Strategic Management for Marks & Spencer: PESTLE, SWOT, VRIO and Porter 5 Forces Analysis

This report provides an in-depth analysis of Marks & Spencer's strategic management using PESTLE, SWOT, VRIO and Porter 5 Forces Analysis. It covers the company's current strategic position and tactics, resources and capabilities, and how they impact the success of the firm. The report also includes a discussion on strategic capabilities and their key components, as well as a resource-based view strategy.

STRATEGIC
MANAGEMENT

Contents
Contents................................................................................................................................................2
INTRODUCTION................................................................................................................................3
MAIN BODY.......................................................................................................................................3
PESTLE analysis.................................................................................................................3
SWOT Framework.......................................................................................................................5
Porter 5 forces..............................................................................................................................7
VRIO MODEL....................................................................................................................8
Strategic capabilities and their key components..........................................................................9
Resource based view strategy......................................................................................................9
CONCLUSION..................................................................................................................................11
REFERENCES...................................................................................................................................11

INTRODUCTION
Strategic management is one of the important method which is being practicing by
various business firm in order to attain success in their respective sector. Their are various
strategies which an organisation can adopt for enhancing their working condition. (Amran, and
et. al., 2016). Marks and spencers is the business firm which is been choosen in this report. Pestle
and swot analysis are some kind of strategies which can help an organisation to positively deals
with their external and internal factor. Many more tools and strategies will be explaned in this
report.
MAIN BODY
1. Collect information about the company and the industry in which the company
evolves. Construct strategic tools that will lead to the analysis performed in your
individual report. This task is your research and is not graded. However without the
research you will not be able to successfully complete the individual task
Marks & Spencer is a British multinational retailer with headquarters in London. Michael Marks
and Thomas Spencer launched the company in 1884. Since then, M&S has opened around 1463
stores around the world. London is where the company's headquarters are located. Marks and
Spencer's most popular items include home goods, food & consumables, and clothing. The
company's own brand name is used to sell products. M&S is a publicly traded company on the
London Stock Exchange. The company will employ around 80000 people by 2020. However,
due to the covid-19 outbreak, the company announced in August 2020 that it would lay off 7000
people. In 2020, the company's annual revenue was 10181.9 million pounds. (Drnevich,. and
Croso., 2013).
PESTLE analysis
The PESTLE framework is a strategic tool used by businesses to have a better knowledge
of their external market and business environment. In the case of M&S, the PESTLE analysis is
discussed further down..:
 Political factors: This aspect has to deal with tariff rates, tax policies, and the stability of
the central government. M&S will profit from doing business in the UK since it is

politically stable and offers lower tax rates for businesses. Marks & Spencers, for
example, enjoys full government support due to its rich historical values and fair trade
practises. If the government hikes taxes, the price of Marks & Spencer's products will
climb even more, resulting in lower sales for the corporation.
 Economic factors: The UK's growth rate, GDP, interest rate, inflation rate, and people's
purchasing power are among these elements. The UK has a high growth rate, and people
have disposable income, allowing them to shop at M&S. M&S could be harmed by rising
inflation rates as a result of the Great Recession of 2018.. (Ghezzi, , 2013)
 Social factors: People's attitudes, opinions, beliefs, and attitudes are all affected by many
social aspects. People in the United Kingdom are progressive and open-minded. They
prefer to use new and innovative technologies. M&S's sales and profits will rise if they
give their customers with high-quality, modern merchandise.
 Technological factors: People in the United Kingdom use the internet and digital media
in their daily lives, making it a technologically advanced country. To maintain client
interest in M&S's products, the corporation must modernise its technology, machinery,
and distribution systems in accordance with market demand. Marks & Spencer is
working on a new Technologies Operating Model that will help the company leverage
new technology and adopt industry agile techniques. The technological supply base of
Marks & Spencer has been simplified and consolidated.
 Legal factors: All legislative rules and regulations imposed by the UK government to
protect the welfare of customers and employees of firms, and vice versa, are included in
this macro factor. So that M&S does not face significant penalties for disobeying the law,
the company's manager must follow all legal procedures. They were found guilty of two
charges, one of which was based on the Health and Safety at Work Act 1974, which
required them to take steps to create worker safety standards. They were found guilty of
both offences and were each fined 500,000 pounds. . (Hoejmose, Brammer, and
Millington, 2013)
 Environmental factors: These aspects are linked to environmental and ecological
protection from harmful corporate activity. Following environmental standards can help
M&S retain a positive image in its markets. As a result, the firm's sales and profits will be

significant. Concerns about current climate conditions are frequently propagated on
television, in magazines, and in newspapers. Marks & Spencer has created their own
Green Policy, which they have called "Plan A." It's a company-wide initiative aimed at
improving people's well-being, communities, and the environment.
SWOT Framework
SWOT analysis is a tool that will assist M&S in identifying their strengths and
weaknesses in detail so that necessary changes can be made. Different opportunities and
dangers are also recognised that can have a significant impact on business. SWOT
analysis is performed below in the context of M&S.:
Strength
 Well- experienced- Marks & Spencer has been in operation for 136 years. In the United
Kingdom, it is a significant retailer. The company's initial retail endeavour was Penny
Bazaar at Kirkgate Market. The organisation has created a number of key partnerships
around the world over the years. A plethora of experience is really beneficial to the
organisation.
 Multinational company: - In addition to an online store, M&S operates physical stores
throughout Europe, Asia, and the Middle East. The company has 1463 outlets worldwide,
with 1035 in the United Kingdom, according to estimates. Online stores and physical
sites have supported the company's global expansion.
Weakness-
Declining sales- Several M&S stores had experienced a drop in sales at the end of 2019. A
defective supply chain system and a lack of product availability were to blame. The similar
problem occurred during the 2017 Christmas season, when the company was unable to meet the
required demand for food and apparel supplies. The company's image suffered as a result.
(Scholes, 2015)
 Perception of public- M&S is thought to not sell apparel for children and teenagers by
the general public. Many people feel that the company caters primarily to the elderly.
Despite the fact that this belief is erroneous, it has cost the organisation a significant

amount of money. Despite the fact that the majority of customers are elderly, the
restaurant does not cater exclusively to them.
Opportunities
 Global expansion- Marks & Spencer is a British retailer that has stores in India, Russia,
Brazil, Poland, and Indonesia. Now is the moment for the corporation to expand into
those countries that have yet to be conquered. It means that the brand must expand its
presence in the remaining nations by opening new locations.
 Online store- Marks & Spencer also has an online store. When we compare the
company's position to that of other large online retail e-commerce giants like Amazon or
eBay, however, the company falls behind. M&S, on the other hand, is well behind its
rivals. Despite the fact that the company is well-established, has extensive experience,
and a strong brand identification. Ecommerce shopping is the way of the future for
purchasing because people are becoming busier and prefer to avoid public and crowded
places. As a result, the business should focus on growing its online store. M&S has lately
announced that its clothing and home goods lines would be available online.
Threats
 High competition- In the United Kingdom and around the world, the retail sector is
getting increasingly competitive. Marks & Spencer's main competitors are Amazon,
Tesco, John Lewis, ASDA, Debenhams, Sainsbury's, Sports Direct, Morrison's, Gap, and
Next. Because the competition is so severe, the company will progressively fade away
from the market if it does not change its strategy. The scale company's position in the
global market is falling if the brand graph is going downhill. M&S has been closing
stores in the United Kingdom, France, and China, for example.

Porter 5 forces
Porter's five forces is a strategy concept that considers future outcomes rather than just current
competition when making strategic decisions. This framework has five aspects, which are
discussed below in relation to M&S:
 Threat of new entrants- Because M&S is a well-known firm with a global presence, the
threat of new entrants is limited. While conducting business operations and activities, a
new company would not be able to invest as much as M&S does. As a result, newcomers
to the market are unable to compete with M&S in terms of customer base, market share,
and the ability to provide clients with standardized items.
 Bargaining power of suppliers: The retail industry employs a large number of large
firms, particularly in the food and clothes industries. As a result, suppliers have a
significant amount of bargaining power. If competitors pay their suppliers well, they may
not be able to supply M&S with all of the essential supplies and resources, resulting in a
drop in profitability and sales..
 Bargaining power of buyers: Due to the high degree of competition in the retail market,
M&S has significant buyer negotiating leverage. Buyers may switch their preferences to
things offered by competitors if a company charges excessive prices to its customers
without providing a satisfactory product.
 Threat of substitutes: Clothing and food will almost certainly not be substituted. As a
result, in the case of M&S, the risk of replacing items is minimised. Customers will be
unwilling to purchase the firm's offerings if the things on offer are of poor quality.
 Rivalry among existing competitors: Many retail companies operate in the United
Kingdom and around the world, including H&M and Zara. In the case of M&S, these
competitors pose a significant danger. This is because all of these companies price their
products to be competitive, therefore a small increase in M&S's product variety will
allow other companies to expand their customer base.. (Maté, Trujillo, and Mylopoulos,
2012)
2.Provide a critical internal analysis of the firm giving details of its current strategic
position and tactics. You should also consider the resources and capabilities of the firm and

how they impact upon the success or otherwise of the firm. You will need to base s ome of your
analysis on the reflection you have posted on your individual journal> (Distinctiveness of the
firm based on the identification of competitive advantages).
VRIO MODEL
Value, rarity, limitability, and organisation are all abbreviations for VRIO. It is used as a
strategic tool by businesses to identify their available resources and internal capabilities. They
will be able to obtain a major competitive advantage over their competitors as a result of this.
The VRIO analysis is detailed in regard to M&S further down..:
 Valuable: In order to deliver intense competition to rivals in a timely manner, M&S
managers must properly utilise their valuable resources. A corporation can make a lot of
money if it has valuable resources. M&S's core resources include employees,
distribution, and supply chain management, to name a few. Whether or not Marks And
Spencer Ltd's resources are beneficial to the company. Such resources include knowledge
in finance, personnel, operations management, and marketing. This is a list of the most
crucial things to think about while determining competitive advantage.
 Rareness: This characteristic assists a business in determining whether or not the product
it prepares is unusual. M&S's unique items will help them build customer loyalty,
resulting in considerable sales and revenue improvements. The company's uncommon
items include manufacturing and production machines. M&S believes in providing
clients with unique and imaginative things because of the company's rarity..
 Imitable: M&S is required to create products that are not easily duplicated by
competitors. If M&S's items are replicated, competitors can sell them for less money, and
customers will be less likely to buy them. Raw materials for food and textile production
are examples of importable resources for the business.
 Organisation: The ability of VRIO to compete in the market while making efficient use
of its valuable resources, which are difficult to duplicate, is the focus of this portion of
the VRIO report. The company's execution strategy and employees are typically the
exclusive focus of management development. As a result of the corporation's judgments
about the evolution of its strategic capitals, the firm's capabilities are polished through

time. It's vital for companies like M&S to make the best use of their existing resources.
The costs of a corporation will rise if its resources and materials are not used in a
methodical manner. As a result, the company's revenues will drop, making it more
difficult to compete with competitors. Employees, suppliers, investors, and company
stakeholders are just a few instances of stakeholders.
Strategic capabilities and their key components
A strategic capacity is described as the method by which a company implements
multiple strategies in order to outperform competitors. The six main components of these
strategic competencies are strategic purpose, primary goals, action planning, analytical
instruments, values, and vision. These components aid the organisation in maximising the
efficiency of their implemented strategy.
Resource based view strategy
The resource-based view [RBV] is a strategic management tool and framework that
companies and organizations use to identify and utilize strategic resources in order to create a
long-term competitive advantage. The RBV framework is based on evaluating and selecting
resources that will help a business become more competitive, as well as strategically aligning
them. All organizations and businesses, according to the RBV, have access to, possess, and
control resources that allow them to build a competitive advantage. As a result, a subset of these
resources allows for improved long-term performance. Possession and management of key
resources can result in a long-term, sustainable competitive advantage. There are two types of
resources in this strategy: intangible resources and tangible resources. The tangible resources are
those that have a physical nature and can be easily identified by the organisation and its
competitors. Additionally, these materials are readily available on the market or can be produced
over time. Intangible resources, on the other hand, are assets that have no monetary value but are
held and utilised by businesses such as Marks And Spencer Group Plc. Marks And Spencer
Group Plc's competitive advantage is built on intangible resources, which are often unique and
more likely to stay inside the company over time. Intangible resources for Marks And Spencer

Group Plc include intellectual property, trademarks, brand reputation, and other intangible assets.
Value chain model
The value chain analysis forces strategists to think about organisational operations in a new way.
The key activities associated with the creation or delivery of a service or product are inbound
logistics, operations, outbound logistics, marketing, sales, and services.
Inbound logistics-
The processes of receiving, storing, and distributing the inputs that go into the creation of
products and services are referred to as inbound logistics. M&S won the GBS supply chain prize
and is well ahead of the competition thanks to its Plan A sustainability programme, which
intends to make significant improvements in the company's global supply chain.. (Moseley III,
2017)
Operations
To boost supply chain management, M&S is investing in IT system changes. There was also an
issue that resulted in the release of 800 online customers' personal information, and while M&S
said that no financial information was disclosed, the incident revealed a lack of appropriate
safeguards.
Outbound logistics
Outbound logistics includes the collection, storage, and delivery of items and services to
customers. In addition to in-store purchases, M&S offers home catalogue, online, and click-and-
collect options..
Marketing and sales
Marketing and sales work together to increase customer awareness of the product and persuade
them to purchase it. The company's digital department, M&S Venture Lab, works using lean
start-up technologies to improve customers' shopping experiences. M&S also runs high-impact
initiatives to boost customer value by leveraging customer loyalty data.
Services
The service component includes all procedures that increase or preserve the value of a product.
M&S is also planning to expand its dining halls and reclaim space that was previously used for
clothes and fashion. Marks & Spencer has begun a pilot operation to increase the size of its
dining halls while decreasing the amount of space it devotes to fashion..

CONCLUSION
From the above report it has been concluded that, an organization should always adopt
some business strategies that can help them to successfully run their business. Complete swot
and pestle analysis of m&s is been included in this report. Later on, porters five forces and value
chain model regarding m&s is been explained in this report. These strategies can help them to
improve their business profitability and sales. By using this different theories and framework the
management of m&s can implement right strategic planning for themselves.
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