Strategic Management: Competitive Analysis and External Factors

This document discusses the concept of strategic management and its importance in achieving business goals. It explores the competitive analysis and external factors that impact the organization's performance. The document also includes a case study on Marks & Spencer, analyzing its competitive position and the influence of political, economic, social, technological, legal, and environmental factors on its operations.

STRATEGIC
MANAGEMENT

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Compare theory and practice.......................................................................................................3
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
For the company to be able to achieve their goals and objectives in the market the
company needs to have a formed strategy for themselves which is known as strategic
management. This can make the company be able to meet the demands of the customers and
satisfy them further. Marks & Spencer was established in 1884 which means 136 years back and
the company is currently having its headquarters in London, United Kingdom. The company is
currently having more than 80,000 of workforce and the founders of the organization are Thomas
Spencer and Michael Marks. The report is going to discuss the competitive analysis of the
organization which is going to make the organization be able to compete in the market
effectively. There is also a good understanding by analyzing the external factors of the
organization to have further planning and decision making be able to take place in the
organization.
MAIN BODY
Compare theory and practice
There are a lot of tools and measures which are present for a business in the market like
competitive analysis, comparative analysis positions and business environment which is going to
help an organization be able to develop and achieve their targets and goals in the market. The
demands and needs of the customers are changing therefore businesses in the market have to use
these factors to be able to maintain their reputation in the market.
Business environment analysis
The business environment of an organization will affect the decision making in the future
if this factor is not understood well. There are already a lot of changes which M&S is having for
them and without the right framework the organization will not be able to operate effectively in
the market (Barney, 2017). There has to be good collection of information about the market only
then the organization will be able to gain competitive advantage for a long run.
PESTLE Analysis

For making an organization is able to operate effectively and efficiently in the market there
has to be good understanding of the external factors which are present for the company in
market. PESTLE analysis standards for political, social, economic, technological, legal and
environmental factors which are going to have an influence on the working of M&S in the
market. There is a standard and expectation which the organization has developed for themselves
in the market and the company will have to standard to them so that they have a higher brand
image and recognition globally.
 Political factors
The policies and laws are the same in the country which is because the stability in the
political power is same in United Kingdom making the company have good advantage. The
company is using the same strategies and measures which is providing the organization with a
better sense of direction. The company understands the trading and taxations laws and have the
right measures for implementing them in the organization as well which is due to the experience
which the organization is having in market (David and David, 2016). There are changes in a lot
of factors after Brexit like in culture, religions, etc which the company will have to get in the
organization to have higher functioning. After Brexit there are also a lot of restrictions which
M&S is having for them to be able to operate effectively and controlling them is very important
for the reputation of the business.
 Economic factors
There is a lot of investment which M&S is making for themselves to have a stable economic
factor and find a good balance as well in the market. There are right strategies and measures
which the organization is taking for themselves which is going to make the organization have
higher profitability in the market (Berisha Qehaja, Kutllovci and Shiroka Pula, 2017). M&S has
long term goals and for that there has to be good planning which the company is having due to
their experience in the market. The currency value is changing which is impacting the pricing of
the products and services of M&S in different countries due to inflation in the country. The
company is reducing the unemployment rates but there have to be better decisions for the
economic stability which the company will have to take for the future.
 Social factors

For the company to keep having a profit in the market the organisation will have to
understand the customer's needs and trends which are coming up according to their culture and
religion. There is a huge impact on the company because of the social factor which is because
they want to satisfy the level of customers (Manyaeva, Piskunov and Fomin, 2016). Marks and
Spencer is providing the right information to the customers from time to time because they want
to show how much changes they are getting in the products and services for them. The
competition for Marks and Spencer is increasing rapidly in the market due to which the company
has lost its market share to the other competitors but to make the company e have a competitive
advantage they have got a healthy environment for the employees to work in which is making the
productivity stable.
 Technological factors
Marks and Spencer has got in and invested in a lot of technological aspects for the
organisation so that they can remove the pressure from the employees. Employees are being
trained and developed according to the technologies which are coming in the organisation so that
it can provide the organisation to have a higher satisfaction and productivity. The company is
using the online platforms as the new strategy so that they can attract more customers and
communicate with them from time to time which are going to improve the standards of the
products and services (Farooq, 2019). There is a lot of innovation and productivity which has
increased in the organisation making the company fulfill the needs and demands of the customers
and impacting the portfolio and reputation of the organisation positively which is very good for a
global placing of the company.
 Legal factors
There are a lot of legislature and laws by the government for the industry so that there is
going to be a smooth functioning and operation which can take place for a long term. It is
important for the organisation to follow these laws are making the company have a higher
reputation in the market. There are a lot of important laws for the employees and the customers
like minimum wages, equality laws, data protection, etc protection so that the organisation can
have a better functioning. There is a proper guideline which is provided to the employees so that
they know what is expected out of them and they can fulfill that need an expectation which the
organisation has from them (Peppard and Ward, 2016). Marks and Spencer always takes the

actions legally so that there is no disturbance in the performance of the organisation in the
market. Legal factor gets in healthy environment and functioning for the organization which is
good for the reputation of the organization and direction for the company is going to be present
as well.
 Environmental factors
There are environmental changes which are happening and the company is aware of them
which are why they have taken action accordingly. The company is maintaining the disposal of
the waste in a productive manner so that they are not harming the environment in any way
possible which is going to get support of the government and restrictions for the company are
going to be lower (Venkateswaran and Ojha, 2017). To have an effective functioning as well as
brand value in the market the organisation has taken measures to have zero carbon footprints in
the market. The company has also been using the resources effectively and getting in the change
according to the customers from time to time which is a very good factor for the brand value.
The company is trying to improve themselves in the overall market so that they will be able to
compete in the market effectively which is good for the reputation of the organization.
From the above external factors mentioned the organization must follow them so that there is
going to be higher performance and operations which are going to be present. The company will
be able to design and plan their actions effectively and smoothly in the market to be able to
achieve the goals and targets of the business in the market which is going to make higher brand
image in the market as well.
Competitor analysis
There is an increase in the competitors which has been observed in the market. There are
different products and services which the company has expanded themselves in to which are
clothing, food and other products. The pricing is effective for the organization which is going to
get in more customers and since the company is focusing on the basic needs and demands of the
customers the organization is going to have loyal customers as well. The company is trying to
maintain their quality and services as well so that there is going to be aggressive customers

increase and monitoring the performance of the employees is present in the company (Nickols,
2016). The company is having 5% growth of competitors and making the company’s market
share is in threat. The company has gathered a strong base for themselves over the 136 years and
the performance well of the company is well maintained as well.
The company is having a high threat from its competitors in the market and the
profitability is also getting affected. ASDA, Tesco, Sainsbury’s, etc are large organizations
which is taking away the market share of the organization. There are different methods for
different situation which is being used by the organization so that there is going to be higher
functioning and smooth operations which can take place (Berisha Qehaja, Kutllovci and Shiroka
Pula, 2017).
The company has developed stores for the organization in different locations so that the
business will be able to grow effectively. The company is developing their strategies and
essential working as well in the organization so that the needs and expectations of the customers
are going to be fulfilled and the company will have higher sales which is good for the reputation
of the organization. The company has gotten online and has made the company have an increase
in the sales by 6% each year and there 33% of growth rate in the country for the organization as
well.
Porter’s five forces model
To get a competitive advantage in the market there are a lot of frameworks which are
present in the market so that the organization will be able to develop them. Porter’s five forces is
one of the effective models which the company is using for having higher decision making and
functioning accordingly and the further report is going to discuss this model in context to M&S
(Koseoglu, 2016).
 Competition in industry (High)
Marks and Spencer has been able to get a competitive advantage in the market over the years.
The company understands the demand and expectation which the customers are going to have
from them that were they are able to compete in this industry effectively. There is a growth in the

competition by 6% each year in United Kingdom making the company have a great threat of
losing their customer base (Murphy, 2018). The company has to use the online platforms and
social media networks effectively so that they can and maintain the reputation brand image brand
value and their customer base effectively and efficiently so that the profitability is going to be
maintained in the organization. Potential of new entrants in market (Medium)
The chances of having new entrance in the market for Marks and Spencer’s are low since the
organization has made a lot of investment in the market. Any organisation which will be coming
in the competition of this organisation will not be able to compete since there is a requirement of
a huge amount. There are a lot of situations and issues which come in this industry and without
experience, a new organisation will not be able to deal with them effectively like Marks and
Spencer would (Fernandes and et.al., 2017). Employees and stakeholders of the company a very
responsible and have the right knowledge and skill to be able to make the right decisions and
make the company achieve the target and goals.
 Threat of substitute products (Medium)
There are companies in the market like ASDA, Tesco and Sainsbury which are providing
similar products and that are a great threat for the organisation. It is very easy for the customers
to shift from one organisation to another therefore it is important for Marks and Spencer to have
a good productivity and performance in the market as well as maintain their quality of the
products (Carayannis, 2018). There are a lot of discount, offers and other privileges which are
been provided to the customers of Marks and Spencer and an improvement in the clothing sector
of the organisation. Trains and demands of the customers are making the organisation have a
different design and a good strategy to follow in the market so that they will be able to have
higher profitability.
 Power of customer (High)
Belonging from retailing industry the demand and needs of the customers is never going to
fade away which is going to make the company have more and more customers. The pricing of
the products which Marks and Spencer is having in the market or not too high and is according to
the competitive pricing which is making the loyalty and trust of the customers increase in the
organisation (Dagnino, King and Tienari, 2017). To make the performance level increase there is

the change which is coming in the strategies of the company from time to time according to the
competition. There are unique products and features which Marks and Spencer’s having for the
clients to be attracted and a lot of investment is been done in the research and development
department of the organisation. The trends and expectations of the customers is changing which
the company has to adapt to so that the standards and brand value of the company is going to be
maintained in the market.
 Power of supplier (Low)
Over the years Marks and Spencer has been able to develop a strong communication and
contact list off the supply is present in the market. To maintain the quality of the service and
products which the company is dealing in that has to be good raw material and supplies which
are coming in the organisation to gain a competitive advantage. Maintaining the raw material and
supplies the company will be able to gain the trust and loyalty of the customers as well. It is the
suppliers who are dependent on the large organisation present in the market therefore they cannot
be pricing the products above the rates which are going on in the market. It is very easy for
Marks and Spencer to shift from one organisation to another to gain a cost friendly raw material
which is good for the economic stability (Taródy, 2016). For the changes to take place in the
organisation there is a requirement of wood suppliers which the company has developed over the
years in the market.
CONCLUSION
From the above report it can be concluded that businesses in the market need to
understand and find a balance between external and internal factors so that there is going to be
higher performance and productivity which is going to be found. There is a hue competition in
the market which businesses need cope up with so that they can maintain their market share and
customer base in market. The trends and needs of the customers are changing rapidly which
needs to be included and adapted to by retailing industry which is going to make the organization
have higher satisfied customers. There is also going to be global recognition which an
organization can get when they use the right strategies and measures to be able to implement

these changes. The company has to think for higher profitability since they are investing a lot in
making the company be able to expand and make a brand image in the market.

REFERENCES
Books and Journals
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assets: Label proliferation and theory development in the field of strategic
management. The SMS Blackwell handbook of organizational capabilities. pp.422-426.
Berisha Qehaja, A., Kutllovci, E. and Shiroka Pula, J., 2017. Strategic management tools and
techniques usage: A qualitative review. Acta Universitatis Agriculturae et Silviculturae
Mendelianae Brunensis. 65(2).
Berisha Qehaja, A., Kutllovci, E. and Shiroka Pula, J., 2017. Strategic management tools and
techniques: A comparative analysis of empirical studies. Croatian Economic
Survey. 19(1). pp.67-99.
Carayannis, E., 2018. Strategic management of technological learning. CRC Press.
Dagnino, G.B., King, D.R. and Tienari, J., 2017. Strategic management of dynamic growth.
David, F. and David, F.R., 2016. Strategic management: A competitive advantage approach,
concepts and cases. Florence: Pearson–Prentice Hall.
Fernandes, C and et.al., 2017. The dynamic capabilities perspective of strategic management: a
co-citation analysis. Scientometrics. 112(1). pp.529-555.
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costs. International Review of Management and Marketing. 6. p.S5.
Nickols, F., 2016. Strategy, strategic management, strategic planning and strategic
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Peppard, J. and Ward, J., 2016. The strategic management of information systems: Building a
digital strategy. John Wiley & Sons.
Taródy, D., 2016. Organizational ambidexterity as a new research paradigm in strategic
management. Vezetéstudomány-Budapest Management Review. 47(5). pp.39-52.
Venkateswaran, R.T. and Ojha, A.K., 2017. Strategic management research on emerging
economies. Critical perspectives on international business.
Online
Farooq, U., 2019. PESTLE Analysis of Marks And Spencer. [Online]. Available Through :
<https://www.marketingtutor.net/pestle-analysis-of-marks-and-spencer/#:~:text=

%20PESTLE%20Analysis%20Of%20Marks%20And%20Spencer%20,name%2C
%20but%20due%20to%20its%20longstanding...%20More%20>.
Murphy, E., 2018. Marks and Spencer Group Pls Porters Five Forces Analysis. [Online].
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