Business Strategy for Marks and Spencer: Impact of Macro Environmental Factors and Internal Capabilities

This report analyses the impact of macro environmental factors on Marks and Spencer's business strategy and evaluates its internal environment and capabilities using appropriate frameworks such as PESTEL analysis, SWOT analysis, Ansoff matrix, value chain analysis, and VRIO analysis model.

Business Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
Part A...............................................................................................................................................3
Analysing the impact and influence of the macro environmental factors on organisation and
its strategies.................................................................................................................................3
Part B...............................................................................................................................................5
Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks..................................................................................................................................5
Part C...............................................................................................................................................8
Porter's five force Analysis:........................................................................................................8
Stakeholder Analysis:................................................................................................................10
Balance Scorecard Model :.......................................................................................................11
Part D.............................................................................................................................................11
Porter's generic strategy:...........................................................................................................11
Bowman’s strategy clock :........................................................................................................11
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business strategy is a set of actions or technique which is used by organization to achieve
the desired objectives. This technique is also helped organization to achieve their success, vision
and mission for a long time which leads to increase the profit of organization. The company
which is chosen for analysing the business strategy in this report are Marks and Spencer. Marks
and Spencer Group plc is a multinational retail based organization and is headquartered in
London. The company was established in 1884 by Michael Marks and the ultimate motive of this
company is to deliver best quality products to consumers. This company are mainly dealing in
three major products such as cloths, food products and home appliances. These products are very
necessary to fulfil the basic needs of the customers in every day life. This report is totally
prepared on the basis of secondary data such as magazines, journals, newspapers and so on. In
this report various methods are described which was used by organization for evaluating the
strength and weakness of competitors in the market. It includes PESTE analysis, Ansoff matrix,
SWOT Analysis and so on . This report is highly based on the analysis of impact of covid 19
pandemic in market.
Part A
Analysing the impact and influence of the macro environmental factors on organisation and its
strategies
The methods which are used by Marks and Spencer Group PLC for evaluating the effects
macro environmental forces at the time covid pandemic are described below -
PESTEL Analysis -
It is a technique which is utilized by company to understand their macro external factors
which was facing by them (Liew, 2018). The stages which are included in the PESTEL analysis
are described below -
 Political – In this factor various regulations and rules, trade regulations, laws and other
type of actions are used to maintain the political stability in organisation. Due to various
free trade policies of government, Marks and Spencer decided to follow trade policies of
trade policies of UK in effective manner. In this way relations between organization and
government are positively maintained for long time. But in other words if the policies are

not sincerely followed by company then their operational activities and services are not
systematically worked.
 Economical – This factors indirectly affect the company's economy which includes
wages, interest rates and so on. Due to covid pandemic organization increased the prices
of their various products and due to this reason customer did not buy product. For
reducing these problem Marks and Spencer used various strategies. It includes
discounting offers, various schemes and which leads to generate revenue of company for
maintaining their economy stable. But in COVID pandemic these strategies are not
effectively worked in offline mode because the visits of the customers are highly
decreased in that situation.
 Social - This factor refers to the set of those actions which are highly responsible to
influence the customer behaviour (Linton and Kask, 2017). It includes social classes
groups, subculture and culture and family. In context to Marks and Spencer, management
providing ready to eat meal products with good quality to customers according to their
traditions, cultures and desires. Products includes sweet and sour chicken, mozzarella
sticks, macaroni cheese and so on. But in Covid due to shortage of raw materials
company are not able to balance the supply and demand effectively. Due to this negative
impression are developed in minds of customers towards company.
 Technological – This refer to those factor which is highly utilized in organization in the
form of technology. Technology is very essential aspect to run the organization's
operational and departmental functions systematically. In context Mark and Spencer,
management used AI technology for increasing the convenience of consumers at large
extent for buying the product. In this technology management used online shopping and
self checkout system which is highly liked by customers.
 Environmental – It refers to those factors which effects the organizations naturally and
effectively. It includes food temperature, food, population density sound and so on. In
context to Mark and Spencer, management used reuse, remove and recycle plan for
decreasing the use of harmful materials in their product. Then according to this plan
management started to use the eco friendly packing materials and these materials is
produces with designs and colours. In this way the health of human beings are easily

maintained and sale of product are increased easily. But in other side due to high use of
carbon footprint environment are getting polluted which leads to decrease the pure
oxygen for living organisms.
 Legal – Legal refers to those factors which impact the organization directly by
government which includes government laws, rules and regulations. In context to Mark
and Spencer it is necessary for them to run their business fairly and legally. Fair and legal
business also helped to maintain good relation with customers, suppliers and government
for a long time. But in other side if legal norms are not followed effectively. Then they
face huge penalties in the form of fine which is not good for their revenue.
Ansoff Matrix -
It is a strategic planning method which is used by senior managers or executives
organization for develop and use various strategies according to market (Lüdeke‐Freund, 2020).
These strategies are mostly used to increase the future growth and success of organization. The
strategies which is involved in this method are -
 Market penetration – It refers to increasing the sale of already existed product in a
existed market. In context to Mark and Spencer, due to covid pandemic management
used unique and effective strategies for increasing the sale of their product at maximum
level. It includes increasing product sales volumes, use of effective distribution channel,
fixing fair and competitive prices in their product etc. In this way the portfolio of the
organization are effectively increased at maximum level in comparison with other
competitors.
 Market development – It mainly focused on develop the market with the help of using
existing product. In context to Mark and Spencer, due to covid 19 organization used
some effective strategies for increasing the reach of their product to customers
effectively at international level. It includes use of social media, high speed internet, use
of various apps. Then in this way wide range of products are easily displayed to
customers in low and market of organization are easily increased in short duration.
 Product development – In this stage organization mainly focused on developing new
product in an existing market. In context to Mark and Spencer, it is one of those

company who made lot of investment in research and development department. With
help of various research company effectively analyse the desire and wants of all
categories of consumers. Then, according to that organization made lot of modifications
in their product such as cloths, home appliances and others. Then after the final change
company launched new product which is unique from other competitors.
 Diversification – In diversification company mainly focused on introducing new
product in new market. In context Mark and Spencer, management must establish good
distribution channel internationally. Then, in this way the availability of their new and
existing products are increased for customers in both offline and online mode in any
time. Due to increasing availability of their product easily established their offices in
other location also. These offices are helpful for deliver the services to customers in fast
manner.
Part B
Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks
SWOT Analysis -
It is a strategic method which is utilized by organization for handling different types of
internal situations with in company (Papadas, Avlonitis and Carrigan, 2017). In context to Mark
and Spencer, management used these technique to determine various strength, weakness,
opportunity and threat which are described below -
Strengths includes -
 Clear brand image – Marks and Spencer have clear brand image in front of consumers
in market between competitors. Because this retail company mostly focused on middle
and upper class family for serving the best quality services. In this way their products are
soled easily at large number.
 Private labels – It is one of the company who has their own private labels in products
which includes Louis Vuitton, Versace and so on. These labels are very helpful for attract
customers towards the brand. With help of these labels the popularity of their product are
effectively increased in various locations.
Weaknesses includes -

 Customer satisfaction – In context to Marks and Spencer, customer satisfaction is very
low because company are not implemented their policies properly. For example return
and exchange policy of product which is mostly used by customers at the time of buying
and receiving product.
 No proper presence in foreign markets - Organization are not able to capture the
foreign market because their products are mostly based on western culture not on other
traditions. Due to this customers of other countries did not like their product and
popularity also get decreased.
Opportunities include -
 Target new market – This company mostly focus on dealing clothing product because
in today's time fashion are highly increased according culture and traditions. Due to this
reason company manufacturing various fashionable to increase their market. This type of
fashionable products are highly consumed by the ladies. In this way the demand and
supply of product and market share are increased easily for long time.
 Use of technology – For maintaining communication globally with consumers and for
promoting their product they use all type of medium (Saha, Gregar and Sáha, 2017). It
includes TV and mobile adds, print media and other media campaigns.
Threats includes -
 Competition – The major competitors like Zara, United colours of Benetton and Tommy
Hilfiger creates to company. Because they are also providing high quality fashionable
cloths to users in same segment. When other brands providing the same products to users
then, chances are enhanced effectively for customers switching to other companies.
 Brexit – Due to Brexit incident they lost their reputation and image in United Kingdom.
It leads to decrease the customers in numbers and also break the relation with government
and suppliers.
Value chain analysis -
This is a set of activities which is utilized by company to develop customer value for their
product (Subramaniam, 2020). Organization used this method to run their operational activities
and departmental functions properly in different stages which are described below -
Support activities -

 Firm infrastructure – It refers to overall structure of organization which was designed
by top level management to attract the customers. In context to Mark and Spencer
management must maintain eco friendly atmosphere for employees in workplace area.
Because with help of good atmosphere workers easily suggest right product to consumers
in any time.
 Human resource management – It refers to managing the overall resources of
organization properly without creating any type of wastage. In context to Mark and
Spencer, management must facilitate effective effective training to employees regarding
various equipments. Because equipments are highly essential for completing the work in
time and also for optimum utilization of resources on daily basis.
 Technology – Technology is a very essential company for any organization for run their
operational and departmental functions smoothly. In context to Mark and Spencer,
management used digital platforms and AI technology effectively in COVID pandemic.
In AI technology various elements are used in their store which includes self check in and
check out system, self service etc. In this way consumers buy their products in large
volume for long time.
 Procurement – It refers to introducing the product in front of consumers with various
aspects which includes keep good relationship with suppliers and others. It is
responsibility of Mark and Spencer that deliver valuable products to customers which
leads increase relationship for long time.
Primary activities -
 Inbound logistics – It refers to those activities which are done by organization internally
which includes receiving, storing and distributing. In context to Mark and Spencer,
management must maintain distribution channel effectively for maintaining good
connection with employees for long time. Because effective distribution is highly
important for complete the production process in time with help of various raw materials.
 Productions – It basically refers to manufacture the product with the raw materials and
substitutes. In context to Mark and Spencer, management must use advanced equipments
and systems and correct raw materials for producing quality product in time. Because
when customer received quality product then only positive relationship are built between
consumer and producer for long time.

 Outbound logistics – It is the final stage in the product manufacturing and in this
product and services are finally distributed to customers. In context to Mark and Spencer
management must establish effective supply chain externally at global level for providing
various services to customers in time. In this way services and portfolio of company are
increased at maximum level in long run.
 Marketing and sales – It refers to create product popularity and brand awareness
between the public. Mark and Spencer must use effective strategies for increasing their
sales of product. It includes advertising, digital marketing, direct selling and so on. With
help of using these strategies desires and wants of consumers are increased easily for
buying the product in large quantity.
 Services – It refers to in which way company providing services to customers for their
satisfaction level consistently. Mark and Spencer must provide special services to them
for maintaining good relationship with users. In COVD management used online
platforms for facilitating various types of services to customers in time.
VRIO Analysis model -
It is a strategic method or tool which is used by organization for understand their
capability and competitive potential (Tulung, 2017). The factors which was considered for
evaluate the organization are -
Ability and
Resources
Valuable Rare Imitable Organised
Financial
Resource
Yes Yes No Yes
Employees Yes Yes Yes Yes
Patents Yes No No Yes
Effective global
presence
Yes Yes Yes
No

 Valuable – It means that for Marks and Spencer financial resources, global presence of
company, employees and patents are the most important asset. Because all these assets
are helpful for running the departmental functions smoothly for long time.
 Rare – In this stage Mark and Spencer mostly focused on those factors which is
responsible for achieving competitive advantage and portfolio easily. It includes financial
management, employees and worldwide global presence.
 Imitate – It basically refers to engaging the business activities with use of various
elements. It includes employees and world wide presence and due to use of these
elements the popularity of Mark and Spencer are increased easily at maximum level.
 Organized - In this stage Mark and Spencer concentrate on whole organizational
activities. For run the activities smoothly management used various elements which
includes patents and employees.
Part C
Porter's Five Force Analysis:
This framework gives a platform for evaluating competing point of the organisation and
it permits the firm to understand their position in the sector or market place (Adner, Puranam,
and Zhu, 2019). It assists in knowing and understanding the affect of an organisation's strengths
and weaknesses. In context to Marks and Spencer its five forces are mentioned below:
 Supplier's bargaining power- A supplier is a person or an organisation that gives the
products or raw material to the businesses for later evolution of their final made goods.
The framework means to the level of dominance that supplier's has on the organisations.
In relation to Marks and Spencer, suppliers bargaining power is bit low as they cannot
dominate the firm for enhancing prices unless negotiated with them as because company
have various different suppliers to give them with their offerings and services.
 Buyer's bargaining power – Buyers are the consumers who purchase and utilise
organisation's final goods and rates of those goods. In context to Marks and Spencer,
there consumers have immenser bargaining power as because company is having various
of its competitors in the retail segment which give the buyers more power in dominating
the price of the products. In order to overcome that after Covid 19 management can

enhance the sale of their products online which can give them an edge over its
competitors as because consumers are getting the product delivered at their door step.
 Competitive Rivalry – It refers to the competition of the company in a particular market
segment (Campbell and Park, 2017). This method helps in maintaining its competitor
rivalry which does not impact the sale of their products. In relation to Marks and
Spencer, management functions in a highly competitive market segment and after the
Covid 19 company can introduce various tempting services which can give them an edge
over their competitors and mainly they can also collaborate with other small retailers in
order to expand their market segment.
 Threat of new entrants – It means to the threat to the existing company from the new
firms in the market segment and offering similar product range (Chen, 2019). It assists in
evaluating that how possibly a new organisation can provide the harm to the sale of the
company. In context to Marks and Spencer, threat of new entrants is very much low for
them as because the goodwill company is having is hard to make for new organisation
and to work at the same level as Marks and Spencer is operating requires a large amount
of capital investment which is not at all easy for anyone.
 Threat of substitute – It refers to the threat of the imitation or in simple words it means
to the threat of the several firms that may gives similar or duplicate products of at lower
range. In case of the firm Marks and Spencer, this factor can be a threat to the
organisation in the retail and clothing segment because people can easily switch to from
one brand to another in need of the related products they desire in a low price as M&S is
a luxury brand.
Stakeholder Analysis:
This technique can be applied to any company's objectives and every individual or team who is
involved in the functioning in accomplishment of those objectives are known as stakeholders
(Frazelle, 2018). This analysis is the way of understanding those individuals or team before the
implementation of the objective grouping them in accordance to their stages or levels of interest
and authority in the organisation.
 High power, High interest – It refers to the stakeholders which are having higher
authority in the decision making as well as the higher interest in the operations and
growth of the business organisation. In context to Marks and Spencer, firm's higher level

management like CEO or board of directors are included in it as they have the most
power in the decision making as well as higher interest in the profitability and success of
the organisation.
 High power – Low interest – This category of stakeholder analysis, it involves those
people of the firm who have bit low interest in the operations of the organisation as they
only focus on the outcome and moreover, they also possess higher level of authority in
the organisation. In relation to the Marks and Spencer, their investors can be included in
this category as they have high power in decision making but low interest in tehir
operations.
 Low power – High interest – In this level of stakeholder analysis it means to the
individuals who are having higher interest in the operations or activities of the
organisation and also having low authorities in the decision making (Gonzalez,
Rodriguez and Sossa, 2017). In context to Marks and Spencer, their consumers are the
belong to this stage as they have no power in the decision making in the organisation but
they are having high interest in the activities or offering practices of them.
 Low power – Low Interest – In this category it relates to the stakeholder who are having
zero to no interest in the operations or activities of the business as well as no power also
in the process of the decision making. In case of the company Marks and Spencer, lower
level employees or labours belong to this category as they have no power in the any
practice of the company and no interest as well.
Balance Scorecard Model :
Balance scorecard is a performance method which is utilized by organization to identify, control
and improve their various activities and results (Yoshikuni and Albertin, 2020). It is also
necessary to maintain the track records of employees on daily basis. Because when track records
are maintained then only various benefits are provided to employees and it includes incentives,
bonus etc. In context to Mark and Spencer, management used this method to polish the internal
skills of employees. Because skills are very important to run the organization smoothly with
proper balance. When organization maintain balance scorecard properly, then employees easily
achieve their targets.

Part D
Porter's generic strategy:
This framework was made by the Michael Porter in 1980. This method of this framework shows
how firms can attain an edge over their competitors by utilising the appropriate strategies
(Gorondutse and Abdullah, 2017).
 Cost leadership- It means to the organisation attaining an edge over their rivals by lower
their prices in their target market area. In context to Marks and Spencer, administration
should follow this scheme to give their clients merchandise at cheaper cost, and they can
also take down their earnings margins to gain their sales revenue and client base.
 Differentiation- In this factor firms tries to be unique in terms of offering different
products as compare to their competitors (Kang and Na 2020). In case of M&S, company
can concentrate on devising their goods in accordance to demand and interest of their
consumer.
 Cost Focus- This framework assist in promoting in a smaller and particular area by
knowing the requirements of the clients. In case of M&S this scheme is irrelevant as
company provides several merchandise segments in many nation as well.
Bowman’s strategy clock :
This framework was founded by the Cliff Bowman as well as David Faulkner in the year 1997
and this paper is known as corporate and competitive strategy. This technique assist a
organisation in identifying proper strategic positioning in the market segment in accordance of
perceived and price value which is convenient to utilise. In context to Marks and Spencer its
factor of this framework is mentioned below:
 Low price and low value added – This factor of Bowman's strategic clock refers to the
selling of products in large volume in which the cost of the goods is bit low (Kateb and
Ahmadi, 2018). The goods that are being sold in the market are the same only but with
lower price value. This factor gives low competitive position in the market.
 Low price – This factor refers to the setting up of the prices in lower rates. In other
words this strategy states about that the products with low cost give low margins which is
vital in success inclusion of the cost reduction and process efficiency. It focuses on
aiming at large quantities in order to increase their profits from the higher sales.

 Hybrid – It refers to the set of product differentiation as well as the cost effectiveness.
The cost is agonistic and having lower sensed worth form the purchasers promoting the
value added features of the goods. The growth of this factor means to the maintaining the
balance between differentiation as well as the cost that gives better profit margins and it
is also very effectual strategy for the organisation.
 Differentiation – This factor refers to the selling of new products or offering different
from its rivals in the market by getting high sensed worth (Ko and Liu, 2017). It also
gives a different aspect to a merchandise with the utilisation of technology in order for a
better innovation that manages more consumer base and more success.
 Focused Differentiation – This factor renders more value and more cost to the goods
that enhance the revenue but it is also bit hard to manage. Goods are sold at a higher
price range in which customers can buy their goods because of its high sensed value. This
strategy is very much effectual for the luxurious or premium brand that functions at
international level. This factor of this strategy can be very effective for the organisations
in order attain in goals of supplying quality good in larger market area.
 Risky high margins – The firms ask for higher rates for their good which are worthy in
terms of the customers . This strategy is one of the riskiest as for the long term
sustainability is hard because of the higher prices of the products. The customers will
expects the better quality products in accordance to the cost of it.
 Monopoly Pricing – It refers to the authority of the business in order to manage their
goods and its prices (Laari, Töyli, and Ojala, 2018). In this factor, there are no
competitors of the organisation or in other words company is selling those products
which are not offered by others in the same market segment. If the consumers requires
those goods they have to purchase it even if the rates are actually very high.
 Loss of market share – It refers to the worst situation of the firm and it is utilised by the
firm who desires to tap in to market segment. This possibility happen when the
organisation is not capable to give the good in accordance to the need of the clients.
In order to adopt the above mentioned strategies it is recommended to the firm to follow
differentiation of the goods strategy with have new and different characteristics which can be
offered to the consumers in order to attain maximum gains.

CONCLUSION
From the above report it is concluded that without execution of proper business methods it is not
possible for a firm to attain their required objectives. Company need to apply the several
business strategies in order to know the trend and evaluate the competition. The several
strategies includes the SWOT, PESTLE, VRIO and various other frameworks which all gives the
info related to the position of the company as well as the marketplace. Moreover, company need
to concentrate on the new market area which can assist them in enhancing consumers base.

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