Pestle Analysis and Market Entry Strategies

This assignment delves into various business concepts, including PESTLE analysis, Porter's five forces, market segmentation, targeting, and different entry modes. It discusses how these strategies can be applied to businesses, such as Marks & Spencer, which uses joint ventures for market entry. The report also examines the importance of understanding consumer behavior through segmentation and targeting. Additionally, it explains Porter's generic strategies, including cost leadership, differentiation, and focus strategies, and their relevance in achieving competitive advantages.

Strategic marketing

EXECUTIVE SUMMARY
Strategic marketing refers to identification of one or more than one of sustainable
competitive benefits company has in market its services, resources allocation for exploit them. It
is a necessary aspect that gives opportunities to large as well as small business in order to expand
their opportunities in to other or new countries by effective frameworks. In context to attain the
growth, it is necessary to provide various aspects for an instance various market entry, PESTLE
analysis, targeting, market segmentation etc. Marks & Spencer is retail company and it has
around 979 restaurants in all over world. This company wants to expand its business in Qatar
country and for this PESTLE analysis will be helpful in determine affect of the external factors
on operations. Through doing the PESTLE analysis, company can determine opportunities and
threats. Main modes of entry helps for company to enter in to new country or market consists
Merger and Acquisition, strategic alliance etc.

Table of Contents
EXECUTIVE SUMMARY ............................................................................................................2
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
Overview of company............................................................................................................1
PESTLE analysis....................................................................................................................1
Market entry options...............................................................................................................4
Market segmentation and Targeting.......................................................................................5
Porter generic strategy............................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic marketing is a way in which company differentiates itself from its rivals
through capitalising on its capabilities in order to given effective value to consumers as
comparison to its competitors. Company use the strategic marketing to develop plan for better
reach at consumers and fulfil their needs while enhancing productivity and profitability. This
present report is based on Marks & Spencer company and it deals in luxury food products,
clothing and home products etc (Wilson and Gilligan, 2012). The main aim of this company is to
open its new business to gain the high market share and enhance profit level by providing shoes.
Under this mention report mention about the PESTLE analysis to examine the possible threats
and opportunities. There will be discuss about the different modes of the market entry to enter in
new market.
TASK
Overview of company
Marks & Spencer is a British Multinational retailer company in London. It was
established in year 1884 and specialised in selling of home products, luxury food items and
clothing. Now, this company also started to sell the branded products such as Kellogg's Corn
Flakes. At present, it has around 979 stores across United Kingdom involving 615 only sell the
food items. Now, management decided to expand its business in the Qatar country with a motive
of earning profit. The total population of Qatar is 2.6 million and this country has highest per
capita income in all over world. Strategic planning is to be complete as it is necessary aspect that
consist activities concerned to planning regarding future strategies. In order to expand new
business, Marks and Spencer decide to sell attractive shoes for females.
PESTLE analysis
For better introduction of the new product of Marks & Spencer, it is necessary to examine
those factors which are present in external environment with negative and positive impact. It has
more importance in identify threats and opportunities to gain more benefits of favourable
conditions for better establishment of operations and activities of business. PESTLE analysis is a
framework of the macro- environmental factors which are used in environmental scanning
component related to strategic management. Under this, PESTLE Analysis of Qatar mention
below:
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Political factors- Various factors which are included are political situations, trade
policies, government regulations etc. Under this country, there is not any demographic
government and also no elections are held but there is a one person that is king and takes all
decisions of country. In Qatar, there is stability of government and also no chaos to develop any
turmoil in country. The main source of income of this country is reserve of oil. The Qatar
country has strong relations with the neighbour and developed countries of world.
Opportunities- After analysing the political conditions of Qatar, firm will not face any
issues because this country has stable political situations. It will help in develop the new
opportunity for Marks & Spencer to enter in new market easily with support of the rules and
regulations (Sammut‐Bonnici and Galena, 2015).
Threats- Under this country, there is no voting option. People have no right to select a
liable person that can take better decisions. So, it can dev lop the negative affect on operations
and profitability of business.
The solution of this threat is not to be permanent but people can raise their voice to
develop the democratic government and provide them voting rights.
Economical- For attain desired objective, it is necessary that economic situations of the
new country should be favourable. Qatar has strong economy as it is a rich country. There is
more chance for the entrepreneurs and industrialists to stablish their business.
Opportunities- As the economic condition of Qatar is favourable so that there is a better
opportunity to Marks & Spencer to conduct its business in this country.
Threats- As in Qatar, there is different rules and regulations and it can impact on the
planning of company. Through this, company will need to make changes in its external
environment. It develops negative impact on business of Marks & Spencer in Qatar.
The solution that assess Marks & Spencer company to overcome from situation related to
economic factor is to determine the all factors of Qatar in a detailed manner.
Social factors- Under this factor includes per capita income, age distribution,
employment level etc. affects the business market of any country. The social factors are also
related to the education level and age of people. The main attention of this country is to provide
the special attention on education of young generation, so that they can get the better knowledge
Qatar has the highest per capita in the world that's why students are going abroad for their studies
so that employment level could improve. Increase in tourism could be a great sign for the
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country. Qatar should try to pitch the investor and give them a alluring deal through that business
market can be improve.
Opportunities- The main opportunities which Marks & Spencer company will get by
large number of people as comparison to other countries that helps for firm to earn more profit
level. From high literacy rate of Qatar helps in use of the mobile applications or other technology
in order to operate its functions.
Threat- The main threat for Marks & Spencer is that the place is unknown for the firm
and it is not aware about the tastes and preferences of consumers at that place.
The major solution to overcome from this threat is that company should be focus on its
promotional activities and aware the people of Qatar about services and products and take the
feedback from the people of other country and change accordingly. It will help in attract large
number of people in Qatar.
Technological factors:
Qatar has always been a exporter of oil to many countries in the world, they have utilize
their resources at its fullest. But the country should also focus on new technology in all the
sectors through which employment would be generated.
Opportunities- By using the effective technology, company can enhance its development
and by using the mobile applications, it can operate its business in a better manner. Through this,
consumers can easily purchase the shoes from Marks & Spencer firm.
Threats- It is concerned with technology failure dues to rapid changes in this sector or
tastes and preferences of consumers,
Environmental factors:
While exporting the oil they have decrease their natural resources at a certain level that
could harm the country in future. Qatar should make strict rules regarding the environment as
they are now developing and have to chance to save the environment.
Opportunities- Under Qatar, government develop an act or legislation to protect an
environment. It makes the environment of country clean and safe. As management of Marks &
Spencer motivates and also follow all rules of that country related to environment. It is helpful in
develop positive impact on business through using the eco- friendly environment.
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Threats- There are many different institutions which harm the environment. As the Marks
& Spencer is a retail company and the packaging of products is in the plastic form that is not
environment friendly.
Legal factors:
Government developed many legislation and also executed them at workplace. In this
country, judicial system is strong and also firms have abide through regulations and legislations
in order to carrying all activities. Judicial system of Qatar is strict but also favours the factor
which helps the country to grow. This country is ideal for the business as law protect the safety
of the people first.
Opportunities- In Qatar, legislation related to employment is not more so, it provides the
better opportunities to Marks & Spencer to hire the well qualified employees.
Threats- It is based on political situation that present within country. In Qatar country,
there is a king that takes all decisions but there is no democratic politics. So, it is a main issue.
In order to overcome from this threats, company should be focus on maintaining quality
of its shoes products and attract more consumers.
Market entry options
Market entry strategy is planned delivery and distribution method of services and
products to new target market. In export and import of services, it refers to development,
establishment and also contracts in foreign country. Before start a new business firm has to make
some important decision which can be mode of market, time to enter and their scale level. Marks
and Spencer should chose those market which provide it long term benefit, sustainability,
growth. Here, Marks and Spencer adopt various modes such as Franchising, Merger and
Acquisition and Joint Venture for entering. The advantages and disadvantages of these are as
below:
Franchising
Franchising is a kind of business through which owner of goods, method or services
obtain distribution by the affiliated dealers. It is based on concept of marketing and adopted
through company as strategy for expansion of business (Laufs and Schwens, 2014). There are
two parties in franchising called franchisee and franchisor. The organisation is called franchisor
and the user is franchisee. Here franchisee pays to franchisor. In this type of mode, franchisor
gives benefits to franchisee which can be use of trademarks, product reorientation, operating
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system, supports in terms of employee training, quality and service. The benefits can be low
investment and risk, information about product culture. But this mode is not suitable for Marks
and Spencer. As it reduces opportunities for both market, problem of trade secrets. It is also not
possible for both countries to maintain product promotion and quality. Even Marks and Spencer
cannot control international franchisee.
Mergers and Acquisitions
The consolidation of two companies are called merger and acquisition. The combination
of two companies to form single is called merger. When one company takes another is called
acquisition. It helps in marketing network and worldwide manufacturing. In this, transfer of
ownership, control. According to the structure of Marks and Spencer, this mode is not beneficial
at Qatar because requires complex process for arranging the more funds. The rules and
regulations are also very strict and there is restriction of local companies.
Joint Venture
When two or more company join together to start and create new business is called joint
venture. It possess distinct and legally separate form the main company. It includes shared
ownership. The formation of joint venture encourages because of social, political, technological
and economic. The capital requirement is huge, latest technology and able to distribute risk at
foreign market.
After analysing all the above mode of entry, Marks and Spencer should chose joint
venture to start new business at Qatar. When two company join together then the risk is
distributed. Under this, if Marks & Spencer will work with the establish company of Qatar then
it will not face any difficulty related to business because the existing firm of Qatar will have
proper knowledge about situations, marketing strategies, rules, policies, exiting competitors etc.
The capital investment is large from both companies. Marks and Spencer join hand with the
foreign country for market. It provide skills to both companies such as technical, human,
marketing and technology. These all assist in achieving large turnkey projects.
Market segmentation and Targeting
Market segmentation is a process of dividing market of exulting consumers in to groups
based on the various characteristics (Market Segmentation, 2018). Under this, segments develops
are to be composed of customers which will respond to the marketing strategies which as well
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share traits for an instance needs, same interests etc. There are different kinds of segmentation
mention below:
Demographic: This segmentation divides the market in variables such as age, gender,
family, size, religion and more. It is applicable in auto-mobile markets. It is most easiest and
broad type of segmentation (Wedel and Kamakura, 2012). Industries use this to know the usage
and expenditure of the product.
Behavioural: This segmentation divides the market by the behaviours of the the
consumers and their decision making patterns such as purchase, consumption, usage and
lifestyle. The product is marketed based on the behaviour of the consumers.
Geographic: This type of market segmentation describes about geography in which
customers are located. The geographical area determines the location of the customers such as in
rural or urban. The product which is going to be delivered to the customers rely on the area of
customers living. It checks whether the product is value for customers or not.
Psycho-graphic: It is the segmentation which uses people's lifestyle, activities, interest
and opinion to define a market segment. It considers the psychological aspects of the customer's
buying behaviour. The psychological aspects may be consumers lifestyle, activities, interest and
opinion.
According to the gender basis, Marks & Spencer makes differentiation in its products as
it provides the shoes for females. Company makes attractive and designer shoes so that female
can be more attracted.
Targeting- It refers to breaking market in to the segments and after then concentrating on
marketing efforts on one or some segments including consumers whose wants and requirements
are match with the provided services and products (Weinstein, 2013). It is necessary for
company to select specific segment as it will be helpful in develop strategies by which firm can
attain its objectives.
After examining the various segmentation tools, it has to be suggested for Marks &
Spencer company to use an effective targeting technique that help in capture large market share.
With the help of this, company will easily provide its goods to consumers. The main target
market of Marks & Spencer is female. Mostly females like the designer, attractive and
comfortable shoes. On the other hand, company should be focus on minimising cost of its
products so that large number of consumers can be attracted towards company.
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Porter generic strategy
Porters generic strategies allows a company to opt competitive advantage. It explain that
how an organisation can pursue the competitor benefits across the selected market scope. A
company can deal in different segments of market. It can catch average customers by providing
cheaper products and services to its customers or can provide quality products to catch other
ones (Banker and et. al., 2011). After examining all factors, Marks & Spencer company use this
strategy. Different factors of Porter Generic Strategy are mention below:
Cost Leadership
This kind of strategy consists process of cost minimization and also be a market leader. It
is an effort to make least expensive goods and reduce costs below the closest competitors. In
today's market customers are being aware of the choices available to them. They often choose the
product which is available to them cheaper. Business which have least production cost will
provide less cost of products to its customers. As comparison to the other strategies, it is an
effective strategies because its main motive is to provide the better quality of products at
minimum cost to females (Porter, 2011). In addition to this, differentiation is not the main motive
because Marks & Spencer is specialised in clothing segment but now shoes is launches through
this firm is also offered on the effective cost.
Differentiation
It is the strategy that distinguish a product or services with others, offered by competitors
in the same market. When a firm chooses this strategy, it allows its customers to buy a unique
product which value to them. Thus, firm becomes the market leader in that particular product
with its uniqueness (Porter’s Generic Strategies, 2017). In order to effective execution of this
strategy, company needs to carry out the various aspects for an instance innovation, research and
development, using effective sales or marketing technique etc. This factor is not effective for the
Marks & Spencer company because it consist more costs that leads to be improvement in
operational costs along with minimize margin.
Cost focus
It is a marketing strategy under which main concentrate of firm is on its resources on
expanding or entering in industry segment. In cost focus strategy, company analyses a advantage
on reduction on the cost of the product. An organization makes sure that the costs remain low.
They understand the customer and market requirements and seeks a cost advantage in its targeted
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segment by lowering down the cost to survive in the competitive market. This company can
enhance its profit level by minimizing cost of its products.
Differentiation Focus
Differentiation includes making the services or products varied from other firm. This
strategy focuses on choosing one or more strategies used by the buyers in the market and then
plan the business accordingly to meet those strategies. This strategy focuses on setting a
premium cost of the product and build trust among consumers by giving reasons to buy their
product over other products.
CONCLUSION
From the above mention report, it has been concluded that PESTLE analysis is a
necessary framework that assess in identifying effect of macro environment factors on activities
and operations of business. It is helpful in make improvement in the process of decision making
of management. Different kinds of mode of entry has been studied in this report. Marks &
Spencer company uses the Joint Venture mode of entry to enter in to the new market. Targeting
and segmentation both are helpful in know about the behaviour of consumers to fulfil their needs
and preferences. Under this assignment studied about the Porter generic strategy that assess in
achieve competitive benefits by using the internal capabilities.
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REFERENCES
Books & Journals
Introduction
Wilson, R.M. and Gilligan, C., 2012. Strategic marketing management. Routledge.
Porter’s generic strategies
Banker, R.D. and et. al., 2011. CIO reporting structure, strategic positioning, and firm
performance. MIS quarterly. 35(2). pp.487-504.
Porter, M.E., 2011. Competitive advantage of nations: creating and sustaining superior
performance (Vol. 2). Simon and Schuster
Segmentation and targeting
Wedel, M. and Kamakura, W.A., 2012. Market segmentation: Conceptual and methodological
foundations (Vol. 8). Springer Science & Business Media.
Weinstein, A., 2013. Handbook of market segmentation: Strategic targeting for business and
technology firms. Routledge.
Pestle analysis
Sammut‐Bonnici, T. and Galena, D., 2015. PEST analysis. Wiley Encyclopedia of Management,
pp.1-1.
Market entry mode
Laufs, K. and Schwens, C., 2014. Foreign market entry mode choice of small and medium-sized
enterprises: A systematic review and future research agenda. International Business
Review. 23(6). pp.1109-1126.
Online
Market Segmentation. 2018. [Online] Available through:<https://www.qualtrics.com/experience-
management/brand/what-is-market-segmentation/>.
Porter’s Generic Strategies. 2017. [Online] Available
through:<https://www.toolshero.com/strategy/porters-generic-strategies/>.
Strategic marketing. 2018. [Online] Available
through:<https://www.pmlive.com/intelligence/healthcare_glossary/Terms/s/
strategic_marketing_concept>.
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