing Market Waitrose is the
biggest threat because they provide value added or fashionable branded product to their
customer. So customer purchase the valued production.
 Change of social environment: Other than competition, change of customer preferences
is also threatened of the business. Because the need of customer is change any time. They
can easily switch their product according to the current trend. For example customer
attract to the other country their culture and dressing sense is more unique (Adner, 2017).
So customer change their taste in any time. So Marks and Spencer have disadvantage on
their customer loyalty
PORTFOLIO ANALYSES
BCG matrix
BCG matrix is a strategic management tool which is being created to evaluate the products
and services given by the company.
 Stars
Website launched in 2013 of M&S supported by e-commerce distribution centre at Castle
Donington is capable of selling 1 million products daily. In this the products having the largest
market share and generates the greatest sales among its products portfolio. It covers the share
which contains the largest amount of shares, in 2013 it has 11% market share in the UK. The
overall category will grow to 5% in the next 5 years. It has the highest potential in the market as
the customers were demanding the similar products, they should go for research and
development and develops the innovative products so that they can increase their sales. 'Living
the Dream' Range is the highest selling range in children.
 Cash cows
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Here it's a low growth and higher market share in Marks & Spencer the food products and
lingerie (Bras are regarded one of the most iconic products of M&S) has a 30% market share
which is considered very high market share, but the overall market is declining as the company is
not outsourcing its product and manage the suppliers itself.
 Question mark
The confectionery business unit in BCG matrix of marks and Spencer is a question mark. It is
one of the attractive, market in food industry but still marks and Spencer is having low market
share, the recommendation is that they penetrate the market and push their products presentable
and reached out in more outlet. So that they can convert into cash cows.
 Dogs
Synthetic fibre products and Artificially flavoured products' comes under the category of dogs in
BCG matrix of marks and Spencer, this unit is being in the loss from last 5 years.
KEY STRATEGIC GOAL
 Long term goals of Mark and Spencer is to become one of the best brand of UK in
luxurious products with a large customer base.
 Short term goal is to create new customers by new product development and retain
existing customers by innovation in products.
SMART OBJECTIVES
 Marks & Spencer group wants it customer base to be increased by 20% by the end of
2020.
 Also, the company wants increase the profitability to 15% by the new product
development.
 To increase the sale of new product Luxury Sofa by 20% till the end of year 2020
 They set a special research and development team to know what are the needs and wants
of customer.
 The company focuses on employee's satisfaction so that they can decrease employee
turnover ratio of Marks & Spencer group.
RESOURCE IMPLICATION
 Recruit more and experienced staff for the new product category that is luxury sofas.
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 Also, company need to promote new product to the market. For this they need to
advertise through TV and newspapers(Adner, 2017). Company also offers promotional
activities through sponsorship of sports team.
 They can borrow funds from banks and shareholders for establishing new product in the
market.
 At lest 2 stores in one month will be open in UK.
 Establishing online presence of Luxury sofas so that consumers can buy them.
EVALUATING AND MONITORING THE PLAN
In order to evaluate the success of strategic plan company will take support of key
performance indicators. It will compare sales of business with previous year and with
competitors as well. This will help in analysing success of overall strategy. Furthermore,
benchmarking will be sued in order to identify whether firm is able to meet quality standard or
not.
SUITABILITY, APPROPRIATE AND Feasibility
SAF model
Suitability
 The new product in Marks and Spencer is using its existing customer as a base and target
them to supply luxurious range of Sofas.
 The strategic plan is focusing on customer base which is the company long term goal. So,
the plan is initially focusing to retain and win new customers.
Appropriate
 Company will offer moderate return in initial years to the stakeholders by new product
development(Prajogo, 2016). As the customer base increases' year by year, returns will
automatically increase.
 Marks and Spencer will offer good quality and comfortable sofas to the customers.
Although they will be expensive but the quality will compensate the cost.
Feasibility
 The management team of this range of product will be efficient and experienced.
 The company borrow funds from shareholders to develop this new product range which
will give them moderate return.
 Company also offers home delivery service to all customers.
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Thus, the SAF test is successful and Marks and Spencer can easily implement and introduce this
range of products to mark
CONCLUSION
This report was all about business strategies followed by Marks and Spencer Plc Ltd. The
company deals in retail hence facing too much competition and need to innovate timely and
appropriately. This report was concluded that SWOT analysis of Marks and Spencer which
actually highlights its internal factors that affects its functioning. PESTLE analysis of the
company were also discussed in the report and by analysing this company can improve its
functioning because it contains external factors. After that porter's five forces were elaborated for
the better understanding of all the threat face by the company. At Last, a strategic plan were
made which include a new product development.
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REFERENCES
Books and Journals
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future research agenda. Journal of World Business. 53(2). pp.134-150.
Hsu, P.H., Moore, J.A. and Neubaum, D.O., 2018. Tax avoidance, financial experts on the audit
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SPRINGER-VERLAG BERLIN AN.
López-Cabarcos, M.Á. and et.al., 2015. Organizational capabilities and profitability: The
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Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics. 171.
pp.241-249.
Thomé, K.M. and Medeiros, J.J., 2016. Drivers of successful international business strategy:
Insights from the evolution of a trading company. International Journal of Emerging
Markets. 11(1). pp.89-110.
Online
Ans off Matrix. 2019. [Online]. Available through
<http://knowledgegrab.com/learners-zone/study-support/performance-management-
review/generate-options/ansoff-matrix/>.
The organizational structure of the company. 2019. [Online]. Available through <https://en.info-
novitas.hr/about-us/organizational-structure/>.
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