Impact of Macro Environment on Marks and Spencer Strategies

This report analyzes the impact of macro environment on the strategies of Marks and Spencer, evaluates the internal environment and capabilities of the company using the SWOT model, and applies Porter's five forces to assess competitive forces.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
P1. Macro environment impact on Marks and Spencer strategies...............................................3
P2. Internal environment and capabilities of Marks and Spencer...............................................5
P3. Porters five forces to evaluate competitive forces.................................................................8
P4 Range of theories and concepts in strategic planning............................................................9
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Strategies are pillars of business as it provides direction of attaining goals and objectives.
Every business requires different types of strategies within the industry they operate and
products and services offered. It is necessary for them to grow and expand in such a complex
business environment as more companies are emerging. this has resulted in rise in competition.
besides, with frequent change in economic condition and customer needs, strategies support in
sustaining for long term (Balon, Panda and Kumar, 2019). Alongside, it is necessary to analyse
internal and external environment of business so that strategies are developed and implemented.
The analysis gives insight about what factors might impact on growth. However, strategies
contain goals, tactics, methods, etc that how to attract customers and generate profit. Basically,
there are three types of strategies that is tactical, functional and operational. Also, it provides a
roadmap and blueprint of how goals are attained. On basis of strategy organisation distinguishes
itself from competitors.
This report will describe about impact of macro environment of organisation and its
strategies. also, it will evaluate internal environment through SWOT model. Moreover, porter
five force will be explained for identifying competitive positioning in market. At last theories
and concepts will related to strategic planning will be discussed.
MAIN BODY
P1. Macro environment impact on Marks and Spencer strategies
There are various factors which can lay impact on decision making of Marks and Spencer.
These elements can lay positive as well as negative impact. It can be analysed and evaluated with
the help of PESTLE analysis.
Political factor: There are various factors that can affect the working of Marks and Spencer.
One of the most positive aspects of modern day politics which has been established between so
many different countries. This has helped firm in increasing their trade which has directly laid
impact on their profitability aspect. Free trade has supported company in importing raw material
which is cheap, this has decreased operational cost and expenses of Marks and Spencer which
was really necessary for their growth. Thus, it has assisted company in maintain the heavy
margin of profit. Because of this they are also being able to diversify their market so that they
can satisfy a large number of different consumers and enhance consumer loyalty for them. It has
also been analysed that Brexit has laid impact on working conditions of Marks and Spencer

(Sridhar and et.al., 2016). If the United Kingdom is going to leave European union than it can
negatively impact the operations of Marks and Spencer. They will be facing loss as the free-trade
policies will be stopped and also the price of goods and services that is being supplied to
consumers will increase.
Economic factor: It includes various factors like labour rate, fiscal policy, inflation that can
impact the working aspects of company. It has been analysed that price has always been a factor
which is affecting the retail industry. Like for example from budget clothing store to budget
super market all of them has possess critical threat to so many premium brands such as Marks
and Spencer. So company is facing huge threat from this. It has been analysed that firm needs to
build up new strategies so that they can overcome this economic problem. In recent time, it has
also been evaluated that there has been a decrease in rate of labour so it can assist Marks and
Spencer in boosting up their profitability and sales market. It will help firm in growing enabling
them to achieve their goals and objectives.
Social factor: There are various socio-cultural factor that is affecting sales of Marks and
Spencer. It has been analysed that company is facing threat and making their image negative as
they are not engaged in supplying trendy products as the new industry is coming with. It is
making firm incompetent. So in order to overcome from this problem it is really necessary for
Marks and Spencer to analyse the needs and demands of consumers and providing them with
product and service which they require. Marks and Spencer reputation has become a less trendy
brand for consumers and specially for young adults. So company needs to lay special emphasis
on this in order to grow. It has been analysed that there has been an increase of liking related to
ready meals as they are more easy to be cook and can be carried with them to any place. So firm
have the big time opportunity of investing in this sector as company has dominated the food
industry for so many years. This will lay positive impact on their growth.
Technological factor: In order to grow it is really necessary for company to make use of
advanced technology. One of the biggest trend that has been followed by food stores is self-
checkout. It will assist them in saving money as this will assist them in not spend money on
recruiting cashier. It will also help Marks and Spencer in saving time. It has been analysed that
company has already implemented a number of self-service checkout across the store. Also in
order to increase the sales, it is really necessary for organization to start selling through online
channels. This will help them in connecting through large consumer base. They can also have

engaged in providing online service of food. This can assist Marks and Spencer in gaining
consumer loyalty and can also help them in achieving their long term as well as short term goals
and objectives. Also they can make use of automation and artificial intelligence like they can
develop their own mobile app through which consumer can purchase the product directly. They
can also make payment through the app.
Legal factor: There are various laws, rules and regulations implemented by government
which needs to be followed by organization and can affect their working. Like for example
Marks and Spencer needs to be engaged in following the health and safety act (Aithal, 2017).
According to this act company must be involved in providing safe and secure environment to all
employees working with them. This will assist company in creating up the employee loyalty and
can also reduce turnover related to workers. Marks and Spencer also needs to comply with other
legal rules such as equality act. In this they must make sure that equal opportunities are been
provided by them to all workers working with them. They must not be engaged in discriminating
on the basis of disability, colour, religion. These rules and regulations needs to be followed as it
can lay positive impact on working of Marks and Spencer. They must also make sure that food
that is been supplied by them is of high quality so that it does not lay impact on health aspects of
consumers. Low quality of food can lay negative impact on mind of consumers.
Environmental factor: There are various environmental factor which is affecting the
working of Marks and Spencer (Suquet and Lion, Mastrad, 2016). It has been analysed that in
order to keep the image of their luxurious brand company is working towards more sustainable
aspects. They are making sure that firm effectively utilises the resources and produces minimum
amount of waste. Organization is working continuously towards reducing the carbon emission.
This will lay a positive impact on environment. Firm is also required to be engaged in doing fair
trade which is an initiative created to better compensate foreign producers, also has an impact on
the environment. Also they need to get engaged in doing corporate social responsibility as if this
not done by company, it can lay negative impact on their reputation.
P2. Internal environment and capabilities of Marks and Spencer
In order to analyse internal strength and weakness, Marks and Spencer can have engaged
in making use of SWOT model. This framework will help them in analysing and evaluating their
competitive abilities. It can assist them in analysing the facts and figures which is really
necessary for the growth of company. It includes the following:

Strength: Marks and Spencer has various strength one of them is their brand reputation. It
has been analysed that company has really high brand value, they are involved in providing value
to consumers who are buying product from them. Company has been engaged in giving
consumers a huge number of choices, they deal in high number of products and services. Marks
and Spencer is being able to provide string offerings by working on latest industry trends. They
have also developed the first ever vegan sandwiches and different type of vegan wraps that has
bene highly liked by consumers. Organization is also being engaged in employing large number
of women so that they can become best enterprise in recruiting women. Marks and Spencer is
also leveraging on its expertise development in E-commerce, they are heavily investing in
Information technology system. Marks and Spencer is also performing corporate responsibility;
they are working upon the leading sustainability agendas. They make sure that resources are
being effectively utilised so that future generation have adequate resources with them. Firm is
also performing corporate social responsibility. Company has also been engaged in developing
reliable and effective supply chain.
Weakness: In order to expand their market in new geographical area it is really necessary
for Marks and Spencer to investment more in new technologies. This can help them in expanding
their business across the borders. It is really necessary for growth of company. Financial
planning is not done properly and efficiently (Bull and et.al., 2016). The current asset ratio and
liquid asset ratios suggest that the company can use the cash more efficiently than what it is
doing at present. When Marks and Spencer is engaged in marketing the products they do not
provide proper description of unique selling proposition which makes the advertisement
incapable of attracting the consumers. Also they are lay emphasis on young adults, Marks and
Spencer needs to be engaged in laying focus on other segment of consumers too. This can assist
them in attracting large range of consumers. Also it has been analysed that some of the
consumers made complain related to quality of goods provided by M&S. thus, it has laid
negative impact on image of firm. Company is also facing problem related to high attrition rate.
They are not engaged in motivating employees because of which worker’s loyalty is been
created. It has also been analysed that firm has low online presence, they are not engaged in
selling out their product and service through social media channels. This can act as weakness for
firm as because of this they are unable to cover large range of consumers and also affecting their
profitability aspects

Opportunities: Company has opportunity to extend their business in new market areas.
Marks and Spencer have the chance to invest more in technology which provides them with
opportunity to provide consumers with differentiated products and services. By making use of
new technology firm has the option to enter new emerging market that can assist them in
boosting up their profits (Gürel and Tat, 2017). It will help organization in developing the market
which can allow firm to have competitive advantage. Making use of differentiated pricing
strategy will assist Marks and Spencer in increasing the profitability and also it will support in
gaining market share. It has also been analysed that decrease in transportation cost can also lower
down shipping prices can assist Marks and Spencer in bringing down the expenses which is an
opportunity to organization to boost profitability. This can also help firm in enhancing sales and
revenue that is really essential for growth of firm. They have the opportunity diversify their
product and service so that company can attract large range of consumers. This will help them in
achieving their goals and objectives. It can also support firm in growing and increasing their
profitability aspects. They also have the opportunity to expand their business in emerging
market.
Threat: Marks and Spencer have the huge threat from its competitors. For this company
needs to be engaged in doing strategic planning so that they can overcome the barriers that has
been faced by them. It has also been analysed that if due to recession cost related to raw material
rises than Marks and Spencer has threat because of it. This will lay severe impact on profitability
aspects of firm. It has also been analysed that growing strength of local distributors can also lay
impact on organizations profitability as the local distributors can earn high amount of profit.
Marks and Spencer also needs to work upon the quality of product that is being supplied by them
as this can act as threat for them. Consumer with low quality of goods and services cannot be
satisfied that can negatively impact growth of firm.
Analysis related to internal capabilities of company: This can be done by Marks and
Spencer through making use of VRIO model.
Valuable Rare Inimitable Organized
High quality of
products and services.
Marks and Spencer
also provide goods at
Company is engaged
in providing high
quality vegan
sandwiches which is
Marks and Spencer
Logo cannot be
copied by any other
organization. It makes
Company is also
engaged in providing
training to employees
so that skills of

low price providing
value to consumers.
really hard to find and
not sold up by much
of the enterprises
them different form
others.
workers can be
increased and by this
organization culture is
also being improved.
P3. Porters five forces to evaluate competitive forces
This model is basically used by company to analyse competition which is being faced by
them. It helps firm in doing strategic planning by evaluating the competitive intensity affecting
their business. It includes the following:
Threat of new Entrants: It is high as so many retailers are opening up their shop and
bringing out new and trendy products. Also it has become really easier for them to enter the
market through online channels. New entrants are making use of lowering down the pricing
strategy and also reducing the cost. So Marks and Spencer in order to overcome from this threat
needs to bring out more innovative and creative product. This will assist them in gaining
competitive advantage and will also help them in growing.
Bargaining power of suppliers: It is low as there are so many suppliers from which
company buys raw material. It has been analysed that in order to increase the overall
profitability, it is really necessary for Marks and Spencer to build up an efficient network related
to supply chain (Safari, Farhang and Rajabzadehyazdi, 2016). They must make sure that
company is engaged in developing bond with suppliers so that support can be provided by them
during the time of supply fluctuations. Thus, it will assist firm in time of crisis.
Bargaining power of buyers: It is high as buyers are engaged in demanding more, so it
become really hectic for firm to cope up with it (Gerard, 2018). They also have the ability to seek
high number of discount and offers. So in order to overcome from this problem it is really
necessary for Marks and Spencer to build a large consumer base as the small base more powerful
will be customer. Increasing consumer base will assist company in reducing the bargaining
power. So Marks and Spencer needs to make sure that better bond is built with consumer in order
to create their belongingness. It will also help firm in growing and achieving their goals and
objectives.
Threat of Substitute: It is high if it offers the value proposition that is actually different
from the product and services delivered by company. There are so many other brands who are
engaged in fulfilling the needs of consumers by providing them high quality same product and at

low price. So in order to fulfil it Marks and Spencer needs to be service oriented rather than
product oriented. They need to be engaged in analysing wants of consumer.
Rivalry among existing firm: It is medium as the existing players are engaged in lowering
down the prices and can also increase sometime. So in order to manage the rivalry it is really
necessary for Marks and Spencer to build a sustainable differentiation.
P4 Range of theories and concepts in strategic planning
For a business there are different theories and concepts available which are applied. They
are useful in evaluating external environment (Zhong, Sun and Lee, 2020). Also, it provides
strategic direction to firm on how to gain competitive advantage. besides, theories and concepts
are used in different way. Similarly, for M&S there are certain concepts available through which
a strategic plan is developed. It consists of certain stages which allow business to attain goals.
besides, that the suitability, feasibility feature allows in evaluating strategies. Furthermore, plan
is developed with help of certain theories and concepts. It is as follows :
Mission To make aspirational quality accessible to all people
Vision To become a standard against which others are
measured
Objectives To attract more people in UK and other cities.
To increase customer base of loyal customer in the
market of UK.
To expand in untapped market and offer variety of
products.
Strategies
(Suitability, Acceptability and feasibility)
There are number of strategies which can be applied
by M&S in order to expand and grow (Balon, Panda
and Kumar, 2019). However, strategy developed
must be suitable, acceptable and feasible for
company. there are three things in it :
Suitability- It means that a strategy must be suitable
enough so that it can help M&S to attain its goals.
Suitability is also refereed to developing strategy by
identifying threats and opportunities. For M&S
market development is suitable as it will help in

expanding business at global level. as M&S is
having a strong brand image so it will be easy for
them to attract customers and increase their presence
at global level.
Acceptability- it means that strategy must be
accepted by everyone in organization. M&S should
also be able to convince stakeholders so that strategy
is accepted. Without that strategy can not be
implemented (Anderson, 2019). Also, they give
suggestions and crucial data and info about market
situation. They help in implementing strategy by
communicating with suppliers, customers, etc. It is
because it is less risky. M&S strong brand image
may attract people from different market. The
acceptance from stakeholder can be gained by
showing them the benefits of this strategy and how
will result in their growth and development.
Feasibility – it means that in order to implement
strategy there must be adequate resources available.
These resources include HR, capital, etc. thus, in
order to implement market development, M&S
require skilled and qualified employees and capital.
This strategy is feasible enough for them as they are
already possessing both these resource and capital is
easily acquired This will enable firm to increase
customer base (Zhong, Sun and Lee, 2020).
Tactics
(Marketing mix)
Here, Ansoff matric is followed by organisation
which provide various tactics and strategies to be
followed. this matrix enables in growth of business.
Market penetration- this is a strategy in which
organisation focus on increasing sales in existing

market of existing products. this is useful in
increasing customer base and gaining competitive
advantage in market. for this promotion is done,
discounts, offers, etc. are provided to people.
Market development- in this strategy the
organisation expands in other market with existing
products. it is done to attract new customers and
generate more profits and revenue (Khedmati, Lim
and Navissi, 2019). Also, by expanding into other
markets, awareness is generated within people.
Product development – in this new product and
services are developed and offered within existing
market. the new features are included in product
with change in its design and packaging. it is useful
in attracting people and retaining them.
Diversification – in this organisation enter in new
market with new product. It is mots risky strategy as
market as well as product is new. thus, there are high
chances of getting failure.
Marketing mix- it is a framework which allow
company to promote their product and services in
the market. It consists of 4 P’s which are defined as :
(Habib and Hasan, 2019)
Product- The product refers to commodity that is
either tangible or intangible. so, here M&S
commodity is their variety of products and services
which is offered to people to fulfil their needs. they
will introduce and develop new product and services
to attract more people.
Place- it is related to location or place where

products are available in the market. It is high street,
malls, etc. thus, M&S will provide their products
and services in stores which are located in high
street., shopping malls, etc. (Balon, Panda and
Kumar, 2019)
Price- Price refer to value of product which
customer are willing to pay for it. Basically, price is
set according to cost of product. here, M&S will
follow competitive pricing strategy in order to attract
people.
Promotion – The promotion means to advertise
product and services within market. there are many
ways of doing this such as social media, website, e
mails, etc. it also refers to communicating with
customer and generating awareness. therefore, M&S
will promote it through social media, e mails,
moreover, they will advertise it via TV, newspapers,
etc.
Implementation and control In order to implement the strategic plan proper
measures and actions are taken. for that, managers
are assigned roles and allocated resources. Besides,
controlling will be done by taking effective measures
and action. the manager will be responsible for
controlling strategic plan. Monthly reports will be
prepared to ensure that plan is going through as per
steps defined in it (Anderson, 2019)
Evaluation The strategic plan will be evaluated by comparing
outcomes with set goals within the plan. for that
main focus will be on increase in sales and profits.
through that it will be easy to analyse whether
strategic goals are attained or not. And if not that

what changes are to be done and areas which lack.
CONCLUSION
From report it is summarised that business strategies provide a roadmap to accomplish goals
and objectives. It includes actions, tactics, etc. which is executed in market. They are of different
types depending on nature of industry. Furthermore, it is analysed that Brexit has laid impact on
working conditions of Marks and Spencer. Also, it there has been a decrease in rate of labour so
it can assist Marks and Spencer in boosting up their profitability and sales market. One of the
biggest trend followed by food stores is self-checkout. It will assist them in saving money as this
will assist them in not spend money on recruiting cashier. Firm is also required to be engaged in
doing fair trade which is an initiative created to better compensate foreign producers. Company
can extend their business in new market areas. they have the chance to invest more in technology
which provides them with opportunity to provide consumers with differentiated products and
services. also, company is having the huge threat from its competitors.

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