Analyzing the Influence of Macro Environment on Business Strategies

This report discusses the influence of macro environment on business strategies, using the example of Marks and Spencer. It covers the analysis of external and internal environment, application of frameworks like PESTLE analysis and Ansoff's matrix, and evaluation of strategic capabilities using McKinsey's 7S model.

BUSINESS
STRATGEY

Table of Contents
Introduction......................................................................................................................................3
TASK 1............................................................................................................................................3
P1 Apply different frameworks to analyse the influence of macro environment on a company
and their business strategies.........................................................................................................3
TASK 2............................................................................................................................................5
P2 Evaluate the capabilities and internal environment of a company by using appropriate
frameworks..................................................................................................................................5
TASK 3............................................................................................................................................5
P3 Implement porter's five forces to evaluate competitive forces of a market sector for a firm.5
TASK 4............................................................................................................................................5
P4 Apply different models, theories and concepts to interpret strategic planning for a company
.....................................................................................................................................................5
CONCLUSION................................................................................................................................5
References........................................................................................................................................7

Introduction
Business strategy is a process in which organisations aim to make various strategies so that they
are able to implement them to achieve their overall set business objectives and goals in the
specified time period. It can also be defined as a master plan which can be implemented by a
individual to achieve a competitive advantage in market. This report is based on Marks and
Spencer, this is a UK based retailer & manufacturer and they are dealing in food items, clothes
and various home related products (Anwar and Hasnu, 2016). This report includes various
different aspects which happen while a organisation is willing to make decisions related to
business strategies. Such as there is analysis of external environment of business, after that
internal analysis is done as analysing internal environment is equally important for all
organisations. There are various models and theories are also applied so that a successful
business plan can be made and further it can be implemented for achievement of laid down
business objectives and mission of organisation.
TASK 1
P1 Apply different frameworks to analyse the influence of macro environment on a company and
their business strategies
Vision: vision of Marks and Spencer is to create quality products and provide increased value to
their customers. This will be helpful for this company in having a strong customer base which
will have a outcome in terms of increased profits for this company.
Mission: In Marks and Spencer main vision of company is that they want to become a b rand
having a exceptional quality which is not provided in the prices at which they are offering their
products.
Objective: In Marks and Spencer objective of company is that they are able to become leader in
clothing & food sector this will help this company in becoming a global brand in these two
products. Which will also helpful for them in having a competitive advantage in market in
comparison with other brands dealing in such similar products (Burlton, 2015).
Strategy can be defined as a action which will be taken by manger in firms so that overall
goals can be achieved in organisation. In general sense it can also b e said that to achieve high
results and growth this strategy plays a very crucial role. When effective strategies are
formulated then it helps in having a high advantage over other competitors in terms of total

revenue and sales of company. Achievement of high profits with help if various business
strategies will be very helpful for marks and Spencer in achievement of goals set by top
management in this company. This is a key which can lead to achievement of success at
international and national level (Chang, 2016).
Various strategies in planning techniques:
 Business analysis: When analysis of business will be done then all the functions will be
taking place in a more appropriate manner. Marks and Spencer will be able to
acknowledge overall weakness and strength with efficient means which will help them in
achieving success by efficient planning of all strategic decisions in Marks and Spencer.
 Benchmarking of activities: It can be defined as a comparison which can be done of
various metrics with other competitors or also can be with the entire industry in which
company is functioning. In Marks and Spencer they will be able to understand what is
market position which company is there in present situation when they will be able to
compare their performance with other market leaders. This will help them on formulation
of various appropriate strategies of business strategies for achievement of higher profits.
PESTLE analysis
Pestle analysis is framework which is used as a strategic tool by various business
organisations so that they are able to acknowledge and understand various external forces
which are prevailing in market. In case of marks and Spencer this analysis is done below:
Political factors: This is one factor which is concerned with various different types of tariff
rates, regulations of tax and stability in relation with central government. UK is a country which
is having a politically stable government and they are having tax rates for various business
organisations who are operating there (Chen and et. al., 2018).
 Economic factors: This is factor which involves various factors such as GDP, interest
rate, inflation rates, purchasing power posses by citizens if this country and disposable
income which people is having. All such factors actually define whether or not people are
able to purchase various products which are being offered by Marks and Spencer.
 Social factors: There are various social aspects which are related to opinion, attitude, and
belief of people who are living at one particular place. UK is a country which is having a
broad mind society and here people are using advanced products. If Marks and Spencer

will be vale to offer high quality products in accordance with requirements of their
customers then surely this brand will be able to achieve high success and high sales.
Technological factors: UK is a advanced country in terms of technology where citizen of this
country are involved in using digital technology and also internet up to a very high extent for
their daily business operations. In Marks and Spencer as a company they have to make efforts
that they are able to update themselves with various new technological advancements in
according with changing requirements of market (Eaton. and Kilby, 2015).
 Legal factors: This is also macro factor UK is a advanced nation and they are having lot
of norms legal rules and polices which have to be implemented by various companies
functioning in this country.
 Environmental factors: These are some of factors which are having link with protecting
environment from various hazardous emissions which can be made by organisations. It is
very important to follow all the business environment laws which will be of great help for
Marks and Spencer in having a positive image in market.
Ansoff's matrix
Ansoff matrix is a strategic tools which is used by companies for planning by
managers in firms so that right strategy can be adopted for achieving success in formation
of business strategies:
Product development: In this strategy, a company is introducing a product in external market
which can help in attracting potential and existing customers. This will help Marks and Spencer,
will lead to increase in revenue (Langabeer and Champagne, 2016).
 Market development: For achievement of growth strategy existing products of company
can be offered to new customers can be achieved in Marks and Spencer. This will benefit
company in increasing of profit margins and sales.
 Market penetration: In this strategy, company tries to achieve market share with help of
existing products. In strategy company will be making efforts to provide services to their
customers which can help them in attaining high share of market.
 Diversification: this as one of most risky strategy as new products which are offering to
their customers in new market. If organisation will fail then it will be a huge loss of
customers. If new customers will be attracted towards Marks and Spencer and they will
be achieving high share in market and profits.

 In accordance with discussion done above, Marks and Spencer it is a recommendation
made that they should adopt market penetration as a best strategy worth reference to
present business situations. This will be of great benefit for this brand as they will be able
to increase their revenue and share and no efforts have to be done in direction of
introducing any new product in market (Lehmann, 2016).
SWOT :
This is a tool which is of great help for companies in case of M & S this SWOT analysis
is a tool which they use in making an analysis of various internal factors and understand
what are strength, weakness of a company. Part from that this tool also helps in
developing an understanding of what are various threats and opportunities which are
available with the company.
Strength Weakness
 There is a brand recognition in
case f Marks and Spencer which
helps in having a differentiation
identity as compared to other
similar brands. This image has
been achieved by this company
because of various different
products and services which they
are offering and they are of very
high quality.
 Marks and Spencer has a wide
variety of products which they
offer to their customers. Also, they
are able to cover needs of all
different segments of market such
as men, kids, women and this has
lead to availability of multiple
varieties for all segments of
 In UK many people have a
mentality that Marks and Spencer
is a store which is offering non
trendy products especially in case
of youth they feel that marks and
Spencer is dealing into outdated
clothing which affects their sales
and brand image.
 Marks and Spencer is not able to
use new advanced technology for
their production work for this they
are having high cost of production
which affects their overall profit
percentage and are not able to
achieve higher profits.

customers being offered by Marks
and Spencer.
Opportunities Threats
 Company have a very good
opportunity as they are having
presence in Asian and African
countries which has made it
widely available for their potential
customers. Also, their customers
can have easy access to their
products as they have opened their
stores across various locations.
 Marks and Spencer has a
opportunity that they can invest in
various marketing activities just
like their competitors which can
make them have a competitive
advantage in products which are
being offered by them, this will
help on attracting more
prospective buyers also their brand
will get a recognition.
 There are many changes in
political environment which is
happening and there are also many
modifications have been going on
recently in global operations of
business which has lead to
increase in threat for Marks and
Spencer.
 There are many rival companies or
brands which are giving
competition to Marks and Spencer
such as Zara, H&M this is leading
to increase in threat for Marks and
Spencer (Martinez-Simarro,
Devece. and Llopis-Albert, 2015).
TASK 2
P2 Evaluate the capabilities and internal environment of a company by using appropriate
frameworks
Strategic capabilities and their key components
Strategic capabilities is a process in which there are various strategies which after put in
action by many company so that they have a advantage against their various competitors. There
are many strategic capabilities which is having six main components such as key goals, tools for

analysis purpose, vision and values. These are components which are benefitting the company
and using strategy in a manner which is beneficial for organisation (Nohria, 2017).
Resource based view strategy
Resource based view refers to a managerial framework used by large number of
companies in order to identify those resources which might be adopted by the company in order
to gain sustainability as well as competitive advantage at the market place. In the context of these
strategies there are mainly two types of resources which are intangible & tangible resource. In
case of tangible resources various elements and physical resources which includes land,
machinery, capital, buildings, lands, equipment’s and many more. On the other hand intangible
resources are not in the form of physical but are associated with the organization with
companies like M&S like trademarks, intellectual property, brand reputation and so on
(Moseley .2017).
McKinsey's 7S model
McKinsey's is a tool used by organizations in order to examine organisational design of a
institution by determining seven essential internal elements. These are the components are
required to be associated in an effective and appropriate manner, this will assist in attaining goals
of a company like Marks & Spencer. All these elements are going to be discussed as follows:
 Strategy: It refers to a plan developed by an organization in order to accomplish
competitive advantage at the market place so that competition will be maintained
effectively. If M&S will not modify or robust their strategy then the organization need to
face ample number of difficulty such as reduction in customer base and sales.
 Structure: It defines the way in which an organization, units as well as divisions are
being organised, managed and share information along with data with each other in an
appropriate manner. If M&S do not have effective structure then there overall
effectiveness will be decreased which assist rival companies in order to gain various
advantages at the marketplace.
 Systems: This process of organization aims to depict daily activities as well as decision
making of a business organisation. Therefore, maintaining effective systems provide
ample number of benefits in order to implement organisational change in an appropriate
manner (Yoffie and Cusumano, 2015).

 Skills: It consist of competences as well as capabilities of staff members within M&S
while doing business operations. Capable and skilled staff members of M&S helps them
in order to deal with complex situations.
 Style: It represents the way where an organization is managed and controlled by
management as well as top level team along with the manner in which they made
interaction with their staff members. In the context of M&S, participative is the style
which is used by management team.
 Staff: This factor is associated with the kind along with the number of staff members
working in M&S. It includes the way in which employees are being hired, trained,
motivated as well as rewarded.
 Shared values: It is the last essentials element of McKinsey's 7s model which involves
the norms as well as standards which provide guidance to the company like M&S &
attitude of staff members in an appropriate manner.
VRIO framework
VRIO analysis refers to an abbreviation which stands for value, rarity, imitability as
organisation. It defines as a strategical tool mainly used by large number of organizations in
order to examine their available internal resources, capabilities, skills and knowledge of
employees. This will assist them in order to attain highly competitive advantage at the
competitive marketplace over their rival organisations (Torrent-Sellens, 2015). In the present
context of M&S, VRIO analysis model are going to be discussed in detail manner which are as
follows:
 Valuable: It is one of the most essential element for the management team of M&S in
order to effectively utilise their all valuable and high quality resources. This will assist
them in making tough competition at the marketplace by using all the resource in an
appropriate manner. It has been analysed that if a business organisation posses valuable
resources positively and effectively, they will be able to gain high amount of profitability
at the marketplace. For instance, in case of valuable resource in context of M&S is supply
chain management, employees as well as distribution channel.
 Rareness: It is most significant element or aspect which benefits an organisation in order
to understand whether the products or services developed by the company is rare or not.
In the context of M&S most rare products offered by the company in order to retain their

loyal customers for a longer period of time and assist in increasing sales as well as
profitability at the competitive marketplace. For this, rare products or elements in case of
M&S is manufacturing as well as production machines. Therefore, M&S highly believes
in developing unique & innovative goods and services to their consumers which makes
the whole firm very rare at the market area (Lehmann, 2016).
 Imitable: M&S needs to provide those goods and services which are not copied and
duplicated by any rival organisations present at the market place. If all the products
which are being offered by M&S copied by any rival firm will be sell by them in low
price which might affect the whole business functions in a negative manner at the market
place. Therefore, in the present context of M&S imitable resources for the organization
includes raw material used by them for producing food item and clothes. This as a result
make them one of the most competitive company at the marketplace as they provide high
quality products and services (Yuliansyah, Rammal and Rose, 2016)..
 Organisation: Last element which is included in this framework is business
organisations for example M&S has to manage and control their current resources in an
appropriate and effective manner. If all the resources as well as materials of an
organization need to be used in an appropriate and systematic manner which will leads to
increase their overall profitability as well as revenue of the company. But on the other
hand, if these resources are not used in an effective manner then company will not be
able to beat the competition available at the marketplace which is quite difficult for the
management team. Some of the resources in this context used by management team of
M&S such as suppliers, employees, investors as well as stakeholders of an organization
(Maté, Trujillo and Mylopoulos, 2012).
TASK 3
P3 Implement porter's five forces to evaluate competitive forces of a market sector for a firm
Porters five force analysis is seen as the effective framework that is used by business
associations in making valuable decision within the industry. The respective framework is
helpful in analysing industry in deeper manner that develops knowledge of the company on their
strength and weakness along with the available opportunity within the sector. Manager of Marks
and Spencer have used this framework for developing their knowledge retail industry’s

competition and its influence over the same company. Porter’s is mainly consist of five forces
which are explained below one by one:
Threat of new entrants (Low to moderate): Influence of this force on Marks and Spencer is
relatively low to moderate as the company is having strong image at marketplace and if any new
company wishes to enter into the same sector then they will be requiring huge capital. This
would not be possible for the new companies as they does not this much range of amount with
which they can establish their business as well as develop their image at marketplace. This
simply shows that influence of new entrant is low in retail industry(Thompson, Strickland and
Gamble, 2015).
Bargaining power of suppliers (Low): Marks and Spencer is the renowned company of
retail industry which is generally having strong connection with huge number of suppliers. The
company generally places their order in bulk which means that its suppliers are getting good
business from this company as they bulky order to provide them higher profits. In case if these
suppliers does not agrees to the provided quotations then company can move forward towards
other suppliers. Thus existing suppliers do not have any alternative option rather agreeing to
Marks and Spencer.
Bargaining power of buyers (High): The influence of buyers in retail industry is high as it has
numerous of companies who offer similar kind of products to customers at similar range of price.
This means that buyers have lots of options if they do not find feasible product they simply could
move to another company (Sia, Soh and Weill, 2016).
Threat of substitutes (High): According to the higher number of competitors within the
retail industry it can be said that threat of substitute is quite higher for Marks and Spencer as its
rivals are surely putting efforts to introduce something new by which have can easily influence
interest of customers toward them in appropriate manner.
Rivalry among existing competitors (High): The main competitors for Marks and Spencer in
retail industry are Zara, H & M, and John Lewis etc. This simply states that competition within
this industry is higher. In order to deal with the competition, it is essential for marker leaders of
this company to go for collaboration with one another so that they can effectively make use of
each other’s resources and strengths so that they can collaboratively enhance market share of
whole retail industry among all instead of fighting with one another in the same sector. As a
result, kit contribute in the growth of overall retail industry in effective manner. Threat from

these competitors is very high in case of M&S. This is because all of these company rate their
products in accordance with competitive pricing due to which a slight rise in product range of
M&S will give opportunities to rival firms in enhancing their customer base (Scholes, 2015.
TASK 4
P4 Apply different models, theories and concepts to interpret strategic planning for a company
Porter's generic strategies
The generic strategies of Porter benefits in properly identifying the way one shall be
attending a competitive advantage in the market and in a general kind of tactic it also different
sheets in the cost leadership and focus of company.
In context with M&S, these strategies are mentioned below:
 Cost leadership: from this strategy price sensitive customers will be easily targeted and
by making a business organisation like such a M&S can offer their products to their
customers in very decreased price. Many of these can be provided to the customers
including discount and coupons which will make them loyal customers and gain trust for
the company.
 Differentiation: in this type of strategy usually your company offers several type of
innovative products to the customer so they can be differentiated from there are other
substitute companies which are actually dealing in the same industry. Within this dekhen
of a mini innovative ideas and products which can increase their sales.
 Focus: search strategies have two types of aspects first the cost focus and a particular
differentiation focus. In differentiating between all these companies they have to offer a
proper modern product so people can buy it without being so much aware of the price
(Langabeer and Champagne, 2016).
Bowman's strategic clock
Bowman strategic clock is actually a very important model which usually helps any
business organisation and exploring better and appropriate amount of strategic positioning in
which their products have so much high advantage level as compared to their other rivalry
companies that they can achieve all their objectives and goals in a proper manner. Some of the
most important elements related to this framework are given below:
 Low price and low value added: this is a very less competitive stage for this
organisation, many products are actually not that much differentiated and consumer

usually perceive a very decreased value of product even if the amount of the product is
very low.
 Low price: In search aspects the can have a good position in a low cost leadership
market having minimum amount of technique and profit for each product or unit will be
low since high sales volume and the overall profit value will be matching the goals and
objective set.
 Hybrid: this strategy is about very low price product differentiation and usually positions
as a very effective technique.
 Differentiation: in this type of strategy they have to provide good innovative idea to the
customers so the sales can be enhanced accordingly.
 Focused differentiation: usually the products are made on a very high level price and
can be with the perceived value search luxurious branch can operate on several different
levels.
 Risky high margins: in this a very high level of risk are resulted which can lead to
business failures so this organisation has to set a minimum amount of high prise without
any perceived amount (Chen, and et. al., 2018).
 Monopoly pricing: the market which only has some kind of product on minimum
amount of products to offer have the Monopoly as it is not connected about the price or a
particular kind of feature the customers usually need this kind of product even if the price
will go to high level.
 Loss of market shares: search strategic positioning is usually a disaster in a market of
competition the company needs to provide a a middle range of products as well which
skin beyond back from the companies profit.
CONCLUSION
From above report it can be concluded that when there will be adoption of appropriate
strategies then it will be beneficial for every business organisation to achieve success and
positive outcomes. There are many tools which can be used n this regards such as PESTLE
analysis, SWOT analysis, Ansoff matrix which will be of great use in acknowledgment of
various factors prevailing in business environment, other tools such as VRIO analysis,
porters five force model can be used for attainment of competitive advantage in market.

Various other theories, models and frameworks, Bowman’s strategy can also be used for
planning stratgies in right direction.

References
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