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Business Strategy Assignment | Marks and Spencer

   

Added on  2021-02-19

21 Pages6787 Words147 Views
Business Strategy

Table of ContentsINTRODUCTION...........................................................................................................................1Activity 1.........................................................................................................................................11.1 Environmental Analysis- PESTLE.......................................................................................11.2 Organisational Audit – SWOT .............................................................................................4Activity 2.........................................................................................................................................62.1 Analysis of strategic capabilities – VRIO.............................................................................62.2 McKinsey's 7S model............................................................................................................7Activity 3.........................................................................................................................................83.1 Porter's Five Force Model.....................................................................................................83.2 Ansoff Matrix .....................................................................................................................10Activity 4 ......................................................................................................................................114.1 Porter's generic strategies and Bowman's strategy clock....................................................114.2 Recommend growth strategies............................................................................................124.3 Produce a Strategic Management Plan................................................................................134.4 Competitor analysis.............................................................................................................14CONCLUSION .............................................................................................................................16REFERENCES..............................................................................................................................17

INTRODUCTIONBusiness strategy is a roadmap and long term actionable direction which states how anorganisation accomplish its pre determine goal or objective within prescribed time limit. Withthe increase in competition between companies or within industry, it has been analysed thatbusiness strategy plays a vital role. This is because it enable an organisation to identify existingor upcoming trend or demand and based on that it assist firm to maker corrective course of actionwhich lead them to attain sustainable profitability in a better way (Ajagbe and others, 2016).Moreover, business strategy mainly focusses on capitalising the strength of the business andusing the same as a competitive advantage in order to position the brand within businessenvironment in an efficacious mode. Apart from this, it is a part of business plan which definesthe goal and strategies as well as direct the company for achieving the same in an improved waywithin stipulated time frame. Additionally, business strategy is considered as major area inretaining the existing customer as well as empower the establishment to attract new range ofpopulation towards the brand by adopting innovative technologies or novel ideas for maximisingthe profit in an amended manner. In regard of this report, Mark and Spencer has been considered which is one of theleading and reputed company among UK retail industry and it is commenced in the year of 1884.It offers a wide range of products like clothing, home products, food items across the globe in abetter and high quality that help them to survive in competing marketplace for a longer period oftime in an amended mode. In this study, it involves the application of PESTLE and SWOTanalysis for examining the external and internal business environment respectively. Furthermore,implication of Porter's model help organisation to analyse its competitive force among industry.Finally, development of strategic plan lead a firm to obtain its profit maximisation with anoptimal utilisation of resources in a better mode. Activity 11.1 Environmental Analysis- PESTLEPESTLE analysis is most widely used strategic planning tool or framework whose mainintent is to seek and analyse the external macro environment that impact organisation decisionmaking process in order to gain competitive advantage as well as sustainable profitability ratio.Along with this, conducting PESTLE analysis within business functional areas enable a specific1

establishment to visualise its various factors such as political, economical, social, technological,legal, environmental for framing better decision that lead firm to acquire best positioning amongpresent industry in an amended way (Chang and Tsai, 2016). Due to an intense level of rivalriesbetween firms, it challenge Mark and Spencer to implement best action for attaining amendedway of profit margin in a desired time period. Therefore, company makes an attempt to acquirethe PESTLE analysis in its business function that assist them to examine its capability,opportunity and threat and also help them to take corrective course of action by improving thebrand image in a better mode. The implication of PESTLE tool in M&S are discussed below: Political: Under this factor, it signifies how and to what degree government interfere inthe economy. Some of its elements are political stability, foreign trade policy, governmentpolicy, trade restriction and so on. However, in UK, an introduction of Brexit which meanswithdrawal of UK from European Union effect heavily over retailing sector in terms ofproductivity and profitability. In context of Mark and Spencer, Brexit impact negatively over itsbrand image as it generate several modification or alteration in each and every employmentregulation as well as impact its sales performance because EU was the key source for M&S salesgrowth. Therefore, Mark and Spencer takes an initiative to determine its current growth scenarioin UK market that help them to take corrective course of action by acquiring the benefit fromEC's free trade agreement by receiving goods or services form other countries in cheaper ratescompare to M&S higher cost structure (Demuijnck, 2015). Due to this action, it assist them todecrease its sourcing cost which attract large number of population towards its brand image andreflects in enhancement of company's volume of sales. Additionally, the political stability of UKhelp M&S to cope up with emerging modification in government policies in a better manner thatstrengthen its productivity and sustainability among UK marketplace. Economical: In this phase, it states that how an organisation does its business and howprofitable they are in particular market for accomplishing its business goal in an amended way.For e.g. economic growth, interest rate, exchange rates, disposable income of consumers andmany more. Hence, in the few years back, there was an huge recession took place which totallyhampered the business cycle of UK retail industry that challenged negatively on M&Sproductivity ratio. However, in order to overcome this negative impact, Mark and Spenceracquires the modified tax and interest rate which lead them to deliver the product in lower costthat help firm to capture the attention of wide range of population towards their brand during2

recession period. Along with this, fulfilling the policies or legislation of government, aidorganisation to accomplish its strategy i.e. being an international, multi-channel retailer andreduce the dependency on UK economic cycle. Social: It is the element which is concerned with shared belief and attitudes of thetargeted population. Some of its components are population growth, age distribution,demographic factor, customer taste and preference and etc. that directly influence over itsdecision making process. In case of UK, there was a huge demand among population regardingtrendy and fashionable clothes which threaten Mark and Spencer's profitability within existingmarketplace. Therefore, company makes an effort to examine the current trend or demand amongUK individuals and according to that they produce trendy and fashionable clothes in a affordableprice which strengthen its sales performance in an amended manner (Fletcher, De Massis andNordqvist, 2016). Along with this, another demand among customer is about company's CSRactivities that influence negatively Mark and Spencer decision making potentiality. However,M&S carries out various CSR activities like donates returned clothes to charity New Life whofunds medical research and awareness campaigns for disabled and terminally ill children andmany more. With the help of such initiation, Mark and Spencer is able to acquire best brandposition within competing retail industry in an improved manner. Technological: In this factor it is relate with innovative or latest technology, novel ideas,advanced techniques and many more which contains huge impact over organisation profitmargin. In regard of Mark and Spencer, it has a strong presence in social media platform andonline which lead them to serve their products or service across the globe in a modern style.However, there was a recent trend among UK population i.e. mobile commerce and onlineretailing to in-store purchases which hinder M&S to capitalise its avenue within competingindustry. Therefore, to tackle over obstacle Mark and Spencer make an effort to build up itsonline presence more effective by developing application for online shopping i.e. Mark andSpencer mobile commerce website in which customer can find around 24,000 products of allsegments like clothing, food or home products and etc. (MARKS & SPENCER MOBILECOMMERCE,2019). Due to such formulation, M&S is able to strengthen its digital medium inorder to acquire full advantage within competing marketplace. Legal: In this component, it is concern with those aspects which is related to governmentlegislation, rules, regulation, policies and so on and each of them has strong influence over3

organisation's capability in obtaining sustainable profitability. However, due to Brexit, M&Sundergoes with several threats that directly effected its productivity and reputation amongcompetitors in UK retail industry. One of the major difficulty which Mark and Spencer faced dueto modification in government policies is that it find obstacle in processing its omni channelexperience to customer i.e. a service of home delivery and in store pick up. Therefore, companyimplements best strategic decision in terms of strengthening the overall performance of its salesactivities that lead them to do optimal utilisation of resources for obtaining profit maximisationin an effective and efficient manner (Geissdoerfer, Bocken and Hultink, 2016). However, thebiggest advantage which Mark and Spencer acquires is that it is very sensitive in following alllegal requirements that help them to reduce the invention of government within its businessfunction and it improves its brand image in UK retail market. Environmental: Under this, it is related to saving or preventing environment from all sortof pollution by developing ozone-friendly product which effect establishment goodwill andproficiency ratio. IN regard of M&S, it undergoes with a challenge from UK population as therewas a huge demand about environmentally product or way to control pollution from surroundingwhich impact negatively over its potentiality in acquiring competitive advantage. Therefore,Mark and Spencer takes an attempt to design environmental friendly application i.e. Greenpeacewhose key intent is to take out the toxic chemical form the production process. With theimplication of such initiation, it enhance its market share or size as well as help them to gaincompetitive advantage in an innovative and creative style without any hindrances withinprescribed time frame. Henceforth, the above explained PESTLE analysis help Mark and Spencer to examine itsexisting or upcoming trend or demand and also empower them to take corrective course of actionin order to obtain sustainable profitability as well as aid company to acquire best position withinUK retail industry. 1.2 Organisational Audit – SWOT In order to survive among competing marketplace, an effective and productive businessenvironment assist them to accomplish its desired goal or objective in an effective way.However, SWOT analysis is one of the integral component which aid an establishment toimprove its overall performance in an amended manner (Gonzalez, Rodriguez and Sossa, 2017).SWOT analysis is an instrumental framework which assist a concern to identify its strength or4

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