Developing Business Strategy for Small Firms

This assignment requires students to understand the importance of developing a business strategy for small firms. It involves conducting both internal and external analysis to identify weaknesses and create a plan that helps achieve goals within a time limit. Students are expected to adopt various tactics for entering new markets, such as using SMART objectives, and provide references from relevant books and journals. The assignment aims to develop students' critical thinking skills in understanding business strategy and its application in small firms.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................2
1.1 Vision, mission, goals and core competencies for Mark and Spencer. ................................2
1.2 Factors needed to be considered when formulating a strategic plan ....................................2
1.3 Two techniques used when developing the strategic plan ...................................................3
TASK 2............................................................................................................................................4
2.1 Current strategic position of the Mark and Spencer with the help of internal audit. ...........4
2.2 Environmental audit for Mark and Spencer. ........................................................................5
2.3 Significance of stakeholder analysis while formulating new strategy .................................5
2.4 New strategy for Mark and Spencer .....................................................................................6
TASK 3............................................................................................................................................6
3.1 Alternative strategy that can be used Mark and Spencer .....................................................7
3.2 Justification of the new strategy ...........................................................................................7
TASK 4............................................................................................................................................8
4.1 Roles and responsibilities of personnel while implementing the strategy............................8
4.2 Resources required to implement discussed strategy ..........................................................8
4.3 Contribution of SMART target in the strategy implementation...........................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy help the firm in achieving its goals and objectives with the help of
proper planning and directing them in right direction. It helps firm in making right decision
regarding the allocation of the resources that can help the firm in achieving its goal and
objectives. In order to improve their business plan, the firm uses two types of stargaties that is
generic and competitive. This strategy helps firm in developing its position in competitive
market. It plays important role in the business expansion and resource allocation that can help
the business in achieving success.
For the present study, Marks and Spencer (M&S) has been taken into consideration. It is
one of the leading multinational retailer in Britain. The firm owes its existence for more than 133
years with approx. 454 stores all over the world. In UK alone, the company has 979 stores that
help them in catching the eyeball of their customer. The worldwide revenue of the firm in 2017
was recorded £10, 622.0 million. The average number of employee, employed by the firm is
84,939. The CEO of the firm has said that the main objective of the firm is to provide quality
product to their customer along with the great productive space. The company have achieved
great success when it comes to the success and growth of the firm. In 2010 the revenue that is
earned by the cited firm was 9,536.6 Million GBP, the firm is continuously growing that shows
in the increasing revenue of the firm from year 2010 to 2017. In 2013 the annual revenue of the
firm was 10,026.8 million GBP, and in 2017 it has been recorded 10,622 Million GBP. The firm
is continuously growing and was able to achieve the success of great height.
The firm specialises in producing luxury clothing, home products and luxury food
products. The firm has saw profit rise of 4.3%, the food department of the firm continue to run
sarong, yet the general merchandise which include clothing and home product slip by 2.2%,
while the stores that are open for more than a year notice the fall of 2.9%. Looking at the drop in
the sale of the firm, the CEO of the firm has come up with the plan of “recovering and growing”
where he has made clothing and home as one of the main priority that can help them in retaining
their sales. In order to increase the sale of the firm it has decided to focus more on the customer
and making sure to provide them with high quality of product. Along with this, it plans on
increasing their availability by selecting better place of distribution that can provide them with
great visibility. In addition to this, it plans on focusing more on their core shoppers that is the
female of the age 50 that shop within the cited firm approx. 18 times a year. Along with this, it is
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also making major change in the food products by reducing the number of brand from 500 to
100. Along with this, it is also introducing 100 distinctive international brands. The firm is
making major change in their business strategy in order to increase their sales and profit.
TASK 1
1.1 Vision, mission, goals and core competencies for Marks and Spencer.
M&S is one of the big retail firm in the UK. The firm focuses on the customer
satisfaction in order to achieve their goals and objectives. The firm believes that by providing
quality product and services to the customer the firm can make profit and can also increase their
sales.
Vision: The vision of the M&S Ltd is to sustain in the market for longer period, and to provide
their customer with quality of services. They believe in adapting new business strategy that can
help them in maintaining the value that they provide to their customer. They believe changes are
necessary part of business. In order to find stability its necessary of the firm to adjust themselves
according to the situation (Agrawal, 2016).
Mission: The main mission of the firm is to provide their customer with quality product in order
to maximize their profit. In addition to it, they also work to attain the loyalty of the customer so
that they can connect them to the firm for lifetime.
Goals and Objectives: Goal and objectives are the desire of the entity that they want to achieve
within the specified time. The main objective of the firm is to improve their services and profits
while the goal of the firm is to become the best retailer in the market of UK ( Armstrong and et.
al, 2015).
1.2 Factors needed to be considered when formulating a strategic plan
Strategic planning in simple terms can be defined as the way through which a firm can
analyse the issue that can create the problem in the success of the firm. In addition to it, this also
help in identifying key factors that can help them in resolving that issue. It involves
multidirectional research that help firm in their success.
Gap Analysis: It's a process that helps firm in identifying the current competency of the firm and
its future need. This gap analysis helps the firm in identifying its strength and weaknesses that
help them in formatting a plan that can eliminate their weaknesses and strengthen their strong
points that can help them in achieving their objectives (Bentley and et. al., 2013).
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Competition level: By identifying external competition the firm minimize the risk level.
Analysing the level of the rivals help M&S Ltd. to come up with better strategic plan. By
identifying the strength and weaknesses of the rival the firm can produce better product and
services that automatically provide them competitive advantage and also help in gaining high
customer satisfaction (Scholes, 2015).
1.3 Two techniques used when developing the strategic plan
M&S have adopted two effective techniques which has helped them to develop a better
strategic plan that can help them in achieving their goals.
SPACE planning techniques: This Model is implied at the beginning of the planning.
With the help of this planning the firm comes to know about its financial competitors of the firm
(Bharadwaj and et. al., 2013)
BCG Strategic techniques: With the help of this technique the firm can analyse its
business portfolio and competitors level that will help them in coming up with better strategy.
Along with this it also quite useful in evaluating the position of the cited firm in market.
Illustration 1: BCG matrix
(Source: BCG matrix or BCG analysis,
2017)
§
 Stars: Stars are those stores of M&S Ltd. That shows high growth in market share and
can bring more profit towards the entity. With the help of this M&S can invest much
money in these shops as they have high chances of profit return.
 Dogs: Dogs are those situations where the market growth of cited firm is very low and
investing money in such stores will only increase the operational cost of the firm in such
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situation firm should shut down their business and should focus more on the firm that are
making more profit (Johnson and et. al., 2013).
 Cash cows: In this situation the firm has low growth but the stores generate high market
share. With the help of this M&S can identify its market position and market share so
that they can adjust and modify their strategy which will help them in gaining more
profit.
 Question marks: in this situation the market share is low but the growth is high. This
situation increases the risk with the entrance of new product. In such situation its
necessary of the M&S Ltd. To come up with the better product strategy that can help
them in finding stability (Verbeke, 2013).
TASK 2
2.1 Current strategic position of the M&S with the help of internal audit.
With the help of internal audit, the firm can come to know about its strength and
weaknesses. M&S can adopt SWOT analysis in their working that will provide them not only
with internal analysis but also with external analysis.
Strength
 Strong brand image
 Wide range of products
 Large number of stores and outlets
provide great visibility
 Strong domestic presence (Gamble and
Thompson, 2014)
Weaknesses
 Decline sales in clothes and general
product. High competition from other
firms (Blackburn, Hart and
Wainwright, 2013).
 Bad Publicity and Non-trendy stores
reduces the attraction of the firm.
 High operational cost
Opportunities
New market segmentation
Digital marketing
High chance of success in developing
countries (Leonidou and et. al, 2015).
Threat
 High competition in price market.
 Government policies.
McKinsey 7s is another technique that firm can adopt in their evaluation process.
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Hard element Soft element
Strategy
System
Structure
Staff
Skill
Style
The firm is known for using cost leadership strategy in their working which help them in
exercising bargaining power that they held over the suppliers that help them in making effective
deal in low price (Leonidou and et. al, 2017). The firm has also eliminated many layers that
hindrance the communication and has adopted flatter structure in their working for efficient
working. Along with the major change in the working of the firm it's also focusing on the soft
skills so that overall improvement can be implemented in the firm.
2.2 Environmental audit for M&S.
PESTLE analysis is one of the best model that can help firm in analysing its external
environment.
Political Factors: EC'S free trade policy has worked in the favour of the firm it has led to
decrease sourcing cost. The firm is known for its various CSR activities but lack clarity on its
energy efficiency scheme can lead the firm in legal hassle (Martinez-Simarro, Devece and
Llopis-Albert, 2015).
Economical: The firm is facing high competition from the firm that is offering discount prices.
The firm was able to attract the customer by producing quality product but economic and
financial crisis has affected the sales of the firm as people are becoming more price sensitive.
Socio cultural factors: The firm need to put more focus on the lifestyle of people. The
perception and views are changing and its necessary of the firm to adopt themselves according to
them so that they can survive in this market.
Technological: The firm need to improve their online presence. In current time the consumers
have become more technological focused and prefer to buy online than in store purchase
(Scholes, 2015).
2.3 Significance of stakeholder analysis while formulating new strategy
Stakeholders are those people who get affected by the various business activity of the
firm. Stakeholder are all those people who have direct or indirect relationship with the company
such as customer, employees etc. Stakeholder analysis of M&S are given below.
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Name of
stakeholder
Level of Interest Influence Type of
information
shared
Frequency of
information
sharing
Employees Medium Medium Job satisfaction,
incentives, offers
etc.
High
Customers Medium High Information about
products and
offers. Quality of
products. Etc.
high
Government High High Tax recipient
overall earning
CSR activities
(Sia, Soh and
Weill, 2016).
Medium
Suppliers High Low Long term
contracts,
purchasing power
etc.
High
2.4 New strategy for M&S
The main aim of M&S is to become leading retailer in the market of UK along with this
it also wants to expand its business in other part of the world. Along with this, it’s also focusing
on the quality of its product in order to gain the loyalty of customers which will also help them
in increasing their customer base (Verbeke, 2013). From the above analysis it has come forward
that firm has great chance of success in the developing market of Asia pacific countries. With
proper market entry strategy and market development strategy the firm can develop their market
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in these countries. In the domestic market the firm require to focus more on their core business
in order to gain profitability.
TASK 3
3.1 Alternative strategy that can be used M&S
M&S always aimed for long term goal and come up with different strategies that can
help them in achieving those goals. Below are given different strategy that M&S can adopt.
 Market Entry
 Substantive growth retrenchment
Market entry strategy: These strategies help the cited firm in entering new market and settling
their business there. These strategies help M&S in analysing their new market, competitors and
potential customer. M&S generally rely on the strategies like franchising while entering new
market. The cited firm can also adopt strategic alliance or acquisition method in their working it
will help in increasing the brand name and presence.
Substantive growth strategy: This strategy focuses on various form of diversification that help
entity in its development. There are two types of diversification in this strategy. Related
diversification provides the firm with the chance to diverse its operation in the current market
while unrelated diversification help company to indulge unrelated product category (Agrawal,
2016).
Retrenchment strategy: M&S have many stores that are going through loss in such time this
retrenchment strategy help firm in selling their non-profit stores and can invest their money on
those stores that are showing great growth.
3.2 Justification of the new strategy
M&S can use various strategies which can help firm in attaining the desired success and
growth. Market entry strategy has been taken into practice, in which merger and alliance tactics
is one of the best way through which growth can be achieved.
With the help merger the firm can create partnership with other established firm of that
country this will reduce the risk that come with the entry in new market and firm will also able
to established their market in the developing country (Armstrong and et. al, 2015). Strategic
analysis can also be adopted by the firm with this the firm can share the risk along with this it
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also provides continuous flow of money which help firm in its many operations. With the help of
this the cited firm can easily penetrate the market.
Retrenchment strategy can also be used by firm in the market of UK as we have discussed many
of the stores are suffering from continuous loss by selling this stores firm can concentrate more
on the stores that are making profit (Bentley and et. al, 2013).
TASK 4
4.1 Roles and responsibilities of personnel while implementing the strategy
The main of strategic implementation is to achieve the desired target. In order to do so
it’s necessary that each employee of the firm understand their roles and responsibilities and carry
out them efficiently. To achieve a business plan, its necessary for the firm to have effective
management team which can help the firm in proper implementation (Scholes, 2015). The good
leader delegates the work among its subordinate on the basis of their capabilities that help them
in achieving best result. The Top management is responsible for the proper communication so
that each employee can become aware about the plan and it can implement properly. The
management is responsible for the systematic implementation of strategy so that error can be
avoided. It also helps in analysing the gap between actual performance and desired performance.
Roles and responsibilities
Low level management: Low level management is required to follow all the policies and
procedure that is implemented for smoother working.
Top level management: They are required to make effective strategies and policies that can help
the firm in achieving its goals and objectives (Bharadwaj and et. al., 2013).
Middle level management: They are responsible to create communication among the firm and is
also responsible to see the working of the staff to ensure that they are working toward the goals
of firm.
4.2 Resources required to implement discussed strategy
There are many resources that are required for the proper implementation of a strategy
Human resource: Diverse workforce is the biggest asset a company could have. It’s necessary
of HR manager of M&S to hire only those employees who can contribute in the success of the
firm (Johnson and et. al., 2013).
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Financial resources: In order to conduct any business activity, its necessary for the firm to have
financial resources that can support that activity. In order to enter new market, the entity required
huge capital that can be invested in hiring new employees, machine technology etc. This factor
plays major role in the carrying out business operational activities.
Material resources: M&S Ltd. require resources in order to implement their business plan.
These resources will help firm in producing quality product that always are able to attract the
customer towards the firm.
Time resources: Time is one of the important resources that determine the success of the firm.
It’s necessary for the firm to have proper time management so that they can give specified time
to each of the activity so that best results can be obtained (Verbeke, 2013). This will help M&S
manager in completing all the work on proper time and it can focus more on the quality of
products and services.
4.3 Contribution of SMART target in the strategy implementation
New market strategy has been taken into practice so the appropriate SMART target
would aid in gaining profitability and market share. With the help of this strategy, the firm will
be able to penetrate the new market. This will not only increase the customer base of the entity
but will also help in maximising the profit. The strong economic condition of this developing
country will also help in the growth of the company (Gamble and Thompson, 2014). Along with
this, the corporate can adopt various methods such as digital marketing to make people more
aware about various products and services. This method will also help them in making close
communication with the service users. With the help of smart target, the firm will be able to
achieve its goal in required time.
CONCLUSION
From the above report, it can be concluded that the business strategy plays major role in
assisting an organisation in achieving its goals and objectives. In order to come up with the best
strategic plan, its necessary for the firm to conduct both internal and external analysis so that
they can become aware of their weaknesses and can come up with the plan that can help them in
achieving their goals. There are many tactics that firm can adopt in order to enter new market.
SMART objectives help the firm in achieving their goals within the time limit.
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REFERENCES
Books and Journals
Agrawal, H. O., 2016. An Approach to Business Strategy. In Handbook of Research on
Promotional Strategies and Consumer Influence in the Service Sector (pp. 154-182). IGI
Global.
Armstrong and et. al., 2015. Marketing: an introduction. Pearson Education.
Bentley and et. al, 2013. Business strategy, financial reporting irregularities, and audit
effort. Contemporary Accounting Research. 30(2). pp.780-817.
Bharadwaj, A. and et. al., 2013. Digital business strategy: toward a next generation of insights.
Blackburn, R. A., Hart, M. and Wainwright, T., 2013. Small business performance: business,
strategy and owner-manager characteristics. Journal of small business and enterprise
development. 20(1). pp.8-27.
Gamble, J. E. and Thompson, A. A., 2014. Essentials of strategic management. Irwin Mcgraw-
Hill.
Johnson, G. and et. al., 2013. Exploring strategy text & cases (Vol. 10). Pearson.
Leonidou and et.al, 2015. Environmentally friendly export business strategy: Its determinants
and effects on competitive advantage and performance. International Business Review.
24(5). pp.798-811.
Leonidou and et.al, 2017. Internal drivers and performance consequences of small firm green
business strategy: the moderating role of external forces. Journal of Business Ethics.
140(3). pp.585-606.
Martinez-Simarro, D., Devece, C. and Llopis-Albert, C., 2015. How information systems
strategy moderates the relationship between business strategy and performance. Journal
of Business Research. 68(7). pp.1592-1594.
Scholes, M. S., 2015. Taxes and business strategy. Prentice Hall.
Scholes, M. S., 2015. Taxes and business strategy. Prentice Hall.
Sia, S. K., Soh, C. and Weill, P., 2016. How DBS Bank Pursued a Digital Business
Strategy. MIS Quarterly Executive, 15(2).
Verbeke, A., 2013. International business strategy. Cambridge University Press.
Verbeke, A., 2013. International business strategy. Cambridge University Press.
Online
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BCG matrix or BCG analysis. 2017 [Online]. Available through:
<https://www.marketing91.com/bcg-matrix/>
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