Business Strategy for Marks & Spencer: Impact of Macro Environment, Internal Capabilities, and Competitive Positioning | Desklib

This report discusses the impact of macro environment, internal capabilities, and competitive positioning on the business strategy of Marks & Spencer. It includes a PESTLE analysis, SWOT analysis, and Hilton 7's framework. The report also covers the variety of products offered by Marks & Spencer, its collaboration with different brands, and the declining sales faced by the business. The report concludes with the opportunities and threats faced by the business in the competitive marketplace.

Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
LO1 Discuss appropriate frameworks and determine the impact and influence of the macro
environment in the context of chosen business organisation and its supported strategies. ........3
LO2 Address the internal environment and capabilities of the chosen organisation using
appropriate frameworks...............................................................................................................7
LO3 With the implication of Porter’s Five Forces model analyse the competitive forces of the
chosen market sector for an organisation..................................................................................10
LO4 With the implication a range of theories, concepts and models, interpret and devise
strategic planning for the chosen organisation..........................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Business environment consist of different factors of influence that affects the business
decision-making and the performance. These factors of influence might be internal as well as
external, thus, a business needs to identify such factors of influence and formulate effective
strategic planning in order to make flexible changes irrespective of different challenges and
opportunities in the business environment. This report is in the context of Marks & Spencer
which is a British global organisation famously known for delivering its varieties of market
offerings to its global prospects. Marks & Spencer is a UK-based organisation, headquartered in
London, UK and founded in the year 1884 by Michael Marks and Thomas Spencer. The variety
of products and services offered by Marks & Spencer includes banking services, food services,
beauty products, apparels and home improvement tools. Marks & Spencer as the chosen business
organisation this report covers analysing the impact influence of the macro environment on the
business performance which supported theory and models, internal environment analysis and
capabilities in context has chosen business organisation, analysing the competitive positioning of
the business in the market please and adding range of theories concept and model in order to
evaluate the strategic planning of the business organisation (Adamides, 2015).
MAIN BODY
LO1 Discuss appropriate frameworks and determine the impact and influence of the macro
environment in the context of chosen business organisation and its supported strategies.
Pestle analysis helps to define the external macro environmental factors and its impact
on the business performance (Basu, 2017). With the help of Pestle environmental analysis,
businesses can also formulate suitable strategies in order to make flexible amendments in the
business functioning. Pestle analysis is a framework of different factors such as political,
economic, social, technological, legal and environmental factors. Further, Pestle analysis on
Marks and Spencer is conducted as per:
Political factors
Free trade

Free trade in UK supports Association in order to promote foreign trade with the suppliers. Free
trade helps Marks & Spencer in order to import products at cheaper prices which positively
impacts profitability of the business.
Brexit
With implication of Brexit, there can be seen many negative impact on the business such as
increased prices of raw materials, freezed employment, restrictions of foreign trade and others.
Economic factors
Economic factors include the inflation rates, foreign exchange rates, the economic growth of a
specific country and related economic activity in a country. United Kingdom is listed under the
largest economies in the world. The policies such as fiscal and monetary are properly
implemented and the country have a strong financial position in the market place. All such
factors positively affect Marks & Spencer in a way by enhancing profitability and sales margin
of the business (Brewster, 2017).
Social factors
Social factors determined by the cultural value and the social believe of people living in a
country. As per the cheap market industry where people prefer less expensive and cheap
products at similar qualities that popular brand offers, such activities negatively affects the
business activities of the association such dropping of sales and market share. There is also a
market trend where more than 10% of people prefer paying through credit cards for purchasing
products and services. Looking at the changing market trend Marks and spencer also introduced
payment through credit cards in order to enhance the sales margin of the business. Marks &
Spencer is one of the oldest retailer in UK. This brand identity of the oldest retailer often
perceives in the minds of the customers and further damages the brand reputation of the business
as listing among the retailer of non-trendy products (Chen and et.al., 2019).
Ready meal sector
With the rising demand of ready-made sector businesses, Marks & Spencer has successfully able
to develop the brand identity of being listed under the U.K.’s top 10 ready meal distributors. This
ready meal initiative of the business has drawn business towards success and profitability.

Technological factors
UK is counted as one of the fourth largest technologically advanced country that positively
affects the businesses in the country. Marks & Spencer uses such technological advanced tools in
the business, wherein the association have launched technology transformation program in order
to bring digital innovation and enhancing the customer experiences. This technological
transformation program has been introduced in order to develop a faster technology solution and
achieving efficiencies in the business activities. The business develops technology operating
model that would help the business in order to identify new technology and adding innovative
methods and approaches to the business (Keyes, 2016).
Self-checkout
Self-checkout is one of the latest technologies where different e-commerce businesses have
introduced it in the physical outlets. Marks & Spencer have also introduced checkout options
embedded with latest technology in order to enhance shopping experiences of the customers. It
also helps to bring benefits to the business where the business is able to save expenses over
deploying employees for managing checkouts.
Online shopping list
Marks & Spencer have also introduced e-commerce website where customers can shop online.
With the rising technological advancement and the reliance of people over the internet platforms,
more than 70% of people in UK have switched over online shopping, in the e-commerce website
of Marks & Spencer customers can book online and the products and services will be delivered
at their doorsteps (Kim, 2015).
Legal factors
Different countries have different legal structures. The association conducts different training
sessions in order to practice the current laws and regulations followed in a specific territory.
Marks & Spencer follows different legal norms framed by the government of UK in the business
organisation such as health and safety act, employees right act and others.
Environmental factors

Environmental concerns have become a major challenge in the country, where government of
UK have implemented different measures for environment protection. Marks & Spencer adheres
to all such environment safety and protection norms in the business organisation. Marks &
Spencer have launched new product line into producing electric energy with the use of
sustainable approaches. Wind energy is the renewable source of energy used to produce
electrical power. The sustainable approach used by the business organisation helps to build the
brand goodwill and reflect the corporate social responsibility of the business in the marketplace.
Apart from that, Marks & Spencer also practices different environmental protection measures
such as recycling and reusing, proper treatment of waste, using green practices in the workplace
and other related measures (Pidun, 2019).
Stakeholder Analysis
It refers to the process to identify the qualitative information and understand the needs
and expectation of inside and outside the project business. Stakeholders of this business are
classified into categories which are as follows:
 High power, high interest: It refers to those stakeholders, who are most important for
the business and for the progress of project. Firm's main priority is to keep them happy.
Top management authority such as owners and investers are comes under in this category
because they are the person who control the overall activities of the firm and also
investing money for the business. It is basically relates to all those authorities that have
high power in the business.
 High power, low interest: In this category the people are comes who have a high
influence over the company but have less interest in the projects and business focus on to
keep these people satisfied. In case of M&S, business may be affected by the employees.
They have an authority for making changes but they are not highly interested. It will have
to offers all the necessary information in respect to make them satisfied in terms of the
business and their operations.
 Low power, high interest: It focus on those people who are kept in loop, talk with them
and ensure about what is happening in the project. suppliers have low power due to
pricing but have high interest for meeting with clients and discussing budgets along with
increase the profitability. It cover low power in the business but have the major interest as

in relation to it they utilize to offers the supports in the projects and the working but with
low interest aspects.
 Low power, low interest: It often to monitoring the people but do not spend more time
and energy. Government and Media are comes under this category because they have no
power for arising changes in the firm. It use to define that it normally shows no interest in
company and have less power as been examined.
LO2 Address the internal environment and capabilities of the chosen organisation using
appropriate frameworks.
SWOT analysis is the internal environment analysis that helps to identify the strengths
and grey areas of the business, the possible opportunities and challenges and its impact on the
business performance.
Strategic capabilities
It offers the manner in which all the activities and implementation of plan might be
develop as to increase the benefit of the business and also to increase the profit and competitive
growth.
.Resource Based View
This is the manner by which the business can make diverse sort of tactics as by which
they can manage the development and the sustainable growth and the competitive edge in the
analyses of business exercises.
Business strategy utilize to manage the aims and the targets that can implement the long-
term targets and planning. It utilize to maintains the guiding value and the approaches in which
the business can perform and manage their work in a suitable manner. It helps out in measuring
the decision making procedure and also in managing the targets and the aims of the business.
Further, SWOT Analysis on Marks & Spencer is discussed as per:
Strengths
Well experienced brand

Marks & Spencer have well established business operating since 136 years. The well
experienced brand identity of the business is the main strength that helps to earn consumer trust
and to stay engaged with the brand. It also helps the business in order to sustain in the market
place and build strong consumer positioning.
Recognised brand
The established brand name of the association supports the business organisation in order to
improve its profitability margin where customer feels more reliable and loyal towards the brand
(Puranam and Vanneste, 2016).
Variety of products
Marks & Spencer delivers variety of products to its prospects ranging from food services,
banking services, apparels, beauty products, home improvement and other standardised products
in the market place. This variety of products offered by other business helps to focus on different
customer’s sections and serve their needs.
Designer brands
Marks & Spencer have collaboration with different brands such as blue harbour, Indigo,
autograph and so on. Where customers can experience all of these brand under one roof. It also
gives customer numerous choices of designer brands. Further, the collaboration with different
brands also enhances the sales and profitability margin (Rugman and Verbeke, 2017).
Weaknesses
Declining sales
The research conducted as per Wood 2019, which reflected that Marks & Spencer face declining
sales in 2019 due to poor supply chain management. Where the business was not able to meet the
customers demand as of unavailability of suffice supply.
Public perception
There is a public opinion about the brand that it is too old so that is why it offers products which
are non-trendy especially for youngsters where they prefer more high-end fashionable apparels.
High cost due to manual process

Marks & Spencer still manages its work by depending on manual processes. These manual
processes for managing different business activities are time taken and higher cost incurring
activities. Further, there are also more chances of human errors and inefficiency for managing
business functionalities (Silverman, 2016).
Opportunities
Global expansion
Global expansion is a major business opportunity where in the business can reach out large
number of consumer prospects and enhance its market share. Marks & Spencer also works in
partnerships and strategic alliances with different brands and multinational organisation in order
to increase its roots to other countries and maintain the sustainability and profitability margin of
the business.
Online stores
Marks & Spencer ‘s has introduced e-commerce website, with the increasing demand of e-
commerce businesses and online shopping. This e-commerce website introduced by other
Association not only helps to serve the customers in a better manner but also supports the
business association in order to save the cost incurred for managing brick and mortar stores.
Online stores are more personalised way of engaging with the customers where the business can
interact with the consumers and rightly address each of the consumers need and their
preferences.
Threats
High competition
There are numerous competitions in the marketplace. Right from small businesses to global
brands there are different businesses that offers products that best matches customer preferences.
In such competitive environment, it becomes difficult for the association to sustain in the
marketplace. There are different start-up businesses that adopt the concept of global brands like
Marks & Spencer and delivers similar products at same quality and cheaper prices. This gives a
reason for customers to switches to other brands and thus, negatively impacts the overall
business performance in the market place. Marks & Spencer uses different approaches in order to

deliver differentiated products and unique features that are not easily available with other brands
(Sull and et.al., 2018).
From the above discussion of SWOT analysis on Marks & Spencer it is very clear that Marks &
Spencer have a well-established market goodwill and a global presence in the business
environment. The well experience brand identity and the numerous variety of services covering
quality at affordable prices makes the business a market leader in the country. With large number
of globalisation and technological advancement, the increasing competition has also become a
major challenge for the business where in the business adopts different tactics in order to
maintain the sustainability and the long-term positioning in the marketplace.
It refers to a business tool that approach the welfare and future growth of the company. Hilton
7'S framework determine the seven elements of the firm that helps to improve the effectiveness
of the company. Following are the elements which defines the capabilities of an organisation.
 Strategy: It refers to a well organised plan and focus on achieveing goal . Company
provides high quality of services, advance integration of information and various
communication technologies to its customers. Strategy of the business attempts to
associate the experience of customers in consuming the luxury brand which has high
quality.
 Structure: It is a method by which business activities are divided and coordinate the
member performance. M&S follows fkat organizational structure.
 Systems: The operations of business depends on a wide range of system such as
quality control system, employee recruitment, selection system, evalution of
employee performance can simplify a necessary process to a great extent.
 Styles: Its a way to represent the company. M&S follows democratic leadership style
where it attracts opinion of employees and take mutual decisions.
 Staff: It is concerned with the number of employee in an organisation, how they will
recruit trained and motivated. In M&S company there is more than 69577 team
members work together across the world.
 Skills: It refers the capability and competencies of the employee by which employee's
perform very well. Basically company focus on those individuals who accept ethics
and behaviour when dealing with general public also have calm nature.

 Shared Values: It is the core of the business that guide employee behaviour and
company action.in case of organisation highest and lowest comment posted on
employee cafeteria. Company are passionate about delivering the quality as well as
focus on guest feedback.
LO3 With the implication of Porter’s Five Forces model analyse the competitive forces of the
chosen market sector for an organisation.
Porter five forces model is a strategic tool that helps to determine the competition in the
marketplace. With the help of this model businesses can analyse the market positioning further it
can also be supported in order to evaluate what all strategies a business can implement in order
to attain the competitive advantage. Porters five forces model in context of Marks & Spencer is
conducted as per:
Threat of new entrants
The small start-up businesses come up with great innovations and unique market offerings in the
market place that puts a lot of pressure to brands such as Marks & Spencer. Where in such small
businesses looks for offering the best meets the customer preferences and covers quality at
affordable prices. In order to combat with the threat of new entrants in the marketplace Marks &
Spencer adopts different tactics in order to bring new innovations and product diversification
strategies. Marks and Spencer focuses on retaining the old customers as well attracting new
customers. Apart from that, the business also adopts different technical solution in order to
improve the traditional methods rather focusing on bringing efficiencies and economies of scale.
Marks & Spencer also invest on different research and development activity in order to stay
updated as per the current market trends. Thus, it can be said that the threat of new entrants is
medium (Surijah, 2016). The business of organization have a lot of divisions that present the
term of threat of new entrants that are running on major and modern framework in the business.
Bargaining power of buyers
The buyers expect the products at minimum possible prices. Wherein they compare a product
with different brands and selects the one that offered at minimum prices and look for discounts
and offers as when they don’t find it they feel unsatisfied. In order to combat with the bargaining

power of buyers, Marks & Spencer looks for introducing up with new products in order to limit
the bargaining power of buyers. Thus, it can be concluded that the bargaining power of buyers is
relatively higher in retail industry. This should be related to potential and suitable divisions of
the growth and advancement to evaluate the outcome and make effective maximization in
discounts and provide for the growth procedure of the business of organization in an effective
and efficient term.
Bargaining power of suppliers
The suppliers look for delivering products by charging higher prices and compromising on the
quality of the product. Thus, in order to limit the bargaining power of suppliers Marks & Spencer
adopts approaches to reduce the dependency upon the suppliers rather focuses on establishing
direct contacts with the manufacturers, the business also uses different suppliers and reliable
ones for the same. Thus, it can be seen that the bargaining power of suppliers is relatively higher
in retail industry (Tanriverdi and Du, 2020). With the help of fundamental term of variations and
growth to evaluate the outcome and make higher supplier to select the cost.
Threat of substitute products and services
There are different start up and small-scale businesses that copies large brands ideas and sells
products and services at similar features and lowest possible prices. This lowest possible prices
attracts the customers where they can find quality and savings over the expenses. In order to
combat with the threat of new substitute in the market place Marks & Spencer adopt approaches
by effective marketing campaign to earn customer reliability and sell unique and differentiated
products in the marketplace. Thus, it can be said that the threat of new substitute in the retail
industry is higher. All of such sort of divisions that are related to efficient term of argument and
develop the relations and changes to evaluate the outcome of the business of organisation.
Competitor rivalry
It is no-brainer that there are different global brands selling numerous products ranging from low
to high prices at different quality and features. This rising competition due to globalization and
other advancement shift in the environment negatively affects different businesses. In order to
combat with the competition in the marketplace Marks & Spencer have collaborated with
different designer brands such as blue harbour, autograph to enhance the current market share

and accomplish competitive advantage. Thus, it can be said that the competition in the
marketplace is higher in retail industry.
From the above discussion, it can be seen that the model reflects the market positioning of the
business and what are the strategies it has adopted to attain the competitive advantage.
LO4 With the implication a range of theories, concepts and models, interpret and devise strategic
planning for the chosen organisation.
In order to formulate sound strategic planning, the supported theory and model is added
in context of Marks & Spencer, it is discussed below as:
Porter Generic model
Porter generic model involves four dimensions such as cost leadership, differentiation strategies,
cost focus and differentiation focus strategies. Cost leadership strategies involves lowering down
the overall business cost in order to accomplish maximum output. Marks & Spencer uses large-
scale production in order to reduce the business cost and bring economies of scale. Further,
reduced business cost helps to lower down the prices of the product and services offered to the
customers.
The cost focus strategy involves niche marketing where in the business focuses on a specific
customer segment. Marks & Spencer segregate the customer segment as per different income
earning capacity. Where in the high income earning capacity consumers are offered luxury
products at higher prices comparison to the low income earning customers (Wadström, 2019).
Differentiation strategies formulated my Marks & Spencer involves introducing product
modification and new product development strategies in order to deliver unique goods and
services and attain the competitive advantage in the marketplace. This includes bringing
innovation in existing product so that it can be made unique.
Differentiation focus strategy Marks & Spencer involves segregating the customer base in terms
of different factors including income, age and others and delivering the products and services on
the basis of these differentiated customer segments such as Marks and spencer have segmented
the customers in a way wherein the offers apparels to different age sections including kids,
women, men and so as other products of the business.

Bowman extended model of strategy
Low price and low added value
Marks & Spencer uses this strategy at times of heavy sales or any occasional offers. Wherein the
business emphasis on quantity selling mainly for the purpose of improving the sales margin. It
advances the costing to hold the low so as to create the advantages and also to execute all the
aspects and the working divisions that are to be easily captured.
Low price
Marks & Spencer uses this approach in order to reduce prices of the products and services by
reducing overall cost incurred for manufacturing and distribution of the goods and services. This
is basically relates to the method in which the business can adopt a low pricing section that will
supports them to make all the variations and the establishment.
Hybrid
Marks & Spencer integrates lower prices and differentiated products to deliver quality to the
customers. It is a combination of both the low price and differentiation. It include the high brand
goods that are being created as effectively with all the tactics and the combination that are being
choose by them.
Differentiation
Marks & Spencer uses this approaches in order to bring innovations in the business activity and
deliver products with unique features and quality so that it can take competitive edge over others.
This include producing of the best facilities for the goods and also to make the accepted fields
and targets so as to create the specific variations.
Focus differentiation
Marks & Spencer delivers differentiated products to its segmented customers on the basis of
income level and other factors. This helps in attracting them on the basis of uniqueness. It is
basically relates to the needs or creating all the facilities and the goods that are to be allotted in a
well defined manner.
Risky high margin

Marks & Spencer delivers products and services at higher prices, as in customers have a wrong
perception that higher prices of products are of high quality. It persisted the dynamical pattern of
high costs for the facilities that are being offered to them.
CONCLUSION
From the above discussion, it is clear that business environment plays a significant role
that also greatly impacts the decision-making in the overall functioning of the business
organisation. Whatever decisions a business makes be it defining organisational structure,
defining the market offerings, establishing a competitive strategy or any other business strategies
are greatly affected by the business environment. It becomes important that businesses analyse
these factors of influence and its impact on the business activities supported with suitable
strategies. So that the business is able to make amendments as per latest market trends and
demand. Sound strategic planning is also important as it defines the core functional activities of
the business and growth strategies.

REFERENCES
Books and Journals