Strategic Analysis of Marks and Spencer: A Comprehensive Study

This comprehensive study delves into the strategic landscape of Marks and Spencer, a renowned British multinational retailer. It analyzes the impact of the macro environment on the organization, assesses its internal capabilities, and evaluates its competitive position using Porter's Five Forces model. The study further explores various strategic directions available to M&S, including generic strategies, growth strategies, and the implementation of a related diversification strategy. It concludes with a strategic plan outlining SMART objectives, strategies, tactics, and evaluation and control mechanisms for M&S to achieve sustainable growth and competitive advantage.

BUSINESS STRATEGY
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Contents
INTRODUCTION................................................................................................................................3
LO1...................................................................................................................................................4
ANALYSE THE IMPACT AND INFLUENCE WHICH THE MACRO ENVIRONMENT HAS ON AN
ORGANISATION............................................................................................................................4
LO2 ASSESS AN ORGANISATION’S INTERNAL ENVIRONMENT AND CAPABILITIES.........................9
LO3 EVALUATE AND APPLY THE OUTCOMES OF AN ANALYSIS USING PORTER’S FIVE FORCES
MODEL TO A GIVEN MARKET SECTOR...........................................................................................14
LO4 APPLY MODELS, THEORIES AND CONCEPTS TO ASSIST WITH THE UNDERSTANDING AND
INTERPRETATION OF STRATEGIC DIRECTIONS AVAILABLE TO AN ORGANISATION......................17
GENERIC STRATEGIES.................................................................................................................17
GROWTH STRATEGIES FOR M&S...............................................................................................19
STRATEGIC PLAN........................................................................................................................25
CONCLUSION.................................................................................................................................27
REFERENCES...................................................................................................................................28
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INTRODUCTION
A strategy is the term which provides direction and scope to the working structure of any
organisation. In this word, the advantages and configuration of the resources within a
challenging environment can meet the needs of the markets. It can further fulfil the
expectation of the stakeholders of the organisation (Favaro, 2015). There are a number of tools
which can assist in the strategic analysis of the external factors that influence the strength and
positioning of the organisation.
Marks and Spencer is a well-known British multinational retailing organisation. It specialises in
the selling of clothes, luxurious food products and home products. M&S was founded in 1884
by Thomas Spencer and Michael Marks in Leeds. The company is listed on London Stock
Exchange ranking on FTSE100 index (Gamble and Thompson, 2014). The business mission
statement is based on the M&S outlined clothing and food business with its core financial
objectives to maximise the preference of their shareholder.
M&S has currently 1483 stores around the globe, among which 615 only sell a food product.
Back in the early 20th century, the establishment of selling British made goods and policies were
entered into a long-term treaty with raise of pay for Supermarine Spitfire fighter aircraft. The
organisation followed those policies and treaty to set competitive advantage to the market. The
company consists 914 stores in the UK and beyond them, 222 are owned and 348 are franchises
stores which provide them with a platform to encounter with more than seven million
registered users across the global market.
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LO1
ANALYSE THE IMPACT AND INFLUENCE WHICH THE MACRO ENVIRONMENT
HAS ON AN ORGANISATION
M&S has expanded their business through establishing a best practice of retail in society. It is
western managerial giant through which the corporate objectives of business can be
determined as “Making aspirational quality and innovation which are accessible to all”. Marks
and Spencer can foreplay generic strategies through which strong tradition and corporate
responsibilities are integrated with all other operations at each level (Zhu and Chertow, 2017).
Multinational companies and firms who are establishing as subsidiaries and entities in foreign
countries or are depending on integration process of the subsidiary are generally originated
through Origin Company.
Macro-environment factors, as well as the influence of the economic factors, can set the
dimension to correlate with the dimension of research which is interlinked with intercultural
dimension and integration process. A macro environment factor involves the influence of
economic factors of the business through examining the inbound logistics, marketing, outbound
logistics and sales and services.
The company has established their entire business through Middle East, Asia and Europe
through spans of 59 territories and generate revenue of £1.2 billion in their last financial year
(Drucker, 2014). The company has suffered financial crisis from the past years but has
continued to be strong brand as they had maintained their premium pricing, backing and
continuous investment in advertising. The improvement in their sales and share prices has
reversed their grip and had outreach to the competitive retailers. They have also helped the
retailer to build a strong brand positioning through sustaining waste reduction and sourcing
and providing community care.
MISSION OF THE MARKS AND SPENCER
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The mission of the organisation is to be standard organisation against others in providing the
accessible quality goods to their customer. Further, their mission is to maintain the business on
strong values, innovation, Integrity and Inspiration (Goetsch and Davis, 2014).
VISION OF THE ORGANISATION
The vision of the marks and Spencer is to investigate the economic, social and global
environment which is reliable for them. In order to explore the significance of international
trade and the European dimension for the UK business building, a sustainable future is
essential. By being a business that enables the customer to have a positive impact on well-being
and on communities.
GOAL AND OBJECTIVES
The strategic intent of the organisation is to expand their customer base through sustainability
plan. They will support to 1000 communities and 10 million people to live happier and healthier
lives through Zero Waste Business (Rothaermel, 2015). The objectives of the Marks and Spencer
majorly focus on-
 To build its brand
 To sustain customer interest in their food stores
 To introduce unique design and create unique clothing style
CORE COMPETENCIES
M&S core competencies result in the development of quality products and influencing as a
strong brand and good customer services. The reliability to generate the strong leadership
position to the firm with the development of core product is considered as the core
competency of the organisation (Rothaermel, 2015). It can be foreseen that the customer
benefits can imitate the competitors easily. Thus, leveraging on products and markets helps in
developing an attribute towards outperformance of the competitors and implementing
strategies accordingly.
IMPACT OF MACRO ENVIRONMENT FACTORS IN MARKS AND SPENCER
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The strategic business analysis of Marks and Spencer can be recorded through performing
PESTEL analysis in order to understand the impact of macro factors in the organisation. A
PESTEL analysis provides an extensive framework to investigate a non-controllable factor by
potential means in order to affect its operations (Morelli, 2018). These measures are likely to
minimise the upcoming risks factors and implications. They can be explained as:
POLITICAL FACTORS
M&S has been favourable in terms of product imports and export under the treaty with the
European Commission’s Free trade agreements. The company has, however; decrease their
cost of outsourcing their products. The working prospects of the business have been affected
after the British EU referendum on 23rd June 2016. It has resulted in a dip in the company's sales
and has increased their cost structure (Anton, 2015). Due to this, the company has to suffer
huge market share loss. The stalled growth in their international business has certainly
decreased profitability and has also affected their overseas operations. The business has
enormously suffered decline due to geopolitical instability and fluctuations in their local
currency. It has resulted in a decrease in consumer demand. The company has eponymously
intestate on their ethical “Plan A” which is based on the green strategy. This has set them into
dealing with the sustainable measures (Paul, et al. 2014). This flagship energy efficiency scheme
has resulted in providing them with a clarity in their business prospects. Initially it has affected
the company's effort but later on, it has outset their business behaviour.
ECONOMIC FACTORS
During the financial crisis in the year 2008, the company has suffered heavy loss in their
customer base as the competitors like Tesco, ALDI and other has offered them discounted
prices product. M&S has an emphasis on providing higher quality products and better customer
satisfaction. This has also however led to decrease in the sale for short-term and increase in
consumer confidence for the long term. The strategy has helped the business to maintain their
market share and achieving their targeted sales in the business (Rauch, et al. 2015). The impact
of Brexit has propounded on the sudden drop of the consumer confidence and fluctuations in
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the commodities prices. Further, it has negatively impacted on the performance of the stores in
the Middle East.
SOCIO-CULTURAL FACTORS
The factor that has affected the change in the value of population and producing high-quality
products has been affected. With the considerable development in the different generations,
customer preference such as Baby Boomer generation retiring and Generation X and the
Millennial has heavily shifted towards consumer behaviour and their shopping trends along
with channels and technology (Paul, et al. 2014). The two trends that are considered are green
consumerism and customers ethical concerns that contribute to the sustainable development
of the organisation. The introduction to the Plan A has helped the organisation to build
relationships with customers and suppliers. It has also added the organisation to operate with
redistribution partners effectively by organising community shop programme. Further, M&S has
also started a campaign through 1000 employees those who are indulging in community work
and charity action days. The programme named as “Spark Something Good”.
TECHNOLOGICAL FACTORS
M&S is in good strategic position after the proliferation of enjoying benefits by rising mobile
wave. This has increased their business trends and has also increased in speed of
transportation. People associated have seamlessly integrated online behaviour experiences and
physical experiences through setting a platform for the organisation (Goetsch and Davis, 2014).
M&S has launched their own web platform through which they provide services and products
to the people by serving them with deliverables. A predictive analysis of the replenishment and
adaptation of digital strategy result in first mobile approach and resolving the dis-comfortless
with the help of technology. The latest trends to access answer to their customer and meet the
needs of consumers can forefront to the technological development of the company.
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Figure 1: PESTLE Analysis
Source: (Anton, 2015)
ENVIRONMENTAL FACTORS
The formulation of the Plan A has resulted in the environmental and ethical practices
concerning towards the consumer pressure in the business. It has cradled on to grave their
suppliers and disposes on the strategic and tactical practices of the environment (Anton, 2015).
M&S has outset their business curve on reducing the waste and helping stakeholder's
communities. For this plan of action, M&S has been sourced from silver and gold sustainability
standard producers. The charitable activities have been continuously performed by the
organisation to set a transparent supply chain. The company has gained its rank ahead from
their competitors by increasing the development of sustainable products and services through
the implementation of the lucrative strategy.
LEGAL FACTORS
Following the impact of the Brexit on the company, it is likely to face major legal issues
regarding the supply chains, IP rights and international contracts and more (Gamble and
Thompson, 2014). Under the Health and safety regulations, consumer rights and other legal
factors organisation have set an initiative called "Behind the Barcode" through which different
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standards such as VAT rules, Online Home delivery services and in-store collection through
scanning a product has been published. The legal environmental practices of the organisation
are paramount on the expansion of ‘Simply Food' by the organisation. M&S has set a
framework to improve their remuneration work and provide greater transparency to their
stakeholders. For this, the company requires put a strategic plan in order to reduce the tariffs
and buying the power of the stakeholders in the market.
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LO2 ASSESS AN ORGANISATION’S INTERNAL ENVIRONMENT AND
CAPABILITIES
The internal capabilities of the organisation can be maintained through aiming at strengths,
weaknesses and opportunities and threats that are faced by the M&S. A SWOT analysis can be
performed through which assurance to the external environment can be maintained.
STRENGTHS
Marks and Spencer plc explores their business through different means of franchise agreements
and in-house stores. It has been recorded that there are around 1382 stores worldwide. This
provides a strong competitive advantage compared to organisation comparative to other UK
business (Favaro, 2015). They have expanded their international business to 59 territories
across the globe. Majorly operating territories are Europe, Middle East and Asia. This place gets
the benefits of retail business under joint ventures and franchise operations. It has been
foreseen that Marks and Spencer have explored their food and clothing business in the top
developing market such as India and other regions such as Hong Kong, Europe. M&S has
inherited with the geographical diversification international strategy in order to mitigate the
potential risks in other countries and accessing on providing more stability.
It has also been observed that the company has managed their business in the food sector
through maintaining their profit margin of the market to 3.5% (Rauch, et al. 2015). This has
outreach to distinctive and differentiated means of a specialised strategy that is consumer
focused. The customer-centric approach has marked them as an iconic brand and is considered
as one of the top brands in the UK. The innovation, brand building and high-quality value
products enables the growth rate to the top position in the online sector from last quarter.
WEAKNESS
Despite multiple initiatives that have been strategized by M&S to attract the number of
employees from rival companies has resulted in the decline of their shares in the market. This
attempt was however not successful especially for strengthening their clothing arm business.
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The business has faced steep fall in their upcoming year since 2005 (Rauch, et al. 2015). After
the second quarter of 2016, the company has however grasped the level of stability in their
business. The decline in sales has also resulted in the loss of many key employees leaving the
job and joining to their key competitors.
The company has to face a battle while hiring the new recruits as the expenditure has raised
the bars of the organisation. The investment in the recruitment, hiring, training and
development of the new employees has however resulted in facing risk through potential
contracts and business (Goetsch and Davis, 2014). The new employees were becoming readily
available for the competitors. They have also decided to implement a digital transformation
strategy through which the company can set their own web platform which has also
experienced technical difficulties and privacy breaches. This turns out to be a great loss in their
schemes related to the introduction of their members. It has temporary set a shutdown to the
website.
OPPORTUNITIES
The growth rate in the food business of M&S has outreach to highest peak comparative to their
other services. The sale of the food business has also utilised the trend of expanding its network
through Simply Food, convenience stores and planning the fastest food through the opening
programme. The current prospects of the business to engage their customers were done
through high street stores and online shopping. M&S has also launched number of clubs
through associating members in groups and called it as Sparks. They have also introduced
personalise shopping experience and loyalty schemes (Jayaram, et al. 2014). Some of the
launched initiatives are no monthly fee and £100 gift cards facility. This has also present
opportunities for the company.
THREATS
Once the biggest clothing giant M&S has faced a big slump in sales that has dropped them to
the third position after Primark and Asda. Due to this reason, there has been a phase in which
recession and other macro-environmental factors were weakened (Rothaermel, 2015). It has
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been experienced that M&S is still facing challenges in the Middle East. The instability in
political and economic conditions has an upraised threat to operations in Ukraine, Russia and
Middle East areas of franchise operations.
Figure 2: SWOT Analysis
Source: Hill, et al. 2014
Increase in the terror attacks in Europe has also impacted the targeted sales of their stores. It
has been also measured that safety measure has not been focused by the organisation which in
turn result in destroying of large stores (Rothaermel, 2015). The economic uncertainty has
resulted in restructuring their supply chains and also comprise of loss of 8 percent of the
workforce in UK's stores of M&S.
USE OF MCKINSEY FRAMEWORK TO ENLIGHTEN STRENGTHS AND WEAKNESS OF M&S
The use of the McKinsey 7-S framework model can be used in order to align the situations that
are enduring the strengths and weakness of the organisation. The McKinsey 7-S framework
applied to M&S helps in accessing their internal capabilities, strengths and weakness of the
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organisation. It has been experienced that effective change in future capabilities and alignment
to departmental processes can be merged through this framework (Mitchell, et al. 2015). It
consists of seven elements through which organisation practices can be encountered. They are
classified as Hard and Soft Element.
Hard Elements Soft Elements
Strategy Shared Values
Structure Style
Systems Skills
Staff
Table 1: Hard and Soft Elements of Model
Source: Mitchell, et al. 2015
The elements can be explained as:
STRATEGY
M&S follows competitive pricing strategy through which marketing mix and product portfolio
have been developed. The Marks & Spencer has provided premium quality product through
which they offer a discount on products to get more customers. The dynamic strategy helps in
setting old stock input for sale at a lesser price. The other strategy they promote is a seasonal
sale to loyal customers by offering special discounts under their program named Sparks. Even
they get rewards points on each purchase (Tizroo, et al. 2017). They emphasize on diversity in
each outlet to promote women employees by bringing more female-friendly policies.
STRUCTURE
The organisational structure of Marks and Spencer is flat organisational structure through
which a limit is set between administrative level and front-line level employees. Through this
structure, the organisation is accessible in taking decisions with the support of their employees.
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Figure 3: Flat organisational Structure
Source: Tizroo, et al. 2017
The structure basically decreases to bureaucracy structure as the rapid change in the baseline
of the organisation is easy (Bertozzi, et al. 2017). M&S having flat structure result in delayering
of the authorities and increasing responsibilities of the employees through departmental
responsibilities.
Figure 4: Bureaucratic Organisation Structure
Source: Bertozzi, et al. 2017
SYSTEMS
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Systems play a vital role in the functioning of the organisation. M&S is the largest store with
first introduced self-checkout tills. The system that is followed by the organisation is Enterprise
system. These systems consist of processes that involve different departments along with
functional systems that are confined to each department (Goetsch and Davis, 2014). The
functional working system is recorded through which standard structure data is maintained.
SHARED VALUES
The M&S values of quality, innovation and trust of the customer. The M&S shared value
strategy. They depend on their sustainable retailing strategy through which the corporate
responsibilities report has been set out creates its impact on CSR values and draw a conclusion
among its stakeholders.
STYLE
The hierarchical scale of the management has a variety of management styles. M&S follows
autocratic leadership style through which they undergo their organisation activities (Jayaram, et
al. 2014). Other than this, Democratic working structure style is also followed by the
organisation in order to enumerate their working profile.
SKILLS
The skills recorded at M&S for their effective working is Communication skills, work value skills
and self-assurance and honesty and truthfulness skills.
STAFF
The employees that are associated with M&S are bringing values to life through innovative
products and creating more logical services to upright the business plan and skills with right mix
to deliver growth (Favaro, 2015). The staff can be acentric to follows the custom of the
organisation such as following uniform, wellbeing website and training and development for
providing driven facilities such as saving the plan.
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Figure 4: Mckinsey Model 7S
Source: Favaro, 2015
ANALYSIS OF INTERNAL CAPABILITIES OF M&S
To analyse the internal capabilities of the organisation and sustained competitive advantage
can be presented through VRIO Framework. The VRIO/VRIN Model can help in sustaining
competitive advantage for the organisation (Whitehead, 2015). It provides an additional
framework to enable opportunities for the business and defend threats.
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Figure 5: VRIO/VRIN Framework
Source: Whitehead, 2015
This can be analysed through BCG Matrix. The BCG matrix portrays brand portfolio of quadrants
through relative market share axis and speed of market growth. M&S can be positioned in
Question Marks as their market growth rate is high and can perform large cash usage through
many projects and campaigns but they do not access the large market share. The company
faces the direct competition with Waitrose, ASDA and other organisation those who are quite
successful with the segment (Zhu and Chertow, 2017). This company is positioned in Question
Mark stage and aims for Star Position.
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Figure 6: BCG Matrix
Source: Zhu and Chertow, 2017
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LO3 EVALUATE AND APPLY THE OUTCOMES OF AN ANALYSIS USING
PORTER’S FIVE FORCES MODEL TO A GIVEN MARKET SECTOR
An analysis to gain the competitive edge and outreach to improve the performance of the
organisation Porter’s five forces model can present better interpretation of data. Porter’s Five
Force Model was specifically designed to determine the competitive intensity and
attractiveness of an industry. The case of the M&S can be elucidated through influencing the
industry as follows:
THREATS OF NEW ENTRANTS
The retailing sector can present the low threat of new entrants as high capital investment costs
are required to enter the market. The potential entrants can be hindered by the M&S as they
gain the strong loyalty of their customer. This strategy of the company helps them to focus on
their quality products and overcome considerable barriers to entry. The company faces
incoming competition in both clothing and food sector (Bertozzi, et al. 2017). This can be
attained through lower end market and targeting customer with lower prices. The other fashion
brands such as Zara, Gap, Next and H&M has its major concern to target youngsters, fashion-
oriented people and others to gain the latest fashion set at affordable prices. The launch of
M&S site has helped them to gain competitive advantage but their footholds in its own High
street consumer are very reliable in gaining a competitive edge from their competitors.
THREATS OF SUBSTITUTE PRODUCTS
M&S has faced a decline phase of their industry due to ever-changing paramount of the
market. In order to remain competitive and at the premium position it is necessary to keep
one's brand consistent (Shakhshir, 2014). This requirement for any organisation is to meet the
ever-changing needs of the customer and encounters with their customer base.
The business measures in a different field are upraising and this regards with M&S clothing
business too. The threat of substitute is very high and it can imitate on the design of ever easier
design of the products. A huge loss has been incurred in the retailing operations of the M&S
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post-1990s which relate to the foreign imports. This has taken a threatening shift in the
customer preferences regarding the brand label and other measures were obtained. The
potential shift of the shop for a label or look for similar quality products can be offered through
maintaining better price. As regards, different company’s food stores business has also
developed a high range of quality foods and abandons the traditional market of M&S
(Mathooko and Ogutu, 2015).
BARGAINING POWER OF BUYERS
In the retailing sector in which the M&S industry operates rely on the bargaining power of the
customer. Therefore, it is consistent to say that bargaining power is high. It has also resulted in
pricing as the customer seeks for the fashionable designed items which instinct with a shift in
the consumer market. It has been experienced that disloyalty of UK consumers to British
products has affected retailers in heavily. The primary product-oriented strategy of the
company has placed a strong emphasis on its brand and are employing their customer through
customer-oriented approach (Mathooko and Ogutu, 2015). This helps in building strong
consumer relationships through which weaker consumer confidence can be approached. The
impact of Brexit has resulted in a decrease in growth of sales. However, cutting of the
employees (recession) and prices upshot to provide customer satisfactory results.
BARGAINING POWER OF SUPPLIERS
The M&S organisation was priory dependent on British suppliers due to which they had
experienced high bargaining power. Later on post-1990s, there was a sudden decline in sales as
the suppliers overseas have offered more competitive prices in order to outsource their
product globally. The company’s accounts significant competitive advantage through which
they enhance the bargaining power of its suppliers which is currently low (Paul, et al. 2014). It is
necessary to provide a considerable result to the British Suppliers as to overcome the declining
stage of the bargaining power of industry in terms of bargaining power of its suppliers.
INTENSITY OF COMPETITIVE RIVALRY
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The Marks and Spencer operate in the retail sector through which company offers quality value
for money products strategy. The organisation is almost 132 years old and has built its image
very strong. They have offered many benefits to the loyal customers through presenting
strategy by showing signs of weakness. It has made a drastic transformation in their catalogue
and online shopping with the steady rise in offering goods and quality products at affordable
prices (Tizroo, et al. 2017). The company has been growing their online business in order to
increase their sales ratio and set a strong competition level while facing their intense rivalry
from supermarket chains. The other rivalled supermarkets are Sainsbury, Tesco and Asda which
gives tough competition to the organisation. In clothing and Homewear retailing business
competitors of M&S are Topshop, H&M, Zara and John Lewis which tables their sales around
twenty-eight percent and eighty-five percent in supermarket retailing and clothing respectively.
Figure 7: Porter’s Five Force Model
Source: Paul, et al. 2014
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LO4 APPLY MODELS, THEORIES AND CONCEPTS TO ASSIST WITH THE
UNDERSTANDING AND INTERPRETATION OF STRATEGIC DIRECTIONS
AVAILABLE TO AN ORGANISATION
A strategic plan of M&S can be developed in order to achieve different business objectives. For
the development of an effective plan, it is crucial to focus on the different types of strategic
direction available to the M&S.
GENERIC STRATEGIES
Porter’s Generic strategies – It can be adapted to understand and analyse the effectiveness of
various strategies for M&S. According to this model, there are different strategies which can be
applied by an organization in order to achieve competitive advantage over other rival
companies. Key strategies which can be adopted by M&S are cost leadership strategy,
differentiation strategy and focus strategy (Moon, et al. 2014).
The Cost leadership strategy- Cost leadership is an effective strategy for gaining the
competitive advantage over other rival companies. M&S can achieve competitive advantage by
increasing profits by reducing the cost or by increasing market share through charging lower
price still achieving profit by decreasing the cost.
The differentiation strategy- It can be a most effective strategy for M&S as it involves making
the products different attractive and different from the rival companies. M&S can focus on the
features, durability and attractiveness of its products (Hales and Mclarney, 2017). It can focus
on the research, development and innovation to develop high-quality products which can meet
the expectation of customers.
Focus strategy- In this strategy company focuses on the niche markets. Companies add
something extra to their product to meet the expectations of the customers belong to the niche
market. M&S can focus on adding something extra to meet the expectations of the customers
belongs to niche markets (Hales and Mclarney, 2017).
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Figure 8: Porter’s Five Strategies
Source: Shakhshir, 2014
BOWMAN’S STRATEGIC CLOCK MODEL
Bowman’s strategic clock is another important model that can be adopted by a company to
position its product or service to achieve the most competitive position in the market. It helps
a company to positions its product on the basis of two dimensions that are price and perceived
value. This model describes eight different positions which can be considered by a company to
gain the competitive advantage (Shakhshir, 2014). These positions are low price and low added
value, low price, hybrid, differentiation, focused differentiation, risky high margins, monopoly
pricing and loss of market share. M&S can focus on the hybrid, differentiation and focused
differentiation position to achieve the competitive advantage over its rival companies.
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Differentiation position would be most suitable for the M&S as it aims to offer customers the
highest level of perceived added value.
Figure: M&S Bowman’s strategic clock
[Source: Shakhshir, 2014]
GROWTH STRATEGIES FOR M&S
There are different strategies which can be adopted by M&S to achieve significant and
sustainable growth. Key growth strategies which can be effective for the growth and
development of the business of M&S are done through
LIMITED GROWTH
Market Penetration is a growth strategy where the business relies on the Selling existence of
the product into existing markets. This has also been used to achieve and maintain the market
share of the current product. The combination of different competitive strategies can be
applied in order to provide the high-quality goods to the clients that are relative to drive out
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the competitor in the market (Weiss, 2016). For example- The discounted coupons are offered
to their customers under the launch of the loyalty schemes.
Market development is another strategy for the business which seeks the existence of the
business in the new market. For example- Marks and Spencer shift their growth for the business
in different cities of China. The aspects of new geographical areas and other possible entrants
approaching the working structure of the organisation can be explored. Marks and Spencer can
presently focus on their new store launched in Shanghai as to develop the market.
Product Development is the business which aims to introduce a new product into existing
market (Ward, 2016). This strategy helps in developing modified products and services through
financial service and banking such as new product development
SUBSTANTIVE GROWTH
Substantive growth strategies can be adopted by M&S to achieve the competitive edge over
other rival companies and to make a significant and sustainable growth and development. M&S
can focus on the different strategies like horizontal integration, related diversification, vertical
integration and unrelated diversification.
 Horizontal integration- In this strategy, a company merge with the direct or indirect
competitors in order to enhance its market share. M&S can focus on merging with its
competitors to expand its business in new markets.
 Vertical integration- A company can also link with another company in the same supply
chain. M&S can link with the other companies in the same supply chain.
 Related diversification- Related diversification is moving into an area where either
technology or marketing issues are similar. M&S can also move into such areas through
acquisition, merger or strategic alliance.
 Unrelated diversification- Unrelated diversification is one of the risk-based strategies as
its launching of new products with new technology in a new market.
It is important to consider the different factors for the selection of the appropriate and effective
business strategies. Key factors which can be considered for the selection of appropriate
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techniques are strength, weakness, opportunities, threats, organizational objectives, the
capability of organization etc.
RETRENCHMENT
There is a number of problems that are associated with the entrants in the Chinese market. This
has also centralised the trading policies of M&S. Through this strategy, the elevating
substantive means of the organisation hinder the country's economy. The Chinese market
certainly disapproves the foreign brands in the market as this can rapidly indulge the consumer
on the others (Tomczak, et al. 2018). Therefore, it is very difficult for M&S to maintain their
status in this market as they undergo rapid movements in grocery and clothing and other
sectors.
 Turnaround- This specifically initialise with the strategies to outset the profitable
amount of performance
 Liquidation- This stage helps in analysing the assets of the organisation in terms of sales
 Divestment- The shared bond with the other company portrays the divestment of
company details. In other words, it relates to the selling of the business to other
company.
M&S is struggling with many stores to serve the customers. The different changes in the
business environment have influenced the business of the company. By considering different
factors and analysing the current situation of the company, the related diversification strategy
can be effective for the company (Rong and Xiao, 2017). The horizontal integration strategy can
help the company in enhancing its market share through merger, acquisition and strategic
alliance.
CASE FOR M&S
Marks and Spencer is one of the leading brands in terms of retailing. They can expand their
business through setting a merger alliance with the other organisation to set a treaty and enter
the Chinese market. The franchise operations to fulfil the needs of the organisation such as
inbound logistics, suppliers, operations and store designing and other stocks are all well aware
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and productive measure which can be planned by the organisation. This can account for
providing the customer product at less price (Moon, et al. 2014). Thus, the marks and spencer
business can depend on the diversification strategy through which maintenance to the global
scenario has acknowledged the customers by latest technologies in the business sector.
IMPLEMENTATION OF THE RELATED DIVERSIFICATION STRATEGY
Related diversification is a strategy of the acquisition of additional business activities that are at
the similar level in the context of values chain in similar or different industries. The company
can focus on the M&S can focus on the related diversification in order to enhance its market
share. It can merge with its companies like Aldi, Asda and Tesco to enhance the sales. M&S can
also merge with the NEXT to reach to online buyers. Related diversification can help M&S in
achieving several advantages such as economies of scale, reduction in cost, and increasing
market power (Weiss, 2016). They can also set a merger with the Chinese supermarket stores
and outset on the services and implement them.
BALANCED SCORECARD SYSTEM
This system can help in communicating different strategies through which strategic plans and
other measurement systems can be managed (Moon, et al. 2014). The role of BSC relates on:
 Communicating with another merger in order to accomplish the desired objectives
 Aligning update on a daily basis
 Prioritizing the project through maintaining product and services
 Proper monitoring and progress of the project is marked towards strategic targets
28

Figure 9: Balanced Scorecard System
Source: Moon, et al. 2014
STRATEGIC MANAGEMENT AREAS
AREAS OBJECTIVES SET TARGE
T/
TIMESC
ALES
REVIE
W
POINT
DEVIATION
DIAGNOSIS
AND
CORRECTIVE
ACTION DATES
KEY STRATEGIC
SUCCESS FACTORS
Communication and
Innovation
Financial
Improve productivity By 6% 7 months Every
month
No deviation
Growth Revenue By 18% 2 years Every 6
months
Growth depends on
the sustainable
upgrading of
29

resources that are
not easily
maintained due to
change in market
demand
Customer
Satisfy customer needs Through advertising
products and loyalty
scheme
10
months
1 years Dismantle products
and services.
Proper maintenance
of the services
time-to-time must
be presented
Gain market share By diversification related
strategy
Within 1
year
Every
month
Changing market
demand can lower
the manipulate the
market share
Improve reputation Through branding their
products
Entire
project
NA Through
progressive
continuous
branding is
required
Internal
Manage Innovation Use web-based platform,
the Limited opportunity for
product
Regularl
y
Monthly
review
Web-
service
applicati
on
details
host free
Technological
details get hacked
must be supported
through antivirus
layers
Manage customer Through Online Feedback Regularl
y
Weekly
Through
checking
the
To accessing them
with their required
needs
30

review quality
of the
product
before
dispatch
Manage operations Regular monitoring of the
resources
Regularl
y
Weekly
review
NA Updated machines
and process must
be checked
properly if any
hindrance to the
activities
Learning and Growth
Employee retention Operate at low cost Regularl
y
Weekly
review
Providin
g
services
to the
people
NA
Training Low overhead and
vulnerable competition
Regularl
y
Weekly
review
Appointi
ng to
skilled
people
NA
(Hill, et al. 2014)
31

STRATEGIC PLAN
SMART OBJECTIVES
The objectives of the strategic plan of M&S are:
 To enhance sales of the products in the China market by 18 % in two years
 To increase the brand awareness and reach highest in retailing sales within the tenure
of 2 years
 To provide innovative services to the customer and extend their business across the
countries like China, India and Nepal to achieve the competitive edge
STRATEGIES
Effective strategies can be developed by considering the different factors which can affect the
sales of the company (Ward, 2016). A company can focus on the related diversification strategy
to deliver the quality and unique products to the customers to achieve a competitive edge.
Market segmentation, target and positioning of M&S can be done to identify its target
customers so that strategies can be developed accordingly. The target customers of M&S are
people belong to belong to the middle-income group. Companies can also focus on the
effective utilization of technology for the effective operations as well for enhancement of the
sales. A company should focus on E-commerce to attract the online buyers.
TACTICS
M&S can develop effective tactics to meet its organizational objectives. A company should
focus on delivering the quality products at best price. A company can reduce its profit margin to
enhance the sales of its products. The company can cover the loss by reducing profit merging
by lowering down operation cost (Barney, 2014). A company can adopt different operation
management techniques like lean manufacturing and six-sigma to manage inventory and to
reduce operating cost. Merger or acquisition can also help the company in enhancing its market
share. It can also focus on merging with E-commerce companies like NEXT in the Chinese
market to target online buyers.
32

EVALUATION AND CONTROL
The strategic plan of M&S can be evaluated to analyse its effectiveness in achieving objectives.
This plan is effective and its effective implementation can lead to the desired result. The
controlling of the plan is important to ensure that plan delivers results (Barney, 2014).
Controlling can be done through regular monitoring and implementing required changes.
33

CONCLUSION
The study provides in-depth information on the Marks and Spencer retailing business. Different
strategies are presented in order to understand the organisation capabilities and gaining
competitive environment. The role of strategy to achieve business objectives has been clearly
artefacts in the study. The importance of the strategic capabilities and a key component to
enhancing the competitive environment can be specifically understood by using PESTLE
analysis, SWOT analysis, VRIO Framework, McKinsey 7S Model, Porter’s Five forces and BCG
Matrix. For developing the strategy for the organisation evaluation of the generic strategies
such as Porter’s strategy, Leadership strategy, Focus strategy and Bowman’s Strategy Clock has
been studied. The justification to the appropriate use of growth platform is extended with the
development of the SMART objectives such as expanding in Chinese Market result in using
Related Diversification Strategy and Balance Score Card Strategy to implement the strategic
functioning of the organisation.
34

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