Strategic Management at Marks & Spencer

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
External Analysis ............................................................................................................................1
Current market and competitor analysis ....................................................................................1
External Analysis........................................................................................................................2
..........................................................................................................................................................4
Internal Analysis .............................................................................................................................4
What Marks and Spencer do ......................................................................................................4
What does M&S do really well ..................................................................................................4
What M&S do that other cannot do............................................................................................6
Strategic solutions :..........................................................................................................................7
Porters generic strategies :.........................................................................................................7
Strategic lock-in .........................................................................................................................9
Evaluation of the organisation’s strategy.........................................................................................9
The Ansoff Matrix and ...............................................................................................................9
BCG Matrix on Marks and Spencer..........................................................................................10
CONCUSSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic management refers to the continuous process which includes planning,
observing as well as analysing and assessing all the essential things required for an
administration to meet the desired objectives. To make the organization successful the company
need to make decisions strategically as per the new technologies, customer wants. Marks and
Spencer (M&S) is an international retailer company which was established in 1884 and the
founder of the company was Michael Marks Thomas Spencer. The company having its
headquarters situated in London, United Kingdom. The company sells the specialised products
like clothing, home as well as food products of high quality. Marks and Spencer is listed under
the London stock exchange. The company started to trade branded goods like Kellogg's corn
flakes in November 2018. Marks and Spencer is having 959 stores across UK at the same time it
includes 615 stores that sells only food products.
The report will include the analysis regarding the key issues in the external environment and in
what way it will affect the company. By applying PESTLE the company can identify the
political, economical, social, technological, legal as well as environmental issues. It will also
include the internal analysis of the company by applying the SWOT analysis and also will find
the strategic solutions to maintain the company's position in the competitive market by applying
porters generic strategies. Further the study will include the critical evaluation regarding the
current strategy the company is using as well as the strategies that can be used to implement and
to gain the competitive advantage.
External Analysis
Current market and competitor analysis
Marks and Spencer is among the leadership multinational which is based on United
Kingdom. The company is operating their business in United Kingdom for a long time, the first
store of M&S was opened in 1884. As of 2019 there are 1043 stores of the company in UK and
more that 444 store all around the world. The company employees more than 80 thousand
employees in which 71 percentage of employees are females.
BASES MARKS AND SPENCER TESCO
Revenue 10.4 billion Pounds 6.3 billion Pounds
Employees 80787 450,000
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Locations 1463 6800
Founded 1884 1919
Headquarters London Hertfordshire
Tesco is the biggest competitor for Marks and Spencer as Tesco in dealing tin the same
sector as Marks and Spencer. Tesco is has more stores that Marks and Spencer and they also
have more employees that Marks and Spencer .
External Analysis
Pestle analysis : Pestle analysis is tool to analyses the external factors affecting Marks and
Spencer.
 Political Factor : It plays an important role in identifying the factors which can
affect the profitability of Marks and Spencer in a particular country or internally.
It considers the stability of government, relation of government from other
countries and many more. The government of United Kingdom is very stable so it
and doesn't change to many laws and rules helps the company to stick on one
organisation structure(Aguinis, Edwards and Bradley, 2017).
 Economical Factor : The external factors like Foreign exchange rate, Income
level. GDP and many more comes under economic factors. The economy of UK
is well stable so it affects the company in positive manager.
 Social Factor : The shared Beliefs and the attitude of the population play an
important role in growth of Marks and Spencer. The company is often called as
non trendy store by the customers, this a negative factor for M&S in social
factors. Social factor is also called as Socio-culture factors.
 Technological Factor : As Marks and Spencer are among the leading retailer in
UK, the company always have to keep their technology updated. In the era of
innovation and technology it is difficult of the companies to Stay updated,
changing technology is short period also increase the Cost price of the product,
 Legal factor : In this the company need to take care of all the legal acts and
Policies like Customer act, Heath and Safety act, employees act and many more.
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Marks and Spencer had faced many legal problem for obligations of act like heath
and safety act. This decrease the goodwill and the market-share of the company.
 Environmental Factor : Economical factor are all the factor of the company
which affects the environment related factors. Marks and Spencer is managing
their waste properly to minimising the pollution moreover the company is only
dealing in environment friendly products.
Porters Five Forces : Porter five force is a business tool used by the companies to
analysis the competition of the business the Porter five forces are as follows
 Threats of new Entrance : Marks and Spencer have a huge threat of new
entrance because new entrance in brings innovation in the retail business it many
include new ways of doing the work etc. the new entrance will reduce their price
of product to create pressure on M&S(Ansoff and et.al., 2018).
 Bargaining Power of Suppliers : In retail industry all the business buy their raw
materials from various suppliers. If the supplier are in dominating position they
can easily decrease the profitability of Marks and Spencer. If the supplier is
having high bargaining power it will surely lower the margin of the company.
 Bargaining Power of Buyers : The buyers are always looking to get the best
products in minimum price. This is a big challenge of the profitability of the
Marks and Spencer. If the bargaining power of customer are high they will seek
for higher discounts. This may increase the revenue generation of the company
but it will decrease the profitability of the firm
 Threats of Substitute Products : When a new product is introduced in the
market which provide all things which the products of Marks and Spencer is
providing the market-share and the profitability of M&S suffers. The substitute
product offer a value of product which is different from the present product of the
company.
 Rivalry among the Existing Competitors : Marks and Spencer operate their
business activities in very competitive market of retail sector, the competitors
drive down the prices of their products to increase the market-share of their
company. This affects the profitability of Marks and Spencer (Bryce, 2017).
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Industry life cycle :
Illustration 1: Evolution of Marks and Spencer
(Source:Evolution of Marks and Spencer,2019.)
From the above figure it has been summarised that the products of the company are at different
level in industry life cycle. The clothing sector is at maturity stage whereas the food is at growth
stage. This report can vary from country to country. The clothing in UK is at maturity whereas
the market in Asia and western Europe is at growth stage, this growth stage at other countries
provide opportunities for business expansion internally (Evolution of Marks and Spencer,2019.).
Internal Analysis
What Marks and Spencer do
Marks and Spencer is multinational retailer brand. It deals mostly in premium clothing,
accessories and food product. Marks and Spencer is has more than 400 variety of in their food
department moreover the company is having more that 1400 outlet worldwide and more than
1000 stores in United Kingdom. The company is mostly dependent on the market of UK and the
company mostly target customers from high income group(Engert, Rauter and Baumgartner,
2016) .
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What does M&S do really well
Distinctive capabilities :
Marks and Spencer is a highly profitable company. The profits of Marks and Spencer has
founded on the different set of Capabilities and resources that combined has given it significant
competitive advantage.
 The outlets of Marks and Spencer are at prime locations for retail business, which helps
the company to increase the sales of the company.
 The company is having a good reputation in the market with a huge customer following,
from this the company doesn't need more promotional activities.
 Marks and Spencer have a good retention rate of employees this lead to lower turnover of
employees which saves lots of money of Marks and Spencer.
 The company is having a close and effective management of supply change which leads
in lowering the cost of the product as well as increasing the quality of the products
 The organisational structure is Flat management structure which reduces the middle
management and involve the lower post employees in decision-making, this boost the
confidence of the employees which ultimately leads to increase in sales of the company.
Despite all these strengths of Marks and Spencer, the performance of the company has
declined at late 1990s. It was clear that all these capabilities of the firms were not sufficient to
maintain the competitive advantages in the market(Ethiraj, Gambardella and Helfat, 2016). The
firm was mostly dependent on the brand reputation and the good of the company, the company
was not involved in advertisement activities which was creating problems and difficulties of the
company. The taste of the customers was changing and the customer were demanding for the
companies whose brand value was stronger. Marks and Spencer was highly dependent on the
United Kingdom's market whereas the competitors where increasing their business activities
internationally. At that time Marks and Spencer need to develop new capabilities to survive as
well as prosper in the market.
Strengths and Weakness of Marks and Spencer :
Strengths :
 Marks and Spencer is among the most powerful and trusted retail brand of United
Kingdom.
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 The company is having a good reputation for selling high quality products
 Marks and Spencer is having a very large store network in UK as well as Worldwide. It
has 1043 stores in UK and more that 444 store all around the world.
 The company is having a reliable and sustainable supply chain.
 The retention rate of the company is very high and the employees are highly trained.
 Marks and Spencer is rapidly growing in e-commerce website.
Weaknesses :
 The biggest weakness of Marks and Spencer that the company is dependent on limited
marketing
 Marks and Spencer still follows their orthodox strategies and they are very slow in
adopting change and trends of the market
 The company is often called as non-trendy by the customers
 Marks and Spencer deals in premium clothing and assessors, which are expensive for
normal people.
What M&S do that other cannot do
VRIN : This stands for Valuable, rareness, imitable and non-substitutable, which cover the
classification of all potential key resources(Frynas and Mellahi, 2015).
 Valuable : The most valuable resource of Marks and Spencer are their employees. Marks
and Spencer is having a good retention rate. They spend a lot on training and
development of the employees and they also include their employees in decision-making
process.
 Rareness : Marks and Spencer rarely send money on the advertisement of the company
still the company is having lots of loyal customers and having a good reputation in the
market
 Imitable : Marks and Spencer are selling some limited edition in clothing and they are
having trademarks on those products, they demand of the products are high and only
M&S can Sell those.
 Non-substitutable : Marks and Spencer is dealing in quality products for a long time. The
quality of products has build trust in consumer for the company which is irreplaceable.
Opportunities and Threats of Marks and Spencer :
Opportunities :
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 The economy of United Kingdom is recovering from the global recession, this is a great
opportunity for Marks and Spencer because the economy is starting growing again
 Earlier the demand of fashion clothing was among the age group from 18 – 30 but
nowadays the demand for fashion clothing is growing for the age group of 30 plus.
 The customers now prefers to do online shopping as Marks and Spencer are now focusing
on e-commerce it is a great opportunity for the company
 The market of Asia is growing very fast and Marks and Spencer is highly dependent on
United Kingdoms market, the company can expand their business and focus more on
Asian Market for business expansion(Ginter, Duncan and Swayne, 2018).
 Marks and Spencer also deals in food products and the people are now drastically shifting
to healthy food, Marks and Spencer can easily snap this opportunity.
Threats :
 Marks and Spencer is often called as Low fashion and non trendy store the company is
having major threads form the companies which are selling high fashion and low cost
products in the market
 Marks and Spencer does limited marketing for their product because of the low
marketing strategies of the company the sale of the competitor products and company are
increasing
 The clothing industry of the company is at mature stage of product life cycle
Strategic solutions :
Porters generic strategies :
Porters generic strategy is the basic generic strategy that can be used or applied to help
Marks and Spencer in order to maintain and achieve the competitive advantage for the long term
over other competitors. This helps the company for the long term as well as for short term
success. It is very easy for the company to run a business with the clear idea that company want
to achieve but its very difficult for the company who don't have the idea to adopt which strategy.
The four strategies that can help are as follows:-
Cost Leadership:- This strategy can be used by Marks and Spencer in order to enable the
organization to produce at large scale to achieve the efficiency as well as competitive advantage
at wide range in the economy. This is the traditional method which is generally related to large
scale enterprises that offers the standard products with small differentiation that can be easily
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acceptable by maximum number of customers. If the company is having a cost advantage over
other competitors then it can help the company to increase the sales as well as market share. This
strategy requires the coordination among all structural areas of enterprise. To become a low cost
manufacturer the company should achieve the following:-
 The company should have broad level of the productivity.
 It must have high capability for utilization of resources.
 The company must have the bargaining power in order to bring out the lower prices for
manufacturing of inputs(Hanson and et.al., 2016).
 The use of technology by the company should be effective in the manufacturing process.
 The company should Use lean manufacturing method in order to minimize the waste.
Differentiation :- This strategy can be used by Marks and Spencer in order to attain the
competitive benefit at large or broad markets. This plan of action is used by the company in
order to place the business in unique way to achieve the criteria that are used by the buyers.
Differentiation includes charging the premium price that indicate higher manufacturing price and
additional features that gives the customers the understanding to choose that particular product
over other competitors. This strategy is opposite of the cost leadership strategy. There are
different ways through which the company can achieve differentiation leadership but the
company need to do investment which is sustainable in the market that is:-
 The quality of the products must be superior with added features, advantage, long-lasting
as well as reliable.
 The product should have strong brand recognition as well loyalty among customers.
 The company should have wide distribution channels for product.
 It should have regularity for promotional support that can be controlled by advertising
etc.
focus
Differentiation focus:- This strategy can help Marks and Spencer in order to achieve the
competitive advantage in narrow market. In this strategy the company goals in order to
differentiate the product by targeting in small segment of market. This strategy is also known as
niche marketing(Lasserre, 2017). The company should ensure before targeting the particular
segment that do customers have really different wants and company should have logical base of
differentiation as to meet the competitive advantage over other competitors. Marks and Spencer
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can establish themselves in the target market by using this strategy to achieve high price as
compared to undifferentiated commodity with the help of special expertise or by adding value to
the customers.
Cost focus:- This strategy is like cost leadership but it focusses on particular niche of the
marketplace. This strategy cab help Marks and Spencer to sell the products to a particular part of
the market where unique products are purchased rather than selling to whole market. With the
help of this strategy the company can get the opportunity to be a leader in niche market that will
result company to achieve the competitive advantage.
 Porter's generic strategies is the important way which can help Marks and Spencer to
make the overall aligning of the business. This porter's strategy can help the company to
use this model at the time planning process so that it will help the company to select the
best strategy that will result to leading of the company in the market.
Strategic lock-in
This strategy refers to the strategy in which the customer is very much dependent on the
marketer regarding products and services so that the customer is not able to move to another
marketer without the availability of switching costs(Meyer, Neck and Meeks, 2017).
Evaluation of the organisation’s strategy
The Ansoff Matrix and
Ansoff Matrix : It is a marketing tool used by the senior marketing manager of the company to
come up with new strategies for the growth of the company. These all the various points of
Ansoff Matrix which the marketing manager of Marks and Spencer can use
 Market Penetration : This is the safest among all other points of Ansoff matrix. This
helps the company to increase the sales of a particular area. In these Marks and Spencer
need to do some promotional and marketing activities which can help the company to
boost the sale of particular and of particular stores.
 Market Development : In this step the of Ansoff matrix model the company decide to
enter a market with the existing products, this helps the company to explore new market
and grow and expand their business internally. In this strategy Marks and Spencer will
enter a new market with their existing product for example if Marks and Spencer used
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this strategy the company will sell their clothing or food products in new markets like
Africa, Southern Asia(Noe and et.al., 2017).
 Product Development : In this strategy of Ansoff matrix the company decide to
introduce new products into existing market of the company. The company is having
good knowledge regarding the demands of the products and services because of the
goodwill of the company, the chance of success of new product increases. Marks and
Spencer is having a good reputation In United Kingdoms market, this strategy can be
very affective for Marks and Spencer, Introducing new product for business expansion is
the best suitable strategy for the company in current condition of Marks and Spencer.
 Diversification : This is the most risky and difficult strategy among all the strategies of
Ansoff matrix. In this the company enter into new market with new products. If Marks
and Spencer uses this strategy the company need to change their product as well as the
market for example if Marks and Spencer enters in African market with banking services
or any other services or product which they are not dealing in, then this will be
Diversification strategy.
BCG Matrix on Marks and Spencer
BCG (Boston Consulting Group) is a helpful tool which is used to analyse the
attractiveness of a company's product against the market growth rate. Products are placed in four
categories that includes stars, question marks, cash cows and dogs, and a decision being made on
whether to build, hold, harvest and divest. Stars refers to business units in high growth markets
with high market shares which requires heavy ongoing investment to sustain them. Question
marks exists in high developing market with low market share that requires significant
investments to push them to the star class. Cash cows operates in low developing or mature
markets with the high market shares. Lastly, dogs are the business units with low contribution in
low developing markets as they are a drain on resources, it is major being recommended that
these can be removed from the portfolio(Bryce, 2017). Mark and Spencer has a wide range of
products with many several business lines within each of its portfolio. BCG matrix has been
limited to the company's core business of general, food and clothing merchandise.
 Stars: Marks and Spencer is a star in products and service portfolio because the new
website which was launched in 2013 was supported by the new e-commerce distribution
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centre at the castle Donington capable of processing around 1 million of products daily
that has shown a great potential for development. A build objective should be examine by
continually upgrading and improving by expanding the website with making more
products available online which enables it to be a future cash cow(Ginter, Duncan and
Swayne, 2018).
 Question Marks: Marks and Spencer cannot deprive women wear and beauty products as
they both complement lingerie that is a cash cow in product portfolio. If two products are
complementing each other, then removal of one can give a negative impact in the
marketing of the other products in product portfolio. Innovating women wear with
designing fashionable clothing for attracting the 30 plus market is a growth strategy
which is being recommended. Menswear and kids clothing are eventually giving a good
reasonable revenue for Marks and Spencer which would be a good idea in continue
investing in the same to turn it into stars and cash cows. Whereas beauty products haven't
shown a significant response from the market and not yet achieved a dominant position.
 Cash Cows: Mark and Spencer have two cash cows which includes food and lingerie
because these products represents the backbone of the organisation which should be
smartly defended by holding onto sales and market share. Funds that are being generated
from these cash cows could be channelled into the stars and promising question marks
that develops them into cash cows(Engert, Rauter and Baumgartner, 2016).
 Dogs: Dog category can be identified in premium priced clothing with the low
contribution in a mature and declining market. Marks and Spencer can give strong
consideration to depriving this product line as it may be continued to a place that drain on
resources without any desired level of returns.
CONCUSSION
From the above study it is concluded that to achieve and to maintain the competitiveness in the
market it has focussed on the Marks and Spencer company by providing strategic analysis for the
company as well as by examining the external environment by doing the PESTLE analysis
political, economical, legal, social as well as technological factors and their impact on the
company. With porter's five force model it has explained the threat of new entrants, threat of
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substitutes, buyers and suppliers bargaining power. Furthermore, it has analysed the internal
factors such as the company's strength resources that give the company the competitive
advantages as well as what types of services, products and markets the company deals with. It
also helped to identify the unique capabilities to compete against the competitors with the help of
SWOT analysis. By applying VRIN model it has helped Marks and Spencer the extent of the
competitive advantage that the company can have from its resources that is the resources are
valuable, rare, imitable. Furthermore, it has recommended strategic solutions for Marks and
Spencer to build the competitive advantage with the application of Porter's generic strategies like
cost leadership, differentiation, cost focus as well as differentiation focus that has helped the
company to choose the best strategy and how the strategy will enhance the company's
capabilities against the competitors. At last, it has critically evaluated the strategy of the
organization with the help of BCG matrix in order to help the Marks and Spencer company to
determine the areas of their business in which company requires more resources and investment
that will help the company to achieve the objectives successfully in the competitive market for
sustaining for the long term.
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REFERENCES
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Aguinis, H., Edwards, J.R. and Bradley, K.J., 2017. Improving our understanding of moderation
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Gruyter GmbH & Co KG.
Engert, S., Rauter, R. and Baumgartner, R.J., 2016. Exploring the integration of corporate
sustainability into strategic management: a literature review. Journal of cleaner
production, 112, pp.2833-2850.
Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2016. Replication in strategic management.
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Frynas, J.G. and Mellahi, K., 2015. Global strategic management. Oxford University Press,
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Ginter, P.M., Duncan, W.J. and Swayne, L.E., 2018. The strategic management of health care
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Hanson, D. and et.al., 2016. Strategic management: Competitiveness and globalisation. Cengage
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Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2016. Strategic management: Concepts and cases:
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Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Meyer, G.D., Neck, H.M. and Meeks, M.D., 2017. The entrepreneurship‐strategic management
interface. Strategic entrepreneurship: Creating a new mindset.pp.17-44.
Morschett, D., Schramm-Klein, H. and Zentes, J., 2015. Strategic international management (pp.
978-3658078836). Springer.
Noe, R.A. and et.al., 2017. Human resource management: Gaining a competitive advantage. New
York, NY: McGraw-Hill Education.
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ONLINE
Evolution of Marks and Spencer .2019.[Online].Available through
<https://www.academia.edu/13153417/An_evaluation_of_Marks_and_Spencer>
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