Analyzing the Impact of Macro-Environment on Marks & Spencer

This report analyzes the impact and influence of the macro-environment on Marks & Spencer, a British retail multinational organization. It discusses the PESTEL analysis, SWOT analysis, and VRIO analysis of the company's internal and external environment.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analyse the impact and influence of the macro -environment in a organisation...................1
TASK 2............................................................................................................................................3
P2 Evaluation of internal environment in context with organisation capabilities......................3
TASK 3............................................................................................................................................6
P3 Porter's Five Forces Model....................................................................................................6
TASK 4............................................................................................................................................8
P4 Strategic management planning.............................................................................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................11
.......................................................................................................................................................11

INTRODUCTION
Business strategy refers to master plan of achieving company's vision and mission
statements. This is a management tool that in turn helps in attaining financial and operational
performance with planned business model (A Definition of Business Strategy. 2018). This is a
integral part of strategic management concern with formulation and implementation of tactics for
purpose of achieving organisational goals effectively. MARKS and SPENCER is a British retail
multinational organisation and originally situated in Westminster, London. M&S is a global
brand specialised and deals in extreme stylish and quality clothing, trendy home-appliances,
fresh food products. Firm serves its products worldwide and enjoys strong customer base.
This report contains detailed facts related to study of macro and micro environment in
which M&S is operating its business with various frameworks namely PESTEL, SWOT and
VRIO. Further, there is discussion over industry analysis through Porter's five forces model in
context with following organisation. At last, it throws light on various strategic direction which
can be choose by firm analyst with aim of enhancing profitability level of organisation (Anwar
Shah and Hasnu, 2016).

TASK 1
P1 Analyse the impact and influence of the macro -environment in a organisation
Macro-environment- It refers to the external environment that influences an
organisation's decision making and also affects on performance and strategies. It consist of all
the impact that includes opportunities but also pose threats to the business enterprise. The
business environment is very dynamic in nature and to understand this, Marks & Spenser use
PESTLE analysis (Bentley-Goode and et. al., 2017).
Mission- Overall mission of Marks & Spenser is to make pretension quality that is available
and recognisable to everyone, through the depth and range of its product offerings. Because of
dynamic environment in today's nature mission can be decided. To make and find more
opportunities in the external and macro factor manager of Marks and Spencer develops the
product on the basis of recognisable quality and range of the goods.
Objective – Main objective of Marks & Spenser is to longer sustainability through consonant,
profitability and maximum market share. And the company is accountable to shareholders and
wide stakeholders. This objective can be decided after analysing the external environment so
they make product according to the society need and wants to earn more profits and increse
market share.
Vision- company provide the standard against its rival firm by customer satisfaction, care of
environment and society and provide the working environment. The vision of the company is
very much in favour of macro – environment. Because it will satisfy the customer needs beat the
competitors make use of innovative techniques and follow the government legal laws that was
stated for the welfare of the employees.
PESTLE Analysis-
It refers to the external factors that includes political, economical,
sociocultural,technological,legal and environmental analysis that affects the Marks & Spenser in
implementing their strategies. It is an important tool to identify what the organisation needs to
compete in the market(Bentley-Goode and et. al., 2017). Political Analysis- This factor affects the Marks & Spenser in two ways. First in the
positive aspects, that in a modern- world free trade has been accepted between many
different nations. It allows company to import goods freely from foreign countries and
sale products in their outlets and earns a high margin profits. Secondly in negative

aspects that because of Brexit free trade is stop in some European units. This will greatly
impact the organisation in a way that result in the loss of numerous free trade policies
with European suppliers and this impact the higher product offering cost for their
customers (Anwar, Shah and Hasnu, 2016). Economic Analysis- Currently many of the European countries are facing euro crises this
will led to poor economics in some countries. Being customer goods business, Marks &
Spencer faces the threats that majorly influence by its targeted consumers because the
income level of customers will dropping down for the last few years. This situation is
heavily impact the company because they deal in a luxurious products which contain high
price and the consumes tend to avoid to purchase that goods rather than they move
towards the cheaper price goods (Brewster, 2017). Sociocultural Analysis- This factor consists of consumer's taste, lifestyle and
preferences that includes both opportunity and threats for the UK firms. For Marks &
Spenser there is a great opportunity that consumers in the UK are very loyal towards one
brand and quality of products so this will help company in smartly changes the pricing
strategy from their competitors. In addition, it also contain threats that user in UK prefer
trendy styles rather than classics that affect in regaining the market share for its buyers
(Brewster, 2017). Technological Analysis- This factors witnesses major change in technological factors. In
today's environment customer prefer self check-out service especially in food stores and
online shopping in buying clothing items. In context of Marks & Spenser, company
executed a number of self- service checkout system in their retail outlet. Organisation
introduced a strong e-commerce only for clothing that does not deliver food items
(González-Rodríguez and et. al., 2018). Legal Analysis- To sustain in the global environment company requires to be line with
global laws as well as local legal systems in which a firm operates. For example , Marks
& Spencer established a venture in china for this firm adopts the Chinese labour laws to
sustain in that market. However, it enters in the food industry for this firm should follow
the food product standard that is enforced with local markets in UK (Habib and Hasan,
2017) (Perera, 2017).

 Environmental analysis- Buying and selling of products create a great impact on the
environment that how these goods are used and disposed by the end user. Marks &
Spenser is the leading and luxurious retail brand in the UK and have adopted best
strategies to minimize waste, encourage suppliers to go green making and make a trendy
approach to locate the business as a society benefit. It gives the opportunity to put a good
image in customer mind by using and producing environmental friendly offerings. The
natural environment place a great impact on the clothing preferences of the user in
winter, consumers demand woollen clothes whereas in summer they demand summer
cloths. This provide the opportunity to produce the clothes according to the season
requirement of countries and fulfil the demand.
In the present macro- environment, Marks & Spenser faces and reduce the threats and find
opportunity that would help in for longer survival of business. Brexit, is the major threats that the
organisation follow as many euro- countries are restricted to free trade this will impact the
economy of the UK and the company. On the other hand industry provide ready meals to their
customers by using self- checkout service as a unique techno- factor and push towards the
environmental friendly products (Kitsios and Kamariotou,2016).
Shareholders matrix
It refers to that matrix that identifies the people before the task start, grouping them
according to their levels of participation, interest and influence in the goals. And analyse how to
best transfer the information to these stakeholders group. Below the matrix mentioned by the
company that influence decisions making.
Level Of INTEREST
Level Of POWER
LOW HIGH
HIGH Community Shareholders
LOW Suppliers Employees
 Community- It is an essential part of stakeholder matrix that influence the decisions of
the organisation due to the legal factors that was develop by the company.
 Shareholders – In M&S, shareholders have the major rights and authority to take all the
decisions related to firm.

 Suppliers - These are the important stakeholders of M&S who supply raw material to
firm to make a finished output. They provide company raw materials, technologies
because of this company earn more profits.
 Employees- These are also essential part of stakeholders because they are the human
resource of M&S . Every decisions are affected the employees performance.
Stakeholder management
It is based on above recommendations that play a vital role for a company. These are as follows.
 Working employees- In context of M&S, if there is changes occur in any activities that
was helpful in completing the task it would affect the employees performance for this
firm can provide training session to familiarise themselves and their employees towards
the changes. For this they recommend meeting and seminars.
 Suppliers- In M&S, research and development department involve with the suppliers
and they decide what a company can buy to earn more profits and share. They involve in
suppliers decisions making process for this, this report using e-mail.
TASK 2
P2 Evaluation of internal environment in context with organisation capabilities.
Internal or micro environment are those surroundings which are incorporated within
business enterprise. These are elements which influence the organisation decisions, choices and
different activities internally besides it can be controlled by management unlike macro
environment. This includes existing workforce, corporate culture, physical resources, vision and
mission and value system. M&S internal climate can examine through two models SWOT and
VRIO.
SWOT Analysis of M&S
SWOT represents intrinsic components of organization that is strength, weaknesses are
internal factors on which company have some control while other are opportunities and strength
that are external factors over which firm has no control (Kossyva, Sarri and Georgolpoulos,
2015).
1. STRENGTHS: M&S is a leading brand and serves over million customers across
international markets. Corporation has number of strengths but core advantage enjoy by
company. M&S having highly recognizable brand value known by every individual in

UK street as well as oversees because of its quality products. Firm deals in huge variety
of diversified product line to serves all age groups. Another strength of M&S is that
company uses private label brands such as UNA, North Coast, Autograph. Company has
multichannel presence including brick/mortar and online stores with aim of reaching and
attracting more customers (Boyd and et. al., 2017).
2. WEAKNESSES: Major drawback of M&S is its ineffective publicity as non trendy
stores despite of firm has wide range of products with separate brands but in some cases
general public has wrong assumption that company only offer its clothing items to aged
group consumers not for teenager and youth this bring sales and business profits down.
Further, firm is unable to perceive in few foreign markets although company is an
international brand but areas like Asia and Middle East are unfavourable for organisation
cause M&S serves western wear instead of traditional outfits(Kossyva, Sarri and
Georgolpoulos, 2015).
3. OPPORTUNITIES: fashion industry is full of dynamism as every day something new
occurs in terms of design, outfits, so on. This generates an opportunity for M&S to evolve
exclusive brand segments on basis of occasion, seasons. For instance, in ASIA there is a
huge market demand for ethnic and traditional outfit so it become favourable advantage
for firm to produce ethical clothing in order to serve and tap Asian market(Leischnig,
Woelfl and Ivens, 2016).
4. THREATS: M&S serves globally as well as compete in very intense market where other
well known companies are also competing for large market share and long term survival.
There various rivals which are providing cut throat competition namely ZARA, Gap,
Tommy Hilfiger, UCB and more. Company required to keep eye on its competitors
moves so that it can strategize its game plan accordingly (Leischnig, Woelfl and Ivens,
2016).
VRIO Analysis in context of M&S
VRIO refers to separate frameworks of analysing and evaluating the resources and
competitive advantage of organization. VRIO stands for Value, Rareness, Imitability and
Organization which helps company to secure valuable resources and uncover hidden
competencies with aim of gaining competitive edge among its competitors. This particular

mechanism is applied just after setting vision statement but before commencing strategic process
(Malerba and et. al., 2015).
RESOURCES VALUABLE RARE IMITABLE ORGANISATION
FINANCIAL YES - - -
PATENT
DESIGN
YES YES - -
FOOD
PRODUCTS
YES YES YES -
HUMAN
RESOURCE
YES YES YES YES
1. VALUABLE: these resources are those which helps organization to enhance its
efficiency and effectiveness. financial resources are highly valuable for Marks and
Spencers as compare to other resources as it enable the management to invest in other
areas in order to explore unique opportunities arises due to change. If company has strong
financial capability then it can help the firm to act as First Mover so that firm can fetch
any advantage before anyone else (Yoffie and Cusumano, 2015).
2. RARE: some resources are valuable but rare in nature as these type of resources can be
acquired by few person or company. Patents rights are rare resource for M&S according
to VRIO analysis because these patent design are not always easily available or owned by
other rivals . This enables firm to operate without any interruption of its competitors and
helps in attaining competitive advantage (Mårtensson and Westerberg,2016).
3. IMITABLE: these resources indicates that even though some resources are valuable, rare
but can be reproduce or copy by others in industry. According to VRIO analysis, food
products are come under imitable resource as local food items are not much costlier to
imitate as these can be obtained by other rivals because these resources do not required
much experience.
4. ORGANIZATION: these particular resources helps organization to attain sustainable
competitive advantage as these are divided in equal ratio at all parameters of this

framework. Human resource are organized resource for M&S as these are valuable for
company, rare in terms of designing products, imitable by others also.
From above frameworks it is understandable that M&S can effectively increases its
potentiality by optimum utilization of its capabilities so that it can expand and sustain its
competitive edge within industry and cultivate adaptive atmosphere so that management can
easily modify its policies and structure on basis of prevailing changes (Schaltegger, Hansen and
Lüdeke-Freund, 2016).
TASK 3
P3 Porter's Five Forces Model.
Porter's Five Forces model is one of the popular mechanism for analysing components of
industry and determine exact position of an organization within market. This model simplify and
evaluate all five competitive factors concern with measuring weaknesses and strengths of
company. This particular approach is used to examine the structure of industry in order to
formulate corporate strategy. The impact of these five factors can be negative and positive on
Marks and Spencer decision making functions which can be understood from given points:
1. Rivalry among competitors: this force states that how many rivals are their inside
industry and how their competencies are affecting operation of an organisation. Higher
the intensity of competitors along with their large number of equal products they produce
will decrease power of business enterprise. In context with M&S, the impact of this force
is high because identical quality products at similar rates are offered by other competitors
due to which it increases the competition level within market that definitely result in fall
down in prices and decrease in overall profitability of M&S (Teh and Corbitt, 2015).
2. Buyer's power: this force describes the capacity of customers at what extent they are
able to drive down prices low. The power of buyers will be high if company has smaller
and strong customer base that means each buyer has ability to negotiate over rates and
attain better quality deals offered by company. In case of M&S, the impact of this
component is high cause consumers became price sensitive as well as fashion sensitive
due to which buyers search for best quality of clothing at affordable rates. In this
situation, consumers has a power to switch on other competitors brand. This generate
pressure on M&S productivity and profitability in long term survival. M&S has to

research over its target market as consumers are resisting to pay higher rates for products
and demand for high quality products at lesser price.
3. Supplier's power: this factor states that how quickly suppliers can increase their cost of
raw material at ease. It majorly influenced by high intensity of suppliers of inputs
available in market and how exclusive as well as diversified these inputs are in particular
market. If number of suppliers are low in industry then it will raise power of suppliers
and they can easily charge more from dependent company. The impact of this factor is
low which is favourable for M&S because company purchase its raw material and stock
from very few UK suppliers which creates a condition in front of suppliers as they are
dependent on M&S and can not charge high rates as M&S has power to switch on other
supplier (Torrent-Sellens, 2015).
4. Threat of substitution: this component states about similar or identical goods that are
available in market that can be purchase by consumers instead of company's product
which creates a threat in front of organisation. When there is no alternate of product or
service are available in market then it is favourable for firm as they have power to charge
high prices from consumers. On contrary if substitutes are accessible in market this
provides options to customers to choose better. In context with M&S, the effect of this
factor is high because there are variety of clothing products are offered and marketed by
other rivals at similar prices which provides choices to customers. Buyers has option to
switch the brand as they find high quality products at favourable prices.
5. Threat of New entrants: this power states that competitive position of company is also
affected by entrance of new organisation with different products at affordable prices. An
industry having powerful restriction over entry of new competitor is favourable for
current enterprises as they are able to sustain and survive better. In case of M&S, the
impact of this force is low due to it contain high cost of entry and required proper
maintenance in particular clothing market. M&S is an established organisation from
longer period of time and has strong knowledge of market with powerful distribution
channels. Company enjoy high level of brand loyalty from its customers.
From above model, it can be analysed that all five forces provide clear picture of what
affects the profitability of company within industry. With help of this framework, analyst can

easily detect the fluctuation emerging in trends early before anyone else and able to react
smoothly to explore upcoming opportunities and can modify these factors in organisation favour.
TASK 4
P4 Strategic management planning.
There are number of strategic model and theories which are adopt by different firms with
the purpose of expanding their business growth and sustain as well as increase their competitive
advantage in order to grab more opportunities to serve better products and services to their target
market. Marks and Spencers is one leading retail organisation deals in stylish fashion garments,
home-ware products and serves its items in wide range of customers. Organization can make use
of Bowman's strategic clock model concern with strategic positioning of firm by the help of this
mechanism management of M&S can able to strategize that how it has to position its new
product in market (Weber, Geneste, L.A. and Connell, 2015).
Bowman's Strategic Clock Model
This particular model was proposed by two popular economists Cliff Bowman and David
Faulkner. The main purpose of this approach is to help out the organisations to realize what
position they are having in target market comparatively with other competitors. According to
Bowman, suggested that cost advantage act as different component for firm as it affects strategic
positioning of company as well as entire positioning of product in target market. The model
contains eight clockwise elements axis on two dimensions priced and perceived value to
customer.
1. Low Price and Low Value Added: this positioning strategy implemented by firm when
it keeps the products prices comparatively low as to compete with other competitors in
market. By using this method business sustain very little competitive position
additionally this strategy is low in price as well as provide less value to its customers.
2. Low Price: Company make use of this strategy when it produce huge quantities of
products so that items are valued in target market. Under this strategy, products are being
sell out at lower prices which leads to low profit margins on single item but bulk range of
output can cultivate by firm through which company can earn high profits. Focal point of
this method is cost minimization with help of quick and large production.

3. Hybrid: As name suggested, this strategy is a combination of low price and product
differentiation. Under this method, company emphasize on stimulate customers by
providing better added value through combining reasonable price and accepted product
differentiation. This strategy makes items extremely valuable in market (Yoffie and
Cusumano, 2015).
4. Differentiation: this strategy explains that organization adopt this strategy to provide
high quality product at moderate price and offer consumer high level of added value that
create different identity in particular market. Company emphasize on efforts in order to
generate brand image and preserve their loyal customers.
5. Focused Differentiation: this particular strategy is opt by those organization which
focus on lavish and extremely exclusive products which are high in quality as well as in
price. Huge profit margins are gained by these type of company as they use promotional
activities, marketing programs.
6. Risky High Margins: this strategy is used when company charge high prices for
products and perceived moderate value by customers. It is somewhere riskiest method to
adopt by company as it may loose its long term position. If customer constantly purchase
product at high prices then it will create higher profits.
7. Monopoly Pricing: Under this strategy, organisation place itself as monopoly leader
where only they offer unique kind of product in market. This method is beneficial for
company as there is no competition and it can act as 'Price Maker' where it solely set
price of product.
8. Loss of Market Share: this particular tactics, is not much favourable for organization
because company is not in position of producing a product which customer value. Under
this strategy, firm set standard rates of product to sustain and survive in market.
From above study, M&S can opt Differentiation strategy to position its products in target
market. This strategy helps company to attract more customer and retain the existing one by
providing them best value added products. It creates brand loyalty and goodwill for organization.
Strategic Management Plan
M&S is one of the leading retail multinational brand which deals in variety of fashionable
products and home appliances. Organisation adopt various strategy to sustain its competitive
edge and try out to explore new market for growth expansion.

Vision: The vision statement of M&S is to act as standard on which others performance can be
measured.
Mission: M&S mission statement is to create aspirational quality affordable by everyone.
SMART Objectives: To increase company profits by 10% and to serve high quality products.
STP Process
Segmentation: M&S divide its target market in terms of demographic, geographic, psycho
graphic and behavioural segments.
Targeting: M&S targets all age group customers including children, youth as well as old age
people.
Positioning: M&S wants to positioned itself as Premium organization brand in retail industry.
Evaluation: M&S regularly measure the performance of its selected strategy in order to analyse
that it successfully attaining planned objectives and if not company will take corrective measure
to meet out following goals (Boyd and et. al., 2017).

CONCLUSION
From above discussion, it can be concluded that business strategy plays an essential role
in strategic management as provides answers to various questions face by organization to survive
in particular market. Business strategy is a game plan for company through which it can able to
sustain its competitive edge and helps in attaining mission goals. It contains various models
which to examine macro and micro environment which is full of dynamism where business
operates its functions. It is crucial for each organization to strategize its plan especially when
company is going to establish new enterprise or expanding its existing business units in different
area of markets.

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pestle-analysis/>. Definition, Levels,
Components & Examples
Business Strategy: Definition,
Levels, Components &
Examples
Business Strategy: Definition,
Levels, & Examples