Business Strategy for Marks and Spencer: Analyzing Macro Environment and Internal Capabilities

This report analyzes the business strategy of Marks and Spencer, including the impact of macro environment, analytical frameworks, internal capabilities, and strategic directions. It also discusses the Porter's five forces model and its application to M&S.

Business Strategy

INTRODUCTION
Business strategy is the combination of certain decisions which is being taken and actions
performed by the business in order to attains goals with the aim of sustaining in the competitive
environment. It is the backbone of any firm which leads to have the desired goals. It is important
to have the appropriate market(Barbosa And et. al., 2021). It is important that business that takes
into account certain factors which includes the market competition and the business
environment. Marks and Spencer is the chosen organisation for this report, It is the UK based
retailer and the manufacturer of foods, cloth and home items. This report will cover the impact of
macro environment on business strategy of organisation and also cover the various analytical
framework to acknowledge external environment. Further it will analyse the internal capabilities
of the business environment that is acknowledge with the evaluation through the Porter's five
forces. Lastly, certain models and concepts is being discussed in order to understand strategic
directions are determined.
TASK 1
Vision: The main visions of the M&S is to become the global aspects for which the
international organisation can measure the performance.
Mission: The mission of M&S is to create the quality product which can add value to the
customers. It also helps the company to enhance their customers base by which they can have
more profits.
Certain analytical framework to acknowledge macro environment
Stakeholder analysis
A stakeholder analysis refers to the method of identifying the individual who are
impacting the overall performance of the company. This framework analyse the benefits for
M&S in grouping the right people in order to conduct the stakeholder analysis that are explained
as follows:
Step 1: Analysing the various stakeholders by making the list of all the necessary people
which can be the potential stakeholder of the firm. In context to the M&S, they can be the sales
department, marketing executive and executive staff, suppliers, consumer and public.

Step 2: After making the list of the candidate or the important stakeholders, manager in
an organisation needed to have the priority in various categories that includes level of
participation and their influence etc.
 High power, high interest: stakeholders are the most Significant for M&S & with the
help of them organisation can operate the effective business functions so that objectives
can be attained smoothly(Diusembaeva, 2020).
 High power, low interest: Stakeholder can impact the functioning of the company but
the interest of the stakeholders is not high in the various activites.
 Low power, high interest: Stakeholders need to be informed for the business functions
so that assignments of M&S can have hurdle at any stage.
 Low power, low interest: These stakeholders are not very interested in task of
organisation and not having sufficient power to take the major decisions.
Step 3: In this aspects, manager of M&S have the effective communication with their
stakeholders according to their consideration which also support the various stakeholders to
completing project without any major difficulty.
PESTLE analysis
It is the framework which is used to analyse the external environment of the company so
that they can acknowledge about the macro forces for the business in an appropriate manner. In
context to M&S, PESTLE analysis is given below:
 Political factors: The kind of factors which are includes in this are tax regulations and
stability, tariff rates of the government. UK is having the political stability and the tax
rates for the business is less by which M&S can operate their business in beneficial form.
 Economic factors: These are the aspects which are the factors which includes the
interest rate, inflation rate and the buying power of the individual in the UK. As the
people is having the good disposable income due to which they can capable enough to
buy the goods according to their interest. Inflation due to great recession of 2018 have
more impact on M&S.
 Social factors: These aspects incudes the attitudes, norms, values ad the ethics of the
individual in an particular state. In UK, people are open minded and they prefers to have
the modern and advance products. When M&S is offering high quality products to their
customers which can enhanced their revenue and sales(Chege and Wang, 2020).

 Technological factors: UK is the technological advance nation where people uses digital
platform in the daily basis activities. M&S needs to update their technology, equipments
in accordance to their market so that they can attract the large customer base by offering
quality products and services.
 Legal factors: These macro factors includes all the legal rules & norms that are being
imposed by the government of UK do that they can secure the welfare of customers or
workers from business organsiation and vice-versa. M&S needs to follows all the legal
procedures so that they have to pay fines due to law disobedience.
 Environmental factors: Such factors includes the connected with protecting ecology &
environment for harmful activities. considerating environmental laws also benefits the
organisational in maintaining sustainable business environment in the market by which
M&S can enhance their sales and profitability.
Ansoff's matrix
It is the matrix is defined as a strategic tool for effective planning that is being utilised by
manager of a company so that effective strategy can be used for the enhancement can be
adopted. In respect with M&S, these strategies is listed below:
 Product development: In this aspects, An organisation can introduce a new product in
the market by which potential buyer can buy them in large quantity. By which, sale of
M&S can enhanced due to high profit can be retained.
 Market development: In this aspects, current products of the organsiation is being
introduced in the new market so that good customer base can be increased for M&S. This
will help the organisation in increased sales & profits.
 Market penetration: In this strategy, organisation tries to enhance their market share
with the assistance of existing goods in the same market. In this strategy, organisation can
reduce the prices or an offer the complementary services by which they can increase their
market share by which high revenue can be increased.
 Diversification: It is considered as the most risky process in which the new product is
being launched in the new marketplace. It the company fails to please the customers by
which they are having the higher profits and revenue(Galliers, 2020). In this case, If the
customer will like the new products then M&S will earn the higher profits.

In context to the above discussed aspects, manager in M&S is suggested to adopt the
market penetration and for that existing product that is giving offers & discount to their
customers of the current market so that high revenue can be increased. This also help the
organisation in enhancing their profits & revenue without introducing new offering or without
targeting any new marketplace.
SWOT Analysis
SWOT analysis is the strategic tool that helps the M&S to identifying their strength
and weakness in the descriptive approach so that they can make the necessary changes.
Various opportunities & threats are also determined which is having huge impact of business.
In context to M&S , These factors are given below:
Strengths Weaknesses
 Brand recognisance of Marks and
Spencer is high as they are offering
quality products.
 Organisation is having wide product
range such as clothing for men, women
and kinds, food outlets and home
products due to which they can have
various options for choosing best one.
 According to the population of UK, it is
believed that M&S is not the trendy
stores for youths and adults in case of
clothing.
 Organisation is using older methods in
order to produce the products with high
prices in comparison in the rates that
are given by other organisation.
Opportunities Threats
 Marks and Spencer can expand their
market presence to the Asia and Africa
due to availability large group of
potential buyers.
 organisation can invest in various
marketing tasks so that they can get to
know about the product given by them.
 Changing political environment due to
the global organisation also hinder the
overall functionality of the business.
 Competitors such as H&M and Zara is
giving tough competitors to M&S that
is also the being threat for the company.
TASK 2
Strategic capabilities & their key components

Strategic capabilities are the method in that various aspects are shaped up & put into an
action so that an organisation can meet the competitive edges in the large market. Such strategy
capabilities are having six aspects which are strategic purpose key goals, action planning(Ge,
2021). Tools for analysing, vision and the value for the company. It helps in using their strategy
in well-defined manner. It is the main aspect of analysing the internal approaches of the
business.
Resource based view strategy
Resource based view is the managerial framework which is being utilised by the venture
in order to analyse the strategic resource that can be exploited by a venture in order to gain the
sustainability & the competitive edges in the marketplace. In relation to this strategy, there are 2
types of resources tangible and intangible resources which can be used by the company so that
they can have the better approach in the company and also make the best use of their available
resources. Tangible resources includes the physical goods such as land, building, machine,
capital, equipments etc, on other hand intangible resources do not have any physical
consideration but these can be managed by Marks and Spencer such as trademarks, and
intellectual property, brand reputation.
McKinsey's 7S model
It is the framework that analyses the overall design of the company by identify the seven
key internal components of them. These aspects must be aligned effectively only then Marks and
Spencer will be able to run their Business in an well-defined manner & can meet the competitive
edges in the market. The components of this model are explained as follows:
 Strategy: It is the plan that is being formulated by the organisation in order to met the
competitive edges so that rival can be competed in an appropriate manner. In context to
M&S, If they do not robust the strategy then the company will face the certain issues and
customer based can be reduced.
 Structure: It states the manner in which the business functions is being operated and
aligned each other by sharing their information. If M&S is having the inappropriate
structure then this will minimize the effectiveness of the organisation due to which other
company can gain the competitive advantage(Hafsi, 2020).

 Systems: It is the process of company due to which all the daily task is being done and
certain decision making also conducted. Maintaining appropriate systems will helps the
business to implement the organisational change properly.
 Skills: It includes the skills and abilities of the workforce in the M&S for performing
their professional work. Potential staff will allow them in analysing with complex
situation in an appropriate manner.
 Style: It shows the leadership style which is being adopted by the leader so that they can
lead their employees to get the work done in a right manner so that better results can be
gained. In M&S, participative leadership style is being adopted by the leader so that
suggestion can be welcomed by them.
 Staff: It includes the type and the number of employees that arr working within the
organisation so that they can rightly make the better choice with in the candidates. M&S
focuses on hiring the trained, hired and motivate them for their working.
 Shared values: It is the core values and standards, norms which guides the actions of the
company such as M&S and the behaviour of the worker in an appropriate manner.
VRIO framework
VRIO analysis is the aspect which is related to the values, rarity, imitability and
organisation as it is the strategic tool that is being used by the company in order to identify the
internal resources and the internal capabilities of the business. It also helps in gaining the
competitive advantages over their competitors. In context to Marks and Spencer, VRIO analysis
is given below:
 Valuable: It is necessary for the managers in M&S to effectively utilised their valuable
goods so that huge competition to other firms in an appropriate manner. If an firm is
having valuable resources, then they can generate the high profits in it. For instance,
distribution and the supply chain management are the valuable resources of the company.
 Rareness: It is the aspects which understands the product that is being prepared by them
is rare or not. In context to M&S, It will helps in achieving customer loyalty by which
they can sales and revenue can be increased in a considerable manner(Lam And et. al.,
2020). Rare goods of the organisation are their manufacturing and production machines.
M&S emphasis in offering unique and innovative goods to their potential customers.

 Imitable: Marks and Spencer required to offers the products can not be copied by rival
organisation. If the product offer by the marks and Spencer will be manufactured same
then the competitors can sell them in few amount by which individual will not buy those
services that are offered by M&S. Raw material for offering food items & clothes are
imitable resources for the organsiation.
 Organisation: It is necessary for venture such as M&S to access their existing goods in
an effective manner. If material and resources of the venture will not be access in an
appropriate manner, It will results in enhancing the cost of the venture as it will reduce
the revenue for the company by which company can face huge competition in the market
Various resources are workers, suppliers, investors and stakeholders of the business
venture.
TASK 3
Poter's five is a strategical approach which takes the appropriate decisions by accessing
the future outcome of the company rather then analysing the present competition. There are five
aspects which are related to the framework that is given in context to M&S:
 Threat of new entrants: when taking the consideration of the company, threat from new
entrants is not so high as M&S is a global business that is being operated at the global
level. This is not possible for the new venture to invest in like as M&S while operating
their venture operations and tasks. With this, new company are not effective enough to
have the better approach to compete with the M&S in consideration to have their
customer base, market share and products standardised to the buyers.
 Bargaining power of suppliers: There are some large profit organisation that are
operating in retail sector majorly foods & clothing. As the bargaining power of the
supplier is high as there are many supplier are present in the market(Spillan And et. al.,
2021). If the other firm pay more to their suppliers then the suppliers can not able to
supply sufficient material to M&S will not able to generate high profits and revenue.
 Bargaining power of buyers: In these aspects, the bargaining power of buyer is huge as
the changing demand and tends in the market occurs in context to M&S as competitors in
retail sector is very high. If they are offering expensive products without giving product
satisfaction to their customers then they will switch to other brand.

 Threat of substitutes: there is probably no substitution for cloths & food. Due to which
threat from the substituted products is less effective, However, if offered goods will not
be good & customers will feel reluctant in buying the offering of the firm.
 Rivalry among existing competitors: There are large retailing company that are
operating in United Kingdom. In context to H&M, Zara etc. Threats of such rivals is very
high is case of M&S. This is due to company rate in their goods and services in context
with the competitive pricing strategy which is quite change in the rise of the goods of
M&S will give opportunities to competitors in increasing their buyer base.
TASK 4
Porter's generic strategies
It is the aspects which helps in accessing the ways in which company can gain
competitive advantage in the market place. In general, these are different kinds of approaches
such as cost leadership, differentiation & focus. In terms of M&S, such strategies are given as
follows:
 Cost leadership: with the help of this approach, price sensitive buyers can easily target
by the firm. In context to M&S, they can offer the goods and services which can be easily
purchased by the customer at the affordable prices. They can also give offers and
discount to their loyal customer by which they can build the trust of the customer within
the organisation which can enhanced the overall offerings of the M&S. This also helps in
increasing their sales and profitability as well.
 Differentiation: In this strategy, organisation can offer the innovative and new goods to
their potential buyers so that they can differentiated from other organisations dealing in
the same segment. With this approach, M&S can offer differentiate goods with the help
of innovation so that sale and the profits can be increased in an appropriate manner.
 Focus: It is the strategy which includes the two factors i.e. cost focus & the
differentiation focus (Van Thuy, 2021). In terms of cost focus, M&S will be access to
offer sale goods in less prices so that they can have good customer base. In
differentiation, company is emphasizing on unique goods so that individual can buy
without being price sensitive.
Bowman's strategic clock

It is the model that helps the business in exploring the right strategic positioning as can
say the way in that M&S can effective their goods in order to gain the competitive edges in the
large market. There are various aspects that are related to such factors are given below:
 Low price and low value added: It is less competitive effect for M&S as they are not
considering differentiated products & consumer is having the less value for their products
if the prices also falls.
 Low price: In terms to this, M&S can establish itself as the low-cost leader in the
market by using cost minimisation approach. Here, profits for each goods will be low but
due to high sales and overall revenue can be increased.
 Hybrid: This approach includes the low prices & products differentiation as M&S can
position their brand in the market itself.
 Differentiation: With this strategy, M&S necessary to emphasis on giving innovation to
their buyers so that sales can be increased.
 Focused differentiation: goods are kept at the high prices level for which buyers can
purchase the products due to its effective value. This approach is used by luxurious
brands which are conducting their business on international level.
 Risky high margins: This is the strategy in which organisation faces the high risk which
leads to have failure in their functions. In context to M&S, they can set the high prices
without offering something extra in perceived value.
 Monopoly pricing: It is the pricing in which single organisation is operating their
business in the market an they are not committed about the prices and innovative
features. If buyer needs that then they have to buy the product in the high prices as well.
 Loss of market shares: It is the strategy in which the organsiation is needed to set the
standard prices in the range for products as strategic position is a disaster in the
competitive market. By which they can leads to earn less market share(Xi, 2020).
In case of M&S, after analysing the two considerations of strategic as they can adopt the
differentiation strategy in that the new & different product is being offered to the buyers so that
innovation can leads to have higher profits & revenue. This also helps the organsiation to
increase their sales & profits in order to improve the market share. In the context to this, they can
have the betterment in the growth of the business venture.

Strategic planning that helps the business to have the effective to identifying the set of
task, priories, focus, resources, operations etc. that also ensures the individual within the
workplace for their common goals. The strategic plan for Marks and Spencer is classified as
follows:
Vision: The vision of the company is to be the standard against which other can measure.
Mission: The mission statement of the organsiation is to make aspirational quality which can
satisfy all the customer segments
Strategies: The strategies which is being used by the company is Market development as they
are having sufficient abilities to utilise their effective competencies. It will be easily used for
them to target the buyers also they can get sufficient support of the authorities as they offer
environment friendly goods.
Objectives: The objective of the organisation is to enhance the customer base by 15% percent by
entering into new market so that they can have the higher revenue.
Tactics: These are the short term efforts which are made by the organisation in order t
achieve the objectives and the tactics followed by the Marks and Spencer is that they have
choose they marketing strategy carefully so that they can align with the advertisement
campaign with digital marketing.
Product The company is dealing in Apparel, accessories, beauty care, home products and
food items by which they can enter in the new market and thy can easily develop
their market with the existing products.
Price As they are having strong brand image so they are competitive pricing policy as
they are having their own in-house brand for apparels. The product are of
premium quality as they kept its prices between medium to high range.
Place They have make their presence in the international market and now they are
planing to reach to the rural areas so that they can expand their business.
Promotion Marks and Spencer is using the magazines, newspapers, television channels for
advertising their products and services in the new market so that they can attract
the large customer base.

Implementation: It is needed for the company to implement the plan by which they can allocate
their resources in an appropriate manner. In context to Marks and Spencer, they can assess the
resources according to the budget of the them so that all the functions can rightly operated. For
this, performance indicator is being used in order to identify the obstacles in the operations.
Evaluation:
Evaluation is related with the collecting the information & the follow up that how the
plan is being evaluated as it is not possible for the company to achieve their desired goal and
outcomes. While developing the market, M&S analyse & compare the actual performance of
marketing teams and the performance necessary in marketing plan.
CONCLUSION
It is concluded from the above report that business strategy play ans signifiant role in
achieving the desired objective of the company. Analysing the PESTLE, stakeholder analysis,
SWOT, Ansoff's matrix benefits the organisation by external business environment. With the
help of VRIO framework & organisational capabilities can be accessed. The organisation can
identifying the competitive edges in the market. Lastly, by using various theories, models &
frameworks such as porter's generic strategy, Bowman strategy, organisation can implement
appropriate strategy for planning further.

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