Analyzing the Impact of Corporate Strategy on Annual Profits: A Case Study of Marks & Spencer

This case study examines the issue of corporate strategy that led to a fall in annual profits for Marks & Spencer. It analyzes the lack of awareness, analysis, and change in competition that contributed to the decline. The research aims to determine the competitive market of M&S, analyze its financial performance, and assess the effect of competitors' actions. The study highlights the significance of corporate governance and offers recommendations for improvement.

CORPORATE STRATEGY AND
GOVERNANCE

Table of Contents
TITLE :- To analyse the issue in corporate strategy that leads to fall in annual profit. A case
study on Marks & Spencer...............................................................................................................1
CHAPTER 1: INTRODUCTION....................................................................................................1
Background of the research.........................................................................................................1
Significance of the research.........................................................................................................2
Research aim and objectives........................................................................................................3
Research questions.......................................................................................................................3
Purpose of the research................................................................................................................3
CHAPTER 2: REVIEW OF THE LITERATURE..........................................................................4
.........................................................................................................................................................6
CHAPTER 3: RESEARCH METHODOLOGY.............................................................................8
Primary method...........................................................................................................................8
Secondary method.....................................................................................................................10
CHAPTER 4: CRITICAL REVIEW OF RESULTS OF THE RESEARCH................................12
Review of result on the basis of primary research.....................................................................12
Review of result on the basis of secondary research.................................................................21
CHAPTER 5: RECOMMENDATION AND ACTION PLAN....................................................23
Recommendation.......................................................................................................................23
Action Plan................................................................................................................................25
CONCLUSION..............................................................................................................................27
REFRENCES.................................................................................................................................29

TITLE :- To analyse the lack of awareness/analysis/ change in competition that leads to major fall in annual profits
of company “ A case study of M&S.
CHAPTER 1: INTRODUCTION
Corporate strategy can be defined as directions through which a company can attain its
desired long term objectives (Wu and Lu, 2012). In present scenario, using a corporate strategy
can help a business firm in managing or directing operations. On the other hand, there are many
fresh approaches related to this kind of scheme which kept its focus over requirements and needs
so that a company can easily make changes in strategy (flexible) to run business in a successful
manner with ease. Basically, a corporate strategy includes a few things like vision, mission
which aid them in attaining long term goals and objectives. Including this, corporate governance
is being considered as a system of rules, practices and processes by which a firm is directed and
controlled. Corporate governance basically consists with balancing the interests of a company's
stakeholders, such as shareholders, management, customers, suppliers, financiers, government
and the community. Away with this, if it is talked about strategic drift then it can be said as a
concept of strategic management which basically refers to decisions that has been made by a
companies like Marks and Spencer to run with the changing business environment. With the help
of this, maximum benefits could be gained by a business firm. Different situations and
unexpected challenges are very common aspects that may arise anytime when driving and
developing strategic change within Marks and Spencer.
Alterations can be made in corporate governance related strategies by Board of directors
of the company. Along with this, corporate governance is identified as a system of practices,
processes and rules by which a company is controlled and directed (Saeidi and et. al., 2015). It
significantly involves balancing the interests of firm's different stakeholders such as customers,
suppliers, management, government, financiers, shareholders and the community. In present
investigation report, Marks and Spencer's corporate strategy has been chosen as an issue that
raised questions on their costly restructuring decisions. This led overall performance level to
reach to a diminishing level.
Background of the research
Marks and Spencer, a British multinational retailer came in existence in the year of 1884
and it was found by Sir Michael Marks and Thomas Spencer. Company is also listed in London
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Stock Exchange is having more than 980 stores in all over world (57 countries). Recently, it was
announced that M&S still feeling the heat as winter approaches, when it is considered as one of
largest clothing store. It is being found that, this took place because, of costly restructuring
corporate strategy to sustain at marketplace. This led Marks and Spencer to think on different
reasons and this took place because organisation was focusing upon future and it was directly
depended on whether it was able to change and develop. Because of this, Marks and Spencer's
image got disrupted in all over the world which impacted and took this company anything close
to a viable (M&S still feeling the heat as winter approaches, 2019).
On the other hand, it was being considered as one of long-term business strategy that was
capable of threatening any of the retailers operating in the in all over world. This issues is being
taken under this report where transformation of business model was needed for Marks and
Spencer, to become successful in existing market so that its sales which came on decline stage
would reach to an increasing stage. Apart from this, it has also been analysed that approximately
every step which was being taken by Marks and Spencer, went wrong and that led business firm
to decrease its market share (Rummler and Brache, 2012). On the other hand, it is being found
that Marks and Spencer's idea of restructuring themselves led them to face a number of issues
like 62% fall in annual profits. Because of this, it's reputation came to a diminishing level which
reduced their sales as well. On the other hand,
Significance of the research
Investigation over different topics can help researcher in gathering appropriate
knowledge and it may also aid in developing effective knowledge as per need and requirements
of learner. It is being analysed that, Marks and Spencer was doing business with same ethics and
norms in existing market where other rivals were using online tools to grab attention of
consumers and were offering really same quality based products and services with cheaper rates
(Saeidi and et. al., 2015).
It is being analysed that, Marks and Spencer's corporate strategy went wrong and took
sales to a declining stage and this happened because of heavy restructuring where, in May,
Marks and Spencer's annual report showed a few results of poor clothing sales; at the same time,
the cost of extensive store closures mounted. Pre-tax profits went down from 62% to £66.8m
after a £514.1m bill for restructuring that included £321m to pay for the first phase of its store
closure plan (M&S feeling the heat as winter approaches. 2018). One in three of its core clothing
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and home stores are scheduled to disappear within four years. All this scenario impacted
negatively on all over performance level of Marks and Spencer because of their poor clothing
sales and the decisions which were made by them led the whole organisation to deal with a
number of problems like customer's neglected.
Research aim and objectives
Aim:
The main of this research is “To analyse the lack of awareness/analysis/ change in competition that leads to
major fall in annual profits of company “ A case study of M&S.
Objectives
 To determine the competitive market of M&S
 To analyse the financial performances of M&S
 To assess the effect of the competitors actions on M&S
Research questions
 What can be considered as the competitive market of M&S
 What is financial performances of M&S
 What are the effect of competitors actions on M&S
Purpose of the research
Main intent behind conducting overall investigation is that Marks and Spencer was
loosing its market share because of wrong decision makings and because of increasing
competition. On the other hand, it has also been analysed that Marks and Spencer has struggled
to offer same price on products which was being offered by its rivals like PRIMARK, ALDI,
LIDL and so on. This impacted negatively on their performance level.
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 CHAPTER 2: REVIEW OF THE LITERATURE
This section of research on set topic plays a crucial role where scholarly papers are being
used to gain knowledge as required by the company. It is being analysed that this aspect of the
research proposal is mainly related with the research questions. In this different number of
authors and scholars have given their opinion about the topic. Report is enclosed with four
different objectives and these are mentioned below as:
Competitive market of M&S:
According to the point of view of Clark, corporate strategy and governance is a strategic
management plan consist of internal rules in order to operate business operations in ethical and
sustainable manner (Nasir and Subari, 2017). The main purpose behind concept of corporate
strategy and governance is to make managers and leaders of a business entity accountable to
shareholders. The corporate strategic management plan also help business organisation in
managing its business activities in ethical and sustainable manner.
As per this research project, the chosen organisation is facing issues in their corporate
strategic management plan. In this regard, it is important for managers and leaders of Marks &
Spencer to understand the role of corporate governance. It will help them in overcoming this type
of issues, which eventually leads in improving their profitability in a dynamic business
environment.
The corporate strategy and governance also concerned with balancing individual societal
and shareholders aims and objectives. It is formulated by board of directors with a motive to
improve overall performance of a business entity in a competitive business market. Corporate
strategy and governance also ensures transparency between employees, which leads in creating
positive relationship between managers and workforce of a business entity (Muzwardi, 2015).
So, it is essential for a business organisation to formulate corporate strategic management
plan in order to achieve their specific goals and objectives in an ethical manner.
Benefits of corporate governance within Marks & Spencer
As per the point of view of Nicholas, corporate strategy and governance help a business
entity in maximising their profitability, which leads in achieving competitive advantage in a
business market. In this regard, Marks & Spencer is facing major decline in their profitability
due to their corporate strategy issue. In this context, it is necessary for the chosen organisation to
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overcome this issue as there are many benefits of corporate strategy and governance, which will
help them in achieving their specific goals and objectives. The benefits of corporate governance
within Marks & Spencer are discussed below as:
(a) Enhancing performance: The corporate strategy and governance is a strategic
management plan, which help business entities in determining ways to take effective decisions
regarding management of business operations. This leads in enhancing overall performance of a
business organisation. In this regard, it is essential for Marks & Spencer to formulate effective
strategic management plan in order to balance potential of their employees and stakeholders,
which eventually leads in maximising their profitability.
(b) Transparency: Corporate strategic management plan also help business entities in
keeping transparency with their employees regarding their policies. This will help them in
achieving employees loyalty and also in satisfying interest of their stakeholders. In this context,
it is important for the chosen organisation Marks & Spencer to modify their corporate strategic
management plan in accordance with the skills and competence of their employees. This will
help them in making effective workforce in a dynamic business environment.
(c) Minimises risks and mismanagement: The corporate strategic management plan
also help business organisations in utilising their resources effectively and efficiently, which
leads in sustaining their productivity (Post and Preston, 2012). In this regard, it will help Marks
& Spencer in operating their business activities in accordance with the continuously changing
business environments, which eventually leads in monitoring risks.
(d) Improve reputation: Corporate strategy and governance boost reputation of a
business entity in a business environment. As corporate strategic management plan help business
organisations in keeping interest of their stakeholders, which enables people to feel more
confident while working with organisation. In this context, it is important for Marks & Spencer
to balance potential of its employees as well as shareholders in order to enhance its overall
performance.
(e) Fewer fines and penalties: The corporate strategy and governance help business
entities in operating their business operations in ethical and sustainable manner. In this regard, it
will help the chosen organisation Marks & Spencer in taking specific steps to stay compliant
with local, state and federal rules and regulations. This will leads in gaining competitive
advantage in a business environment.
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Effect of the competitors actions on M&S
According to the point of view of Tilles, it is important for a business entity to evaluate
corporate strategic management plan before implementing, this will help them in enhancing their
overall performance. As the chosen organisation Marks & Spencer is already facing several
issues regarding corporate strategy, so it is essential for them to analyse certain factors in order
to improve their profitability in a business market (Rummler and Brache, 2012). The corporate
strategic issues are discussed below as:
(a) Getting the board right: Most of the organisation failed in deploying right board
members in formulating corporate strategic management plan. This leads in creating a situation
of mismanagement among employees, which eventually effect performance of its employees. In
this regard, the chosen business entity Marks & Spencer also faces several issues regarding
appointment of right board members in their strategic management plan, which results in
decreasing their annual profit by 62%.
(b) Accountability to stakeholders: According to the point of view of Hickey, the main
motive behind the concept of corporate strategy and governance is to keep interest of all
stakeholders of a business organisation. In this context, most of the organisation faces issues in
satisfying interest of all their stakeholders as they have to keep transparency with their
employees as well as their stakeholders. It is also the major corporate strategy issue, which
eventually leads in decreasing overall profitability of a business organisation in a business
environment (Hancock and et. al., 2013). As per the current scenario, Marks & Spencer also
failed in satisfying interest of their stakeholders, which also effects its overall performance in a
business environment.
(c) Dynamic business environment: The major issue that organisations are facing while
formulating their business activities is that they are operating their business operations in a
continuously changing business environment. In this regard, the chosen organisation Marks &
Spencer failed to modify their strategic management plan in accordance with the dynamic
business environment, which leads in decreasing their overall profitability.
(d) Risk management: This issue is also arises due to continuously changing business
environment. In this context, Marks & Spencer failed in monitoring risk arises from
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implementing corporate strategic management plan, which leads in effecting its overall
profitability.
As per the above mentioned scenario, there are several corporate strategy issues, which
are essential for a business organisation to analyse before implementing corporate strategic
management plan in order to sustain its profitability in a competitive business market.
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CHAPTER 3: RESEARCH METHODOLOGY
Another section which plays a crucial role for investigator through which favourable
outcomes can easily be pulled out. Here, mostly two research method's takes place and these are
qualitative and quantitative. In present investigation, researcher have used qualitative method for
conducting the investigation.
In present context, research methodology is basically identified as an effective process
which an investigator uses for collecting appropriate data so that effective decisions and results
could be implemented in specific time frame. This basically stays enclosed with a number of
things like interviews, surveys publication research and more. It could also cover both historical
and actual data. In addition, it is the systematic and theoretical analysis of the different methods
used to a field of research. There are two methods used by research in order to collected relevant
information regarding its research topic, which are discussed below as:
Primary method
Data which majorly gets collected which stays authentic in nature. Here, researchers are
required to collect data directly by itself through conducting an appropriate survey. This research
method is used by researcher in order to collect first hand information related to its research
topic. Some of methods that can be used are: questionnaire, observations, online/offline
interviews and etc (Yin and Zhang, 2012). The methods of primary research are discussed below
as:
(a) Questionnaire: In this research method, researcher asks questions to respondents
with a motive to get in-depth answers. It can be done through phone, emails or in person and this
method in cost effective as compared to other data collection method of primary research. In this
present research project, researcher has used questionnaire in order to get relevant information
regarding its research topic.
(b) Observation: In this research method, researcher collects information by observing
reactions of respondents as there is no direct interaction between researcher and respondents. In
this regard, this method will help researcher in getting real evidence regarding its research topic.
(c) Interviews: It is the most commonly used method used by researcher in order to
collect relevant in formation regarding its research topic. In this context, research can use both
telephonic or face to face interview to collect informations. This research method provides in-
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depth answers to, which help the researcher in conducting its research activities in an appropriate
manner.
(d) Focus groups: In this research method, moderator leads a discussion about particular
project with a motive to get everyone to participate, which will help them in collecting
qualitative information.
(e) Field trials: In this research method, researcher places company's products and
services in stores or neighbours in order to gain customer responses in real life conditions. This
will help researcher in collecting useful information regarding its research project.
Questionnaire: A questionnaire includes variety of questions, which help researcher in
collecting relevant information regarding its research topic. It is a cost effective method that
provides effective results to researcher
Questionnaire
Q1. Are you aware with the concept of corporate strategy and governance?
(a) Yes
(b) No
Q2. What are the major benefits of corporate governance on Marks & Spencer?
(a) Enhancing performance
(b) Improve reputation
(c) Minimising risks
Q3. Does corporate governance strategy help business organisation to work in ethical manner?
(a) Agree
(b) Disagree
Q4. What are the major corporate strategy issue faced by business organisations?
(a) Dynamic business environment
(b) Risk management
(c) Getting the board right
Q5. Does corporate strategy governance results in systematic division of work among
employees?
(a) Yes
(b) No
Q6. Does shareholders helps in enhancing business growth and profitability?
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(a) Agree
(b) Disagree
Q7. Does corporate governance strategy issue results in decreasing business growth and
profitability?
(a) Yes
(b) No
Q8. Does corporate strategy governance results in employee engagement?
(a) Agree
(b) Disagree
Q9. Does the concept of corporate strategy governance results in positive impact on business
organisation?
(a) Yes
(b) No
Q10. Recommend various ways through which a firm can overcome its failures in corporate
governance strategy?
Secondary method
In this method, researcher collects data from secondary sources like journals, books,
articles, newspapers and information (Wu and Lu, 2012). This research method consumes less
time as compared to other research methods. In this present research project, literature review
has done by using secondary research method. The methods of secondary research is discussed
below as:
(a) Data available on the internet: It is the most popular method of collecting data. In
this method, researcher collects information using internet. This method is also cost effective as
researcher can collects relevant informations without paying money. In this regard, it is
important for researcher to collect data from authentic website.
(b) Government and non-government agencies: The researcher can also get trust
worthy information from government and non-government agencies, which leads in conducting
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its research activities in an appropriate manner. Researcher will have to pay some money in order
to get relevant information regarding its research topic.
(c) Educational institutions: In this research method, researcher collects information
from data collected by universities and educational institution. In this regard, this will help
researcher in collecting in-depth information regarding its research topic.
(d) Commercial information sources: In this research method, researcher uses
journals, magazines, radio and TV stations in order to obtain information for conducting its
research activities in an appropriate manner. These commercial information sources have first
hand information on various topics, which will help researcher in completing its research project
in an appropriate manner.
In this research project, researcher has used data available on internet method in order
collect relevant information regarding its research topic. The link of the websites are stated
below as:
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 CHAPTER 4: CRITICAL REVIEW OF RESULTS OF THE
RESEARCH
Review of result on the basis of primary research
Under this part, responses of selected respondents are analysed by arranging data and
information into statistical manner. After representation of data using bars and chart, further it is
interpreted to draw valid conclusion. Therefore, in context with present research of M&S, data
collected by using questionnaire method of primary research, can be interpreted in following
manner:-
Theme 1: Concept of corporate strategy and governance
Q1. Are you aware with the concept of corporate governance strategy? Frequency
(a) Yes 18
(b) No 12
Interpretation: As per the above mentioned graph, it has been analysed that most of the
respondents are aware with the concept of corporate governance strategy. In this graph, 18
respondents out of 30 said yes, they believes that corporate governance strategy help business
organisations in operating their business operations in ethical and sustainable manner. On the
other hand, 12 respondents out of 30 believes that said no, they are not in favour of corporate
governance strategy as sometimes it leads in creating mismanagement in a business organisation.
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Theme 2: Benefits of corporate governance
Q2. What are the major benefits of corporate governance on Marks & Spencer? Frequency
(a) Enhancing performance 12
(b) Improve reputation 8
(c) Minimising risk 10
Interpretation: From the above mentioned graph, it has been interpreted that corporate
governance strategy leads in enhancing performance of Marks & Spencer. As per this graph, 12
respondents out of 30 believes that corporate governance strategy leads in enhancing
performance of Marks & Spencer as it helps them in balancing potential of their employees as
well as shareholders. On the other hand, 10 respondents out of 30 believes that, it minimises risk
because it helps the chosen organisation in improving their productivity. On the other hand, 8
respondents out of 30 believes that corporate governance strategy leads in improving reputation
of the chosen organisation in international market.
Theme 3: Corporate strategy helps in running business more ethically
Q3. Does corporate governance strategy helps business organisation to work in
ethical manner?
Frequency
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(a) Agree 20
(b) Disagree 10
Interpretation: As per the above mentioned graph, it has been analysed that corporate
governance strategy help business organisations in operating their business activities in ethical
manner. In this graph, 20 respondents out of 30 believes that corporate governance strategy help
business organisation in operating their business operations ethically as it make organisation to
follow federal laws and legislations. On the other hand, 10 respondents out of 30 doesn't believes
that corporate governance strategy help business organisations to work in ethical manner.
Theme 4: Issues faced by organisations related to corporate strategy
Q4. What are the major corporate strategy issue faced by a business
organisation?
Frequency
(a) Dynamic business environment 13
(b) Risk management 7
(c) Getting the board right 10
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Interpretation: From the above mentioned graph, it has been analysed that dynamic
business environment is the major corporate strategy issue faced by a business organisation. As
per this graph, 13 respondents out of 30 believes that continuously changing business
environment is the major corporate strategy issue because organisations has to modify its
corporate strategic management plan regularly in accordance with the business environment. On
the other hand, 10 respondents out of 30 believes that getting the right board members to
formulate corporate strategic management plan is the major corporate strategy issue faced by
business organisation. Whereas, 7 respondents out of 30 believes that managing the risk is major
corporate strategy issue faced by business organisations.
Theme 5: Corporate strategy governance play effective role in human resource allocation
Q5. Does corporate strategy governance results in systematic division of work
among employees?
Frequency
(a) Yes 20
(b) No 10
Interpretation: From the above mentioned graph, it has been analysed that corporate
strategy governance results in systematic division of work among employees. In this graph, 20
respondents out of 30 said yes, they believes that corporate governance strategy governance
results in systematic division of work among employees because its main motive is to manage
employees and interest of shareholders. On the other hand, 10 respondents out of 30 said no, the
believes that corporate governance strategy doesn't results in systematic division of work because
16

sometimes it limits the potential of employees as they have to work in accordance with the
federal laws and legislations.
Theme 6: Shareholders give their support in enhancing business growth
Q6. Does shareholders helps in enhancing business growth and profitability? Frequency
(a) Agree 19
(b) Disagree 11
Interpretation: As per the above mentioned graph, it has been analysed that
shareholders help in enhancing business growth and profitability. In this graph, 19 respondents
out of 30 believes that shareholders help in enhancing business growth and profitability because
profitability and reputation of a business organisation depends upon interest of their
shareholders. On the other hand, 11 respondents out of 30 believes that shareholders doesn't help
a business organisation in enhancing their business growth and profitability.
Theme 7: Failure of corporate strategy ultimately reduces profitability of business
Q7. Does corporate governance strategy issue results in decreasing business
growth and profitability?
Frequency
(a) Yes 22
(b) No 8
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18


Interpretation: As per the above mentioned graph, it has been analysed corporate
strategy issue results in decreasing business growth and profitability. In this graph, 22
respondents out of 30 believes that corporate strategy issue leads in decreasing business growth
and profitability because it help business entities in managing employees and shareholders of a
business organisation. On the other hand, 8 respondents out of 30 doesn't believes that corporate
strategy issue results in decreasing business growth and profitability.
Theme 8: Corporate strategy and governance helps in employee engagement
Q8. Does corporate strategy governance results in employee engagement? Frequency
(a) Agree 18
(b) Disagree 12
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
Interpretation: From the above mentioned graph, it has been interpreted that corporate
governance strategy results in employee engagement. In this graph, 18 respondents out of 30
believes that it improves employee engagement in a business organisation. On the other hand, 12
respondents out of 30 doesn't believes that corporate strategy issue results in employee
engagement.
Theme 9: Corporate strategy positively impact on business
Q9. Does the concept of corporate strategy governance results in positive
impact on business organisation?
Frequency
(a) Yes 25
(b) No 5
20

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Interpretation: As per the above mentioned graph, it has been analysed that corporate
strategy governance results in positive impact on business organisation. In this graph, 25
respondents out of 30 believes that corporate strategy governance leads in positively impact
business organisation because it helps them in operating their business activities in ethical and
sustainable manner. On the other hand, 5 respondents out of 30 doesn't believes that corporate
governance strategy results in positively impacts business organisation.
Review of result on the basis of secondary research
Concept of corporate governance and strategies:
As per views of Yin and Zhang (2012), it has been analysed that it is essential for
organisations to understand the importance of corporate governance and strategies. It refers to a
specific plan which consists a set of rules and policies. These types of policies help in running
business more effectively. For developing effective corporate governance, it is necessary for
corporations to establish achievable mission and goals. This would help in running more
effectively. In addition to this, it also helps organisations in conducting business in ethical
manner through which, high profitability and growth of business can be achieved. In context
with M&S, as this company face issues related to reduce profitability and annual growth in
business. Therefore, by understanding importance of corporate governance and its role in
business, its managers can develop more effective strategies. This would lead business to gain
sustainability as well as high competitive advantage at marketplace.
Benefits of corporate governance for M&S in increasing its profitability:
According to different perception and opinion of Schaltegger and Wagner (2017), it has
concluded that corporate governance provides various opportunities to M&S, in achieving its
business growth. As due to failure in developing effective strategy, this company face issues
related to decline in sales performance. Therefore, by understanding its role and impact on
business, Board of Directors of M&S will gain opportunity to analyse the way by which they can
run activities more effectively. It includes participation of stakeholders in taking effective
business decisions. By focusing on their interest, company will stay in position to generate high
profitability. Similarly, by developing transparency in business and give timely information to
employees, investors and other stakeholders about current practices and policies, help in getting
their high commitment. This would help in turning their efforts into achievement of goals and
objectives. Other than this, minimise risk and improve efficiencies of business management, also
22

aid to generate high profitability. By developing healthy relations among workers and complete
demands of them, help in taking support for providing effective services to customers. It also aid
M&S in improving its image and enhance reputation in marketplace.
Issues behind failure of corporate strategy and governance under M&S:
It has been summarised from literature review that there are various reasons present
within M&S, for occurrence of failure of corporate strategy. It includes concerning on bringing
continuous changes within business to make it more dynamic. This would to face various
problems in running operations appropriately. It also arises various risks while implementing
new policies within business. Therefore, loss in control of risk management, impact negatively
on profitability and growth of business. Similarly, conflicts of interest also leads to creates issues
in executing strategies as per desired manner.
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 CHAPTER 5: RECOMMENDATION AND ACTION PLAN
Recommendation
Through this research, it has been analysed that it is essential for business organisations to
formulate effective corporate governance strategy in order to maximise their profitability. In
context with Marks & Spencer, as this company face issues related to get success in executing its
corporate strategies. Therefore, it is recommended to its Board of directors to formulate their
corporate strategic management plan after analysing overall business environment, which will
help them in getting effective results from their strategic management plan. In this regard, it is
also suggested to the chosen organisation Marks & Spencer to identify what their competitors are
offering to their customers. This will help a business entity in increasing their customer reach,
which eventually leads in improving their overall performance. For overcoming failures in
corporate governance, the chosen organisation can use Porter's five force model, which is
discussed below as:
Porter's five force model: This model is used by business organisations in order to
understand the competitiveness of business environment. In this regard, this business model will
help the chosen organisation in overcoming its failures in corporate governance and strategy,
which eventually leads in identifying strategy's potential profitability. In this business model,
there are five factors, which will help business organisation in analysing competitive business
environment. These five factors are discussed below as:









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


 (a) Competitive rivalry: In this factors, it is important for Marks & Spencer to modify
their corporate governance strategic management plan in accordance with their competitive
rivalry. It is also necessary for business organisation to identify strength of their competitors
and quality of products and services they are offering to their potential customers. It will
help them in maximising their profitability by formulating effective corporate governance
plan in order to give strong competition to their competitors.
 (b) Supplier power: This factors also plays a vital role in overcoming failures of
corporate governance and strategy. In this context, it is important for the chosen business
organisation to manage supplier power in accordance with the uniqueness of their products
and services. This will help them in providing products to their potential customers at an
affordable prices, which leads in improving their productivity. In this segment, it is
recommended to a business organisation to modify their corporate strategic management
plan in order to manage supplier power.
 (c) Buyer power: In this regard, it is also important for a business organisation to control
buyer power, which will help them in increasing their productivity. In this regard, it will
help the chosen organisation in overcoming its failures corporate strategy governance as it
makes them in managing bargaining power of buyers.
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 (d) Threat of substitution: In context to Marks & Spencer, there are large number of
substitutes available, which is also the major reason behind failure of its corporate
governance strategy. In this regard, it is suggested to chosen business entity to provide best
in quality products to their potential customers by formulating effective corporate strategic
management plan. This will help them in retaining their profitability for a longer duration in
a dynamic business environment.
 (e) Threat of new entry: The profitability of Marks & Spencer is also effected by new
entries in a business market. In this regard, it is suggested to chosen organisation to modify
their corporate governance strategies in accordance with the products and services offered
by new entries. This will help them in overcoming its issue of fall in annual profit as it will
leads them in identifying market knowledge.
 So, as per the above mentioned scenario, this model will help them in formulating
effective corporate strategic management plan. This will help them in maximising their
profitability in a competitive business market.
Action Plan
This part intakes ideas by which a company can execute its strategies more effectively. In
context with M&S, for executing above business strategy i.e. analysing impact of external factors
on corporate governance and formulate effective policies accordingly, its managers can take
following actions:
Actions Procedures
Problem identification In order to formulate corporate strategy,
managers of M&S need to identify first where
they actually face losses. By identifying area
like intense competition at marketplace, they
can build more effective plans.
Formulate aims and objectives After identification areas of improvement,
further M&S needs to formulate effective
corporate goals and objectives for achieving
the same.
Conduct literature review After developing strategies, take some
reviews about what other experts say related
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to benefits of the same.
Research methodology Furthermore, this part helps in analysing
effectiveness of such strategies by taking
response of stakeholders for the same.
Data analysis Under this part, reviews of stakeholders and
experts are critically analysed to come over a
decision.
Conclusion and recommendation After completing all above stages, managers
of M&S will come on conclusion point to
decide whether corporate strategies help in
enhancing profitability or need to bring some
modification.
Final submission After then, they finally execute corporate plan
for executing the same.
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 CONCLUSION
It has been concluded from this mentioned research that in order to run business ethically
and effectively, organisations are required to develop proper corporate strategy and governance.
This would lead business to generate high profitability in business. For this process, a company
needs to involve participation of main stakeholders to develop business policies. With the help of
this research, it is being summarised that transformation of business model or small
modifications can help business organisation in reach to an all new level where they can perform
well in targeted areas with complexities as well.
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Online
M&S feeling the heat as winter approaches. 2018. [Online]. Available Through:
<https://www.theguardian.com/business/2018/nov/04/marks-spencer-feeling-heat-
strategic-update-restructuring>.
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