Strategic Management Report for Marks and Spencer

This report provides an analysis of the strategic management of Marks and Spencer, including external and internal environment analysis, firm intellectual assets, business level strategy, corporate level strategy, and more.

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
Main body .......................................................................................................................................1
Strategic management.................................................................................................................1
Analysing external environment.................................................................................................2
Assessing internal environment of Marks and Spencer..............................................................3
Recognising firm intellectual assets............................................................................................4
Business level strategy................................................................................................................6
Corporate level strategy: Creating value through diversification...............................................7
International level strategy: Creating value within global market..............................................7
Entrepreneurial strategy and competitive dynamics...................................................................8
Strategic control and corporate governance................................................................................8
Creating Effective organisational designs...................................................................................8
Strategic leadership: creating ethical and learning organisation.................................................9
Managing Innovation and foster corporate entrepreneurship.....................................................9
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic management refers to ongoing monitoring, planning, analysing and assessing
overall requirements that a business enterprise needs to fulfil or attain desire goals or objectives.
Therefore to changes in business environment requires company to constantly recognise
strategies for success. It provide direction to company by developing plans and policies so that
objectives are attained on set time duration (Ansoff and et. al., 2018). This report is based on
Marks and Spencer that is British multinational retailer since 1884. The company is listed on
London Stock exchange and FTSE 100 index. M&S works under 1463 locations where 78000
employees are working where they sell home products, clothing and food product to customers.
This strategic management report involves analysis of external and internal environment using
PESTLE or swot along with emphasis on recognising firm intellectual assets. Further it
illustrates the types of strategic formation using business level, corporate level, entrepreneurial
level or international level strategy for company to gain profitable results. Further it understand
key decisions and trade-offs to manage manufacturing and service operations where it includes
managing innovation and foster corporate entrepreneurship, strategic leadership, Corporate
governance so that firm develops their strategies accordingly and attain the targets on global
level.
Main body
Strategic management
Strategic management includes formulation and execution of main goals and objectives
that are taken by organisation manager on behalf of stakeholders, based on resources and
identification of internal and external environment where organisation operates. Marks and
Spencer manager highly emphasis on strategic management to gain more competitive advantage
at marketplace (Pfarrer and et. al., 2019). To effectively develops strategic management
company need to understood company vision and mission so that overall aim of performing
targets are recognised and workers fully indulges in completing targets on time. Marks and
Spencer vision and mission demonstrate below:
Vision
The main vision of Marks and Spencer is to generate standards against which others are
measured.
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Mission
Marks and Spencer mission is to develop aspirational quality that is easily assessable to
others. However, in this they value offer quality services, trust, innovation etc.
Hence, to attain the goals of business enterprise, Marks and Spencer need to assess
external and internal environment shown below:
Analysing external environment
External environment defined all the external framework or influences that mainly impact
the operation of business and their market position at global environment. In terms of Marks and
Spencer, this report assess external environment using PESTLE analysis.
Pestle analysis is a strategic framework that is used to examine key factors that influence
business organisation from outside (Amason and Ward, A., 2020). The firm must consider
factors of external environment because it would present opportunities that enterprise has for
success and growth. It is based on six factors that are explain on Marks and Spencer:
 Political factor- This factor considered political situation of nation that are taken into
consideration for taking decisions. In terms of Marks and Spencer, present political
conditions of UK is not much effective due to presence of Brexit. Due to Brixit
implementation, political uncertainties is developed due to negotiations with European
union. Besides this it also impose threat for business organisation because uncertain
policies restrict the company from developing long term growth plans.
 Economical factor- This factor is based on economic environment of nation that directly
affect working of organisation. However, in UK economic slowdown lead the high
inflation and also it affects the value of pound in negative manner that generate
challenges for firm to operate, and negotiate with suppliers (Mongkol, 2021). Hence it
create threat for company because Marks and Spencer face several hardship in selling
their offerings at premium cost range.
 Social factor- As this factor, involves all trends, social and cultural aspects, preferences
that impacted the company and its offerings. In terms of Marks and Spencer, current
buyer market of UK have highly inclined towards adopting healthy food and modern
cloths which are also price friendly according to customer. This represent as opportunity
for Marks and Spencer in maximising offerings that could effective for satisfied the
demands of diverse customers.
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 Technological factor- It represent technological advancement that are currently taking
place within country and related business sector where company need to perform their
operations (Barney and Hesterly, 2019). In context of Marks and Spencer, several
technological advancement such as use of robotics, artificial intelligence, automation etc.
that are effective for company growth in their distribution and manufacturing processes.
 Legal factor- In this aspect of external environment laws and regulations are included
which impact business strategies and helps to attain profitable results in marketplace. For
retaining sector there are numerous laws which are necessary for this sector within UK
such as Equality act 2010. As per this law, Marks and Spencer manager need to ensures
that every individual is capable to purchase the offerings of company that have effective
access to same and also employees must enjoy equal opportunities related to prosperity
and growth. Therefore, such type of legislation present an opportunity for business
enterprise in terms of developing and improving organisational practices.
 Environmental factor- This factor involves environmental practice that have direct
impact on how firm distribute and manufacture products for customers. As per UK, there
is lot of concern presented from government side and also from individual person or
company in terms of protecting the environment. It represent as an opportunity for Marks
and Spencer to ensure that product and services are related to company are environmental
friendly that does not damage the same.
Assessing internal environment of Marks and Spencer
SWOT analysis
It is one of the useful framework to identify organisation strength, weaknesses,
opportunities and threats. In terms of Marks and Spencer, SWOT analysis is demonstrated
below:
Strength Weaknesses
 The main strength of Marks and
Spencer is that is is recognised brand at
marketplace due to which customers
buy for shopping they prefer to go
M&S because it provide quality and
 Major weakness of Marks and Spencer
is that they highly relay on manual
operations due to this company invest
high cost in production process.
 Marks and Spencer face high
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sustainable products to customers.
 Another strength of Marks and Spencer
is to offer variety of products to
customers as they offer home products,
clothing, food products to customers
that fulfil more than half of the
requirements related to daily needs of
customers.
competition due to which firm would
face limited market share at
marketplace (Mariina and Tjahjadi,
2020).
Opportunities Threats
 The major opportunity that Marks and
Spencer enjoy is to emphasis on
developing the online market so that
more customers are attracted towards it
and firm generate profitable results.
 As Marks and Spencer is a global brand
and they emphasis on opened their
stores at those countries where it not
have any existence that represent as an
opportunity to increase more branches
and generate profitable results.
 The major threat of Marks and Spencer
is that there are number of competitors
present at marketplace such as ZARA,
H&M that impact company
profitability in negative manner.
 Fluctuations done by government in
their policies for retail stores impact
company profitability and operations.
Recognising firm intellectual assets
Vrio analysis
It is a type of internal analysis that is used to determine the usefulness and quality of firm
resources and capabilities. It includes four frameworks i.e. valuable, rare, imitate and organised
strategy. In terms of Marks and Spencer these frameworks are demonstrated below:
Basis Valuable Rare Imitate Organised
Brand image yes - - - Competitive
parity
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Product
portfolio
yes yes - - Temporary
competitive
advantage
Technologica
l capabilities
yes yes yes - Unused
competitive
advantage
Financial
resources
yes yes yes yes Sustainable
competitive
advantage
 Valuable- The first aspect is valuable resources. It considered those resources where firm
enable to attain sustainable competitive advantage. In terms of Marks and Spencer, Brand
image is highly valuable at marketplace because they offer quality products to customers
due to which people of UK prefer to buy products at M&S stores. Brand image is useful
to company as it generate profitable results to business.
 Rare- It is essential that organisation resources are rare so that they gain competitive
advantage at marketplace (Stamevski, Stamevska and Stankovska, 2018). However,
product portfolio of Marks and Spencer are rare because they offer variety of offerings to
customers. The company product portfolio helps to attract large base of customers.
Therefore their technological capability is strong due to which they manufacture and
distribute offerings to customers in an appropriate manner. These rare resources are
useful for gain competitive advantage at marketplace. This also effective to target the
customers and attain long term goals proficiently.
 Imitate- In terms of Marks and Spencer, company technological capabilities is highly
imitate because they patented their technologies of producing and distributing the
products so that no other competitor would creep it. This generate high market position at
marketplace and also enhances company survival on global marketplace. To patent the
technological capabilities company have strong financial resources that is also imitate
and useful to gain high competitive advantage at marketplace.
 Organised- It is very important to organised the resources properly because it gives
organisation a sustainable competitive advantage. Mainly the financial resources of
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Marks and Spencer are highly organised in nature that helps manager to developed or
contributes within the company in persistent manner. Hence organised financial resources
are useful to coordinate with strategic planning, budgeting system, logistics system, legal
system, controlling system etc.
From the above analysis it is evaluated that for Marks and Spencer to maintain rareness,
inimitableness, valuable company need to organised their financial resources so that more
sustainable competitive results are enjoyed by organisation in their long term survival
(Fontrodona, Ricart, and Berrone, 2018). Therefore above factors are appropriate for company
in order to recognise the growth opportunities. Besides this, there are also another factor that
emphasis on opportunities for firm. This model is porter's generic model that expressed under
business level strategy. This model is used to elaborate how Marks and Spencer must offer their
goods at marketplace in order to attain competitive advantage in proficient manner. Hence, this
model is expressed on Marks and Spencer:
Business level strategy
Business level strategies is an accumulated and coordinated set of actions and
commitments that an organisation use to gain competitive advantage by utilising basic
competencies in particular product market. To understand business level strategies, manager of
Marks and Spencer need to adopt the use of porter's generic strategy so that best level strategy
are adopted for company.
Porter's generic strategy
 Cost leadership- It is one of the most appropriate strategy within organisation. In this
organisation would compete at marketplace on the basis of cost to become low cost
produced within business industry (Bartošova and et. al., 2020). Hence it is advantageous
to Marks and Spencer to overcome with market condition that was currently present in
market. Besides this it also provide minimal advantage because once the organisation
start to lower their price then their competitive edge at marketplace would be lost.
 Differentiation- In this strategy, organisation would emphasis on producing new and
differentiate products that creates new demands within society. In this company could
examine and chose various dimensions that are valued by customers. The major
advantage of differentiation for Marks and Spencer is that they could offer their products
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at premium price due to distinct mature quality. Besides this, firm need to involve into
repeated market analysis to identify gap at market to manufacture differentiate goods. Focus strategy- This strategy help company to focus on attaining competitive scope
within business industry. In this firm need to chose one specific target market where
strategies are subjected. It is mainly divided into two parts that are elaborated below:
◦ Cost focus- In this strategy, organisation would seek benefits in target segment using
cost.
◦ Differentiation focus- In this strategy differentiation of products used to target the
market of business enterprise.
Out of all the above strategies, Marks and Spencer adopts differentiation strategy in
which they produce the goods and services in exclusive manner to engage more customers and
retain old one for longer period of time. This mainly done for reducing the price of goods and
attracting new customers effectively using promotion.
Corporate level strategy: Creating value through diversification
Corporate level strategy is defined as an action that are taken to attain competitive
advantage at marketplace (Almutairi and Sriramesh, 2020). It addresses the whole strategic scope
of business firm that also provide direction of corporation in several business units to attain the
goals on time. There are variety of corporate level strategies such as stability strategy, expansion
strategy, diversification strategy etc. In context of Marks and Spencer, manager need to focus on
diversification strategy that is explained below:
Diversification strategy- This strategy identify the directions of development that take
organisation away from its current products and markets at a same time. It is highly risky
approach that is used by company to gain more sustainable results and growth within
organisation. Perhaps it is highly risky strategy that could be adopted by Marks and Spencer.
This this company need to enter into new market with new and modified products. Therefore it
shows perfect blend of market and product development. In terms of this M&S adopts
diversification strategy that is linked with analysing potential synergies among existing and new
market. Hence it attracts more customers base so that they generate more profitable results.
International level strategy: Creating value within global market
It reflects those strategy which the business enterprise would adopts to develops the
market on international level. In context of Marks and Spencer, manager need to emphasis on
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create value at global market for this they must adopts the global strategy on international level.
However, by adopting this strategy company stresses on need to attain the lost cost and
economics of scale by offer products and services on global level. In terms of Marks and
Spencer, company sell same type of product range to customers in different locations but in
modified manner as per the needs and demand of that particular nation. Therefore, it helps to
generate more sustainable competitive advantage at marketplace.
Entrepreneurial strategy and competitive dynamics
The Marks and Spencer entrepreneurial strategy are based on focused on the own label
business that involve food, clothing, home, financial services within UK or in international
market. This helps organisation to sustain in industry and attain more profitable growth
(Janošková, Csikósová and Čulková, 2018). As Marks and Spencer deal in the competitive
market due to this they develop their action and responses accordingly so that they attain the
competitive dynamics in appropriate manner. For this they need to differentiate their product
from competitors and needs to emphasis on corporate governance so that high profitable results
are attained on time.
Strategic control and corporate governance
Strategic control is a type of process that is used to control the execution and formation of
strategic plans. It is an effective form of management control that help organisation to attain the
target proficiently and effectively. Strategic control is useful to attain the target by Marks and
Spencer due to which company received appropriate outcomes that they want to receive.
Corporate governance of Marks and Spencer is that the level of trust is high that is useful to built
the right things in the right manner. This help manager to take decisions properly and enhance
the support of work to implement innovation in proper way (GOVERNANCE FRAMEWORK,
2021). Corporate governance is useful for company because they need to emphasis on
diversification strategy where trust, collaboration is very essential to gain sustainable competitive
advantage at marketplace.
Creating Effective organisational designs
Effective organisational designs represented as a way in which organisation is structured
and operated by its workers. It include planning for success that is required for achieving the
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goals on set time frame. In terms of Marks and Spencer, manager must create an effective
organisational designs that are presented below:
 To create organisational design in appropriate manner senior manager of Marks and
Spencer are aligned in appropriate manner so that collaboration are done effectively.
 Secondly, manager of an organisation need to clearly define the goals so that employees
easily understand task requirement and it could be easily achieved (Joannides de Lautour,
2018).
 Further, to create effective organisation design manager need to expect conflicts and
create counselling sessions to resolve it and manage it so that friendly culture is
developed at organisation and useful to attain targets on time.
In this Marks and Spencer organisation structure is very useful because they follow flat
structure where employees are easily understand the task without any misunderstandings. To
maintain effective organisation design, organisation culture is very important that was reflected
with the company structure. Hence, company structure is very effective to deliver the guidance
and rules to employees so that they attain more profitable results.
Strategic leadership: creating ethical and learning organisation
Strategic leadership defines as an ability to influence others to voluntary make decisions
for enhancing long term success while maintain short term financial stability (Leiblein, Reuer
and Zenger, 2018). In Marks and Spencer, manager have a quality of strategic leadership where
they think strategically by maintaining transparent relationship with employees so that they are
satisfied with the working. Further manager act in strategical manner by evaluate employees
performance on daily basis and offer learning sessions to them so that their skills and experience
are enhanced which are useful to generate more effective strategy related to diversification of
market.
Managing Innovation and foster corporate entrepreneurship
In terms of Marks and Spencer, manager need to emphasis on manage innovation for this
they need to develop clear direction so that employees would understand the objective of
business so that it could be attain on set time frame. In this manager also create a transparent
means of ranking the suggestions of employees so that conflicts does not raised and innovation is
developed properly. In this manager need to explain the reason of choosing the one particular
idea so that team work is build and relationship among employees are also developed
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(Shanmuganathan, 2018). Hence it would foster the corporate entrepreneurship of Marks and
Spencer because of this firm generate financial rewards to accept or implement the ideas
prominently and effectively.
CONCLUSION
From the above report it is to be concluded that strategic management is one of the
essential factor under business industry because it express objectives to accomplish goals on
time. This report inculcates external and internal factor to develop strategic management along
with recognising company intellectual assets to understand capabilities of resources. Further it
demonstrate business level, corporate level, international level and entrepreneurial level strategy
that are used to design the organisation and attain more profitable results. This also elucidates
strategic leadership and managing innovation that develops corporate entrepreneurship which is
useful to gain sustainable results at marketplace.
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REFERENCES
Books and Journals
Almutairi, T.M. and Sriramesh, K., 2020. Strategic management of public relations in
Kuwait. Corporate Communications: An International Journal.
Amason, A.C. and Ward, A., 2020. Strategic management: From theory to practice. Routledge.
Ansoff, H.I. and et. al., 2018. Implanting strategic management. Springer.
Barney, J.B. and Hesterly, W.S., 2019. Strategic Management and Competitive Advantage.
Pearson Education, Limited.
Bartošova, V. and et. al., 2020. Strategic Management of Development and Institutional
Formation of Organizations. Academy of Strategic Management Journal. 19(3). pp.1-8.
Fontrodona, J., Ricart, J.E. and Berrone, P., 2018. Ethical challenges in strategic management:
the 19th IESE International Symposium on Ethics, Business and Society. Journal of
Business Ethics. 152(4). pp.887-898.
Janošková, M., Csikósová, A. and Čulková, K., 2018. Measurement of company performance as
part of its strategic management. In Managerial strategies for business sustainability
during turbulent times (pp. 309-335). IGI Global.
Joannides de Lautour, V., 2018. Strategic Management Accounting, Volume II.
Leiblein, M.J., Reuer, J.J. and Zenger, T., 2018. What makes a decision strategic?. Strategy
Science. 3(4). pp.558-573.
Mariina, E. and Tjahjadi, B., 2020. Strategic management accounting and university
performance: a critical review. Academy of Strategic Management Journal. 19(2). pp.1-
5.
Mongkol, K., 2021. Strategic Management Practices in Thailand. Academy of Strategic
Management Journal. 20(4). pp.1-11.
Pfarrer, M.D. and et. al., 2019. Sociocognitive perspectives in strategic management. Academy of
Management Review,\. 44(4). pp.767-774.
Shanmuganathan, M., 2018. Corporate governance relationship with strategic management: a
longitudinal case analysis of RELX Group (Elsevier). International Journal of
Comparative Management. 1(3). pp.273-294.
Stamevski, V., Stamevska, E. and Stankovska, A., 2018. Some aspects of strategic
management. Economics and Management. 14(2). pp.129-133.
Online
GOVERNANCE FRAMEWORK, 2021. [Online]. Available through:
<https://corporate.marksandspencer.com/investors/corporate-governance/governance-
framework>
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