Unit 32 - Business Strategy: Analysis of Internal and External Environment and Capabilities of Marks and Spencer

Unit 32 – Business
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
Applying the appropriate frameworks and analysing the impact and influence of the macro
environment on a given organisation and its strategies..........................................................1
Critically analyse the macro environment to determine and inform strategic management
decisions.................................................................................................................................4
Analysis of the internal environment and the capabilities of organization using relevant
frameworks.............................................................................................................................4
Evaluation of the internal environment to assess the strengths and weaknesses of the internal
capabilities, structure and skill set of organisation. ...............................................................6
Apply Porter’s five forces model and to evaluate the competitive forces of a given market
sector for an organization. .....................................................................................................6
PART B............................................................................................................................................7
Apply a range of theories, concepts & models, interpret & devise strategic planning for a
given organization..................................................................................................................7
Strategic management plan...................................................................................................10
CONCLUSION..............................................................................................................................11
References:.....................................................................................................................................12

INTRODUCTION
For the purpose of proper functioning of business organisation, it is necessary to develop
appropriate strategies. Business strategies refers to the roughly working plans which are
developed by the Human Resource Management of organisation so that they can achieve the
organisational goals and objectives in an effective and efficient manner. Basically, strategy
works for guiding the organisation for making decisions which are also related to the allocation
of resources and hiring employees. It has been found that vision and direction has been created
by the development of strategy. Clear goals of employees help them in moving ahead towards
the direction or mission of organisation. The report is based on Marks and Spencer which a
British multinational company dealing in clothing, home products and food products (Marks and
Spencer, 2021). In 1884, it was founded by Michael Marks and Thomas Spencer and its
headquarter is located in London, England, United Kingdom. This report covers the analysis of
external and internal environment and capabilities. In addition to this, it also includes outcome of
Porter's five forces and concepts which can assist company in strategic decisions.
PART A
Applying the appropriate frameworks and analysing the impact and influence of the macro
environment on a given organisation and its strategies.
There are several internal and external factors which effect the operations of a business
organisation. Macro environment directly impact upon the functions of the business. Hence, it is
necessary to analyse these factors before making any decision. Frameworks which are being used
by Marks and Spencer for the purpose of analysing the macro and micro environmental factors
are given below:
PESTLE Analysis
It is a strategic tool which is used by organisations to analyse the external forces which
are influencing the business operations. PESTLE analysis of Marks and Spencer is given below:
 Political Factors: These factors are related to the political environment of the state or
country where the organisation is operating. Marks and Spencer is a multinational brand
which is performing business operations globally. Hence, it is necessary for them to
expand the business in the countries where the management get political stability. In
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addition to this, Brexit bring many changes in the rules and regulation of UK country.
For instance, Brexit result in the increase in administration costs of organisation.
 Economic Factors: It include the several factors which include inflation rate,
employability rate and many more. Due to COVID-19, a lot of people loss their jobs
which result in the decrease in purchasing power of customers (Yamaki 2017). Along
with this, it is found that various small retailers are providing same products at low
prices which affect the brand image of M&S.
 Social Factors: These factors are related to the demand of customers and spending
habits as well. It has been found that the demand of ready meals are increasing day by
day. They are enhancing profit by providing ready meals to their customers. By
providing products as per the requirement of customers, Marks and Spencer is gaining
profit.
 Technological Factors: These factors are related to the advancement of technology in
the organisation. Marks and Spencer has introduced self checkout machines at their
store. It is the best example of technology advancement. Along with this, they are
selling their products through various online sites which also involve the technology
advancement.
 Legal Factors: It is related to the laws and rules made by the government and the
organisation have to follow the same while performing business operations. Change in
the laws after Brixit affect the brand image of Marks and Spencer. Over the years back,
M&S was involved in some legal disputes (PESTLE Analysis, 2021). Recently the
dispute of Marks and Spencer with Frascati landlord affect their brand image.
 Environmental Factors: It include those factors which affect the ecology. Marks and
Spencer is constantly promoting the sustainable retail industry. For instance, they are
focusing on the environmental friendly process of production.
SWOT Analysis
It is also a marketing tool which is used by the organisations for the purpose of analysing
the internal and external capabilities of the business by analysing the strengths and opportunities
of organisation along with the threat and weaknesses. The SWOT analysis of Marks and Spencer
is given as under:
Strength Weakness
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