Managing Innovation in Business (Distinction Criteria) - BM627

This report provides an innovation audit for Marks & Spencer, including analysis of existing innovation performance and capabilities, as well as an overview of the industry in 2021. The report includes SWOT and VRIO analysis, Porter's Five Forces analysis, and a PEST analysis.

BM627: Managing
Innovation in Business
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Executive Summary
The term business innovation refers to when a workforce takes considerations of new
processes, products or services that guides positive changes while operating business tasks in
contemporary business environment. For the provided report document highlights evaluation
over innovation strategies adopted in chosen company while briefing on its innovation history is
being discussed. Further in the report critical considerations to existing innovation performance
and capabilities of the respective business firm will also be taken into consideration. The
provided report will serve as an effective basis for which business workings will be analysed
while working in tough situations. Lastly, a brief analysis of industry in 2021 will be presented
that coordinates with productive terms of the business firm.
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Table of Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
The organisation and Industry overview..........................................................................................4
Background of Marks & Spencer and innovation history...........................................................4
Existing innovation performance and capabilities at Marks & Spencer.....................................5
The industry in 2021...................................................................................................................8
Conclusion ......................................................................................................................................9
References......................................................................................................................................10
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Introduction
The term innovation have gained a vital part for companies while operating several
business tasks in contemporary business markets. The purpose of the report is to conduct an
innovation audit for the selected organisation i.e., Marks and Spencer. The provided company
was founded in 1884 by Thomas Spencer and Michael Marks as its respective founders which is
being headquartered in London, England, UK (Sirilertsuwan, Ekwall and Hjelmgren, 2018). The
given document containing innovation audit will include analysis over existing innovation
performance as well as capabilities for chosen company i.e., Marks & Spencer. Furthermore,
working of industry in 2021 will also be taken into consideration (Chakraborty and Biswas,
2020).
The organisation and Industry overview
Background of Marks & Spencer and innovation history
The respective company i.e., Marks and Spencer has it existence since 1884 that operated
as a stall in an open market in Leeds, Yorkshire. The stated company was founded by Michael
Marks and Thomas Spencer in Leeds for about 138 years ago when Jewish immigrant Michael
Marks came to the north of England. The company currently is working under supervision of
Steve Rowe as its chief executing officer or CEO. Timely researches are being performed with
respect to analyse business environment on the basis of which techniques of innovation is being
taken into consideration to grab potential opportunities available in the market (Colucci, Tuan
and Visentin, 2020).
According to Hannah Jenkinson, (2017), Marks and Spencer have a wide history of
innovation since its establishment over 130 years. Drawing on the instance respective company
was the first food retailer that appointed technical executive and chief chemist to the food
division. This helped respective company to deliver quality of food products that is still
demanded in current markets. In addition to this, in year 1934, M&S was recognised as the first
British retailer that used own research laboratory to pioneer new fabric. This innovation helped
respective company to maintain strong relationship with its suppliers through adopting advanced
textile technology laboratory (What 130 years of M&S history can teach us about innovation,
2017).
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The respective company that works under fashion retail industry had a great history of
innovation since its incorporation. The timely innovation guided effective operational working of
the business firm when being engaged in business environment. Through undertaking help of
innovative technologies managers at given company was able to tackle high force of competition
in its various marketplace. Such innovation guided efforts being produced at the retail firm to
gain better standards of working in the business firm while engaging in variety of operational
tasks. Through the analysis respective company also highlighted accomplishment of social
objectives of the company. For the purpose being clear vision within the workforce was defined
that coordinated with attainment of business goals and objectives while working in contemporary
business environment. The respective brand have a decent image in current business market
which is potentially the result of timely innovation performed by respective company. For the
reason being productive results were being obtained by delivering attractive design of products
and ensuring effective quality measures for the business firm (Mariani and Wamba, 2020).
Existing innovation performance and capabilities at Marks & Spencer
Graph showing capabilities of M&S with competitors
(Source: Strategic HRM of Marks & Spencer: A Review of Training and Development Practices)
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The term innovation performance and capabilities refers to techniques adopted in the
business firm that correlates to deriving success of the business firm in contemporary business
environment. In the given context, managers at M&S adopts suitable framework through which
effective screening of business environment can be taken into consideration. For enabling timely
innovation techniques at the business firm managers performs SWOT and VRIO analysis
through which business performance and resources capabilities can be taken into consideration;
SWOT analysis of M&S
For this analysis internal and external factors of a business firm is being taken into
consideration. Under the model managers at M&S are able to screen internal and external factors
affecting business workings.
Strengths Well-experienced: M&S has its long
existence since 1884 which is currently
being recognised as major British
multinational retailer. This frames as
the foremost strength for the company
as specialisation in business working is
being obtained including production of
products and providing effective
services to its customers.
 Wide range of products: The given
company offers wide range of products
to its customers. For inclusive of this
element company through its wide
range of product offerings are able to
target wide scope of customer
segments.
Weaknesses
 Poor supply chain: The sales for M&S
in some of its stores had reported to be
declining by the end of year 2019
(Marks and Spencer plc, 2022). The
reason for the cause was due to poor
supply chain system and is also the
weaknesses for the respective company.
 High operational costs: The given
company highly relies on manual
operations that sometimes proves to be
cost consuming process for the business
firm (Meraviglia, 2018).
Opportunities Online presence: M&S have online
presence that is displayed through e-
commerce store like eBay and Amazon.
Threats
 High competition: As M&S operates
under retail industry, thus high threat of
competition is being faced by the
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This provide opportunity to given firm
for ensuring long term presence and
tackle competition in the marketplace.
 Global expansion: The given company
being a multinational brand that is
already working in regions of Russia,
Poland, Brazil and many more provides
with a greater opportunity to expand its
operations in new as well as existing
with new product line (Mishra, Jain and
Malhotra, 2020).
operational firm. This encourages firm
to monitor market changes and invest
resources for staying in-trend to avoid
strategic failures. Some of the business
competitors includes John Lewis,
ASDA, Tesco, Next etc.
 Government policies for retail stores:
The provided company also faces threat
due to any amendments or changes in
government policies regarding
operation of retail stores under several
regional marketplace.
VRIO analysis of M&S
In context to VRIO analysis valuation of each resources of the business firm is being
done at M&S. This includes dividing business resource under valuable, rare, imitation and
organisation;
Resources Valuable Rare Imitation Organisation
Finance Yes No Yes Yes
Awareness of
Brand
Yes Yes No No
Leadership
terms
Yes Yes No Yes
Market position Yes Yes No No
Resources Analysis
Finance
 Valuable: M&S considers finance as one of the
valuable resources of the operational company. For the
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reason being this acts as a strong base for organisation
for completion of several business objectives, thus is a
valuable resource.
 Imitable: The given resource i.e., finance is often
found to be common in business market. This can be
copied by competitors of the business firm.
 Organisation: Finance resource is considered to be
well organised under other operational working of the
business firm.
Awareness of Brand
 Valuable: The given resource is categorised under
valuable resource for the given company. For the
reason being long term existence of the business firm
can be ensured.
 Rare: The provided resource is a rare resource, as
given company has a long term of existence.
Therefore, is one of the rare resource for the mentioned
company.
Leadership terms
 Valuable: The provided resource is considered to be
one of the valuable resource for the company.
Managers at workplace defines collaborative efforts
through defining effective leadership terms in the
organisation.
 Rare: The mentioned resource is also considered to be
rare resource under VRIO analysis. This could be due
to innovative leadership principles being followed in
the business firm.
 Organisation: The stated resource is considered to be
organised resource for the business firm. The
leadership principles adopted at the business firm well
coordinates with other business operations of the
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workforce.
Market position
 Valuable: The given resource is considered to be
valuable resource of the business firm. Under this
effective basis of workings can be established through
promoting better market position of the company.
 Rare: A decent market position of a company is the
result of hard work and dedication, therefore, is
considered to be rare resource for the respective
company (Tavassoli and Bengtsson, 2018).
From the analysis of VRIO analysis for resource at M&S, it can be said that “Finance”
resources is the most important resource for the given company. Managers at the business firm
are advised to invest more dedication to such resource as it will help towards ensuring better
brand image of business firm in future markets.
Porter’s Five Force analysis of M&S
It is a framework or technique that an organization uses to analyse competitors. This
approach, which uses a mix of five indicators to estimate the intensity of rivalry in a sector, is
discussed below in the context of Marks and Spencer:
Threats to new entrance - This aspect relates to new enterprises' ability to enter the
sector. Existing businesses may be threatened since new enterprises will have innovative items in
their storefronts. This reduces the danger of new entries into the market for Marks & Spencer.
Supplier bargaining power: This component determines the quantity of suppliers in the
industry and the degree at which the organization has the ability to deal with companies.
Because of the large number of suppliers in the sector, the power of suppliers is weak in the case
of Marks and Spencer (Hübner and et. al., 2021).
Consumers' bargaining power: This section focuses on customers' bargaining power. If
there are fewer customers in the industry, this might be the company's greatest danger. Because
Marks and Spencer sells high-end goods, customers may have strong negotiating power in this
scenario.
Threats from substitutes: When customers are able to locate an alternative for a product,
this hazard occurs.
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This poses a significant challenge to Marks & Spencer because its items are widely available in
the market, and customers may obtain identical services from other firms.
Rivalry with existing competitors: This refers to the amount of competition between
businesses in the same industry. Marks and Spencer confronts fierce competition from its rivals
in the UK, where multiple stores in the same industry compete for a large portion of the market.
PEST analysis
External analysis assists managers to develop appropriate plans for future development
and improvement. It is a wide phrase that encompasses any actions that occur outside of the
office and have an influence on business. Marks and Spencer's PEST analysis is provided below
for this purpose:
Political: Due to less restrictions on trade practices, Marks & Spencer is able to conduct
business in a variety of nations across the world. Furthermore, Brexit has created a great deal of
uncertainty for the relevant organization, which is having a substantial impact on its commercial
operations (Lomas and et. al., 2021).
Economic: Customers' purchasing habits have altered as a result of the present epidemic.
They are now budget conscious and seek things that are affordable. Customers' discretionary
income is now lower than it was previously. In the case of Mark & Spencer, the ongoing
pandemic is having a negative impact owing to changes in client shopping behaviour.
Social: Customers in the United Kingdom are familiar with the name Marks and Spencer.
Because the firm has been there since the 1800s, it is no longer able to attract new clients. In
recent years, it has become a less popular brand.
Technology: Technology has now become an integral component of the corporate world.
For an organization's success, it is critical to implement the most up-to-date tactics. Marks &
Spencer, for example, ensure that they operate in tandem with technology improvements. They
provide internet shopping, self-checkouts, and other services for this purpose (Wong and Ngai,
2021).
Legal: The legal environmental factors of the retail firm include legal laws and policies
that needs to be taken care by respective firm. This includes consumer laws of the respective
region company operates.
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Environmental: This includes taking care of the environment in which respective fashion
retail firm operates its operations. It provides a formulation of effective brand image of the
company in relative operational environment.
The industry in 2021
According to Dan Hughes, (2021), millions of consumers in contemporary business
market around the world faced issues due to outbreak of coronavirus. In March 2020, clothing
sales under the fashion industry has declined by 34.8% in the UK alone. In light to uncertain
times for which changed behaviour of consumers was observed the provided industry have
struggled a lot. For the phase many brands have adopted techniques of operational strategies and
innovation that guide them to operate effectively in such markets (The Cut of the Fashion
Industry in 2021, 2021). Therefore, due to the cause fashion industry was one of the industry that
was most impacted by the disaster. For the reason being consumers became more concise for the
healthcare and also environment full of stress was also being developed. This in turn lead to
declining sales for the provided industry. In turn effective measures of innovation was adopted
by several businesses working under particular industry. This includes taking use of innovation
and development of effective business strategies for tackling with such issues and challenges
arise in respective industry.
From the analysis it can be stated that, demand for online or e-commerce market products
was being raised during the period of time. In the time due to outbreak of COVID-19, selling of
various consumers products and services showed a significant decline in their sales. The reason
for the cause was highlighted as individuals being health conscious and threat was spread for
spread of coronavirus disease (Thomas, 2020). For overcoming such challenges M&S being
working under fashion industry took use of various innovative strategies. In its inclusion better
standards of working of the business firm was being derived that coordinated with changes in
business markets. Managers at the respective firm adopted customer centric techniques and by
reacting to stakeholders feedbacks specified alteration to code of conduct for the given company
was being taken care of. Therefore, as an overview of industry in 2021 significant changes in
core business operational tasks such as customer dealings, production standards and stakeholder
management was being taken into consideration (Wadho and Chaudhry, 2018).
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Conclusion
From the analysis of above report document, it can be concluded that business innovation
is an important aspect on the basis of which complexities regarding business environment can be
taken into consideration. It can be said that proper environment screening is being done by
business firms with respect to taking into consideration internal as well as external market factors
affection operational working of the firm. Furthermore, it can be stated that effective innovation
strategy can be adopted by the business firm that guides long term existence of the firm in
respective markets.
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References
Books and Journals
Chakraborty, S. and Biswas, M.C., 2020. 3D printing technology of polymer-fiber composites in
textile and fashion industry: A potential roadmap of concept to consumer. Composite
Structures, 248, p.112562.
Colucci, M., Tuan, A. and Visentin, M., 2020. An empirical investigation of the drivers of CSR
talk and walk in the fashion industry. Journal of Cleaner Production, 248, p.119200.
Hübner, A., Amorim, P., Fransoo, J., Honhon, D., Kuhn, H., de Albeniz, V.M. and Robb, D.,
2021. Digitalization and omnichannel retailing: Innovative OR approaches for retail
operations. European Journal of Operational Research, 294(3), pp.817-819.
Lomas, L.Q., Elordi, A.G., Escondrillas, A.A. and De, D.L.D.I.G., 2021, September. A
Systematic Literature Review of Artificial Intelligence in Fashion Retail B2C. In 2021
6th International Conference on Smart and Sustainable Technologies (SpliTech) (pp.
01-06). IEEE.
Mariani, M.M. and Wamba, S.F., 2020. Exploring how consumer goods companies innovate in
the digital age: The role of big data analytics companies. Journal of Business
Research, 121, pp.338-352.
Meraviglia, L., 2018. Technology and counterfeiting in the fashion industry: Friends or
foes?. Business Horizons, 61(3), pp.467-475.
Mishra, S., Jain, S. and Malhotra, G., 2020. The anatomy of circular economy transition in the
fashion industry. Social Responsibility Journal.
Sirilertsuwan, P., Ekwall, D. and Hjelmgren, D., 2018. Proximity manufacturing for enhancing
clothing supply chain sustainability. The International Journal of Logistics
Management.
Tavassoli, S.A.M. and Bengtsson, L., 2018. The role of business model innovation for product
innovation performance. International Journal of Innovation Management, 22(07),
p.1850061.
Thomas, K., 2020. Cultures of sustainability in the fashion industry. Fashion Theory, 24(5),
pp.715-742.
Wadho, W. and Chaudhry, A., 2018. Innovation and firm performance in developing countries:
The case of Pakistani textile and apparel manufacturers. Research Policy, 47(7),
pp.1283-1294.
Wong, D.T. and Ngai, E.W., 2021. Economic, organizational, and environmental capabilities for
business sustainability competence: Findings from case studies in the fashion
business. Journal of Business Research, 126, pp.440-471.
Online
Marks and Spencer plc, 2022. [Online]. Available at:
<https://corporate.marksandspencer.com/archived/annualreport2019>
The Cut of the Fashion Industry in 2021, 2021. [Online]. Available at:
<https://digitalmarketinginstitute.com/blog/the-cut-of-the-fashion-industry>
What 130 years of M&S history can teach us about innovation, 2017. [Online]. Available at:
<https://www.futurelearn.com/info/blog/ms-innovation>
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