Strategic Analysis of Mark and Spencer: Issues and Competitive Edge

This report conducts a strategic analysis of Mark and Spencer, a multinational retailer. It identifies three primary strategic issues: supplier concerns, financial management challenges, and difficulties in overseas markets. The analysis explores how these issues impact the company's performance and potential for growth. The report also examines resources and key capabilities that contribute to M&S's competitive advantage, including technology, trendsetting abilities, supply chain management, and an efficient workforce. The analysis further discusses how these capabilities influence the company's ability to address strategic issues and maintain a competitive edge in the retail market. The report emphasizes the importance of effective strategic planning and resource allocation for M&S to achieve its objectives and adapt to market changes.

Strategic Analysis

Contents
INTRODUCTION...........................................................................................................................1
STRATEGIC ISSUES OF MARK AND SPENSER..................................................................1
RESOURCES AND KEY CAPABILITIES THAT ASSIST ORGANISATION IN GAINING
COMPETITIVE EDGE...............................................................................................................3
INFLUENCE OF ORGANISATIONS COMPETITIVE STRATEGY ON STRATIGIC ISSUES
.........................................................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Organisations that are operating in market have a certain vision regarding what they will be
working for to achieve. They prepare a strong long term plan that will assist these organisations
in moving forwards and growing at the same time. Strategy is basically, considered to be a plan
of action that assist organisation in achieving their goals and objectives in a set period of time
(Al-Turki, 2011). The managers are tasked with the responsibility of conducting strategic
analysis so that company is able to tackle all the issues in an appropriate manner. The chosen
organisation for this report is MARK AND SPENSER, which is a multinational retailer and is
ranks in one of the top 10 organisations. There are more than 1500 hundred stores that are there
in different country. It is considered to be luxurious brand when it comes to its primary offering
that is clothing. This assignment will basically discuss three prime issues at large where there
impact upon organisation will be analysed. Also, how these can allow company in gaining
competitive advantage will be covered in this project. The role of competitive strategy in relation
to strategic issues is going to be stated in this file in a brief manner.
STRATEGIC ISSUES OF MARK AND SPENSER
If the company is not working as per the plans, then it is impossible for them to attain any of
the target in a desired frame of time. they need to state a path that can be followed for making
sure that their strategic tools are used in a way which leads to gaining competitive edge in
market. There are multiple issues which are faced by companies in the environment. most of the
problems are of day to day in nature (Capaldi, 2013). These can be resolved by using strategic
approaches and stated methods to sort these issues out. In the beaning of industrial revolution,
most of the organisations were not focusing on the strategic aspect and hence in long term a lot
of them failed. But today, companies like MARK AND SPENSER are specially putting their
resources in the departments which will assist them in achieving higher level of effectiveness.
The definition of strategic planning is to prepare a plan of action that will set a path for
organisation which will allow its employees in achieving all the objectives and goals (Díaz and
Puente, 2012). There are certain issues which are faced by MARK AND SPENSER in operations
which are strategic in nature. If they are not sorted in a proper manner than there will be higher
level of losses to company. Recently, it has seen drop in its sales and profitability which is due to
the issue. Problems associated with MARK AND SPENSER are stated below:
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 Suppliers issues: There are various strategic issues out of which suppliers concern is
first. The company is known to be fair with them but recently there has been shake-up’s
which can impact organisation and its capabilities. MARK AND SPENSER suppliers
have lower level of bargaining power with them, as there is huge level of competition
within the system (Gallagher, 2012). The company is basically taking advantage of this
situation which has caused troubles with various associations. they did so for enhancing
their profitability while serving consumers at a discounted rate. Today, due to this
situation supplier have formed associations which is now having higher level of
bargaining power. But this is not a new issue for the company, they have this problem
since the beginning of 21st century and because of their temporary approach they have
failed in achieving any sort of target.
Why it is strategic:
MARK AND SPENSER basically thought that they could exploit the advantage of
having suppliers who have lower level bargaining. But due to constant rough behaviour and non-
transferring of profits, the supplier has formed association which has now improved their
bargaining power. Also, the company is facing a lot of resistance in developing nations too as it
tried to exploit weak supplier base. This can impact organisation profitability and market
effectiveness to a higher level of extent.
 Financial management: There has been a lot of news about MARK AND SPENSER
and its financial management. All of them had a negative perspective with them and this
led to issues in the organisation. the company was involved in an accounting scandal in
2014 where it overestimated its profits and presented them as real figures to shareholders
and other parties (Grinblatt and Titman, 2016). This was done to hide the real condition
of organisation from them. also, they invested a lot of resources in overseas expansion
which resulted in losses as these markets did not provide expected results to the users.
MARK AND SPENSER is one of the most valued brand in UK.
Why it is Strategic:
The company was trying to ensure that its main sources of funds stay unaware of real
financial condition was not good and overstated their profits. This basically boosted organisation
market for certain period of time. But lately at the time of audit, it was found out and caused
crash in the market value of company. Basically, if there is a good financial management then
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the company will be able to register optimum utilisation of resources which is important and
required (Harrison, 2011). Also, with installation of proper financial system, the company will be
able to answer to all the queries of shareholders.
 Losing Overseas market: There was a time when MARK AND SPENSER had an edge
over its competitors in UK as it was able to enter and gain market share in overseas
market. But lately it is found that they are losing this edge as they are failing in these
market at a very rapid speed. Recently, MARK AND SPENSER had to pull out of USA
as there was intense level of competition prevailing in the market and also company was
not able to attract consumers to its store due to lethargic approach. This aspect was
strategic for company and enabled it in diverting its dependency on UK market. MARK
AND SPENSER, is basically not able to understand as to which consumer it has to target
for gaining maximum output in the market. The managers need to ensure that each task is
completed with a higher level of effectiveness.
Why it is Strategic?
MARK AND SPENSER is a well-known organisation around the world and it has to
manage its image of being one of the qualitative goods provider. They also, need to take several
steps and enact structures that are as per requirements of consumers (Hirsch, Burggraf and
Daheim, 2013). The company is still operating in China where it has registered growth, it also
need to target markets like India and other ASEAN countries which have scope to offer higher
rate of return to the organisation. it basically, need to divert its reliance from UK market and
ensure that they can attain a higher level of effectiveness at every place.
RESOURCES AND KEY CAPABILITIES THAT ASSIST ORGANISATION IN GAINING
COMPETITIVE EDGE
There are different types of issues which are being faced by MARK AND SPENSER. They
need to use their resources and capabilities in an effective manner to ensure that each task is
completed in an efficient manner. it is very important for the company as to maintain an edge in
the market and attain its objectives in set time. there are different ways this can be done by
company. Below are some of the resources and capabilities listed which assist organisation in
attaining a competitive advantage over its competitors:
 Technology: This is an aspect which has kept MARK AND SPENSER as a market
leader for longest period of time. the company is known to use latest technological
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advancement as a method to achieve its goals and objectives in an efficient manner. It has
installed and trained its workforce in a way that they are able to use all the newly
introduced equipment’s and software’s (Ingley, Mueller and Cocks, 2011). MARK AND
SPENSER is constantly investing in technology which is a good thing for a company as
most of the firm which are now defunct did not focused on improving their technological
ground. They are one of the biggest Online retailers in UK and China. They offer order
and pick services as well and multiple payment system are adopted by the organisation.
 Trend Setter: This is capability of company which is gained after serving market for
more than 100 years. Today, they know how to set a trend in the environment. they use
their marketing tools for targeting people and setting a demand for the new product.
MARK AND SPENSER is known to invest use there are many companies which are
operating in this sector and they all are trying to gain this ability to manipulate market
and its elements.
 Supply Chain Management: The company is known to have enacted a system that has
boosted the capabilities of organisation is filling up its shelfs. Basically, it is able to get
all the supplies to stores in time which is very important as to ensure that all the shelfs are
full and stores are able to serve consumers in a right manner. The whole process begins
with each store making its demand for week to the inventory department which supplies
all products to these stores. There are mega distribution centres which are enacted by
company so that the duration can be reduced by 3 days (Keyes, 2016). All the items and
products are received by stores within 3 days after they have registered the demand.
 Higher capacity to tackle variables: MARK AND SPENSER has come a long way
since its inception. It has more than 6000 stores in different parts of country and regions.
This gives it a strategic advantage over its competitors. The company is able to cater to
needs and wants of people as per requirements and demand. This capability enables
MARK AND SPENSER in changing its patterns of strategy and allowing itself more
time to conduct various task in more efficient manner. MARK AND SPENSER is an old
organisation which is known for its productivity and profitability. They are serving
people with qualitative goods and services. They are getting most of the technical items
from other markets like China to reduce the margins and enhance their own profitability.
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 Efficient Workforce: MARK AND SPENSER is known as a major human resource
recruiter. It is currently having a manpower of 460,000 individuals which enables it in
serving its vast market in an effective manner. These days it is very important for
organisations for to have people who have capabilities as per the requirements. The
company is able to save more than 400 million dollars per year due to the efficiency
improvement that they are having because of its workforce (Koller, Goedhart and
Wessels, 2015). The company has to keep on training them and ensure that they are able
to achieve all the goals and objectives in a set period of time. the aim of top management
of MARK AND SPENSER is always to train people to a level that they are prepared to
face any uncertainty. Quality workforce is the prime factor that allows organisation in
attaining a competitive edge in the market. They are the ones which allow organisation in
reducing burden on financial and other resources. It is basically the people, if they are
good then company will prevail and if they are not as per needs then organisation will
lose big time in market.
 Suppliers: They are the power of MARK AND SPENSER which enables it in serving
consumers as per the requirements. Today company is facing a lot of threats but due to
the quality of products that are provided by its suppliers, they are able to maintain their
position in market. The managers are specially focused on the needs of the suppliers so
that they are satisfied and company do not have to face any major issue in future
(Lamberti, and Noci, 2012). Though recently due to formation of Associations, there are
certain problems that have come up. But the managers are trying to sort them out by
negotiation and strategic approach.
 Brand image: Due to serving market from long time, MARK AND SPENSER was able
to attain a better brand awareness in the market due to its approach and quality that it
provided to people. the whole concept of company is to provide people with One stop
shopping centre. This assisted individuals in saving time and buying everything from one
point.
These are some of the resources and capabilities that enables MARK AND SPENSER in
serving market in an appropriate manner. There are many variables that can hamper its
productivity but these abilities assist it in overcoming them. the company is operational from last
100 years almost and since its inception, it has gained a higher ground in the market. With time it
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focused on developing right capabilities which enabled it in gaining competitive advantage over
competitors. It focuses on people which is important for making sure that each task is completed
in a limited time period and resources.
INFLUENCE OF ORGANISATIONS COMPETITIVE STRATEGY ON
STRATIGIC ISSUES
Mark and Spenser is leading company in retail industry of UK but they are highly
dependent on their domestic market, this is can be considered as one of their major weakness.
Top level management of this company knows that their supplier does not have much bargaining
power, they made a strategy that they will reduce their profit in order to earn more profit
(Mahnke and et. al., 2012). This made a negative impact on the relation between suppliers and
company. This strategic issues raised various kind of problem for cited company because earning
more profit was crucial for their financial growth but at the same time maintaining good relations
with suppliers is also essential. Most of the companies makes strategies so they can attain their
objectives but sometime things do not work according to their expectation. This company broke
some rules relating to accounting standards, they adopted an unethical strategy in order to
impress their shareholders and attract more capital for external sources.
Financial position of this company is not sound and they were trying to make a strategy
that can help them in getting more investment. This firm knew that they cannot retain their peak
position in the industry if they will expand their business in other territories. They started
expanding their business in various countries but most of did not work out according to their plan
(Purce, 2014). Their key strategy was to increase their revenue by investing money in emerging
market but now their investments are not pay them off and they are facing some severe problems
relating to revenue and market expansion. The extent up-to which competitive strategy of Mark
and Spenser will address strategic issues is mentioned below:
Latest technology – This company is known for taking major risks and they have very
active in adopting latest technology. Mark and Spenser started their online store when most of
the other players of this industry were only planning to starts online selling. It provides them
competitive advantages and it also make a positive impact on their sale. The strategy of adopting
modern technology helped cited firm up to a limited extent. It did not assist them in solving the
problems which they had with old suppliers but it supported them in keeping new relations with
new suppliers. The overall impact of the bad connections with old suppliers did not make a huge
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impact on business operation of the company because they successfully maintained a decent
level of demand of their product through online sale.
Sound supply change management– Cited company always have a good supply chain.
This helped them in earning some extra edge over their competitors. This organisation always
focused on the management of their supply chain because they know that it is essential part of
their business (Zichermann and Linder, 2013). In retail sector, a company with sound supply
chain can easily reduce the cost of business because they can minimise the wastage of resources
and maintaining a proper balance between demand and supply. This competitive strategy helped
cited enterprise in in resolve core issues with their suppliers. If this tactic was not adopted and
implemented by cited company, then their issues suppliers may not get resolve in short period of
time. It also assisted them in improving their financial position, when the goods are deliver in
committed time and problem of overstocking get resolved then firm can save significant amount
of money and use it in strengthening their financial position.
Quality workforce – Mark and Spenser always focused on development of their
employees because them know that they are one of the most important resource of this company.
They have large number of skilled workers, developing quality workforce is crucial part of their
competitive strategy (Competing on Resources. 2016). Some of their senior employees are
helped this firm in resolve issues relating to overseas business. Their contribution in resolving
strategic issues is limited but it is significant.
Suggestion for improvement
This firm should raise their ethical standards so they can resolve the issues relating to
financial management. Their financial position may not be in good condition but they show
follow all the norms relating to accounting standards. They should continue the investment
which they are investing in adoption of latest technology. Market trend is changing and people
are preferring to buy good through online shopping. They should not invest their funds in
opening more stores because they already have solved issues with their suppliers and they cannot
be affording huge expenditure on buying land for stores and development it according to the
standards of Mark and Spenser. This company should sell some of their business so they can
reduce the burden of debt and improve their financial health.
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CONCLUSION
From the above report, it can be stated that there are different ways a company can use
strategic approaches to sort out issues that are related to the market profitability and productivity.
The organisation has to focus on various resources that are required for growth and development.
it has to develop a plan of action that will utilise these resources in an efficient manner. there are
different issues which are stated in the report and they need to be addressed. There is also
description of various resources and capabilities of company which enables it in achieving all the
objectives. Also, there are ways stated that will be used for gaining higher level of productivity
in market.
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REFERENCES
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Online
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<https://hbr.org/2008/07/competing-on-resources>.
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