Business Strategy: Concepts & Analysis

This assignment examines key concepts in business strategy, focusing on elements like exploratory and exploitative innovation, the influence of business environments, and the role of corporate social responsibility. It explores diverse strategies employed by businesses, including those at the base of the pyramid and within the cloud computing sector. The analysis draws upon academic literature to understand the relationship between strategic choices and organizational performance.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................2
1.1 Vision, goals and objectives of M&S...............................................................................2
1.2 Significant element for creation of strategic plan.............................................................2
1.3 Analysation of effectiveness of BCG matrix and SPACE ..............................................3
TASK 2............................................................................................................................................4
2.1 SWOT analyses and Anstroff matrix...............................................................................4
2.2 PESTLE and porter's five analysis...................................................................................5
2.3 Importance of stakeholders analysis.................................................................................6
2.4 Presentation of new strategy.............................................................................................6
TASK 3............................................................................................................................................7
3.1 Evaluating appropriateness of alternative strategy...........................................................7
3.2 Justification of selected strategy.......................................................................................8
TASK 4............................................................................................................................................8
4.1 Responsibilities of personnels responsible for execution of strategies............................8
4.2 Estimation of necessary resources....................................................................................8
4.3 Contribution of SMART targets in implementation of tactics.........................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategies are the plans which a company use for attaining their long term goals
and earning competitive advantages of other players of the industry (Definition of business
strategy. 2017). It also include planning for expansion of the organisation (Ang, 2011). It is
necessary for a firm to change their tactics with time otherwise they may face some serious
problems in forthcoming time . Marks and Spencer is leading firm in retail sector. They are very
strong in their domestic market i.e. but at the same time their global presence is also strong. This
company has approximately 979 stores in UK and the number of their international outlets in
around 454. When this organisation started their business, their main products were cloths and
food. They were basically know for the prior items, the quality of their clothing is considered as
their USP. They have capture significant amount of market share in premium segment.
Gradually, top level management of this company understood that they have to offer more
products in their stores otherwise their competitor will get more strong. Currently they are selling
various items like furniture, gadgets, homewares etc. at their outlets.
Almost 85000 employees are working in this 133 year old company. In present scenario,
their sale is approx. 10.4 billion pounds and their profit is around 483 million pounds. Their
revenue is increasing but the main problem for them in current business environment is that their
profit is going down. Some experts believe that they are not performing well because they are
shifting their focus from their key segment i.e. clothing while others think that they are not
aggressively expanding their market in Asian region specially in India. The first foreign
investment of this firm was in Canada, they captured this market in short period of time by
offering high quality services and products. After this, they started expansion of their business in
other European countries so they can earn more revenue and capture developed territories
(Annabi and McGann, 2013).
The main reason behind success of this enterprise is that they always focus on quality of
their products, some people may argue this company sell expensive goods but M&S always
believe in providing value for the money. This organisation is serious about CSR, they are
committed to help 10 million people by 2025 so they can live a happy and healthy life. They are
going run a zero waste business, this enterprise is also going to assist 1000 communities in
transforming their life. This assignment will discuss about various mission, vision and goals of
the organisation. The process of understanding strategic planning will become significant part of
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this file. Environmental and organisational audit will be included in this project, this report will
also explain the importance of stakeholders analyses. Their are various types of growth
strategies, they will be described under this assignment . The responsibility of person for
implementing new strategies will get cover under this project.
TASK 1
1.1 Vision, goals and objectives of M&S
Mission and vision of a company shows the the prime reason behind their existence. All
of their targets either directly or indirectly connected to the long term objectives of the
enterprise.
Mission – This firm want to manufacture the aspirational quality of the products, they
want these items to be accessible to every person.
Vision – This organisation want to keep their standards so high that others only measure
their performance by comparing to the standards which hare set by M&S. They want whole
industry to improve their offering to the public, this can be done by increasing positive
competition in the sector (Bucolo and Matthews, 2011).
Goals – Marks and Spencer want to increase the engagement of their employees,
customers and suppliers in their business operation because it is essential for facing the
challenges which they may face in upcoming time.
Objectives – This enterprise want to develop a career path for their employees. They
want to regain their peak position in clothing and food retail sector.
Core competencies – M&S is known for offering premium quality items, they have
highly skilled workforce. These two factors provide them extra edge over their competitors.
1.2 Significant element for creation of strategic plan
Their are many important factors that are need to be considered as the time of making
strategic plan:
Competition – The retail sector is a highly competitive market, the number of firm,
operating in this industry is high and many multi-national organisations are running their
business in this segment. M&S is present in many countries, they have to analyse the
performance of local and international competitors at the time of forming strategic plan (Burlton,
2015).
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Industry – Every business organisation should understand that the industry, where they
are operating, can make a huge impact on their profits. M&S should make plans according to the
latest market trends and fluctuations in the sector.
Own weakness and strengths – This enterprise should analyse their capabilities before
constructing ant strategic plan. If they will try to attaining something which is directly connected
to their weakness then they may fail to achieve their targets in set period of time (Champoux and
et.al., 2012).
1.3 Analysation of effectiveness of BCG matrix and SPACE
BCG matrix help in finding the correct areas where a company should invest their money
so they can get maximum return. SPACE analysis shows the current position of an organisation.
It also cover financial strength and environmental stability. Below is the BCG matrix and
SPACE of M&S:
Star - Their textile business comes in this segment. Star is related to high number of
shares in a market which is growing with a high rate.
Cash cows – High shares in a market with low growth. Normally in this condition, a firm
try to sell their shares because they know that they will not gain much this kind of business.
Dogs – Low shares in low growing market. A company do not have much market shares
in a sector which is giving low return (Chang and Graham, 2012).
Question mark – Food segment of M&S comes under this points, in this situation an
organisation has less share in a market that is growing with a high rate.
SPACE
It is divided into two parts:
External
Environmental stability – Impact of significant elements, like changes in technology and
rate of inflation, on M&S is analysed in this part.
Industry attractiveness – Retail sector is good growth opportunities and it does not high
fluctuations. The full utilisation of resources is a big advantage to the company (Davis, 2012).
Internal
Competitive advantage – The premium quality and competitive price offer by M&S is
given the extra edge over their rivals.
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Financial strength – Factors like return on investment comes under this section. Cited
firm has sound financial position because they have invested their money in right areas.
TASK 2
2.1 SWOT analyses and Anstroff matrix
SWOT analysis of M&S
Strengths – This firm hold majority of of share in premium segment of clothing and the
number of their permanent customers is also high because they know that this firm always offer
best quality in their stores (Firnkorn and Müller, 2012). Their stores have good interior and their
employees are highly qualified.
Weaknesses – this company is failing to attract young customers, they also face serious
problem when market trend changes. They have a image of an enterprise who only sell expensive
goods.
Opportunities – They can invest extra funds for capturing more market share in food
retail segment. They can also think about opening their stores in some other Asian countries like
China. Their stores can be modified and they can shift their focus on selling their goods through
online mode.
Threat – The local competitors in some nations like India are getting strong. The cost of
material and labour is also increasing.
Anstroff matrix
Market penetration – M&S can offer heavy discount on their premium class product for
attaining significant amount of share in a new market. They are also spend huge sum on
advertising and sales promotion (Helms and Whitesell, 2013).
Market development – M&S has already entered in furniture and homeware segment.
They are opening more stores in various part of emerging markets like India.
Product development – M&S has already started selling some of the new products like
furniture, this can help a company in earning revenue from a new segment and they can sell these
items at old and new markets also.
Diversification – For a company like M&S, the increasing diversity in their portfolio is
very important. This company is already investing huge sum in untouched market and they are
also entering in new segments like homeware.
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2.2 PESTLE and porter's five analysis
M&S is one of the leading retailer. To be competitive against its rivals, it is necessary for a
marketing manager to adopt Pestel and Porter's five forces analysis and frame strategy
accordingly.
PESTEL Analysis- Business environment are always dynamic in nature. To deal with
such external environment, it is required to analyse various factors, which are as follows-
Political– Government sets rules and regulations for the companies such as planning for
risk assessment and control. This is all about how government intervenes in an economy
(Kernbach, Eppler and Bresciani, 2015).
Economic– Economic factors have significant impact on an organisation. It includes
factors such as economic growth, rates of interests and exchange, income of businesses and
consumers etc.
Social– It is also known as socio-cultural factors, covers attitudes and beliefs of
consumers. This factors has key influence on the demand of products and services.
Technical- Technological changes always are difficult to be handled. Giving emphasis
on innovation is must to be competitive against rivals.
Environmental– Environment factors should also be considered. Now-a-days
organisation like M&S are using degradable products which is safer for environment.
Legal– Legislations are always changing. M&S keep up to date with new laws and
regulations and health and safety guidelines issued by government (Killing, 2012).
Porter's five forces model- This is most important tool to understand competitiveness of
your industry. This is useful in understanding forces that re affecting profitability of an
organisation. M&S is giving more emphasise on such model thus, a leading retailer in market.
Supplier's power- This is determination of how suppliers change their prices. If suppliers
are more, obviously an organisation have more options to get material. However, in case of
limited suppliers, a firm has no option rather than buying from them.
Buyer's Power- How consumer's demand influence different prices offered by a firm.
Buyer always negotiate to buy at lesser prices. If buyers are limited, an organisation will
definitely use penetration policy to make those customers loyal.
Threat of substitute- what will be change cost for a consumer and what re substitute
products available are threat of substitute (Li, Zhou and Si, 2011).
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Threat of New entrants- new entrants will follow different pricing policy to attract customers so,
new entrants will always make market more competitive.
Competitive rivalry- how many rivals are existing in market and what are their strength
and how customers are shifting towards them needs to be considered.
2.3 Importance of stakeholders analysis
Stakeholders analysis is the review and consideration of influence stakeholders have on business.
It includes customers, employees, suppliers and rivals in the market. Satisfaction of stakeholders
plays a key role for achievement of goals and objectives.
Satisfied one- These are parties that are highly interested and have m,ore power in
business. Such as shareholders and employees.
Managed effectively- These parties are less interested and have more power like suppliers
and Government. These are to be informed constantly to get best quality (London and Hart,
2011).
Monitoring- These parties have more interest and less power in decisions of business. It
usually consist of customers and financiers. Every organisation are working for their customers,
thus an important stakeholder.
Informed- they are less interested and have less power too. They do not have to be
irritated with constant information sharing such as local community.
Thus, analysis of stakeholders assist management of an organisation to develop strategies
that best fit current condition of dynamic market. It helps in motivating employees to satisfy
customers and create value for a firm. It is role of stakeholders to come up with dynamic
strategies to increase market shares of company.
2.4 Presentation of new strategy
This company should keep their focus on their main revenue generating item i.e. clothing.
At the time of expanding their business in emerging markets, they should not offer furniture and
other segment like food section in market like India. This strategy will help them in capturing
significant number of shares in developing nations who are considered as the future of retail
sector. For developed market, where they have strong presence, they should try offer variety of
items (Palmer and et.al., 2015). They should not enter in more segment but M&S should increase
the variety of products which currently they are offering at their outlets. This firm should
concentrate on organic investment in Asian continent because this will help them in attaining
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more shares in next 2-3 decades. If they will purchase fixed assets in this region in present time
then its value will be very high in upcoming decade.
TASK 3
3.1 Evaluating appropriateness of alternative strategy
Tactics that can be used at the time of entering in new market:
Organic growth – In this strategy, an organisation has to inject more money for producing new
items and enhancing the output of present products. Buying fixed asset is another option for an
organisation at the time of adopting this choice. Investment in huge amount needs to be done
which cost high at the initial stages but later in the long run good returns are received from the
same.
Merger – Merger is generally done at the time of starting business in an unknown territory.
Companies sign an agreement with domestic firm and make a new enterprise for operating in a
region. It is a favourable option as less investment is done in establishment and also much of
marketing cost can be saved. Resources get doubled which further bring a good hike in total
productivity level.
Acquisition – An organisation like M&S can think about buying a company at the time of
introducing their business at new location.
Substantive growth
Product development – M&S can develop more types of cloths with new designing and
fabric. They can also think about selling organic food at the stores. This will develop brand
image also as organisations that focus on maintaining innovation are more likely to be favoured
by customers and they prefer it more over others (Pugh and Bourgeois III, 2011).
Vertical integration – In this option, cited firm can make various partners for making a
finish product. Vertical integration is related to manufacturing a product by making its different
parts by using the help of different companies.
Horizontal integration – in this method, expansion is done opting the option of merger
and acquisition.
Limited growth
Market penetration – Heavy promotion of brand and huge expenditure on advertising can
play crucial role in gaining limited growth.
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Market development – M&S can open their stores in untouched market. This will help
them in increasing their revenue .
Retrenchment
Turnaround – Sell one of the subsidiary company in order to attain better finance ail
position.
Liquidation – Shut down the business because it will not provide profit in upcoming time.
This organisation should enter in new markets by adopting the tactic of origin growth.
The should opt the strategy of marketing penetration in the developed region where they already
have significant amount of share (Reinhardt and Stavins, 2011).
3.2 Justification of selected strategy
The market in Asian region will grow at a high rate because the economic growth of this
region is high the buying capacity and standard of living of people living in the continent is also
improving. If cited firm will have more share in this region then it will provide them competitive
advantages. In developed market, they should try to increase their product portfolio because the
trends are rapidly changing and introduce new products is significant for the growth of the firm.
TASK 4
4.1 Responsibilities of personnels responsible for execution of strategies
It is the responsibility of the manager of finance department to arrange the funds for the
expansion of company. They are responsible for finding the best sources of the finance so
company can earn more revenue after deducting the amount on cost of capital. The HR manger
has to play crucial role in selection more people (Ross and Blumenstein, 2013). They are
responsible for finding and recruiting skilled workers. It is their duty to keep an eye on the
performance of their employees and provide them essential training which is necessary for
effective implementation of the strategy. It has to be given more care that right person is given
the right job to do and if prior training is required than same is provided as this will reduce the
wastage cost and will also minimise accidents in the business.
4.2 Estimation of necessary resources
Basically two kind of resources are needed for execution of this strategy:
Human resources – This firm has to find some local talent at the time of expanding
business in nations like India. Fresh talent is also required in the territory where they are
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successfully running their business, new employees can assist in manufacturing new designing of
the products (Scholes, 2015).
Finance – Money is the basic thing which is required for every work. At the time of
expansion, huge amount of money is required for purchasing fixed assets and paying salary to
the new workers . Leader has to decide how they will raise the fund which is required for
development as every sources has their own positives and negatives. Evaluation of each must be
done so that it is recognised that which offers best opportunities to business.
Technology – Another resource which is required to carry out the operations is of
applications which help in converting the raw material into final products. Advanced and
developed tools should be there so that quality products are produced.
4.3 Contribution of SMART targets in implementation of tactics
Specific- Goal of an organisation needs to be specific with a pre-determined time period.
Such as Acquiring more 30% of market share by M&S during a specified period of 3 years. For
attainment of such goals, marketing manager should have appropriate strategies to be applied at
right time.
Measurable- Objectives must be measurable in numerical in nature. As company cannot
use qualitative data only to set its targets and accomplish those targets (Stiakakis and Georgiadis,
2011). Also current performance needs to be measured and compared to targeted performance. If
deviations arise then, necessary steps needs to be taken.
Attainable- The goals and objectives are attainable. Anything which is not achievable
cannot be set as attainable objective. Like M&S unveiled a new design for its 100 of stores and
try to gain competitive edge over its rivals.
Realistic- M&S are planning to have realistic approach of working and try to gain growth
in market slowly. In order to attain such goals, they are not following penetration pricing.
Company has differentiate its pricing policy according to market conditions.
Time Bound- M&S is likely to have 30% of market shares and such objective is attained
in around 3-5 years. The time boundance is necessary for a company (Tsamenyi, Sahadev and
Qiao, 2011). The marketing manager should be given appropriate time to build up strategies and
work accordingly.
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CONCLUSION
From the above, report it can be concluded that effective business strategies can help an
organisation in getting competitive advantages over their competitors. Various analyses like
PESTLE and SWOT help a company in analysing their external and internal environment which
further assist in planning and designing polices for future. It is highlighted in the above text that
how important stakeholders are and need to be informed whenever any change is made in the
code of conduct of business. Thereafter, importance of person who is responsible for
constructing strategy is given that reflects that he has to take care while taking any decision as it
may effect the future of business to a great extent. Finally, report summarised with how plans
should be made keeping SMART objectives as base with which deviations in the expected
results reduces to minimum.
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