Strategic Management: Analysis of Marks and Spencer

This report analyzes the strategic management of Marks and Spencer, including the value of clear purpose, vision, mission, and objectives. It assesses the competitive advantage using the VRIO framework, analyzes the external environment using the PESTLE framework, and applies Porter's Five Forces Model. The report provides a comprehensive review of the company's strategy.

Strategic Management
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Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
A critical evaluation of the value of clear purpose, vision, mission and objectives in setting the
strategic direction of organizations using examples from selected organisation........................3
Assess the competitive advantage of the selected company, using the VRIO framework..........4
Using PESTLE framework analysing the external environment of the selected business..........6
Application of the Porter’s Five Forces Model for the selected organisation.............................8
A review of the selected organisation’s strategy.........................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11
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INTRODUCTION
Strategic management is referred as an area of Management that includes development and
execution of goals and initiatives which are taken by top managers of organisation by
considering the sources and analysing external as well as internal environment within which the
business run its operations. As the business environment is dynamic, management of
organisation needs to constantly analyse their strategies in order to gain success in market
(Aguinis, Edwards, and Bradley, 2017). This report is based on Marks and Spencer which is the
multinational retailer of Britain and its headquarters is located in London, United Kingdom. The
company was founded in year 1884, around 136 years ago and is offer customers with home
products, food products and clothing which are of high quality. This report covers critical
evaluation of clear purpose, mission, vision and objectives of organisation in setting strategic
direction. For analysing the competitive advantage of company, VRIO framework is included.
Apart from this, it also includes pestle analysis in order to analyse the external environment of
firm and for determining attractiveness of industry, porter's five force model is included. At last,
on the basis of analysis the strategies of organisation are reviewed and a brief conclusion is
provided based on the entire report.
MAIN BODY
A critical evaluation of the value of clear purpose, vision, mission and objectives in setting the
strategic direction of organizations using examples from selected organisation
Strategic management is characterized as the constant process of analysis, development of
strategy, its execution and monitoring. It is utilized by companies with the purpose of
accomplishing and maintaining competitive advantage in market. The main purpose of strategic
management is to integrate the energy of functional areas of organisation into single focused
effort in order to accomplish the superior performance (Audretsch, 2015). Effective strategic
management in organisation is the foundation of crucial decisions of company. It helps Marks
and Spencer to mitigate its objectives and outlines the actions as well as decisions which enables
the company to accomplish its goals. The purpose, mission, vision and objectives of company
must be clear so that employees are directed towards right direction and able to accomplish its
objectives effectively.
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Marks and Spencer is one of the well-known British multinational retailer that offers high
quality products and services to customers. The main purpose of the companies to provide
customers with excellent in store experience and serve them with high quality goods that satisfy
their needs (Baumgartner, and Rauter, 2017).
Mission statement of Marks and Spencer:
This is statement of Marks and Spencer depicts about the business of the organisation and
its key purpose. The mission statement of business entity is "to make aspirational quality
accessible to each individual, by the depth and range of its goods". It is a leading retailer that
bringing great value food, quality homeware and clothing to millions of consumers all around the
world.
Vision statement of company:
The vision statement of Marks and Spencer assist in working in goal congruence. The
vision of companies to become a leading retailer worldwide by offering exceptional quality
products to customers with great innovation. The vision statement of Marks and Spencer is
measured against the set standard (Certo, and et. al., 2016).
Objective of Marks and Spencer:
The main objective of company is to develop sustainable business by consistent and
profitable growth and ensure that it act responsibly in mitigating its accountability towards wider
stakeholders as well as shareholders.
Values of Marks & Spencer:
The main values of company on which it emphasizes the most includes quality, innovation,
service and trust. The company generates revenue as well as delivers value for its shareholders
by a family of accountable business. The company focuses on providing quality products to
customers and bringing constant innovation in its products that mitigates needs of customers and
satisfy them. It also aims to provide excellent services to consumers and develop their trust on
the brand (Cosenz and Noto, 2016).
Assess the competitive advantage of the selected company, using the VRIO framework
VRIO analysis of framework that helps in evaluating resources of the company and
therefore, competitive advantage. The company assets are resources and capabilities on the basis
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of their value, rarity, inimitability and organisation. The VRIO framework in relation to Marks &
Spencer is discussed below:
Resource/Capability Valuable Rare Inimitability Organisation
Human resource
management
Yes - - -
Location of store Yes Yes - -
Leadership Yes Yes Yes -
Brand image Yes Yes Yes Yes
Valuable:
Human resource management: The human resource management of the company is
valuable as the manager is able to manage all the employees in organisation effectively and keep
them motivated and satisfied. It ensures that skilled and capable workforce is maintained within
firm (Engert, Rauter, and Baumgartner, 2016).
Location of store: The location of its store is valuable for the company as it helps in
attracting large number of customers. All the stores of the organisation are located in main areas
where the movement of public is more. This company provides competitive advantage to
company and prove to be valuable for it in attaining high profits.
Leadership: The leadership ability of the organisation is valuable as it helps in ensuring
good productivity and performance of organisation which proves to be valuable for the
organisation as it helps it in generating high profits.
Brand image: The brand image of company derives value for it is crucial for managing
strong presence in market. Good brand image of company in minds of customers helps in
developing their loyalty which creates value for company in terms of high profits and revenues.
Rare:
Location of store: The location at which the stores of Marks and Spencer are located is
rare. The areas where the stores of company are existing is very hard to find for other companies
(Frynas and Mellahi, 2015). The outlets of company located in posh area of city where the
movement of people is very high which makes it rare for other organizations to open their stores
and run them effectively.
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Leadership: The leadership style used by the leader of Marks and Spencer is
transactional leadership which helps company to ensure its high performance in market. The
leader of firm is visionary and is able to inspire and influence other people effectively which is
rare for other companies. Having a good leader in the organisation is very rare in the companies.
Brand image: In the market, it is not very easy to develop a strong brand image like
Marks and Spencer have. Developing good market image is rare for other companies. This rare
capability of company provides it with competitive advantage in market (Ginter, Duncan, and
Swayne, 2018).
Inimitable:
Leadership: The leadership style used by the leader of Marks and Spencer is hard to be
copied buy leader of another organisation. No company can imitate the ability of leader as each
individual possess different skills and capabilities which makes it difficult for them to copy it
easily. So, the leadership style used by the leader of company is unique which cannot be imitable
by others.
Brand image: good brand image of Marks and Spencer is that capability of company
which is not possible to imitate. No other organisation can imitate this capability of Marks and
Spencer as it is difficult to develop good image in marketplace.
Organised:
Brand image: Since the company has good brand image in the market of United Kingdom
as well as other markets and company continue to expand its presence, Marks and Spencer is
successfully exploiting this capability. The companies able to organized its brand image
effectively and successfully (Hitt, and Duane Ireland, 2017).
Using PESTLE framework analysing the external environment of the selected business
It refers to a strategic tool that is used by the Marks & Spenser to analyse the external factor
so that they can understand in an appropriate manner. It can be shown below.
 Political factor – It includes the various terms like tariff rates, government stability, tax
regulation etc. In this the Marks & Spenser that operated in the UK but its presence in all
over the world. This will benefit in a high extent. in this free trade allows the company to
import the foreign products on their store and sale them at low price by maintaining the
revenues (Loon, Evans and Kerridge, 2015). But due to Brexit this free trade affect in the
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European countries. This will present as a threat to the company. But on the other hand
trading outside the European counties will become an opportunity for the firm.
 Economical factor - This factor includes the inflation rate, GDP, growth rate,
purchasing power of the customers in the United Kingdom. in UK the growth rate is high
and people earns the high amount of income because of this they are capable of buying
the products that is offered by the Marks & Spenser. But increased inflation rate due to
high recession impact the Marks & Spenser sales in a negative manner (Meyer, Neck and
Meeks, 2017).
 Social factor – these factors shows the behavior of the people in the society, their values,
customs culture etc. In this people of UK are very trendy in nature as they accept the new
and fashionable things. In the context of Marks & Spenser they sales the non-trendy
cloths for the young people due to this their sales may be affected. But on the same time
it covers the wide scale in the food retail sector as they sales ready meals that is more
palatable due to the use of advance technology. This will create the great opportunity to
the organisation for earning high amount of profits.
 Technological factor - It is the latest factor as per the today’s business environment
without it no business firm can earn high amount of profits. in Marks & Spenser they
offer their customers a self-service checkout option in their food stores that will have
attracted the customers on a wide range and due to this they earn high amount of profits.
As they also offer online shopping where people buy the products without visiting the
stores this will help in retaining the customers and attracting the new one.
 Legal factor – This factor includes the legal laws that are imposed by the government of
the UK for the safety and betterment of the employees and customers (Morschett,
Schramm-Klein, and Zentes, 2015). In this Marks and Spenser can follow all the laws and
rules that are helpful in encouraging their employees for the good work and due to this
company can earn high amount of profits.
 Environmental factor –It includes the aspects that is linked to protecting the
environment from the hazardous activity of the business firms. In this Marks & Spenser
can follow the environmental laws like reduce the wastage of the food and use those
machines that do not harm the environment. This helps in sustaining the company for a
longer term in the marketplace.
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Application of the Porter’s Five Forces Model for the selected organisation
Porter's five forces analysis is a model that helps in analyzing competitive environment of
business entity. It helps in assessing the level of competition with industry. It consists of five
forces description of which in context of Marks and Spencer are mentioned below:
Bargaining power of buyers: price sensitivity of customers can pressurize the retailer to
lower down the prices of product. As Marks and Spencer deal in retail industry, there are many
alternatives available to the customers due to which the chances of switching of customers are
high towards another brand (Rothaermel, 2016). So, the bargaining power of customers is high
for the company. In order to sustain in market, firm needs to develop its loyalty and offer
customers with products that provide them with unmatched value.
Bargaining power of suppliers: availability of large number of suppliers in the industry
makes the bargaining power of suppliers’ low as there are many alternatives available to the
companies from which they get raw materials. In context of Marks and Spencer, there are many
suppliers available in the market from which it can acquire raw materials. This makes the
bargaining power of suppliers’ is low for company as if one supplier sell material in high prices
then firm can switch to another supplier for getting raw materials.
Threat of new entrants: retail industry is a highly competitive industry, and in order to
enter in the industry, huge investment is required as there are many retailers available in the
market. Apart from this, for the new entrant it becomes very difficult to make good position in
market initially. There are low entry barriers in industry, but many competitors are available in
the market which makes it difficult for a new entrant to sustain its position for long term. So,
threat of new entrant is moderate for Marks and Spencer as it is not easy for the new entrant to
establish strong position in market (Schilling, and Shankar, 2019).
Threat of substitute products: when a new product mitigates similar needs of customers in
different way than the profitability of industry suffers. This threat is high if a company offers
value proposition which is completely different from the existing offerings of industry. As Marks
and Spencer also deal in food industry, there are many substitute products available in the market
which makes the threat high for the company. Consumers can easily switch the brand if we get
better offerings from another competitor.
Rivalry in the industry: in the retail industry, competition is very high as large number of
competitors are available in the market which offer similar products as Marks and Spencer offer.
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This makes it rivalry high for the company. High competition may force the company to lower
down prices of its product which ultimately impacts on its profitability ratio in the industry. In
order to sustain its position for long term in the market, firm requires to offer unique offerings at
appropriate prices to the customers (Shujahat, and et. al., 2017).
A review of the selected organisation’s strategy
In the current competitive business environment, a company cannot be successful if it is not
having strong and effective business strategy along with the sources of sustainable competitive
advantage. Keep the customer satisfied is the key business strategy of company which highly
contributes in its growth and success in the market and enable it to run its operations
successfully. Being successful in market need to maintain constant focus on preferences and
needs of customers as well as being the first to respond their needs. Different home, food and
clothing products are offered by Marks and Spencer to its customers envisages locations.
Affordability and accessibility are the two crucial aspects of business strategy of Marks and
Spencer. The company is also selling its products online which helps it in attracting large number
of customers towards a brand and enable it to enjoy high profitability in market. Apart from this,
the company constantly invest in digital technology and artificial intelligence in order to provide
high quality shopping experience to consumers (Trigeorgis, and Reuer, 2017). All the strategies
of company are very crucial for attaining high growth in market and gaining competitive
advantage over the rivals. Among the generic strategies, differentiation strategy is adopted by the
company and there is broad differentiation in its products. In comparison to the other competitors
of organisation like Asda and Tesco, the product quality of Marks and Spencer is premium. The
main focus of the companies on quality of its product so that have profitability can be gain in the
market. The products of company are you need and it sell only those products which receive trust
of consumers. In addition to this, the services provided by the company are distinct from its
rivals. The services that Marks and Spencer provided to its customers makes it distinct from its
rivals.
CONCLUSION
As per the above mentioned report, it has been concluded that strategic management
planning is very necessary for the company as it helps it in attaining long term growth and
success in market. The clear objectives, mission and vision of the company provides its
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employees with a path to accomplish them effectively. Use of VRIO help the company in
analysing its resources and capabilities which provides it with competitive advantage in market.
Pestle analysis help in assessing the external environment of business and the impact of factors
on operations of company. Porter's five force analysis is very effective to analyse competitive
position of company in market. It consists of five forces which helps in analysing the level of
competition in the market. The review of strategies of company help the top management to
formulate appropriate strategies for sustaining its position in market and attaining competitive
advantage for long term.
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REFERENCES
Books and Journals
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and mediation in strategic management research. Organizational Research
Methods, 20(4), pp.665-685.
Audretsch, D.B., 2015. Everything in its place: Entrepreneurship and the strategic management
of cities, regions, and states. Oxford University Press.
Baumgartner, R.J. and Rauter, R., 2017. Strategic perspectives of corporate sustainability
management to develop a sustainable organization. Journal of Cleaner Production, 140,
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Certo, S.T., and et. al., 2016. Sample selection bias and Heckman models in strategic
management research. Strategic Management Journal, 37(13), pp.2639-2657.
Cosenz, F. and Noto, G., 2016. Applying system dynamics modelling to strategic management: a
literature review. Systems Research and Behavioral Science, 33(6), pp.703-741.
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.
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
organizations. John Wiley & Sons.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, pp.45-63.
Loon, M., Evans, J. and Kerridge, C., 2015. Learning with a strategic management simulation
game: A case study. The International Journal of Management Education, 13(3), pp.227-
236.
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.
Rothaermel, F.T., 2016. Strategic management: concepts (Vol. 2). McGraw-Hill Education.
Schilling, M.A. and Shankar, R., 2019. Strategic management of technological innovation.
McGraw-Hill Education.
Shujahat, M., and et. al., 2017. Strategic management model with lens of knowledge
management and competitive intelligence. VINE Journal of Information and Knowledge
Management Systems.
Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management. Strategic
Management Journal, 38(1), pp.42-63.
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