Business Strategy: Impact of Macro Environment, Internal Analysis, and Competitive Forces on Organisation

This report analyses the impact of macro environment, internal analysis, and competitive forces on a British multinational retailer's business strategy. It includes PESTLE analysis, SWOT analysis, McKinsey 7's Model, and Porter's Five Forces Model to evaluate the competitive forces of the market sector.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
P1 Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies..........................................................1
P2Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.............................................................................................................................5
P3 Applying Porter's Five Forces model to evaluate the competitive forces of a given market
sector of an organisation.........................................................................................................7
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation.........................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy are bundle of various plans, actions and objectives that determines how
all the activities of a business operates in order to achieve their business objectives to acquire a
competitive edge in the marketplace by providing its products and services. It helps to direct the
actions of all the employees towards achievement of a common objective which will result in
increasing the productivity of the employees. It helps the leaders and managers in decision
making process which results in efficiency and effectiveness in the functions and operations
(Amirshenava and Osanloo, 2022). This report is based on a British multinational retailer. It has
its headquarter in Paddington, London, England. It specialises in selling clothing, beauty, home
products and food products. The company provides great value to its customers across various
nations. The report will cover the impact and influence which the macro environment factors has
on organisation strategies and operations. It will analyse the internal factors and capabilities that
may impact the operation of a particular venture. It includes the evaluation of Porter's five forces
model and various theories,concepts in context to the organisation selected which will help the
organisation to plan strategies that may result in achievement of organisational objectives.
MAIN BODY
P1 Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies.
Internal and external analysis help a company to identify the strength and weakness that
may impact the functioning and operations of a company and opportunities and threats that may
lead the company to prosper or loose its share in the competitive marketplace. In order to analyse
these factors various models are applied which are as follows:
Pestle analysis of Mark and spencer
It is a tool that helps to analyse all the macro factors which helps an organisation to gain
a clear picture of all the environmental factors that may impact the organisation and its
functioning. In context to Mark and Spencer ,this model will help the organisation to evaluate
the impact of different factors on the overall operations of the company and to hold competitive
edge in the marketplace. The various factors in Pestle analysis are as follows- Political factors: These factors emphasis on government control and influence upon
different industries (Ansoff and et.al, 2019). These involves the various rules and
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regulations which include trade and tariff policies, taxation, fiscal policies and more,that
may interrupt the smooth functioning of operations as they are binding for all the
organisations to operate properly. In context to Marks and Spencer, the company had the
benefit of EC's trade agreement that reduces the sourcing cost(Baharudin and Abdullah,
2020) . The company can also utilise the benefit of large EU market to travel their
products freely with any trade and tariff .The company is committed with all government
regulations which helps a company to grow and acquire competitive edge in the market
place. Economical factors: These factors have a direct impact on the long term development of
any organisation in the market. These factors includes inflation rate, disposable income,
unemployment rate, interest rates and more that may impact the price of products and
services. Marks and Spencer, is a leading company in UK. Fiscal and monetary policies
of UK are being properly managed buy the government which have results in low
inflation rates . Due to financial crises, there is reduction in the disposable income of
consumers which may lead to decrease in the sales of products and services offered by
Marks and spencer. Social factors: It reflects the importance of society and impact of their culture and
lifestyle on the price of different products and services. These factors can influence the
buying periods, purchasing habits and lifestyle. This factors include Religion and ethics,
consumer buying patterns, demographics, health , opinion and attitude and more. In
context to Marks and Spencer, have emerged its global presence by providing trendy and
comfortable clothes to its customers every year. The company have grasped the
opportunity of providing ready to make food items for their customers as they are more
portable and handy to customers which helps the organisation to acquire a good share in
the marketplace. Technological factors: The technological advancement in the environment directly or
indirectly impacts the organisation(Bjornsrud-Tidwell, 2021). New innovation and
advancement in products and services by competitors may lead the company to loose its
share in the market. In context to Marks and Spencer has started its online shopping
which helps the customers to shop whenever and wherever they want. It also provides
self checkout services 24*7 hours which helps the company to hold a competitive edge.
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 Environmental factors: These factors relates to the general surrounding. It is very
important for a business man to run it operations effectively which does not effect the
environment and its sources. It include climatic changes, geographical location,
stakeholders and consumer values , weather and more. In context to Marks and Spencer,
it uses sustainable practices and environment friendly approach to produce reusable and
recyclable clothing material and packaging bag packs which helps to protect the
surrounding (Bowman and et.al, 2020). Legal factors: These are the statutory laws and regulations that may impact the policies
and procedures of the industry, employment , safety and regulations within an
organisation. It includes Employment laws , consumer protection , regulatory bodies and
more. Marks and Spencer have engaged in various legal disputes which made it difficult
for the brand to remain constant with its products and services to achieve long term
benefits.
Swot analysis of Marks and Spencer
This model helps an organisation to develop business strategy by making comparison of
their internal analysis against external analysis which helps the business to increase their
competitive advantage in the market. Marks and Spencer ,Swot analysis are as follows-
Strength
 The company is able to get a
competitive edge in the market due to
its constant efforts in bringing new and
innovative products for their customers
consistently.
 The company uses its private labels like
Louis Vuitton and many other big
brands. There are many private labels
which include Pen Una , North Coast ,
Autographs and more (Du, 2018) . The
private labels helps a company to
acquire a significant market share.
Weaknesses
 The company customers are less
satisfied with the brand offerings. There
are lot of issues which are faced by
their customers like return policy and in
store services which lead to poor brand
loyalty and increased brand switching.
 The company have it stores in various
Asian and Middle East but they are not
being able to provide its services
properly and in other states unlike in
United Nations and United States which
have resulted the company to remain
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unsuccessful in their operations.
Opportunities
 The company is having an opportunity
to enter into different segments of
fashion industry as there are continuous
and consistent evolvement in fashion
industry. This will help the company to
hold a good share in the marketplace if
it manages to provides products and
services as per the needs of the
customers.
 The company have an opportunity to
make their stores online as compared to
the other online retail e-commerce
stores which may enable the company
to hold and engage a large number of
customers to experience their products
and services.
Threats
 The major threats for mark and spencer
are the competitors that include Tommy
Hilfiger, Zara, Uniqlo gap and United
Colors of Benetton (Gavhane and et.al,
2020). It may have a negative impact
on the growth and market share of the
company. The company should analyse
its external and internal factors which
are existing in the environment. An
evaluation of all these factors will help
the company to make strategies that
will helps the company to maximise its
strength and achieve competitive
advantage.
Ansoff matrix
It is a strategic planning that helps the organisation to identify the opportunities to acquire
growth and success by introducing new products and services (Gkoltsiou and Paraskevopoulou,
2021). There are different strategies which a marketer can implement in its operations to acquire
a good share and competitive edge. In context to Marks and Spencer, the different strategies are
discussed below-
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 Market penetration: This strategy focuses on selling existing products and services in the
existing market. It is the least risky strategy in any organisation. These strategy involves
increasing marketing efforts, decreasing prices to attract new customers and acquiring a
competitor in the same market. It involves the market expansion by providing its products
and services to new customers (Harris, 2018). Market development: It involves selling of existing products in new markets or new area.
It is a bit risky strategy for an organisation. This strategy focuses on providing their
products to new customers whether through regional or international expansion of its
operations. Product development: This strategy focuses on selling a new product in an existing
market. This strategy is helpful which the business focuses on a particular target market
or group of individual for supplying their products and services. It involves investment in
research and development to develop a new product.
 Diversification: This strategy focuses on introducing new products in a new market. This
strategy involves the highest risk among all the strategies which are discussed above. The
company should evaluate different strategies as per the needs and preferences of their
customers which can help the company to grow and achieve competitive edge.
In context to Marks and Spencer, it is suggested from the above discussion that the
company should adopt Product development strategy. The company holds a global reach in
different countries, hence it is important for the company to develop new products and services
as per the preferences and needs of the customers which will help the company to grow their
customers. This strategy will help the company to gain a competitive edge in the marketplace.
P2Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.
The internal environment and capabilities of a organisation can be evaluated by using
various models and theories which are discussed as follows-
McKinsey 7's Model
It is a tool that focuses on analysing different factors of environment that may effect the
organisation designs in order to effectively and efficiently run organisation to achieve its
objectives. This model focuses on implementing strategies as per the changes in order to
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effectively manage the organisation operations (Helmold, Terry and Hummel, 2020). This
model consists of seven factors that helps in evaluating strategies which are discussed as below- Strategy: These are the sets of plans undertaken by an organisation to achieve its
objectives effectively to achieve competitive advantage. In context to Marks and spencer
, it needs to build a balance between short run cost saving and protecting its core
competitive advantage. It should stop cutting costs resulting in inferior product and
service delivery(Hernandez and Haddud, 2018). Structure: It is the framework that sets a hierarchy within an organisation. It determines
the divisions and units are organised and who is accountable to whom for their
responsibility. With reference to Mark and Spencer, the company should focus on
diversifying its suppliers geographically which helps the company manage the changes
effectively. Systems: It is the process and procedures which helps the organisation in decision
making and managing its daily operations and workforce which helps to effectively run
the operations. With reference to Marks and Spencer, the company should arrange proper
systems to regulate their workforce and internal operations. Shared values: This establishes the norms and standard that guides the behaviour of their
employees to achieve the organisation objectives. In context to Marks and Spencer, The
company should focus on sustainability which will help the company to build a
recognisable image in the market. Skills: These are the abilities and capabilities of an individual to perform a task
efficiently .In context to Marks and Spencer, the company should implement training and
development programmes for people working from remote locations. Style: It refers to the hierarchy through which top level managers manages their
subordinates by directing their efforts towards organisational objectives. In context to
Marks and Spencer, the leaders should pursue a collaborative and more isolated forms of
leadership. The leaders should build smaller teams as part of large ones.
 Staff: It refers to the group of individuals that are being recruited, trained, motivated and
rewarded as per the requirement of the organisation(Iyer and et.al, 2019) .In context to
Marks and Spencer, is a global recognised organisation with a large workforce. The
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company uses various strategies to motivate them so that they should remain competitive
towards their work.
P3 Applying Porter's Five Forces model to evaluate the competitive forces of a given market
sector of an organisation.
Porters Five Forces model
This model is used by organisation to identify various competitors that are existing in the
market. These factors may have an significant impact on business and its operations(Kay,
2019). The forces include five factors, that need to be considered by any business to compete
with other existing brands otherwise it will lead in reduction of the profitability and productivity
of the company. In context to Mark and spencer, competitive analysis is done using Porter's five
forces model which are discussed below: Threat of New Errants: Marks and Spencer hold a global presence which provides
apparel, home and food products. The company holds a good share of the loyal customers
and retain a competitive edge. To enter the market as Marks and Spencer, it requires huge
investment in order to beat the company with risk of whether they can make sales or not.
The brand has made a competitive brand value in the market which is unable for any new
errants to compete with Marks and Spencer. Competitive rivalry: Marks and spencer operates in food and clothing industry which are
the basic necessities for any individual. But the products offered by the brand possess
more competitors. Marks and spencer have positioning in the market as a high brand
value by providing quality goods for money to their customers. There are lot of
competitors that are providing similar kind of products and services which is a threat to
the company. The company should specialises its products and services as per the
personalised needs of the customers which helps the company to hold a competitive edge. Bargaining Power of Suppliers: Marks and spencer have a global presence with
multiple suppliers for raw material. The raw material provided by suppliers is not much
differentiated. The company itself manufactures finished produces which gives a
competitive edge to sell at higher margins in the marketplace. The switching costs for
Marks and spencer very low as they procures their raw material from various suppliers.
By concluding all the factors it is concluded that bargaining power of suppliers is low.
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 Bargaining Power of Buyers: The company have large number of customers for their
products which are price sensitive(Kumar and et.al, 2019). Switching costs of the
customers is very minimal as there are lot of competitors which are available with
differentiated and similar products which makes it difficult for the company to retain its
customers. Hence the bargaining power of the customers is high as they have lot of
options at their disposal.
 Threat of Substitutes: Marks and spencer provides the products and services which are
basic necessities for human sustenance(Nguyen and Adomako, 2021). Hence the
products cannot be substituted with others. But there are lot of competitors which are
available selling the same kinds of products and services which lower costs, which proves
to be a threat to the company and affect their competitive edge in the market. Hence,the
company should bring differentiation in their products to acquire more customers in order
to acquire a good market share.
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for
a given organisation.
Porters generic strategy
It is a strategic planning decisions that focuses on three strategies that help an
organisation to achieve a competitive edge in the marketplace by involving sustainability in the
operations . In context to Marks and spencer, the model is discussed as follows- Differentiation: This strategy focuses on adding unique features in their industry in the
dimensions where it can be valued by the buyers or costumers. Basically, it focuses on
adding new and innovative feature in the product where customers finds its attractive and
superior to other existing products in the marketplace. It enables the company to charge a
good price in exchange for value from its customers. Cost Leadership: This strategy focuses on minimising its cost of production by
procuring the products and services at large level. This strategy will help the company to
retain its customers by offering them value at low prices. A company should analyse all
the factors that can help an organisation to lower its overall cost that will help a company
to achieve a competitive advantage in the market.
 Focus: This strategy focuses on following cost reduction and differentiation strategy to
gain a competitive advantage(Pahl, 2018). The companies that uses focus strategy
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concentrate on a particular niche market by focussing on the needs and preferences of
the customers. The company develop differentiated products with lower cost will help
the company to drive more customers to them.
In context to Marks and Spencer, the company should follow differentiation strategy that
focuses on adding unique and different designs in their products. The company should focus on
introducing exclusive designs in the market which will help the company to drive more
customers to them and thus helps the company to gain a competitive advantage in the
marketplace (Paquibut and Al Naamany, 2020).
Bowman's strategic clock Model
This strategy focuses on positioning the company within a market based on price and the
value of product and services which helps a company to build a position in the marketplace. In
context to Marks and spencer, the various strategic elements are discussed as follows- Differentiation: This strategy focuses on adding unique and different elements in their
products and services from competitors. These strategy is useful for the companies who
offers similar kinds of goods to their customers. Differentiation can make your product
different from others helps you to acquire a market share. The adoption of such strategy
by Marks and Spencer can help a company to achieve a competitive edge from the
existing companies. Low price: This strategy focuses on lower the cost of the products which are being
offered to their customers. The company should cost reduction production process in
order to be efficient with this strategy. This involves lower margins and lower
profitability to the company. This strategy can be adopted by Marks and Spencer to drive
more and more customers towards their store.
 Focused differentiation: This strategy focuses on providing higher value of products at
higher prices. It will help the company to high profits to the organisation by offering high
value of products to the customers against their competitors. This strategy focuses on a
particular segment of any market. Marks and Spencer can adopt this strategy to achieve
growth and success.
Strategic Marketing Plan
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 Background: It is a British multinational retailer with headquarter in London, England.
The company deals in clothing, home appliances and food products. The company have
global reach and a leading company across the world(Shao and Sun, 2020). Organisation Structure: The company follows a flat organisational structure it means
there are few level of management between leadership and employees. Vision: The vision statement is ' To be the standard against which others are measured'
that means offering the value accessible to everyone. Mission: To provide high value to the customers through their products.
 Marketing Mix: It consists of 4P'S which are-
1. Product: The company deals in home appliances, clothing and food products.
2.Price: The company can use competitive pricing strategy .
3. Place: The company should have online and offline stores to serve their customers.
4.Promotion: The company can use social media platforms to engage more audience.
 Controlling and Monitoring: The company can adopt benchmarking technique where
they select the strategy based on the fact whether they are beneficial to the business or not
in accordance with the market situation.
CONCLUSION
From this report it is concluded that analyses of the business environment and the factors
that may impact organisation can result in achieving the business objectives effectively. In this
report an evaluation is done of all the macro environment factors by applying Pestle, Swot and
Ansoff growth matrix. It also includes the analyse of internal environment factors and
capabilities that may impact the functioning and operations of any organisation. This report
includes application of various concepts, models that will help an organisation to make strategies
that will help an to run their operations properly in order to achieve competitive advantage.
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