Business Strategy for Marks and Spencer Plc

This report analyses the impact of macro and internal environment on Marks and Spencer Plc using Pestle and SWOT analysis. It also evaluates the competitive forces using Porter's five forces model and discusses concepts, theories or models to devise a tactful plan for the company.

Business Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
P1. Analyse the impact and influence of the macro environment of the company.....................3
P2. Analyse the internal environment of the company...............................................................5
P3. Application of Porter's five forces model to know the competitive forces...........................8
P4. Applying theories, models and concepts..............................................................................9
CONCLUSION .............................................................................................................................11
REFERNCES:................................................................................................................................12
Books and Journals:..................................................................................................................12

INTRODUCTION
Different organisations have different objectives and aspirations and take several ways to
reach those goals. These ways represents business strategies of such organisations. The term
business strategy relates to a set of actions plans or decisions which help the entrepreneurs to
fulfil goals as well as to secure a competitive edge in the target market. It also refers as a master
plan that the management of business implements to carry on its business functions, to gain
competitive benefits, please customers and reach the ultimate ends of the organisation. The
company which is chosen for this report is Marks and Spencer Plc. It is one of the leading
multinational retailers across the world (Berman and et.al., 2020). It is a UK based company that
is known for selling clothes, domestic products and many more. It has world-wide operations
with 959 outlets throughout the country, involving 615 that only sells food products. It also
serves its products through online channels. The report outlines the impact of internal and
external business environment with the help of suitable frameworks. It also evaluates the
competitive forces, using porter's five forces model. Lastly, it discusses concepts, theories or
model to devise a tactful plan for the company.
TASK
P1. Analyse the impact and influence of the macro environment of the company.
With the help of Pestle analysis, the factors consist in macro business environment can be
evaluated. These factors are political, economic, socio-cultural, technological, environment and
legal. These factors help to know and understand the present and forthcoming market. In case of
Marks and Spencer, the pestle analysis is as follows:
 Political factors: One of the positive impact is the free-trade that has been stated
between a multitude of nations. M&S which is majorly operates in UK benefits
outstanding from this (Browne and et.al., 2018). Free trade allows the brand to do its
import activities for sale in the stores at lower prices and able to keep its profit margins.
On the other side, Brexit in UK to leave the EU delivers a worse impact on the operations
of company. It is not clear where the UK will stand following the Brexit in respect of
tariffs and trade regulations, but many of the possible results are not ideal for the retailers
in UK.

 Economic factors: In retailing sector, price is the main factor that determines the
purchase decisions of customers. It is been studied that there are many budget retailers
that pop-up in the UK. From budget supermarkets to budget clothing stores, these are the
new players stealing the market share from more high-profile brands such as Marks and
Spencer, by encouraging consumers to enjoy similar items but at seasonal or lower
prices. In 1999, the decision was made regarding the use of foreign suppliers was
credibly fuelled by such discount retailers (Yang and et.al., 2021). Hence, as the majority
of citizen in UK is preferred local retail stores rather than the M&S premium items.
Budget retailers are a direct competition.
 Socio-cultural factors: In UK, the name Marks and Spencer is very common and now it
has a household name among the elders, youth and everyone in between. All the same,
the big reputation has has an disastrous effect that is customers are starting to link the
brand with the past (Cavaleri and Shabana, 2018). As new and trendy retail chains
launches year by year. Hence, the reputation of brand has become less trendy in the
market and for customers, especially youths. On the other side, within the past decades,
community has seen a massive rise in the consumption of ready to eat meals. Due to the
advancement in food technologies, ready meals are more appetizing than ever. In case of
M&S, the company is one of the leading brand which serves ready meals to its
consumers.
 Technological factors: One of the major trends in nowadays is, particularly in food
industry is self-checkout points. This trend supports the company in way to save money
that might be invest on cashiers, while at the same time delivering a checkout experience
to its customers that is generally faster. M&S has already implemented this technology in
their checkout points across its outlets. Online shopping has is another big trend in the
retail sector. The chosen company has already established a strong-online presence,
providing almost all of their products from clothing to food products to home products.
Unlikely, it looks that the brand do not offer food stuff in UK.
 Legal factors: It is observed that M&S has been involved in various legal disputes.
These legal disputes have made it typical for the organisation to keep its reputration at a
stiff stature through its long existence. The recent lawsuit was against the Frascati
landlord. The alter in the trade laws of Britain post separation from EU will be another

legal factor that impact the company. This is something that business tactic will unable to
elevate.
 Environmental factors: Marks and Spencer publicize themselves a premium company
and due to that reason that are highly concerned by the effects on environment. They
encouraged the sustainability in the business on several occasions and pledge to be
careful about the process of manufacturing (Chen, 2020). With the existing climate
crises, this move by the brand has been highly respected and encouraged other brands as
well to do so. M&S also merchandise fair trade goods. These allows smaller retail
companies to get minimal cost of manufacturing and enable ecological items production
ways.
P2. Analyse the internal environment of the company.
SWOT Analysis:
SWOT analysis is a strong tool to analyse the company's strengths, weaknesses,
opportunities and threats. The internal factors are strengths and weaknesses, whereas external
factors are opportunities and threats of the company. This enables the brand to bench mark its
organisation functioning in comparison with its rivalries. In case of Marks and Spencer, the swot
analysis is as follows:
Strengths:
 Well-experienced: The respective brand is existing for the past 136 years. It is one of top
merchandisers in the UK. M&S started its journey with Penny Bazaar at Kirkgate
Market. Moreover, the brand has made a fundamental partnerships throughout the globe.
A superfluity of experience is a big achievement of the organisation.
 Variety of products: M&S has variety of items to serve its customers. For example, the
brand has been providing a variety and veggies for many decades out of 136 years. It has
strong and healthy bonds with local growers to take fresh products and distribute among
the customers.
 Famous Designer's Brands: M&S also provided a space to a big number of famous
designers of several brands at its outlets. For example, Autograph, Limited Collection,
North Coast, Big and Tall, Indigo Collection, Collezione, Portfolio and many more. By
collaborating other brands with M&S, created a much stronger impact than ever.

 Recognized Brand: The brand has made a fundamental image of giving quality items to
its consumers in the market (Collinson and et.al., 2020). This is why, when consumers go
out for the street purchasing, they like to go to M&S. It is researched that M&S is the
second to supermarket in the country.
Weaknesses:
 Perception of public: There is misperception among public is that M&S do not provide
clothes to the youths and teenagers. Several consumers thinks that the brand distributes
only older age group. Nevertheless, this perception is not right at all, but due to this, the
brand costs a lot. Hence, if the majority of people for the M&S is mostly old age group, it
does not mean that it provides only that group of customers.
 Declining sales: It is found in a report by Wood 2019, the sale of the some stores of
M&S was falling by the end of that year. This cause due to the poor supply chain system
and the non-availability of the items (Wang and et.al., 2020). In 2017, it happened the
same during the festive season of Christmas, the brand could not meet the required
amount of clothing and food items. It made a huge impact on the brand reputation and
image.
Opportunities:
 Global expansion: As the M&S is a multinational company and it has world-wide
operations in a range of countries such as Indonesia, Russia, India, Poland and Brazil.
M&S requires to expand its branches in other countries as well.
 Market segmentation: Market segmentation relates to a categorizing the customers into
various groups dependent on similar groups (Han, Yu and Kim, 2019). The policies of
the M&S, follows the aforesaid principle of launching mega stores in every place.
Segmenting customers policies would give the brand in different methods. For instances,
the management costs would be lower, maintenance costs would be lower, as small stores
relates that the low cost of rent, and simultaneously risen up the profit margins.
 Online store: M&S already has a e-commerce existence, but if it is compare with other
online retail stores such as e-bay, Flipkart or Amazon. Then, the chosen brand is far
behind in the market. Even though, it is experienced, old and has a powerful brand name.
Hence, online retailing is the future of shopping because customers have no time to vistit

offline stores and they tend to avoid crowded places. So, M&S should keep the eyes on
the growth of online stores.
Threats:
 High Competition: The retail sector in the whole world is very competitive. Some of the
major competitors of M&S are Tesco, John Lewis, Amazon, ASDA, Sports Direct,
Debenhams, Sainsbury, Next, Gap, Morrisons, Tommy Hilfiger, UCB as well as Zara.
VRIO Analysis:
VRIO is a fundamental tool used by the organisation to know and analyse its resources
and competitive benefits (Hassan, Roberts and Atkins, 2020). It is that tool that the company
exploits to evaluate the micro business environment, involving human resources, financial
resources and material resources. In case of Marks and Spencer, VRIO analysis assists the brand
to realise its competitive benefits and weaknesses.
 Valuable: The resources exploited by the M&S are valuable for the company or not.
Such resources are human resources, finance resources, marketing specialists and
management of operations. This are valuable aspects in order to gain competitive
benefits.
 Rare: The valuable resources made exploit of by the brand are even expensive and rare.
If these resources are found easier than it would be easier for the competition and the
brand new competitors in the marketplace to facile displace the rivalries.
 Imitation: The process of replica is costly to imitate for the competitors of M&S.
Hence , it can be competed in two ways that are product duplication which is made by the
brand or launching alternatives of the products with altering costs. This rises the
disruption risk to the present structure of the sector.
 Organisation: This section works with the compatibility of the position of company in
the market making cultivable utilization of valuable resources which are hard to imitate.
The upgradation of management is dependent on the execution team and method
(Jabbour and et.al., 2019). Therefore, this polishes the firm's abilities by time-based
decisions for the growth of tactful capitals.
Resources Valuable Rare Imitate Organisation Competitive
benefits
Market Yes Yes Challenging Yes Sustainable

position competitive
benefits
Network
Flexibility of
supply chain
Yes Yes Close-sharing
some similar
suppliers chain
Completely
consumed
Unused
competitive
benefits
Leadership
team
Yes Yes No Yes Sustainable
competitive
benefits
Awareness of
Brand
Yes Yes No Yes Sustainable
competitive
benefits
Financial
resources
Yes No Compatible
with all
competitors
Financial
status is
sustainable
Temporary
competitive
benefits
P3. Application of Porter's five forces model to know the competitive forces.
Porter's Five Forces Analysis is used by the company in order to make its tactful
decisions. It helps company to analyse the industry and find levers of profitability in a particular
sector. In case of M&S, the manager of company can exploit this model to know the competitive
forces that affects profitability and create a strategy for improving competitive benefits and long-
term revenue in retail market. The following is the analysis of five forces:
 Threat of new entrants: Retailing industry has a high entry barrier due to the
requirement of high capital investment to enter the market and to attain economies of
scale and efficiencies that retailers such as Marks and Spencer would be hard to
accomplish for a new player. The case of peers is unique, yet the brand has popularity
and highly concentrated on the quality makes competition difficult for breaking the
loyalty among customers (Kan, Chung and Chung, 2019). Moreover, meet the efficiency
of channel would by uneasy for the new entrants. Therefore, the threat of new entrants
would be low to moderate.

 Threat of substitutes: The brand needs constant innovation to keep its position strong
and impactful to match the needs of customers. In retailing sector, the duplicacy to copy
designs and get same design products is quite easy. Customers can get such products with
reduced costs. The food business of M&S is already under attack by the big stores such
as ASDA, Tesco or Sainsbury. These brands having various alternative options where
customers can fulfil their demands. M&S has private label items which gives some
uniqueness. Therefore, the threat of substitution is high to moderate for the brand. \
 Bargaining power of buyers: The bargaining power of buyers plays a very vital in the
retail industry. Buyers have low switching costs and has several substitutes available. The
chosen company needs to develop its customer loyalty and deliver its buyers distinguish
value and conveniences that are challenging to match (Malerba and Ferreira, 2020). The
competitors are highly focused on building customer relationships in order to increase
more customers towards their brand. It is essential for the brand to be vigilant and secure
its ground. Hence, the bargaining power of customers is high in the retail market/
 Bargaining power of suppliers: In the late 20th century, M&S were majorly British but
competitive forces strained the selected brand to outsource and diminish the costs
enervating the supplier's powers. Concentration on private label also facilitates M&S
strength over external distributors (Mohant and Vyas, 2018). Moreover, switching costs
for the M&S distributors, particularly sine the company on outsourced distributors are
low.
 Competitors: Competition is very high for the retail industry from other supermarket
chains for its clothing, home wear, food products and fashion products. The competition
is also increasing in online platforms where customers are using click and collect to have
a counterfeit in store shopping experience at low costs than offline shopping. M&S has
been able to develop its e-commerce sales with percentage of online in total retail sales
increasing very fast. Moreover, the company has announced plans to launch new “simply
food” stores which have upscale positioning. Therefore, the company is facing high
competition in the retail industry.
P4. Applying theories, models and concepts.
Porter's generic strategies:

This strategies can be used to ascertain the direction of the business. Michel Porter's
exploits four main strategies that a company can select from. He states that a business must
select a clear course of action to be able to face the competition. In case of Marks and Spencer,
the four strategies are mentioned underneath:
 Cost leadership strategy: With the help of cost leadership strategy, a company can
target a big market while giving the lowest possible prices. It states two choices within
this strategies; the brand can go for the lowest possible price or make sure to have bigger
market share with average prices (Orazalin, 2020). In both alternatives, the main focus is
to keep the lowest possible prices. In case of M&S, the company using this tactic have
substantial capital investment at their efficient logistics, disposal and low costs when it
comes to worker and materials.
 Differentiation: In this tactic, the company is targeting a larger market but with
differentiated good or service. In this manner, M&S have to make its products and
services as exclusive as possible, making it more attractive than its rivalries. M&S
managers must do a proper code of research and development, innovations and the
ability to provide good quality. Also, effective marketing is fundamental so that target
markets knows the benefits of differentiated product.
 Cost focus: In this strategy, the company is targeting a niche market, where market is
focused and have little competition, also offering the lowest possible prices. M&S
managers can select the clear niche market and with the help of understanding the
market dynamics and the customer's demands, the brand can make sure the costs remain
low.
 Differentiation focus: In this tactic, the brand is opting a niche market, which have little
competition but focused market while have the uniqueness in the offerings. It contains
strong brand loyalty among buyers (Paulet and Mavoori, 2019). Also, it is essential to
make sure that the good remains unique so the M&S stay ahead of competition in the
market.
It is analysed for the company that differentiation strategy can be very useful to devise its
directions. M&S specialists can involve innovation and alternation to enhance its customer base
which demand some sort of uniqueness.
Bowman's Strategy Clock:

Bowman's strategic clock involves eight strategic options. It shows a rang of choices
through which an organisation, brand and business can position its item based on two dimensions
that are price and perceived value. In respect of M&S, the following are eight tactic options:
 Low price and low added value: In this tactic, the item is not unique and the customer
perceives low value. Hence, it is not the most competitive position.
 Low prices: In this tactic, the company produces it items in a bulk quantity and items are
valued by the customers (Saiz-Alvarez, 2019). The items are being sold at minimal prices
leading to the low profit margins on the single products. Still, company can produce high
amount of profit due to the high production of products.
 Hybrid: In this, the organisation focuses on the aspect of product differentiation which
makes their goods highly valued by the customers and the key focus is on the low prices .
 Differentiation: The company is creating something new and unique for the consumer.
The main goal is to offer maximum level of perceived value. Simultaneously, it leads to
higher prices.
 Focused differentiation: It is primarily applied by the high end brands that focus on the
exclusivity and luxurious products which are high on quality and merchandise at higher
prices.
 Risky High Margins: It is the most riskiest strategies in which company charges high
prices without offering anything new or unique to its customers.
 Monopoly prices: In this, the company enjoys monopoly position in the market. The
customers is having little alternatives, so, the monopolists can set the prices at its
discreetness.
 Loss of market share: It contain low perceived value by the customers. The prices are
disproportionately high (Sandoval, 2020). It contains inferior products and many be
effective in short-term market trends.
With the help of Hybrid strategy, the company can achieve high perceived value by the
customers while offering its goods at low prices.
CONCLUSION
From the above report, it has been concluded that business strategies deals with the
actions plans or direction used by the company to get its end results. It involves various
frameworks, models and concepts which is important to consider by the firm in order to get

tactful results and to improve its competitive edge in the market. The report analysed both macro
and micro business environment that influences the business operations and functions. The
macro environment consist with various factors from political to ecological that affects the
business and has not control over it. SWOT and VRIO models are used to determine the internal
factors of the company which influences the business and its performance. M&S is one of the
leading brands that has more strong points for continuing its business and has ability to
overcome its threats and weaknesses. Porter's five forces is used in the report to know the
competitive forces that affects the business. Porter's generic strategies and Bowman's clock
strategies are used by the company to devise its tactful directions.
REFERNCES:
Books and Journals:
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