Strategic Management - Strategy evaluation

This report evaluates the critical methods and tools used by organisations to determine their strategy. It includes an application of these tools to a real organisation and critically appraises the importance of change management based on the complexity of the transformation process, its costs, risks and sustainability.

Strategic Management -
Strategy evaluation
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INTRODUCTION...........................................................................................................................3
A critical assessment of the process used by organisations to determine their strategy..................3
An evaluation of the critical methods and tools used by organisation to determine their strategy. 3
An application of these tools to a real organisation.........................................................................7
Critically appraise the importance of change management based on the complexity of the
transformation process, its costs, risks and sustainability..............................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Strategic management is a continuous process which is inclusive of proper plan, control,
monitor, evaluation and analysis of all the requirements prevailing in business environment
through which organisation can fulfil aims and objective (Amado and Belfo, 2021). This process
allows leaders and managers and company to develop strategies accordingly and take use of
guidance and direction to ensure long-term growth and sustainability. Present report is conducted
on Marks and Spencer which was a leading British multinational company operating in retail
Industry sector. Company offers different type of products and services with high quality all
around the world. This report is inclusive of the tools and methods used by organisation. Along
with this report include application of the tools and importance of change management.
A critical assessment of the process used by organisations to determine their
strategy
Mission Statement of Marks & Spencer:
M&S is operating its business services with a mission statement “to develop innovative
and aspirational quality of products which is easily reachable to everyone.
Vision Statement of Marks & Spencer:
M&S vision is “to be the standard against which other companies or products are being
measured”
M&S is performing their business operations in a highly competitive retail industrial sector.
In this company have a significant mission and vision of objectives that provide them a direction
to satisfy consumers in effective manner. Marks and Spencer offer high quality and attractive
goods and services to fulfil needs of consumers in market segment. It has been identified that
M&S undertake use of a strategic planning process which is a method through which company
developed plans to accomplish overall objectives and long-term goals. In this company
undertakes use of different tools such as pestle analysis, VRIO, Porter five forces to determine
strategies accordingly.
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An evaluation of the critical methods and tools used by organisation to
determine their strategy
VRIO Model
VRIO analysis statistical tools through which organisation can evaluate and identify
existing resources of organisation through which they can assure higher competitive advantage in
respective of industrial sector (Bruzzone and Massei, 2021). There are different type of tools and
methods undertaken by Marks and Spencer in order to determine their strategy. In this analysis is
a significant tool through which company emphasise upon their existing resources through which
they can assure higher growth and profitability.
Resources Valuable Rarity Inimitable Organized What is the
result?
Strong brand
image
Strong brand
image
- - - Competitive
Disadvantage
Products Products Products - - Partially
competitive
Software Software Software Software - Competitive
advantage on
temporary basis
Personnel Personnel Personnel Personnel Personnel Competitive
advantage
Valuable:
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This is an effective element that enhances and offer value open organisation and further
aid them to fulfil organisational objectives and goals in an estimated time frame. In terms in
Marks and Spencer their valuable elements include:
Strong brand image:
M&S is having strong market image in industrial sector through which they acquire
competitive rivalry and ability to acquire profitability. Strong brand image add value in
company. As organisation offer higher quality goods and services to consumers with offer
satisfaction to end consumers.
Products:
As to offer high quality and affordable projects and services to consumers this is done by
organisation as to gain their loyalty and trust. For this company undertakes use of advanced
technologies.
Software:
M&S keeps on adopting new software as to perform their business operations while
satisfying dynamic needs of consumers in retail industrial sector. With the help of advanced
software company manages their global business operations that enhance company efficiency in
effective manner.
Personnel:
Marks and Spencer consider their employees as an important asset through which
complete fulfil their objectives and goals in effective manner (Foss and Saebi, 2018).
Furthermore, organisation provide training and development session to employees on continuous
basis in order to enhance their personal and professional development through which
organisation assure our competitive growth.
Rarity:
This element assessed in separating organisation with their competitors. It has been
evaluated that if a company wants to achieve higher competitive edge. In this they are required to
make additional efforts. In terms of Marks and Spencer elements of company is inclusive of:
Products:
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M&S products seems to be very rare as company undertake use of innovation and
undertake use of updated tools and techniques. Managers of company utilise technologies by
upgrading them on regular basis which is significantly difficult for competitors to make.
Software:
M&S take advantage of rare software with the help of their IT professional as to conduct
business operations. Software designed according to the company requirement which enhances
its competitiveness in industry.
Personnel:
Marks and Spencer staff members is having unique skills experience and competence in
that assist organisation to fulfil their objectives and goals in effective manner. With the help of
training and development courses Marks and Spencer enhance their personal skills which is quite
rare and hard to be copied by other rivals.
Inimitable:
Every organisation is having some certain form of elements in resources which is
difficult for others to imitate and copy in terms with Marks and Spencer. Company is having
imitable resources in terms of:
Software:
Marks and Spencer take advantage of software which is specifically created as well as
design according to the requirements of company. This is harder to get copied by any other rival
in industry.
Personnel:
By offering regular training and development sessions organisation maintain employees’
skills and developed competition. This helps in developing strong as well as positive relationship
with personnel that allow Marks and Spencer to perform their business operations with low level
of labour turnover (Grose, 2021). It also aids company to perform business operation with highly
experienced employees those who can overcome changes even in difficult situation. This
resource is inimitable for Marks and Spencer.
Organized:
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It is the last element of VRIO analysis which include number of resources which is
organised in an effective manner as to fulfil objectives and goals. In terms at Marks and Spencer
company in organised elements is inclusive of employees.
Personnel:
Staff members of Marks and Spencer’s is organised in a manner that aid them to deal
with complex situations. It also help organisation to embrace changes in an effective basis.
An application of these tools to a real organisation
Present report has been conducted on Marks and Spencer which is operating its functions in
retail industrial sector. This company deals in food items, clothing products and home production
services around the world. Organisation is currently having approximately 959 stores in the
provinces of United Kingdom and offer high quality products and services to consumers.
Mentioned below external environment analysis of company is undertaken in order to identify
future growth prospective:
PESTLE analysis
Pestel analysis is a framework with the help pf which organisation can identify the factors
that can affect business growth and development opportunity along with profit generation ability.
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In terms of Marks and Spencer pestle analysis will allow organisation to have huge impact on
their revenue generation capability. With the help of this analysis company can identify the
elements that can affect their business operations:
Political Factor:
Political factors play essential role in evaluating the elements that can impact upon Marks
and Spencer long term profitability in a certain market or a country. Marks and Spencer’s mainly
operate in the provinces of United Kingdom but also having locations in number of countries
around the world (INDARTI, 2021). There are different factors which can impact upon Marks
and Spencer business operation in the provinces of United Kingdom. In this, brexit can affect
company operations in terms of tariffs and trade regulations. In this it is essential for company to
make sure that the strength and relationship with suppliers in United Kingdom in order to
provide to product cost for end consumers. Along with this factor like industrial sector regulation
and consumer service sector are also some of the political factors that can affect company.
Economical Factor:
Economic factor meanly includes elements related to foreign exchange rate, inflation
rate, interest rates and economic growth patterns and more. United Kingdom is one of the largest
economies around the world and is also an open economy. In this country monetary and fiscal
policies are managed in a proper manner as government is having strong finances. In this
company is having significant opportunity to provide quality products to consumers. However,
Marks and Spencer’s can get affected due to the factors like unemployment rate due to covid-19
which can affect their economic growth rate. In this company is required to undertake strategies
such as provide discounts to consumers in order to develop large base of consumers to ensure
long-term growth.
Social Factor:
Shared believes as well as attitude of the population in a certain market is playing
essential role and determines the manner in which company is required to perform. It is essential
for Marks and Spencer to examine believes and values of consumer groups, as it has been
evaluated that consumer needs and demands changes on dynamic basis. In this with the help of
determining demographic and skill level of the population, education level, attitude and leisure
interest Marks and Spencer can influence interest of consumers. Company is required to
emphasize upon trends which is being followed by young consumers in order to widen scale.
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Company by offering products and services according to the changes in the fashion of consumers
can enhance its competitiveness.
Technological Factor:
This factor is playing major role as technology is fast changing elements cross industries
around the world. In this it is essential for Marks and Spencer to transform according to the
changes in business environment and technology in order to be established player and cope up
with the changes accordingly (Kun, Yuenan and Yingxue, 2021). Company with the help of
conducting technological analysis can provide high-quality services and products to consumers.
In this Marks and Spencer with the help of emphasising upon recent technological developments
and its impact on cost structure on company can assure long term growth. Marks and Spencer by
offering flexible checkout experience self-checkout system across its stores and online shopping
can influence interest of consumers in a significant manner.
Legal Factor:
It is essential for an organisation to emphasize upon legal framework and institution in a
specific market or industry in order to protect their intellectual property rights. It is essential for
company to conduct careful evaluation before entering in a new market segment as to assure
competitive edge. There are different types of legal factors such as discrimination law, consumer
protection and e-commerce health and safety law, employment law and more that can affect
Marks and Spencer. In this it is essential for company to update with the current laws and
legislation and make sure all the required legislation applies within organisation structure. With
help of this company can make themselves protected from heavy penalty and government
obligations that can affect their brand image.
Environmental Factor:
The issues related with environmental factors are being promoted on a regular basis. It is
essential for companies like Marks and Spencer to focus upon different forms as well as
environmental standards, as this can affect organisational profitability. There are different types
of environmental laws which is essential for company to consider such as laws regulating
environment pollution waste management attitude towards ecological product attitudes and
support for renewable energy and more. In this company with the help of emphasizing upon
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sustainable business activities can have positive impact on the planet, communities’ wellbeing
and on organisation. It has been identified that Marks and Spencer are having their own green
policy through which they are contributing in environmental protection (MacLennan and
Markides, 2021). Furthermore, it has been identified that organisation decides to renew their
resources and reduce carbon footprint by 2022.
As per the analysis of vitamin it has been identified that Marks and Spencer are having
significant opportunity to develop. However, in this it is essential for organisation to formulate
effective procedures and policies to overcome the negative impact of brexit as to assure
sustainable business operations.
Critically appraise the importance of change management based on the
complexity of the transformation process, its costs, risks and sustainability
Porter’s Five Force
Business environment keeps on changing on dynamic basis according to the trends and
changes in the demand of consumers requirements and needs. In this it is essential for Marks and
Spencer to positively appraise change that not only helps them to make smarter choices but also
allow organisation to increase productivity and helps in making improvement in organisational
profitability. Change is important process that will allow company to prepare themselves in a
better way for future and encourages them to drive towards long-term growth and competitive
edge. However, in order to embrace changes, it is essential for Marks and Spencer to identify the
complexity of the transformation process while emphasizing upon factors. This is done with the
help of porter five force analysis which is a strategic management tool through which company
can examine different aspect prevailing in market segment such as cost, risk and sustainability.
Threat of New Entrant (LOW):
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Marks and Spencer are operating business operation in retail industrial sector in which
there is low threat of new entrant, as M&S is a leading organisation that offer high quality
products and services to consumer and established themselves in the market segment. It has been
identified that in order to compete with leading organisation new entrants are required to make
higher investments. This is an opportunity with the help of which Marks and Spencer’s can
assure sustainability by offering more benefits and attractive discounts to consumers. This will
help organisation to develop a strong consumer base.
Bargaining Power of Suppliers (LOW):
As per the analysis it has been evaluated that bargaining power of suppliers is low in
retail industrial sector that makes suppliers to perform their business operations with this
organisation for longer period of time (Meyer, Neck and Meeks, 2017). With the help of taking
this opportunity M&S can establish strong relationship with large base of suppliers in order to
negotiate prices of raw materials. This will allow company to provide higher quality goods. This
will also help Marks and Spencer to perform the business operation in lower cost and assure
higher profitability.
Bargaining Power of Buyers (HIGH):
Bargaining power of buyer is significantly higher in the retail industrial sector as there
are different type of organisation such as Tesco, Zara etc those who are offering similar and
same form of products and services to consumers in attractive price base. Customers’ needs and
requirements are dynamic and keeps on changing on constant basis. Along with this it has been
identified that consumers are tend towards affordable and high-quality goods. This signifies that
they are having easy shift option. In this it is essential for Marks and Spencer to significantly
emphasise upon offering higher quality production services while determining risks in terms of
competitors. In this organisation is required to embrace change management process in order to
evaluate trends and factors which influences consumer needs and demand. In this organisation by
offering coupons, discounts and offering products and services in affordable pricing segment can
assure more competitive edge.
Threat from Substitute (HIGH):
Threat of substitution is high in terms of retail industrial sector, as different type of sellers
is offering similar form of services and products to consumer segment. In this M&S with the
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help of emphasizing upon the current trend can enhance consumer segment. It is required to
implement technologies through which they can offer high quality products and services to
consumers with the help of attractive marketing options. This will allow organisation to enhance
their competitive edge in order to maintain sustainability in market segment.
Rivalry among the existing players (HIGH):
Competitive rivalry in existing market players high in retail Industry sector as organisations
like Tesco, Zara are competing with Marks and Spencer on high scale. In terms of reducing
competition level Marks and Spencer is required to bring change, innovation and creativity in
their services and products as to influence consumer attention (Sharma, Arora and Ganti, 2021).
Along with this with the help of analysing business environment and risk that can affect
company growth Marks and Spencer can implement strategies on an effective basis. In this
company can collaborate with more small-scale retailers in order to widen their market share.
This will allow company to assure long-term sustainability in industry.
According to the above-mentioned analysis it has been identified that it is essential for
Spencer to understand the importance of change management process in order to bring
innovation and creativity in their business operations (Phan, 2021). However, in this there are
certain complexities in terms of transformation process such as risks, cost and sustainability.
With the help of analysing factors with the help of porters five force company can effectively
maximize their strengths such as negotiation with suppliers and high consumer base by offering
attractive benefits to consumers. Along with this by evaluating business risk and operating
business operations in low-cost company can ensure long-term sustainability and growth.
CONCLUSION
As per the above-mentioned report has been concluded that strategic management is a
continuous process that not only allow business organisation to formulate plan but also aid them
to develop strategies in an effective manner. By evaluating business environment that can impact
upon their growth and development. In this with the help of different model which is included in
this report such as pestle analysis and Porter five force company can identify their
competitiveness in industry and can further evaluate factors through which they can formulates
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future strategies accordingly. From this report it has been identified that with the application of
these tool company can ensure long-term growth and sustainability.
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REFERENCES
Books and Journals
Amado, A. and Belfo, F.P., 2021. Maintenance and Support Model within the ERP Systems
Lifecycle: Action Research in an Implementer Company. Procedia Computer
Science, 181, pp.580-588.
Bruzzone, A.G. and Massei, M., 2021. Strategic Engineering to Develop Strategies during a
Crucial Period. In Digital Transformation in a Post-COVID World (pp. 95-128). CRC
Press.
Foss, N. J. and Saebi, T., 2018. Business models and business model innovation: Between
wicked and paradigmatic problems. Long Range Planning. 51(1). pp.9-21.
Grose, V., 2021. A Practical Guide to the Fashion Industry: Concept to Customer. Bloomsbury
Publishing.
INDARTI, D., 2021. ANALISIS PORTER FIVE FORCE DALAM UPAYA MENINGKATKAN
STRATEGI BERSAING (Studi Pada UMKM Calenduna) (Doctoral dissertation, UPN"
VETERAN'JAWA TIMUR).
Kun, Q., Yuenan, L. and Yingxue, L., 2021. Analysis of Dandong 99 strawberry market
competitiveness Based on Porter's five forces model. In E3S Web of Conferences (Vol.
253, p. 03058). EDP Sciences.
MacLennan, A.F. and Markides, C.C., 2021. Causal Mapping for Strategy Execution: Pitfalls
and Applications. California Management Review, 63(4), pp.89-122.
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
Phan, S., 2021. The effect of PESTLE factors on development of e-commerce. International
Journal of Data and Network Science, 5(1), pp.37-42.
Sharma, A., Mittal, K., Arora, D. and Ganti, S.S., 2021. A Comprehensive Review on Strategies
for New Drug Discovery and Enhanced Productivity in Research and Development:
Recent Advancements and Future Prospectives. Mini-Reviews in Organic
Chemistry, 18(3), pp.361-382.
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