Strategic Management of a Retail Business

This assignment requires an in-depth analysis of strategic management within the retail industry. Students must conduct a PESTLE analysis to identify external factors influencing the sector, apply stakeholder theory to understand key stakeholders and their expectations, and evaluate common risks faced by retailers along with potential solutions.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
QUESTION 1...................................................................................................................................1
a. Critically evaluating company's approach .........................................................................1
b. Presenting the main area of concern with regards to Marks and Spencer's external
environment............................................................................................................................3
QUESTION 2...................................................................................................................................5
a. Critically evaluating company's risk management in strategic planning process...............5
QUESTION 3...................................................................................................................................7
a. Presenting stakeholder theory and critically analysis of the organization's relationship to
each stakeholder groups in M&S...........................................................................................7
b. Corporate Social Responsibilities (CSR)...........................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategic Management is continuous process of planning, monitoring and analysis of all
that which are necessary for an organization in order to meet out the goals and objectives of a
company. The report main aim is to understand the importance of strategic management in an
organization and the chosen firm for this report is Marks and Spencer (M&S) which is one of the
multinational retail company in UK who provides the best products at reasonable rates such as
food, grocery, clothes and accessories etc.
The report will critically evaluated M&S approach to strategy development that consider
the planner, emergent and incremental approaches. Further by using PESTLE analysis, the report
also provides the main areas of concerns with regards to its external environment. Then it also
evaluate the company's risk management in strategic planning process. Apart from this, the
present study will further define stakeholder theory and provide justification for each of the
stakeholders of M&S. Further, it also describes the meaning of Corporate Social Responsibilities
(CSR) and critically analysis the CSR of M&S.
QUESTION 1
a. Critically evaluating company's approach
Due to change in external and internal environment, the company functions are also
fluctuated and that is why there is a need to re- evaluate the strategy by using some approaches
and Marks and Spencer also uses this strategy which are as mentioned below:
Planned Approach: As there are many factors that affect the business performance and
there is a need to re- evaluate the strategy development for Marks and Spencer. For this reason,
the quoted firm may used planned approach in which issue based strategic planning model may
be used. This Is an enhancement of a basic plan which is used by cited firm in order to go deeper
the planning process and to determine the fluctuation in market (Golembiewski, 2019). For this
reason, the company initially determine the internal capabilities by using SWOT analysis and
then the stakeholders of the company will identify the major issues i.e. external and internal
factors. After this, the reviewing the mission, vision and values of the company and make
necessary changes as per fluctuation.
In addition to this, after reviewing, the managers should develop action on yearly basis to
cope up those factors and keep monitoring the plan at every interval of time. In this way by using
planned approach, Marks and Spencer will easily make planning for its smooth function as well.
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Emergent Approach: it is another approach, which develops when an organization takes
a series of action with time and that also turns into consistent pattern of behavior and some
specific intentions as well (Webber, Pesty and Balacheff, 2018). In the same way, in the context
of Marks and Spencer, as it face the rapidly change environment, there is a need to develop some
emergent strategy rather than to rely on planned approaches (Amiri and Agrawal, 2019). Even
this strategy is also not drawn up separate activity and the min concern of this approach is to
make company able to compete at global level. This approach is also critical in advancement of
the technology that is being used in market. For instance, Marks and Spencer refine or develop
the products then it must provide new and innovative products to their customers that further
helps them to understand the competition. In this way, by adopting new technique into the
working area, the quoted firm may also re- evaluate the strategy to gain better competition in
market.
Incremental Approach: This approach is also the best suitable for Marks and Spencer
such that this approach is based upon the assumption and its prime mode is to used for strategy
setting. Even the theory is also used to integrate some psychological, political and informational
needs of an organization for setting up a strategy (Riks, 2019). In the same way, Marks and
Spencer is also wants to re- evaluate the strategy and this is possible only by using Incremental
Approach into the working area. Apart from this, the theory also helps to improve the quality of
information which is utilized in order to take corporate strategic decisions and it also helps to
deal with personal resistance and many external environmental factors or any important strategy
change encounter (Yun and et.al., 2019). incremental strategy identifies the changes in a firm
that needs to implement in order to improve the specific condition. Further it also provides clear
direction related to political and funding priorities. Using this approach, the company can also
determine the strategy that will help to take better decision. Beside this, the approach also
decreases the uncertainty in the surroundings by allowing the interactive learning between the
enterprise and different impinging environment as well. Thus, in this way the company may use
this strategy to re- evaluate the strategic development in management process.
From the above, it has been cleared that all the three approaches are used to determine the
changes to internal environment, but among all, Incremental approach is the best suitable for the
company because the approach analyses the needs, build awareness, generate partial solutions,
identify zones of opposition and indifference. As to re- evaluate, it has been analyzed that this
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strategy may help to provide better solution as compared to others and also consider as an
optimum approach as well.
For Marks and Spencer, it is quite essential for the firm to have a strategy because it helps
to lead a business towards success and also help to attain objectives as well. Apart from this, the
strategy also help Marks and Spencer to improve the quality of strategic decision and determine
the external or internal factors that may affect the business decisions.
In addition to this, Resource based view is also used which is a managerial framework
that is used to determine the strategic resources with the potential in order to deliver some
competitive advantage for a firm. For instance, for the quoted firm, RBV is as mentioned below:
Resources: For Marks and Spencer, the company have all assets, organizational process
and firm attributes, its knowledge that controlled by the firm that helps it to conceive and
implement the strategies for improve the efficiency and effectiveness of company's performance.
Capabilities: the firm have innovation strategy, and also maintain better relationship
with their suppliers and customers. It has its brand image in market that helps a firm to be
competitive in market.
Competitive advantages: to gain high competitive advantages In market, the company
offer best competitive pricing strategies that helps to implement the best strategy to be superior
in this competitive market.
b. Presenting the main area of concern with regards to Marks and Spencer's external environment
In order to determine the main area of concern for company's external environment, the
company uses PESTLE analysis that helps to determine and assess the impact of key factor and
key changes that happening in the contextual environment . It is as mentioned below:
Political Factor: it is the first area of concern for Marks and Spencer because higher cost
structure has creates disadvantage, especially in intentional market. Further, the company is also
well known for its Plan A, CSR initiatives but due to lack of clarity of UK government in energy
efficiency scheme, it directly creates negative impact upon the firm (Ansoff and et.al., 2019). On
the otter side, Brexit also creates implication or the smooth functioning of business such that the
depreciation of Sterling also decrease the revenue and also affect the consumer spending as well.
Moreover, the change in sudden tax rate and government policies also affect the retail industry in
negative way. TherefResource Based Review ore, M&S should be concern about the political
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factor (Pestle Analysis, 2018). Further it also affect the import of goods and ease of expansion
into Europe.
Economical Factor: it is another area of concern in which financial crises also led to
more price sensitive consumers and that is why quoted firm has to work with the flow of market
in order to raise its sales. Apart from this, the fluctuation in the economy of the country also
affect the business performance in negative way such that if there is an inflation, then the
customers are not going to spend lot of money and as a result, the financial performance of the
firm also get affected. In addition to this the impact of Brexit also creates negative impact upon
the retail industry and that is why the company should make strategy in order to cope up with
area of concern (Dess and et.al., 2019).
Social Factor: One of the most important area of concern for M&S because people
preference are continuously changes and sudden change in trend also affect the demand of
company's product and its operations. In this situation the firm should analyses the needs of their
customers and provide them the best output as well. In the same way, the quoted firm also build
better relationship with their customers by providing them the products as per their need. Such
that as the recent trend in UK changes, but the quoted firm did not adopt the changes and as a
result, it creates negative impact upon financial performance of a business. Apart from this, the
chain of product recalls also creates negative social trend that affect the business performance.
Technological Factor: continuously evolution in technology also helps a business to
operate effectively in a competitive market and also helps to increase the productivity as well by
lower down the cost rate (Ansoff and et.al., 2019). Even the customers are also harnessing the
power of internet in order to purchase the product online and get them delivered directly to their
homes. That is why the company also open online store in order to reduce the supply cycle of the
products. In the same way, the company use modern promotional strategy in order to promote
the business and reach large mass group by using advance technology. But on the other side, the
company also be aware from the negative impacts of technology factor because it somehow
affect the brand image of market.
Legal Factor: laws related to the government should be followed by the government
otherwise, legal factor also become major area of concern for Marks and Spencer. It has been
realized that the company does not obstruct any law and regulation in its home market or in
international market as it follows all the laws such as Health and safety law, Employment law,
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Company law, data protection act etc. But on the other side the law of the government, especially
change in tax policies affect the smooth functioning of the business and also reduce the
purchasing power of the customers. Thus, cited firm should keep adhering all the laws for its
smooth functioning (O'brien, 2019).
Environmental Factor: this is another major area of concern for the company in which
company's main aim is to source all its cotton more sustainable by next year. Apart from this to
protect the environment, the company also launch new clothes which required less energy,
chemicals and water in their manufacturing process. Apart from this, the company also has to
take some initiatives in order to protect the environment from getting any harm and have to
follow the sustainability act as well.
QUESTION 2
a. Critically evaluating company's risk management in strategic planning process
In Marks and Spencer, the company faces different types of risk and it also affect the
business internal and external environment, therefore it is quite essential for a business to have
proper solutions. In the same way, this risk are as mentioned below:
 Data protection policies: It is one of the most common risk which Marks and Spencer
faces in its strategic planning process and it is likely to increase as societies and become
more dependent on data which being collected and stored online. In this, the main area of
concern are new and emerging cyber security threats that affect the business internally
(Risk in retail industry with their solutions, 2018). As Marks and Spencer is doing its
business online and the data breach is also attack on the online stores only and it affect
the customers in negative way. It has been analyzed that in strategic planning process, the
company also wants to adopt new and advance technology into the working area but
because of breaching data, this is considered the risk for a firm.
Solution: To overcome this risk, Marks and Spencer should follow data protection act
and allow the shopping through e-mails. Apart from this, Cyber Liability Insurance also be used
which helps to prevent customer identity theft.
 Compliance and regulation: It is another risk which Marks and Spencer may also faces
in strategic planning process (David and David, 2016). In this, a firm is fail to maintain
the validity of agreement and licenses i.e. lease agreements, business license etc. this may
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also occur to face closure of a business and incur the financial losses or pay penalties.
This directly affect the company's brand reputation.
Solution: The firm should hire internal auditor and also adopt procedures in order to
identify or comply with a ll the changes made to laws. The firm should also fix the dates for
initiating the action that is required for renewing the agreement and further, make sure that the
firm is comply with all employment law, Health and safety law etc.
 Competition: In the strategic planning process, the competition is also consider one of
the most affecting risk and Marks and Spencer faces tough competition because of
limited barriers of entry and as a result, increase in competition also creates hinder
revenue growth. For customers, reduction in the price of a product in consider the main
area of concern for the quoted firm because it directly affect consumer purchasing
decision (Wheelen and et.al., 2017).
Solution: To overcome this risk, company may use some loyalty cards that helps to
attract large group of customers and to raise the sales, the firm should take advantage of sporting
events. Further, the company should also adopt a product pricing strategy by determining the
behavior of customers. In this way, the risk will be easily manages.
 Fraud and theft: This type of risk mainly arises when the customers are pay using the
credit cards and at that time, the employees of the firm manipulate discount which is
granted to them In order to sell the goods at cheaper rates. While on the other side, theft
is the direct stealing goods by the employees or a customers (Lasserre, 2017). This types
of risk are also occur very often and also cause harm to brand image of company.
Solution: To overcome this type of risk the company should use advance technology into
the working area or develop the clear policy on employee discount and introduce advance daily
inventory cash register in order to cross- check the total stock available for the company.
 Failure in supply chain: Another major risk which Marks and Spencer is follows in
which lack of good to display is becoming a sensitive issue for all day to day operations
and as a result, it fails the supply chain as well. This delay the delivery of the product and
as a result it creates negative impact upon the business performance and even the internal
process of the company also got affected in negative way.
Solution: to overcome the failure of supply chain, The firm should have more than one
supplier and they should also not depend upon one specific one, it should also use proper
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forecasting of sales by adopting the stock management policy. Apart from this, Marks and
Spencer should be adopt an automated system in order to review the level of available stock in
their stores (Andriof and Waddock, 2017). This may also meet any increase in the sales for a
specific product and to secure the direct supply to the stores as well.
QUESTION 3
a. Presenting stakeholder theory and critically analysis of the organization's relationship to each
stakeholder groups in M&S
Stakeholder theory: the theory keep addresses the morals and values in managing an
organization such that they are also related to corporate social responsibility, market economy.
This theory also hold that a company's stakeholder includes about anyone affected by the
company and their working. Further, R. Edwards Freeman detailed the stakeholder theory that it
identifies that which stakeholder of a corporation describes or recommend methods by which the
management can also give due regards to the interest of those groups. The stakeholder theory for
Marks and Spencer are as follows:
Satisfied Stakeholder Informed Stakeholder
These are those stakeholders which have to These are those stakeholders who have to be
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Illustration 1: Stakeholder
(Source: Types of stakeholders, 2018)

be satisfied for the smooth functioning of the
business. For example, employees,
customers etc.
informed about every decision such as
shareholders, investors, owners and Board of
Directors.
Running Stakeholder Others
Running stakeholder are those who play
effective role and helps the business for its
smooth functioning such as Suppliers,
vendors etc.
Beside these there are many other
stakeholders who indirectly help or affect the
business performance such as government
bodies, competitors, community groups etc.
Different types of stakeholders: In Marks and Spencer, there are different types of
stakeholder from each section and they are as mentioned below:
 Customers and employees: One of the most important part of an organization is
customers and it is quite necessary for Marks and Spencer to keep satisfied them because
they are the only one who purchase products and keep raising the sales of the company
(Miles, 2017). This creates positive impact upon business performance. On the other side,
employees should also be satisfied because they helps to convert the input into output and
consider as an integral part for the success of an organization. If company have better
relation with both customers and employees then it will easily achieve the success and
attain goals as well.
 Shareholders: it is also necessary to keep informed the shareholders because they invest
some amount in a firm and if the company provide proper dividend to them then it will
creates risk. The personal investor usually risking a greater percentage of their resources
and they also making the investment more for the personal reasons that is believe in the
company's product.
 Suppliers: they are running stakeholder of the company and it has been analyses that
suppliers and business can evolve symbiotically. Even when the well- being of a business
is not proper then the suppliers are likely to come through for the business at critical
times such as allow additional time to pay when company's cash flow is tight (Cordeiro
and Tewari, 2015).
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 Government bodies: this official bodies creates direct impact such that the ability to
expand and continue the operations. Therefore, M&S should take advantage of town
meeting to create meaningful relations with the stakeholders.
Relationship of each stakeholder: Fair treatment and strong relationship with the
stakeholders is a key for a long term profit and business success. All the stakeholder have their
relationship with other such that as Marks and Spencer is a customer centric company, then no
relationship in more critical than that of business and their customers. Such that as quoted firm
treat their customers fairly and also provide the best product solution then it will help to gain
long term customer loyalty (Crowther and Seifi, 2018). On the other side, the company also have
to keep adhering the laws and pay tax bills or other proposals will also creates direct positive
impact upon the business and even creates events to maintain close relationship with
government.
Beside this, M&S also have good working culture that it creates good impression upon
employees as well and even the firm should also show value for employee as people which
includes promoting fair hiring and employment practice etc. this shows that the employees'
relation with M&S is good and effective. However, it has been critically evaluated that the
owners and partners plays a hand-on role in operations and they also provide the financial
support as an investment (Unit, 2015). This also makes a business profit legally o provide
investment return. Even the business also have a trade channels relationship with the suppliers
and being honest and open of this relationship is quite important to sustaining them.
b. Corporate Social Responsibilities (CSR)
CSR: It is the business model that helps to manage the entire business process in order to
produce positive impact upon the society. Further, it also covers sustainability, social impact and
ethics and do work for the welfare of the society. Through CSR, the company also prevent the
financial ramification and increases the employee loyalty as well because it is the part of CSR to
treat the employees fairly and generously in order to maintain good reputation in the market
(Crane, Matten and Spence, 2019). It also helps in preventing environment such that by reducing
waste, recycling and minimizing carbon footprints as well.
Corporate Social Responsibilities of Marks and Spencer: the company also follow
CSR in which it cut the carrier bags use by 33 percent and make them recycles plastic so that it
will not harm to an environment. It also make Plan A in order to ensure that all the key raw
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material are come from the most sustainable sources that is available for the customers. Apart
from this, its Plan A main aim is to only use wood which is recycle and certifies that it come
from the sustainable source only. In addition to this, it also introduce the Food Standards Agency
Traffic Light and Guideline Daily Amount product labeling and even replace the artificial colors
with natural ones for kid's sweets. In addition to this, the company also reduce their water waste
use in UK and triple sales of organic food.
Beside this, Marks and Spencer also work for the people such that the company also offer
graduates a fast track into management and for this reason, it also received more than 8000
application and every year, it employee between 150 and 200 graduates in different department
of the company (Wang and et.al., 2016). The company also won four major awards for 'Graduate
Employer of Choice' for retail. In last year, the company also introduce new career path for the
youngsters and many people join this, the firm also provide 26 week on-going training to those
new employees. It has more than 7000 people who act as a coach in order to train and support
their less experience colleagues and more than 4000 people also completed their Buying
Academy and Food Academy courses. So this shows that the CSR of Marks and Spencer is
unique and the firm main aim is not to generate profit only but it also works for the welfare of
the society as well.
Moreover, the quoted firm also help their people to informed the health choices at
workplace and even in 2008, the company also launches the pilot well-being program in their
several stores for trial a wide range of mental and physical health initiatives. They are also
working hard for the people in order to prevent them from fire, health and safety related
incidents. The company also has a strong trading relationship at global level and it is a secular
organization which embracing all cultures, nationalities, race and religions. Further Marks and
Spencer did not aligns to any country, nation to sourcing all their products (Crowther and Seifi,
2018). As relationship with the suppliers develops, the company also expect them to improve
their working condition in line with more demanding standard promoted by Ethical Trading
Initiatives.
For the firm, the employee engagement is also crucial such that there is a concentrated
drive for engage all (more than 7000) employees for instance volunteering activities. Apart from
this, the company also introduce a ranking system for their suppliers in order to cover ethical
trading performance and also trialing a confidential worker complaints' mechanism for their
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workers so that it improve many supply chain. Therefore, the journey of Marks and Spencer is to
make their business more sustainable and from last many years, the company also moving from
philanthropy to community investment and then Corporate Social Responsibility. When the
company introduce Plan A then it leads a business to focus on world's specific issues t a more
holistic approach as well that also tackled all the sustainability issues as well.
CONCLUSION
By summing up above report it has been concluded that strategic management plays an
effective role in the business and with an effective strategic planning, the company will also
proceed to further level of success. Through this study, it has been concluded that Marks and
Spencer needs to re- evaluate the strategy and that is why the company used Incremental
Approach due to change in internal and external environment changes. From the study it has
been concluded that trade policy, adopting the advance technology are the main area of concern
with regards to Marks and Spencer external environment. Further, it has been concluded from the
report that data protection policy, failure in supply management and non- compliance with laws
are the main area of concern that should be manage in order to prevent a business from any risk.
Apart from this, it as been also concluded that it is quite essential for the business to have better
stakeholder relationship for company's smooth functioning. Lastly, the report critically analyze
Marks and Spencer CSR policy and it shows that the company also work for the welfare of
society as well.
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REFERENCES
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Management (pp. 431-447). Palgrave Macmillan, Cham.
Cordeiro, J. J. and Tewari, M., 2015. Firm characteristics, industry context, and investor
reactions to environmental CSR: A stakeholder theory approach. Journal of Business
Ethics. 130(4). pp.833-849.
Crane, A., Matten, D. and Spence, L. eds., 2019. Corporate social responsibility: Readings and
cases in a global context. Routledge.
Crowther, D. and Seifi, S. eds., 2018. Redefining Corporate Social Responsibility. Emerald
Group Publishing.
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O'brien, J., 2019. Category management in purchasing: a strategic approach to maximize
business profitability. Kogan Page Publishers.
Riks, E., 2019. An incremental approach to the solution of snapping and buckling
problems. International journal of solids and structures.15(7). pp.529-551.
Unit, B., 2015. Corporate social responsibility.
Wang, H. and et.al., 2016. Corporate social responsibility: An overview and new research
directions: Thematic issue on corporate social responsibility.
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Webber, C., Pesty, S. and Balacheff, N., 2018, July. A multi-agent and emergent approach to
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Online
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<https://www.ivoryresearch.com/samples/strategic-analysis-marks-spencer-plc/>.
Risk in retail industry with their solutions. 2018. [Online]. Available thorough:
<http://www.internalauditor.me/article/major-retail-store-risks-and-how-best-to-control-
them/>.
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