Business Strategy: Evaluating Macro Environment and Internal Capabilities of Marks & Spencer

This report evaluates the effectiveness of business strategies in the macro environment and analyzes the internal environment and capabilities of Marks & Spencer. It also applies models and theories to devise a strategic plan for the company.

Business Strategy

INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Evaluate the effectiveness business strategies theories of macro environment in terms of
organisation perspective.........................................................................................................1
M1 Critically evaluated the macro environment analysis in the context of organisation......3
TASK 2............................................................................................................................................4
P2 Analysing the internal environment and capabilities of Marks & Spencer.......................4
M2 Critical evaluation of internal strengths and weaknesses of Marks & Spencer...............8
TASK 3............................................................................................................................................8
P3 Applying Porter’s five forces model and evaluating the competitive forces of Marks &
Spencer...................................................................................................................................8
M3 Devising strategies to improve the competitive edge and market environment of Marks &
Spencer...................................................................................................................................9
TASK 4..........................................................................................................................................10
P4/M4 Applying models and theories for devising a strategic plan for Marks & Spencer..10
D4 Critique and interpret the information for applying on the environment and competitive
analysis with the help of valid strategic direction................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business strategy refers to the action plan in which an organisation run its operation in order to
achieve all organisational objectives and profit units. Business strategy also refers to set of
competitive actions, moves and tactics that a business uses in order to attract customers, compete
successfully in the marketplace, strengthen its performances and attain organisational goals.
Business strategy basically outlines the manner how a business should be carried out for reaching
to desired end or outcomes. This project Marks & Spencer is major British multinational retailer
mainly dealing in fashion and home accessories. Marks and Spencer was founded in 1884 by
Michael marks and Thomas Spencer. The company serves to worldwide customers through their
multi-storey stores but headquartered in London, UK. This report is developed for Marks and
Spencer considering the impact of BREXIT. The report covers analysis of macro environment
off Marks and Spencer with the help of PESTLE analysis (Park, Y. and Mithas, S., 2020). Along
with internal and external capabilities of company by using SWOT and VRIO framework. More
over porter's five forces model is also applied in order to seek knowledge about the competitive
edge of company for developing a thorough business plan. At the end with the help of evaluation
and assessment of Marks and Spencer a business plan is formulated by applying specific models
and tactics.
TASK 1
P1 Evaluate the effectiveness business strategies theories of macro environment in
terms of organisation perspective.
PESTLE ANALYSIS.
The Pestle analysis is the framework of determination about the external factor of micro
environment information provides to the organisation that how it can influences from political,
Environmental, Social, Technological, economical and legal factors which impact of marks and
spencer’s company. So, there is following Pestle analysation in context of Marks and Spencer’s
which can influence the growth, consumers, goodwill as well as brand value etc.
 Political: This factor is determine the regulation and rules which are constructed by
government and compliance framework that can influence in the business strategies, it is
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not always be the government policies are against towards the organisation growth
sometimes it provides the benefits and also instructed to pursue the Tarde as per the
government norms which includes political rules, policies, stability and unsustainability.
Similarly for Mark and spencer’s as it is retailer top most priorities company by
consumers where the political factor is determine the dynamic benefits towards the
economy, it will secure from the military invasion and other which covers in army
offenses, the Brexit entrant having impactful consequences where it stats about the
workforce where the European workers are not allowed in United kingdom business
firms, where it will destructed the brand value as well as the productivity. So, the political
factor can solve these impactful circumstances (Balon, V. and et. al., 2019).
 Economical: The economical segments are influences the economy performances which
directly and indirectly impact on company’s overview performance. The factors which
influences can be inflation, and economic growth, recession according the lack of of
investments etc which can affect the organisation. The Marks and spencer’s group
company having economic factor as inflation, growth rate and other segments, exchange
rates can be benefitable to the company perspective, these factor are favourable for marks
and spencer’s where the plenty of financial investors have invested the capital to promote
the retailer business, it improvise the infrastructure quality in retail industry.
 Social: This social factor comprises the characteristics of demographic like mission,
vison and norms which indicates the core values as well the trading of products classified
into age, gender, religion, attitudes and behaviour. All these factors are determining the
marketers when they dealing the product into targeted customers these factors helps to
provide the guidance them. Mark and Spencer’s are having a good potential of dealing
their products into demographic populations which includes the Class structure, hierarchy
and power of the society. Cultural and norms can be impulsive in terms of cosumers core
values with attitudes and behaviour are more considerable into health, self-consciousness.
The retail industry always targeted to all consumers preferences with objective to fulfil
the requirement of consumers (Jaiswal, S., 2019).
 Technology: This factor is considered about the utilisation of technological resources by
the environment as well as organisation which gives a lead towards the development
innovations, incentives and advanced automation which can influence the market trend
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and consumers preferences also. Marks and spencer’s have to face the challenges through
technological factors where the benefits are get over to the competitors and influence the
products offering. Retailer industries have not get advantages from this factor it just
incurred the cost impact on the products by which retention consumer diminishes and the
rate of technology diffusion decreases.
 Environmental: The factors which concentrates on the increasing of raw material
shortage, the products should dealing with eco friendly , some environment standard
provides the profitability in some market specially in retailer industry. This factors
clearly stats about the entering of new product in existing market it should be have non
impactful towards environment standard. There are some economic factor which are
considerable for Marks and spencer’s wealth and growth in the competitors perspective
such as climatic condition which fluctuates the product diversification, laws and
regulating environment pollution can harmful influence to the company where the waste
management can effective play a role of consumer services sector. Marks and 8spencer’s
focuses on the green product which are ecological point of view products.
 Legal: The factors of Legal perspectives are enhanced the differentiate of laws and
regulation which is co-related with political factor emphasis the employment laws, safety
law etc. For Marks and spencer’s having the legal factor which majorly involves the copy
right, patents and other intellectual law property which works under the compliance
framework by adapting the business strategies where the legal are represent the authentic
work and legal perspective which confronting the safety products deliver by Marks and
spencer’s also it focuses to dealing the products within the environment friendly
(Bentley-Goode, K. A, Omer, T. C. and Twedt, B. J., 2019).
M1 Critically evaluated the macro environment analysis in the context of
organisation.
The above evaluation of macro environment analysis is determines the factors which are
significance the positive and negative impact as in Pestle there is factors which favourable and
unfavourable norms such as political factors are influencing unsupportive segmentation in terms
of Brexit trending which influencing the Marks ‘and spencer’s but where economic and social
factors are supporting as to dealing the products in the market and their influences are providing
the positive impact where the Brexit presence is creating the outlaws, as Environmental and
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Legal are not generating the beneficial towards the company norms and the market scopes carets
very less where the Mark’s and Spencer’s have to face Challenges in terms of policies, laws
inflations where it creates the conflicts to not trade in the market. So, it is the overall macro
environment factor analysation of Pestle which compounded the benefits and non benefits
factors.
TASK 2
P2 Analysing the internal environment and capabilities of Marks & Spencer
Every business organisation has their capabilities and potential by which the work in in
marketplace and their operations. Marks and Spencer is a worldwide organisation building in
retail industry serving to numerous customers on regular basis. The headquarters of Marks and
Spencer are in UK and currently its economy is facing the impacts of BREXIT (Vázquez, C. M.,
2019). Marks and Spencer also being affected and it’s potentials are changed. Therefore in order
to general knowledge about the capabilities of company SWOT and VRIO framework are
utilised.
SWOT is framework which has internal and external factors, Strengths and weaknesses are
internal to company on the other hand opportunities and threats are external. SWOT analysis of
Marks and Spencer is as follows SWOT analysis of Marks and Spencer is as follows
Strength Weakness
 One of the biggest
strengths of Marks and
Spencer is it strong
offerings. The
company offers the
products and services
according to the latest
trends taking place in
the industry.
 The company has
established its
operations worldwide
accessible to customers
through the stores, but
still Marks and
Spencer old too much
reliance on UK
markets which is
making it vulnerable
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 Any other hand
another strongest point
and potential Marks
and Spencer is its
effective and strong
corporate social
responsibility activities
(Garcia-Swartz, D. D.
and Campbell-Kelly,
M., 2019). The actions
which Marks and
Spencer undertakes in
order to fulfil their
CSR are one of the
strongest from its
competitors which
brings great good will
towards the brand.
and ineffective.
 Another weakness of
Marks and Spencer is
its financial
performance which is
very poor and
constantly going
downwards. The
companies also facing
frequent product
recalls which is
affecting their
customer base and
their confidence in the
brand.
Opportunities Threats
 Marks and Spencer
sales in clothing
segment is falling but
company has very
strong hole on food
business with a
successfully specialist
competitive strategy
which is enabling it to
increase it sales. The
opportunity which is
available to Marks and
 Currently BREXIT
that is Britain exiting
from European Union
is the biggest threat
different business
organisation are facing
in the UK. Marks and
Spencer is also
affected by it as main
operations of company
are in UK and it is
dependent upon the
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Spencer for enhancing
their food segment is
utilising the current
trends for expanding
its network with the
help of convenience
stores or planning the
fastest food store
opening program.
 Another opportunity
for Marks and Spencer
is to enter the Indian
marketplace and
establish its online
presence in the
business. The company
established its
operations in Indian
markets by its physical
stores but do not have
online presence. This
is a huge opportunity
for Marks and Spencer
to be more accessible
and connected with the
customers.
UK market.
 Another threat to the
company is changing
trends and increasing
competition. The
fashion industry is
evolving and its trends
are regularly changing
which is affecting the
business and strategies
of Marks and Spencer.
Along with it
competition in food
segment in UK
industry is also
regularly going a
upwards imposing
great threat on the
business of Marks and
Spencer after BREXIT
(Kabongo, J. D.,
2020).
VRIO analysis is a analytical tool which is used for the evaluation of companies resources and its
competitive advantages (Ahmad, S. and Ishak, S., 2019). Drive is an acronym from the initials of
Value, Rareness, Imitability and Organize. VRIO analysis of marks and Spencer resources is as
follows:
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Resources Valuable Rare Imitable Organize
Brand
reputation
Valuable - - -
Financial
resource
Financial
resource
Financial
resource
- -
Human
resource
Human
resource
Human
resource
Human
resource
-
Innovative
products
Innovative
products
Innovative
products
Innovative
products
Innovative
products
Resource analysis:
 Brand reputation of Marks and Spencer is valuable as it highlights and holds the
Goodwill of the company. But it is not rare , it can be imitated and not organized. As the
brand image is used by franchise is given the Marks and Spencer to different businesses
operating in my location if is not rare. the brand image of the company can be imitated by
others in the business by offering and copy all the strategies and product ideas of Marks
and Spencer.
 Financial resource are valuable as every organisation needs finances and functions to
run its business in an effective manner. Also, financial resources of Marks and Spencer
are rare because business structure and activities which are undertaken by entities are
separate from one another which implies that the requirements of each entity are
different. Therefore the financial resources which are used by Marks and Spencer cannot
be in a table or organised as they are rare to company (Elias Mota, B. A. and et. al.,
2020).
 Human resource refers to the employees and workforce of Marks and Spencer. Human
resource is the most valuable resource of every business type as they are the one who
executes and implements all the plans in strategy of the entity. Human resource which are
associated with marks and Spencer are rare as the knowledge can be seminar of two
different individuals but their capabilities depend on their skills and talents. Human
resource are imitable as every human being move further in their career for which this
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which organisations this increases the chance imitability of human resource associated
within Marks and Spencer.
 Innovative products which Marks and Spencer design and offers to the people or its
customers valuable asset drinks higher profits to the company and initially they are rare
too. But once the products enters the market other competitors imitate it and develop
similar products organising the resources required for it.
M2 Critical evaluation of internal strengths and weaknesses of Marks & Spencer
Marks and Spencer is an organisation which present worldwide and service innovative goods and
services to numerous customers or its large customer base (Zucchella, A. and Previtali, P., 2019).
The most potential strengths of company is it CSR activities which it conducts in favour of
environment for returning a small percentage of what it is taking from the society and the nature.
Thickness of company is its use reliance on UK market which is currently facing recession due
to BREXIT and inflexibility as its impact. The Company needs to be more active and
independent rather than relying on the UK marketplace.
TASK 3
P3 Applying Porter’s five forces model and evaluating the competitive forces of
Marks & Spencer
Porter's five forces model is a framework or tool which consists of five competitive forces
existing in marketplace creating a competitive environment for company and compulsory for
Marks and Spencer to evaluate in order to be efficient and attain its competitive edge. Porter's
five forces as its name suggests has five elements which are elaborated below in context of
Marks and Spencer (Matzembacher, D. E. and Meira, F. B., 2019).
 Threat of new entrant retail industry is increasingly rising as new retailers ring innovative
goods and new ways of doing business imposing great pressure of marks and Spencer as
new retailers are adopting lower pricing strategy reducing their cost and serving new
propositions to the customers. Mark and Spencer has to manage these challenges in order
to maintain its competitive edge.
 Bargaining power of customers is increasing as the individuals have larger market and
option available to it. Increasing competition directly indicates increasing power of
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customers as they have pool of choices and options available to them for making
purchase. Mark and Spencer customers base is huge which is helping the entity to reduce
the impact of increasing bargaining power of customers. The company can make use of
innovative and differentiation strategy to be competitive and stabilized in the marketplace
(Dhanuka, A. and Sharma, V., 2020).
 Bargaining power of suppliers is divided as the retail industry and specially Marks and
Spencer by the raw material from numerous suppliers. This reduces the power of
suppliers over business making Marks and Spencer dominant and increasing their profit
margins which day on in the market. The company can manage its competitive edge by
building and effective supply chain with multiple suppliers.
 Threat of substitute is continuously increasing as first new competitors are entering the
market with similar goods or even better goods which are fulfilling and addressing
common needs of individuals. The four threat of new entrant and start of substitute is
regularly increasing over Marks and Spencer and dominating it. The competitive edge of
Mark and Spencer can be maintained when entity work according to the people needs and
continuously innovate and invent new offerings for product lines.
 Existing rivalry factor is potential and can affect the profitability of Marks and Spencer
and even the industry if the existing player in an industry have intense implications. It
will drive the prices of production services down decreasing the profitability of the
business. Marks and Spencer is operating in very competitive retail industry the
competition is high along with new small retailers coming in the marketplace everyday as
the trade barriers are flexible and potential is very low (Khedmati, M. and et. al., 2019).
This actor is increasing the existing and you competition off Marks and Spencer. In order
to be competitive and sustainable in market place Marks and Spencer need to develop
sustainable differentiated goods and services for the existing customers and even
attracting new people.
M3 Devising strategies to improve the competitive edge and market environment
of Marks & Spencer
Porter's five forces is analytical tool which is device of five competitive forces affecting the
business and its environment along with its. Marks and Spencer is dealing in very competitive
retail industry where existing competitors are large number along with increasing threat of new
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entrants. The threat of substitutes also very huge in case of Marks and Spencer. The company
needs to be very dynamic and differentiated, Marks and Spencer need to develop sustainable
differentiation marketing strategies and differentiate products and services. This differentiated
products are innovative and have to be addressing different meanings and designers of wider
range of population. This differentiation strategy can help marks in sensor to attract new people
and change them into potential buyers along with maintaining their existing customers.
Moreover differentiation strategy can help Mark and Spencer to attend and maintain its
competitive edge in marketplace giving potential competition to others.
TASK 4
P4/M4 Applying models and theories for devising a strategic plan for Marks &
Spencer
 Company overview
Marks and Spencer published and came into existence in 1894 with the mix efforts of
Michael Marks and Spencer. Currently the company holds international business with the
help of 450 stores and around 70000 large employee base. It is one of the largest clothing
retailer of UK and hold around 50% of food sales business in the UK. The company has
grown to around 250 franchisees in different territories of the world. Marks and Spencer
is moving to international spaces acquiring international market and recently moved
operations to India. Marks and Spencer is a used organisation in retail industry around the
world with its innovative and best quality products keeping customer experience and
satisfaction at the highest level. The company also make use of effective CSR activities
in order to be most efficient and contribute their part environment and society.
 Vision
The vision statement of company help in working in goal congruence which comes from
inside and outside the entity. The vision statement holds the long-term objectives of the
organisations. Vision statement of marks and Spencer reflects the company wishes to
create a standard of working by which others in the market set their benchmarks and
targets (Cardoni, A., Kiseleva, E. and Lombardi, R., 2020).
 Mission
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The mission statement reflects the short-term objective of entity which is devised from
the long-term and divided into small groups for effective attainment of the objectives.
The mission statement of Marks and Spencer is to render best quality products to the
customers and be accessible to all in different regions.
 Strategy
The company Marks and Spencer made use of Porter generic model to analyse and
evaluate different strategies and adopt a potential one for its business. There are three
different strategies which are part of photogenic model that is cost leadership,
differentiation and focus (Cost focus and differentiation focus). The strategy which is
adopted by Marks and Spencer is differentiation strategy. The strategies states that
company should bring in an entirely new product into the marketplace which is
innovative and invented by it. Product differentiation strategy basically refers to being
separate from other competitors by rendering something new to people according to their
desires and needs and according to current trends. Marks and Spencer used to adopted
this strategy in the past and still focuses on it for keeping its competitiveness stable.
 Ansoff matrix
Ansoff matrix is also called product market expansion grid which is a tool used by
farmers analysing plan their strategies growth and success in future. It has four different
strategies which can be used by firms and Marks and Spencer by analysing its potentials
and related risks. These strategies are market penetration, product development, market
development and diversification (Danso, A. and et. al., 2019).
Market penetration strategy stage light company should develop new marketing plans
for their existing products in order to spread words about their offerings in the existing
market in more efficient manner.
Product development strategy refers to developing a new product for the existing
market according to needs and desires of people for fulfilling them more potentially.
Product development strategy can be adopted by innovating and inventing new offerings.
Market Development strategy states that organisation should move into new market
places which their existing offerings and develop a new marketplace for their products
and services.
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Diversification is the last strategy in the matrix which suggest that company should
move tour New Market place with a new and fresh product. The entity should conduct
research and development activities by which they explore a new marketplace and the
needs according to which company should develop a new product and add new product
line in their operations.
D4 Critique and interpret the information for applying on the environment and
competitive analysis with the help of valid strategic direction
From the over on evaluation and analysis of Marks and Spencer micro and macro environment
with the help of different tools and models it is seen that brexit has very hindering effect on the
operations of the business. Marks and Spencer is suffering economically and politically in the
UK market also the company is highly reliant or dependent on UK economy which makes these
impacts of brexit more harmful to it (Joly, A., Ramos, C. and Aulanier, H. M., 2019). Porter's
five forces analysis is conducted which show that threat of new entrant an existing rivalry is
increasing also set of substitute product is also very high. all these impacts and factors concludes
that company needs to evaluate it strategy in order to attain competitive edge and be more
efficient. The strength of company is its best quality product offering and CSR activities which it
conducts Marks and Spencer can make use of its potentials to gain its competencies again. With
the help of porter’s generic model that differentiation strategy which is used by Marks and
Spencer is the best for their entity and will be helpful for it in near future. the company can make
use of differentiation strategy along which market development. This implies that Marks and
Spencer should move to new market places and develop is operations there by focusing on
differentiation strategy. The company should offer its differentiated products to new markets
where there is no existence of such goods and people are in need of it. Differentiation strategy
can help the company to attract more and more people by increasing its market share and
customer base as if will move to new markets globally. For instance in Indian markets Marks and
Spencer deals and make business transaction with its physical stores and only serves its clothing
segment (Chen, G. Z. and Keung, E. C., 2019). But Indian market is very potential for the
organisation and Company can make use of it by increasing its accessibility and reach into new
table with the help of Internet and digitalization. Marks and Spencer can make use of its online
resources and websites to make sales through its official website or application.
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CONCLUSION
The above report on Business strategies is concluded as a it refers the process of implementing
and evaluating the strategies which can help to attain the organisational goals which can generate
the optimum utilisation of resources as well as it also represent the importance of business
strategies towards the organisation is provides the proper structure of planning and model
towards the trading or dealing with business in aspects to accomplish the goals. As the
analysation of Pestle is describes about the external market macro environment factors which
influence the organisation into negative and positive way in terms of political, economical, legal,
social, technological, environment etc. after that the Swot analysis is to identifying internal and
external capabilities of organisation which commenced the strength weakness, opportunities and
threats. In spite of that the porter five forces is to evaluating the market buyers and supplier
powers with the competitors of the market which was enhancing the scope of competition. And
last the final analysation Ansoff matrix to identify the market and product development in terms
of domestic and international market and which provides the scope to generating of modification
of products. So, here is the full conclusion of report regarding business strategies by analysing
and evaluating the market scenario for retail industry.
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