The report discusses the impact of macro environment, internal capabilities, Porter's five force model and strategic planning for Mark and Spencer. It includes PESTLE analysis, VRIO analysis, and McKinsey 7S model to analyze the strengths and weaknesses of the company's internal capabilities.
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Table of Contents INTRODUCTION...........................................................................................................................4 TASK 1............................................................................................................................................4 P1Frameworks to analyse the impact and influence of macro environment and strategies...4 M1 Analyse the macro environment to determine and infor strategic management decisions:.6 TASK 2............................................................................................................................................7 P2 Internal environment and capabilities of an organisation.................................................7 M2Analysetheinternalenvironmenttoassesthestreghntsandweaknessesofan organisation's internal capabilities:........................................................................................9 TASK 3..........................................................................................................................................10 P3 Porter’s five force model.................................................................................................10 M3 Devise appropriate strategies to improve competitive edge and market position based on the outcomes:........................................................................................................................11 TASK 4..........................................................................................................................................12 P4 Theories and models to implement a strategic plan........................................................12 M4 Produce strategic management plan that has tangible and tactical strategic priorities and objectives:.............................................................................................................................13 D1: Critique and interpret information and data, applying environmental and competitive analysis to produce a set of valid strategic directions objectives and tactical actions:........15 CONCLUSION..............................................................................................................................16 REFERENCES..............................................................................................................................17
INTRODUCTION Business strategy is defined as a long term plan that is implemented for a company in order to reach desired goals and objectives. In context with strategic management, it is involved with the preparation and execution of all targets and certain initiatives on the behalf of stakeholders. As the competition gets increased, the importance of business strategy got more enhanced and led to the increment in the types of business strategies. In context with strategic management plan, it refers to a document which is used to interact in concern with setting up priorities, strengthen operations and assuring that all stakeholders are working towards common goals(Ahmad and Krishnan, 2017). The report is based on Mark and Spencer which is a British multinational retailer with headquarters in London. The company specialises in providing clothing, food or home products. The report involves impact and influence of the macro environment on organisation, analysation of internal environment and capabilities, Porter's five forces model and usage of theories and models and interpretation of strategic planning. TASK 1 P1Frameworks to analyse the impact and influence of macro environment and strategies Mark and Spencer is a British multinational corporation which has around 900 stores within entire United Kingdom and has a turnover of around 41 billion. The company is organised within three divisions which are home care; clothing and food products. Vision: - The vision of Mark and Spencer has always been to provide a standard against which their competitors may be measured and to take care of entire working environment for employees. Mission: - The mission of Mark and Spencer is to make efficient and desired quality accessible to everyone throughout the range of products. Core values: - The values are associated with quality, innovation and trust. PESTLE Analysis: -It refers to a model of macro-environmental elements which are used in the entire scanning element of strategic management. In context with the chosen organisation, it is described below: - Political factors: - These factors are involved with the relation between both government and business organisation(Alberti and Garrido, 2017). There are several political factors like security control, legislation around employment, political stability and many more. In
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context with Mark and Spencer, the government set up certain regulations for their organisation like in the form of health and safety British standards and risk control. The company always believed that it is significant for them to work closely with the government and communicate with them in order to protect all their legitimate interests. The two political factors which created on impact on their company was taxes and political stability. If government increases taxes at a point of time, then the prices of company products also get increased which created a negative impact on their business. Economic factors: - It refers to those factors which create an impact on the economy and includes wages, interest rates and certain governmental activities also. In context with Mark and Spencer, they made a strategy to provide best quality products to all the customers but company got affected by financial crisis due to which they faced a decrease in the demand for all their high quality goods and the main reason behind this was the low income of consumers. Social factors: - These factors are involved with cultural standards, career attitudes, populationgrowthratesandmanymore.Thesefactorsarehelpfulforbusiness organisations to make better and efficient plans concerned with marketing analytics. Consumer purchases are always influenced by social and psychological changes taking place in the market. In present scenario, maximum number of people prefers to do the payment with the help of credit cards. So, Mark and Spencer took the advantage and allowed all their customers to do the payment from credit cards. Technologicalfactors:-Itreferstothevariableswhichareinrelationwiththe development of technology. These factors includes internet connectivity, automation and so on. In present scenario, it is very significant for a business organisation to adopt new technologies in order to attract maximum number of customers(Buller and McEvoy, 2016). In context with Mark and Spencer, they introduced new and multiple check out stores and also established an e-commerce store which is considered effective within entire United Kingdom. Legal factors: - It refers to the legal forces which describes about what a business can do or cannot do. These factors are involved with employment laws, intellectual property laws, civil rights laws and many more. In relation with Mark and Spencer, they have been involved with many legal disputes which became difficult for them to maintain their
brand image for long period of time. One of the legal factors which affected company waschangesinBritaintradelawsafterBrexittookplace.InUnitedKingdom, legislations gets changed on continuous basis on the basis of which Mark and Spencer implements several training sessions on areas like health and safety laws which gets updated with all the current laws and legislations. Environmental factors: - In context with these factors, they are involved with ecological aspects like climate, weather, pollutants and many more. In context with Mark and Spencer, they have always concerned about environmental effects which might affect their brand in future(Gattorna 2017). There were several issues regarding climatic conditions so the company established a new green policy in order to have a positive impact on entire well-being and communities. Stakeholder analysis: - The stakeholders of a business organisation are the individuals who have an interest in the company outcomes from all commercial activities. It refers to a process of identification of all stakeholders of a company in accordance with their interests. In context with Mark and Spencer, it is described below: - High power, high interest: - In context with section, all stakeholders has the capability to influence decision making procedure and take interest in entire business activities of the organisation. In accordance with Mark and Spencer, their biggest shareholders are Parametric Portfolio associates and Cap financial partners(Hajiha, 2017). Besides this, it also comes under the category of public investment fund. High power, low interest: - In this section, target customer base is included as individuals carry on high power because the profit of company completely depends on them. On the other hand M1 Analyse the macro environment to determine and infor strategic management decisions: In context to Marks and Spencer, firm is functioning its working with many competitors of same product segments. By analysing the external factors of the company which is PESTLE analysis its strengthens and weaknesses has been analysed. After evaluating all the factors, political, legal, social and technological factors can be the strengthens of the company but economic and environmental factors can be a threat to the company so in order to smooth working of the business company should maintain their strength and eliminates threats by working on it.
Moreover, it assist in achieving the perks from the value of external factors where Marks & Spencer, is a reputed brand by providing quality products like home, food and clothing which makes it special and different from its competitors. Company is generating more and more revenues as company is focuses on its target marketplace and company can also minimise its weaknesses by executing different strategies which can support them.It has been critically evaluated that M&S Company faces the issues of rumour among customer and in the market. It is found that the company is criticized for its products and services that it specialises only for young ones but not the older age ones. Somehow, company try to overcome the issue but it has impacted the sell of the business. Thus, social factor is also a threat to the company. TASK 2 P2 Internal environment and capabilities of an organisation Internal capabilities and talents of a business organisation plays a very important role in the overall development of a company. It is essential that business strategy needs to be efficiently get implemented after considering all the factors as they help in acquiring a effective position and receiving a stable growth rate for a long period of time. In context with Mark and Spencer, McKinsey 7 S model and VRIO analysis has been used. VRIO Analysis: - In accordance with this analysis, the information related to a company about all their internal resources is provided and in a detailed way. There are several resources which are divided on the basis of value, rarity, ability to exploit all resources and to get imitated in accordance with highest capability. In context with Mark and Spencer, it is defined below: - ResourcesValuableRareInimitableOrganized Brand Value✔ Technological Infrastructure ✔✔ Market Presence✔✔✔ HR✔✔✔✔
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Valuable: - Mark and Spencer financial resources as well as its food products are highly valuable which helped the company in enhancing their brand image. In context with financialresources,ithelpedthecompanytomakeinvestmentintoallexternal opportunities that might take place(Keung and Shen, 2017). The reason behind valuable food products is that they are highly differentiated. Besides this, their distribution network is also valuable which became helpful for them to reach out to maximum number of customers. With the help of this, it became easy for the company to increase their revenue and promotion in a more efficient way. Rare: - The employees working in Mark and Spencer are considered as a rare resources becausetheyarehighlyskilledandtalentedwhichdoesn'ttakeplaceinother organisations. At the same point of time, the patents of their organisation are also identified as a rare resource as they are not easily possessed by competitors. Imitable: - The food products of Mark and Spencer could be imitated because it doesn't involve much cost and can be acquired from competitors if they do effective amount of investment(Macchi,Savino and Roda, 2020). Besides this, the company employees could also be imitated because other business organisations can also train their workers and enhance their skills. Organisation: - In context with the chosen company, their distribution network is organised enough as they uses their efficient network to reach out to all maximum number of consumers. It helped the company in receiving leading position in entire industry even while facing large competition. McKinsey 7S Model: - It refers to an organisational tool that assess the well-being and success of business organisation in terms of their future aspects. In context with chosen company, it is described below: - Strategy: - In context with Mark and Spencer, they use competitive pricing strategy for its product portfolio(Krueger and et. al., 2021). This helps the company to enhance their profits and achieve progression. Besides this, their flexibility provided the company to achieve benefits with respect to all consumer patterns that gets modified globally. Structure:-MarkandSpencerfollowsorganisationalhierarchywhichisentirely supported by learning organisations. By following this structure, it help a company to
makequickdecisionsandenhancetheorganisationalcommitmentwithinallthe employees. Systems: - In context of chosen organisation, they have well-defined system to assure that the business organisation are being managed in an effective way and no kind of conflicts takes place. Mark and Spencer analyses all their systems with the help of designed control which is helpful for the company to provide proper services. Skills: - In context with the chosen company, employees are provided continuous training that enhance their skills and lead to growth and development. All workers are recruited based on their qualifications. Staff: - Mark and Spencer has adequate number of workers across all its global operations and they are hired both internally as well as on external basis. All employees are provided with efficient in-house training through which they get to know about the company and all its values. Style: - In terms of selected company, they has a participative leadership style through which they are able to get involved all their employees in the process of decision making (Ransbotham and et.al,2017). Besides this, a company is also able to increase their workers motivation level and their commitment. Shared values: - In context with Mark and Spencer, their shared values are creativity, quality, accountability through which they assure that all their activities are being performed with high standards. M2 Analyse the internal environment to asses the streghnts and weaknesses of an organisation's internal capabilities: After the evaluation of the internal environment of the organisation, it has been evaluated that Marks and Spencer stay with in its bonding with the consumers and by providing high quality products and services. The benefits of its strengths is that it helps Marks and Spencer, in getting new consumer base and holding the existing ones by providing best products and services. Moreover, it has critically represent that to maintain its strength company need to focus on spending on technological, human and financial resources which is a major threat related with its strengths. It has been evaluated that high dependency on the market of the UK which has lead to appear as one of the biggest weakness of Marks and Spencer. The perk of this weakness is that it is giving the organisation with a suitable opportunity to become more skilled in a specific market
segment and improve the effectual of its functions into its market share.It is important that company must strategise as per the preferences and tastes of consumers. They should conduct a deep research and analysis regarding the demands and choices of customers so that the company can better serve the customers. While employees are the asset of M&S Company as they are highly trained and developed in their specialised areas and skills which makes company to deliver effective results and make profit for the business growth. TASK 3 P3 Porter’s five force model It is defined as a strategical framework that help an organisation to understand the competitiveness level prevailing at marketplace. In addition to this, it describes why different industries are able to survive at various levels of profitability. The higher authorities of Marks and Spencer make adopted porter’s five force model in order to identify level of competition and to develop strategies for attaining competitive edge at marketplace. This model involves five aspects which are as follows: Threat of new entrants:It is analysed that the threat of new entrants for Marks and Spencer is low to moderate as there is a high capital requirement to enter in the market in which company deals. In addition to this, the level of economies of scale and cost efficiencies that company has is difficult to gain by new player (Drobyazko and et. al., 2019). It is researched that Amazon Fresh is coming in the UK market which is becoming a threat of new entrant for the Marks and Spencer. Hence, the M&S needs to ensure its quality on the goods and services and also indulge various offers in the stores so that customer remain attractive by the company. Threat of substitutes:The threat of substitute for the company is moderate as there are lot of competitors who offer the same product at less price. It is important for Marks and Spencer to bring continuous innovation with in the offerings and process in order to remain competitive and to fulfil requirements of customer as well. Moreover, it is determined that food business of company is on attack of large stores such as Asda, Sainsbury, Tesco and so on. This, it is vital for higher authorities of Marks and Spencer to emphasis on offering its food line as a manner that help to attain competitive edge over rivals.
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Bargaining power of buyers:Customers are the king of market and to retain them is important for gaining growth and success in the industry. This threat of Marks and Spencer is high as it offer the products which is similar to its competitors. In addition to this, the switching cost of customers is also low and alternatives is easily available to them (Putra and et. al., 2019). It is vital for Marks and Spencer to emphasis on customer relationship that requires to be effective and vigilant. It help in retaining customers for longer time period and also assist to minimise such threat as well. Bargaining power of suppliers:Marks and Spencer is a huge listed and renowned company that have massive number of suppliers which shows that bargaining power of suppliers is low for the company. In addition to this, it is analysed that company is not highly dependent on suppliers as compare to others as it sells own branded goods and services. Competitive rivalry:It is determined that industry in which Marks and Spencer deals consist of high and strong competition, which state that Marks and Spencer has high competitive rivalry. There are various competitors of respective organisation such as Tesco, Asda and many more which provide similar offerings. For this, it is significant for Marks and Spencer to offer quality products and service, bring innovation and ensure customer service timely as it help in fighting with rivals in an effective and appropriate manner. M3 Devise appropriate strategies to improve competitive edge and market position based on the outcomes: To enhance the market position and competitive edge of the organisation, it can be referred that creation andoperation is one of the best way which can adopt by the Marks and Spencer, after analysing porter five forces, it has been understood that increasing new competition can be the weakness and threat for the company and to overcome with these threats, Marks and Spencer can work on implementing on its products and services. The firm can try to focus on evaluating and supplying creative services and products which has no other competition in the market.This strategy is very efficacious for the company as it will give the organisation a possibility to enhanceadvantage of competition over its rival such as Amazon Fresh. Moreover, it plays an essential role in helping the company in getting new consumers and keeping hold on to the consumers which are already loyal to the brand.Hence the brand can work on giving the services
and products at the cheapest price in the sector by minimising its cost and margins.Moreover, it is recommended to create differentiation in their products and services so that customers do not get bored with the indulged services. It is seen that when customers finds new offers and some kind of uniqueness at the same time, they tend to remain stick with the company and less try products from other companies in the similar market. TASK 4 P4 Theories and models to implement a strategic plan Porter's generic strategies:-In terms of these generic strategies, they defines how an organisation pursues competitive advantage within its market scope. It is involved with three strategies which are cost leadership, differentiation and focus. In context with chosen company, it is described below: - Cost leadership: - It refers to a strategy which mainly focus on decreasing the cost of products and services in order to become more profitable and could add the value of shareholders. In context with selected company, they used this strategy by targeting middle class people and expanding the market share. Besides this, they also offer several coupons in order to achieve all targets and increment of brand popularity. Differentiation: - It accordance with this strategy, the business focuses on distinguishing their products from competitors(Syaniardi and Shihab,2016). In context with chosen company, they also positioned their products in such a way that they look unique from other business organisations. So,the company used the way effective advertisements, huge amount of investment in order to look different. Focus: - This strategy is related to satisfy all target customers who has different kinds of needs and expectations. All business organisations can use this strategy by decreasing costs or by creating differentiated products. In relation to Mark and Spencer, they also focused on both offering unique products and low price. So, they constant changes in the product designs in order to build up satisfaction level of customers and also increasing the value for money. Bowman's strategic clock: -
It is defined as a strategic tool that offers options in order to do positioning across the market which is based on both value and price.It is involved with eight positions which are further described below: - Low price and low added value: - This strategyis in relation with quantity selling. In terms of this, the value of products are low and prices is lowest. In context with chosen company, they always focus on providing premium priced products so they don't follow this strategy. Low price: - It refers to the strategy which is related to have low cost margins and in order to achieve success, a company follow the key of cost reduction(Tuan,Thanh and Le Tuan, 2019). In context with Mark and Spencer, they always focus on high perceived value and effective quality products so they focus on this strategy. Hybrid: - It is in accordance with both differentiation and low price. On the basis of this, this strategy becomes successful as all customer gets effective quality products and at a low priced value. Differentiation: - In this strategy, all business organisations focus on differentiating their goods from other competitors. In context with chosen company, they distinguished their products by enhancing women clothings and kids wear. Focused differentiation: - It refers to providing high value at high price through which innovative products are offered to all customers(Yuan, Cheng and Ye, 2016). In context with Mark and Spencer, they also implemented premium priced products and with high profit margins. Risky high margins: - For a business organisation, it is a threat for them as products are offered at high price and no value is provided to consumers due to which sales of company gets decreased. Monopoly pricing: - The organisations who follow this strategy, they only controls both their products and pricing due to absence of competition. Loss of market share: - In accordance with this position, it is considered effective for those products which has low additional value as it may result into loss of market share.
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M4 Produce strategicmanagement plan that hastangible and tacticalstrategic priorities and objectives: Executive Summary-Marks and Spencer is planning to introduce its new product in ethnic wear which can lead to enhance their customer and market share. Organisational Structure-Company tries to follow flat organisational structure in which they tries to motivate their employees in making strategies and better decision making. Vision-Marks and Spencer have a vision which states that to be the standardized against which others are measured. Mission-Company's mission is to produce the quality products which is available for all. Values-Marks and Spencer values are to focus on quality, trust, service and innovation. Macro environment analysis: Political-In context to Marks and Spencer,after implementation of Brexit law it has negatively impacts the operations of company as most of the policies does not applicable on them. Economic-During pandemic it was challenging for the organisation to negotiate their sales and return policy as most of the countries were in lock down. Social-As organisation is getting tons of rivalry from other retailers which can lead to firm's reputation is getting less trendy for the consumers. Technological-E marketinghas increased sales of its service and products globally and tomakemoreincomeorganisationshouldconcentratemoreindevelopmentof technology in both online and offline level. Internal analysis of the organisation: Strength-Marks and Spencer's one of the biggest strengths is that it has always been focused in their product innovation and also always attempt to work in different sectors. Weaknesses-With growing competition company have lost its sales volumes and in order to generate more sales revenue company has been lowering their margins to stay in the competition. Opportunity-Organisation can collaborate with its competitors to expand their overall market size around the world. Threats-Covid-19 Pandemic is now a big threat to retailer like Marks and Spencer, as import and sales of products has decreased drastically.
Market Analysis-In case of Marks and Spencer,they use product development to expand the range of their product categories and launched it in their established market to generate more sales revenue. Portfolio Analysis: Dog-Management can consider eliminating their classic range and some of its products which are consuming organisational resources and haven't produce much revenue. Cash Cow-Its well established and successful products autograph range serves as a cash cow Star-Clothing products of the companyare generating great revenue from their some chocolate segment like Question Mark-Company's food industryhaven't been capable to grip the market as they were expecting and because of these products their sales volume and revenue have declined. SMART Strategic objectives: Specification- Main objective of the company is to increase their sales. Measurable- It states that target sales of quantity of products. Actionable- Company can increase their sales by E commerce. Relevant- Their goal is relevant for their long term productivity. Time bound- Time to achieve this target is within two years. D1: Critique and interpret information and data, applying environmental and competitive analysis to produce a set of valid strategic directions objectives and tactical actions: After the evaluation information and data is gathered and it has been understood that currently the environmental factors are impacting the function and working of the firm in bad manner. Moreover, rising competition in the retail, food and clothing sector has appeared as the challenge for the company. The strategic goals for the Marks and Spencer are described below: Qualitative objectives: To execute pioneer in latest technology and getting creative technological tools to give to the consumers. To implement consistent modification in the quality of the services and products given to the consumers. Quantitative Objectives:
To enhance its share in the market by 16% by the start of the next year. Company can scale up their operations in three new and different by the end of 2022. Marks and Spencer can achieve 10% annual growth. In the retail sector company can become the top most preference of the consumers. It can be known that the organisation's creativity and consistent betterment in the quality of their product is the main plan of action which is used by the Marks and Spencer. CONCLUSION From the above report it has been concluded that, in order to set up a good marketing strategy it is important to properly determine all the internal as well as external factors which could influence the profitability of an organisation. On the basis of this, the effective method which is considered is following the way of Pestle analysis. Besides this, by implementing Porter's forces model, the organisation gets effective information regarding their position in the marketplace.
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