Strategic Management: Importance, Process, and Analysis

This article provides an overview of strategic management, its importance, and the process involved. It also discusses critical analysis models like PESTEL and SWOT, and how to analyze market competition using Porter's Five Forces.

Strategic Management
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TABLE OF CONTENTS
INTRODUCTION.................................................................................................................................3
MAIN BODY........................................................................................................................................3
1) Introduction and definition of the strategic management...............................................................3
2) process to determine effectiveness of strategy...............................................................................4
3) Critical Models to determine the strategy......................................................................................5
4) Tool to analyze compaction in the market.....................................................................................7
5) Change management importance and their transforming, cost and risk.........................................9
CONCLUSION.....................................................................................................................................9
REFERANCESS.................................................................................................................................10
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INTRODUCTION
Strategic management include the setting of the goals and objectives. it ensures to
proper evaluation of strategies and ensure the roll of the management out the strategies
across the organization.
This report will cover the case study of Marks and Spencer which is UK’s one of the
top retailer company (Certo and et.al., 2016). They are dealings with the products such as
clothing, kitchen appliances and food product. This report will provide brief introduction of
the strategic management and explain their importance for the company. It will also explain
the process of the strategic management in the organization and analyse how organization
make strategies. This report will analyse the internal and external environment of the Marks
and Spencer with the help of PASTEL and SWOT analysis. It will include porter’s five
forces. in the end of this report will analyse the impertinence of the change management.
MAIN BODY
1) Introduction and definition of the strategic management
Strategic is the term which is use to introduce the branch of the management which
concern with the development of thy companies strategic vision, In this process superiors of
the company set the company’s objective to achieve in the future. the formulation and
implementation of the strategies. It has two major objectives- to gain competitive advantages
, with an aim of the outperforming the competitors, to gain the dominance over the market ,
To act as an guide of the Marks and Spencer company to help them surviving the changes in
their workplace environment (Aguinis, Edwards and Bradley, 2017). During the change in
the internal and external environment it is important for the Marks and Spencer to make new
strategies so they take competitive advantages and set the goals for the future. Internal
changes such as change in the business polices which are introduced by the managers, they
make the proper strategies and set goals for the company. Eternal changes such as change in
technology trend can be key driver of the change on company so it is important for the
companies superiors to bring new technology at their workplace so they can gain competitive
advantages, with the implementation of new technology it is important for the companies
superiors to provide training and communicate with them so they can increase employees
motivation and achieve competitive advantages.
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2) process to determine effectiveness of strategy
Strategic management is the process of managing, analysing, planning in order reach
to the set goals by the Marks and Spencer Company. Strategic management helps to them to
see where they are standing new and where they can reach in the future and where they like
to go in the future (Holloway, 2018). This takes benefits of the company’s resources to
create the strategy which helps this company to reach nearby their set goals and achieve
success in their business and show their presence in the market. The process of the strategic
management includes overall five major stages which are Goals setting, analysis, strategy
implementation and strategy monitoring, here is explanation of all the steps of the strategic
management. This helps marks and Spenser to develop a strategy and plan a series of action
for future.
Goal setting
This is one of the first step in which superiors of the company set the goals and plan
the goals. Goals set by Marks and Spencer organization are important to share with each and
every member of the organization because they are part of the organization (Barney, 2017).
This will help the organization to make their employees understand their future perspective,
their target in a better manner. They have to explain how contribution from the each member
of the company have impact on the organization to reach to the set goals This will give each
group members a purpose and will give their job meaning. Leaders an manager of the
company make goals by analysing the companies previous performance and find out where
they can go and where they want to reach in the future.
Analysis
It is another important aspect of the determining organizational strategy. Analysis of
data or information collected helps an organization like Marks and Spenser to understand
what are their main strengths and weakness that are required to be focused on by them. In the
middle of the process that utilise each data to gain the appropriate results. Collecting of the
data can be helpful for the superior to create better strategy to reach to the companies goals
(Lange and Bundy, 2018). This step of the strategic management entails becoming aware of
any kind of the issues at the workplace and understand the all needs of the company. They
have to find the information and there is any weakness of the Marks and Spencer then they
have to find and after find the all information about the problems and issues they have to
make strategy to overcome from the issues’
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Strategy formulation
On the basis of the data analysis in this phase new strategies are formulated by
business which helps organizations like M&S to reach their defined goals and objectives.
This stage superiors of the Marks and Spencer company us all the data which they have
collected so they can formulate the strategy which will be helpful for them to reach to the
goals. They also have to find out the useful resources which they already have and also seek
out other resources will need to set up strategy for the organization to take competitive
advantages.
Strategy implementation
After making the strategy, another step come which is implementation of the strategy.
Company implement these tactics in most effective manner so that desired results can come
out (Ferreira, Mueller and Papa, 2018). this is the stage where strategy make by the superiors
of the Marks and Spencer put it in an action. Strategy implementation helps organizations
like Marks and Spenser to obtain desired results.
Strategy monitoring
It is important for organizations to monitor strategy that has been developed and
implemented by the organization as it helps the organization to bring required changes within
their strategy so that it can be aligned with their defined goals. If any adjustment in the
current plan is required to be brought then it planned and implemented within the current
strategy. This is the stage where superiors of the company track the process and have the
opportunities to deal with any unexpected shift in the strategy.
Evaluation
In order to evaluate effectiveness of strategy KPI can be used which will help the
organization to evaluate effectiveness of the strategy. It can be done using following steps:
 Organization should first create a strategy which would help them in formulation of their
goals and objectives that are required to be achieved by them.
 They should focus on linking their key performance indicators with their strategy (Zahari
and Romli, 2019). This will help them to identify and analyse all the important and
required information that will help the organization to answer all kinds of questions that
will help them to analyse their strategy and take appropriate decision.
 Answering questions associated with the strategy will help the organization will help
them to identify and collect data required by them to evaluate effectiveness of the
strategy.
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 Then on the basis of this evaluation strategy SMART objectives should be developed by
the organization. Development of these smart objectives will help in defining measures
on the basis of which success or effectiveness of the strategy will be measured.
3) Critical Models to determine the strategy
There are some models such as PESTEL and SWOT analysis which is used to analyse
the factors which affect the organization and also helpful to determine the strategy used by
the firms. Here is PESTEL and Swot analysis.
Evaluation of advantage and disadvantage of SWOT and PESTLE
One of the main strengths of PESTLE is that it can be applied and used by all the
organization for analysis of external factors that can impact the business that further involves
cross functional expertise and skills. It further helps in reducing impact and effect of potential
threats for organization (Christodoulou and Cullinane, 2019). It has a proper mechanism
through which all the external factors are segregated in order to understand impact of those
factors on business whereas, SWOT has no mechanism to rank significance of one factor
versus another. As it only creates one dimensional model because of which many times
ambiguity in analysis occurs.
PESTLE has on disadvantage i.e. users can oversimplify information or data that can be used
for decision making. This process is required to be conducted on a regular basis. Access to
quality information is often restricted due to excessive requirement of time and cost. Whereas
SWOT applied to an organization in order to analyse their main strengths, weakness,
opportunities for them and threats for the organization (Rastogi and Trivedi, 2016). It
requires both quantitative and qualitative information from a number of sources. Cost
associated with SWOT analysis is also less.
Evaluation of strength and weakness of SWOT and PESTLE
One of the main weakness of PESTLE analysis is that it does not help organization
exploit all kinds of opportunities that are required to be focused on in order to achieve
success whereas it is one of the main strength of SWOT analysis i.e. it helps in exploiting all
kinds of opportunities that can help an organization to grow.
However, even SWOT analysis has one weakness i.e. it does no provide information
in a hierarchical manner that can lead to poor decision making whereas it is one of the
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strength of PESTLE analysis i.e. it provide all the information about external factors impact
on business in a proper manner.
Evaluation of Strength and limitation of PESTLE and SWOT
PESTLE analysis has one limitation i.e. it changes over time because of which need of
conducting it again and again arises (Islam, 2017). This work as a strength for the
organization i.e. it does not change frequently over time only new information is added to it.
PESTLE analysis can help in taking decision as per the priority of issue whereas SWOT
analysis cannot be used to take decisions as per the priority of the issue.
4) Tool to analyze compaction in the market
PESTEL Analysis
Political factor
Because of slow and unenthusiastic response of governments for corona virus
Outbreak, political dissatisfaction is continuously increasing among citizens which is
impacting overall business of organization as whole UK housing market has been shut
because of this slow response of the government (Nandonde, 2019). This has impacted Marks
and Spenser as their business has slow downed for business.
Economical factor
Corona virus outbreak has impacted overall profitability and revenue of Marks and
Spenser as because of this Whole retail market of UK has been slow down because of which
cost associated with the business is increasing operational cost and revenue has decreased. In
other words it has simply affected economic output of the organization.
Social factor
Corona virus outbreak has increased panic within people because of more than 90
percent of people are focusing on staying home (Hayes, 2018). They only move outside their
home for important and necessary items because of which overall sales of Marks and Spenser
has been impacted drastically and because of lack of customers they are in loss.
Technological factor
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Technology helps this grand to expand their business longer and far. This has also
helped the organization to increase online shopping within their customers where they order
product online and get home delivery even in coronavirus outbreak situation (PANDEY,
2017). They do not need to go anywhere and they can order from their home.
Environmental factor
Marks and Spenser is first major retailer of UK who source fresh milk from RSPCA
assured dairy firms. They even have RSPCA assured logo on all of their milk products.
Legal factor
They are following all the legal and governmental rules where they are operating their
business. Marks and Spenser has faced a dispute with their Frascati landlord till now.
SWOT analysis of Marks and Spencer
Strength
 Marks and Spencer has the strong free cash flow position which allow this company
to have needful resources to expand into the new project.
 Company have strong hold in the United kingdom (Aguinis, Edwards and Bradley,
2017)..
 Excellent performance in the new market because of their proper strategic expansion
plan, this make this company to be successful in their business.
Weakness
 Marks and Spencer company to spend more money in their technology. Technology
they are using is older and o9ther companies can overtake by using trending
technology.
 Recently Marks and Spencer has announced to close their more than 5 stores.
Opportunities
Implementation of the new technology can help this company to expand their business more
and they can take competitive advantages (Holloway, 2018).
 Marks and Spencer can take competitive advantages through improving their
customer services.
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Threat
 Retail industry is one of the most competitive industry and Marks and Spencer to
facing high compi6tion on the global level.
 Prices of the Raw material are increasing day by day and it is becoming g threat for
the Marks and Spencer because they are not able to make profit.
Porter’s five forces is used by business to analyse it situation in external market
Threat of new entrants
Threat of new entrant for Marks and Spenser is low as the new entrant will require high
amount of finance in order to sustain within the target market (Lange and Bundy, 2018).
Marks and Spencer have strong distribution channels and focuses on bringing innovation
within their products and services continuously which makes it difficult for the new entrant to
sustain within the market.
Bargaining power of buyer
Bargaining power of buyer is moderate as today customers are becoming more and
more demanding because of which Marks and Spenser provide best products to the customers
which increases pressure on the organization’s profitability for long run.
Threat of the suppliers
Threat of the suppliers have lower impact on Marks and Spenser as there are large
number of suppliers available to supply products to the organization which reduces
dominance of the suppliers (Certo and et.al., 2016).
Threat of the substitute
Threat of substitute for Marks and Spenser is high as if products of competitors fulfil
needs and requirements of the customers in a much better manner then it can influence the
buyers that can affect M&S overall profitability and sales..
Intensity of the competitive rivalry
Threat of intense competitive rivalry is higher for M&S. In the retail sector where
Marks and Spencer company is operating their business is increasing the competitor day by
day. There are many other companies who are taking competitive advantages with the lower
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price products. They attract customers with their lower prices. This also forces Marks and
Spencer Company to decrease their prices so they can be stay in the competition. This affect
of the profitability of the company and they are not able to make profit by selling their
products, this is a threat for the Marks and Spencer company.
5) Change management importance and their transforming, cost and risk
Change In the organization is important for the Marks and Spencer Company which
can help this company to take competitive advantages (Aguinis, Edwards and Bradley, 2017).
Change can help organizations like Marks and Spencer Company to increase their production
and they can increase their growth in the market. It will change all the task of the company
and their process will be change totally, there are some factors which can take place in this
whole change process.
Risk –Risk is one of the most important factor because of which change management
becomes important. If changes within an organization is not implemented in an appropriate
manner then in such cases its direct impact is seen on the employees. One of the most
common risk that can be faced by an organization demotivation of employees as demotivated
employee would not accept any kind of change easily because of which their overall
performance can get impacted drastically (Certo and et.al., 2016). So in such cases before
implementing any chances within an organization all kinds of risk associated with should be
accessed and all the information related to the changes should be communicated to the
employees in an appropriate manner so that all the employees of the organization understand
need and requirement of the change and will positively adopt it. Analysis of risk associated
with the change management will also help in reducing complexity of change management.
Cost –Change management is important as it helps in maintaining overall cost associated
with the change. When change management comes into picture it is important for
organization to analyse cost associated with the change i.e. if the cost of change management
is higher than feasibility of implementation of the change within the organization reduces
(Day, Van Niekerk and Okumus, F., 2017). Implementation of the new technology can cost
high but financial resources of the Marks and Spencer Company is strong so they can
implement new technology and boost up their product and take competitive advantages in the
retail industry.
Sustainability – Sustainable development is important for an organization to focus on when
change management comes into picture (Petschow, Rosenau and von Weizsäcker 2017).
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When change management of sustainable development comes into picture then few factors
are required to be considered such as: barriers of the change, what things will be affected by
the change, change approaches that would fit an organization, plan the changes so that it can
be implemented in an appropriate manner, engage all the people associated with the change
or who will be affected by the change so that chances of positive response to change
management will increase.
Process – They have to follow proper implementation process with the proper stages, they
have to gain support of the employees who are working in the company and they can to tell
them about new changes in the company and encourage them to support company in the
change process (Doherty, Haugh and Lyon, 2020). With the support of their stakeholder they
can be implement change in their workplace successfully.
CONCLUSION
This report has been covered the case study of Marks and Spencer which is UK’s one
of the top retailer company.. This report has been provided brief introduction of the strategic
management and explain their importance for the company. It also has been explain the
process of the strategic management in the organization and analyse how organization make
strategies. This report has been analyzed the internal and external environment of the Marks
and Spencer with the help of PASTEL and SWOT analysis. Through Porters five forces firm
can know more about forces that can influence business performance hence entity can make
effective strategies so that these forces can be handled properly.
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REFERANCESS
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knowledge assets: Label proliferation and theory development in the field of strategic
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Certo, S.T. and et.al., 2016. Sample selection bias and Heckman models in strategic
management research. Strategic Management Journal. 37(13). pp.2639-2657.
Christodoulou, A. and Cullinane, K., 2019. Identifying the Main Opportunities and
Challenges from the Implementation of a Port Energy Management System: A
SWOT/PESTLE Analysis. Sustainability. 11(21). p.6046.
Day, C., Van Niekerk, M. and Okumus, F., 2017. The importance of strategic communication
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PANDEY, B.C., 2017. Nike Inc-Complete Analysis: SWOT, PESTLE and Marketing
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Petschow, U., Rosenau, J. and von Weizsäcker, E.U. eds., 2017. Governance and
sustainability: New challenges for states, companies and civil society. Routledge.
Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify
external risks in construction projects. International Research Journal of Engineering
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Tonelli, M. and Cristoni, N., 2018. Strategic management and the circular economy.
Routledge.
Zahari, A.R. and Romli, F.I., 2019. Analysis of suborbital flight operation using PESTLE.
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