Strategy Evaluation for Marks & Spencer

This report evaluates the organizational strategies of Marks & Spencer, assesses its competitive advantage using the VRIO framework, analyzes the external environment using PESTLE framework, and applies Porter's Five Forces Model for the organization.

BSc (Hons) Business Management Top up
BMP6002
Strategic Management
Strategy Evaluation
Contents
Introduction p
0

A critical evaluation of the value of clear purpose, vision,
mission and objectives in setting the strategic direction of
organizations using examples from selected organization
p
Assess the competitive advantage of the selected
company, using the VRIO framework p
Using PESTLE framework analysing the external
environment of the selected business p
Application of the Porter’s Five Forces Model for the
selected organization p
A review of the selected organisation’s strategy p
Conclusion p
References p
1

Introduction
Organizational strategy is somewhat meant by evaluation of right policies and
framework that would help the business to accomplish success and stability in the
market environment. It is important that businesses formulate right organizational
strategies that best suits the business environment. An organizational strategy might
differ to businesses, business environment and the geographical area where the
business is operating. Before formulation of the organizational strategies, a business
evaluates different macro and micro environmental factors to set effective business
strategies. The chosen business organisation for this report is Marks & Spencer
which is a global retailer founded in the year 1884 by Michael Marks and Thomas
Spencer. The company is headquartered in London, United Kingdom and founded in
Leeds, United Kingdom. The revenue of the business as per the year 2020 is
recorded as 1,018.19 crores GBP. In the context of Marks & Spencer this report
delivers the purpose, vision, mission and objectives of the organisation, analyzing
the competitive advantage in the strategies taken by the organisation, macro
environment analysis, Porter five forces model for analyzing the industry
Attractiveness and competitiveness, Lastly the report delivers the organizational
strategies of the business (Ambrosini, Jenkins and Mowbray eds., 2015).
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
Marks & Spencer Mission statement defines that what is the business all
about. Mission statement delivers the organizational objectives and goals and
includes information of the business values. Marks & Spencer defines its chief
business revenue maker as clothing and food sector. The financial goal of the
business is to render value to its shareholders by increase returns, sales and market
share. The value and belief of the business defines to deliver value to the customer
so that the customer see Marks & Spencer as ideal place for special food and
clothing produced and delivered by covering the quality standards (Barca, 2017).
Thus,
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The vision of the business is to be the standard against which others are measured.
The vision statement of the business highlights to use differentiated strategy and add
freshness, quality and innovation.
The mission of the business is to deliver uniform quality of output which is
accessible to all. Marks & Spencer defines the corporate social responsibility in the
mission statement and consider value stakeholders needs. Marks & Spencer
highlights that the business follows strong corporate social responsibility and it is
looking to ensures corporate social responsibility at every level of the business
functioning (Bettis and et.al., 2015).
The value of the business is quality, value, service, narration and reliability.
Key objectives:
Employee orientation: Marks & Spencer considers employee as the integral part of
the business foundation and success. The association believes that high
expectations and productive staff contributes more towards organizational
objectives. The association focuses for delivering professional development
opportunities for the employees in order to retain and motivate high caliber working
staff in order to accomplish efficiencies and improve business performance.
Organizational Focus: Marks & Spencer focuses on developing leadership in
clothing and specialty food in the external business environment. In order to
accomplish the organizational objectives, the business focuses for translating their
skills and authority into superiority quality, value and appeal (Bondarenko and et.al.,
2017).
Sales objectives: The business focuses to improve its return on sales per foot as
operational objectives. Marks and Spencer uses regressive marketing approaches
for promoting its brand in both online and brick and mortar stores. Apart from that the
association focusses on establishing the products diversification strategies to
enhance its sales performances.
3

Assess the competitive advantage of the selected
company, using the VRIO framework
VRIO Analysis
It is a tool for evaluating the resources of organisation it helps to highlight strategic
advantage and competitiveness of the resources of a business. It determines the
internal resources and capabilities of the organisation and identifies the core
competencies to establish a sustainable approach and competitive advantage in the
external marketplace. These resources can be segregated as valuable, rare,
inimitable and non-substitutable/organisation. Further, VRIO analysis on Marks &
Spencer is discussed below:
Resources Valuable Rare Inimitable Organisation Competitive
advantage
Brand
image
Yes Yes Yes Yes Sustainable
Competitive
advantage
Quality
products
Yes No Yes Yes Competitive
parity
Internationa
l presence
Yes Yes Yes Yes Sustainable
Competitive
advantage
Financial
strength
Yes No No Yes Temporary
competitive
advantage
Valuable
Brand image in terms of social responsibility
 Marks & Spencer has a strong establish corporate social responsibility
function.
 The Association conducts social responsibility actions in order to earn loyalty
and reliability of the customers.
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 The stakeholders of business are valued and delivered full and transparent
information about the company’s activities
Brand image
 Marks & Spencer as a renowned brand image in the market place.
 The business is famously known for delivering quality products and services
since many years.
 The business is known as a luxury brand and delivers unique products that
cannot be easily imitated by other competitors.
Rare
International presence
 Marks & Spencer have a global presence as it operates different countries
worldwide and has both brick and mortar stores and online presence.
 International presence has also supported the company to gain brand
recognition and exposure to cultural diversification (Dagnino and Cinici eds.,
2015).
Inimitable
Quality products
 Marks & Spencer is famously known for its quality products it delivers.
 The huge number of repeat purchases and increase consumption reflects
quality offerings and strong consumer perception of the brand.
 It is inimitable resource as the product specifications are known to the
executives of the business only.
Competitive pricing
 Marks & Spencer has large production capacity that brings economies to
scale to the business.
 Large capacity also reduces the operational cost of the business.
 The business also uses advanced technology in order to reduce the workload,
enhance the production process and minimize the cost.
 This cost saving approach used by the business helps to maintain competitive
pricing in the market place., it is also an inimitable resource of the
organisation.
Organisation
Financial strength
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 Marks & Spencer has stable financial and brand strength.
 The financial strength helps the business in order to enjoys the position of
leading business in the marketplace and explore different opportunities for
launching new products and services.
 Financial strength is valuable to the company for accomplishing consistency
and sustainability in the external marketplace.
Employee training
 Marks & Spencer focuses in-house training to the employees for different job
roles and job designs.
 Training to encourage employee engagement and professional growth at
work.
 Training also helps to establish strong organizational commitment consistency
in the internal management of the organisation.
Using PESTLE framework analysing the external
environment of the selected business
Pestle Analysis is a framework in order to evaluate the macro environmental
factors. It includes different factors Such as political, economic, social, technological,
legal, and environmental factors of the macro environment, how it impacts the
business and what are the strategies implemented by the business in order to deal
with external environmental challenges and opportunities (Dyer and et.al., 2017).
Pestle Analysis of Marks & Spencer is discussed below:
Political factors
The two different political factors that impact the business performance of Marks &
Spencer are:
Free trade
As Marks & Spencer operates chiefly in United Kingdom and also has its presence in
other parts of the global market. Free trade helps the association in a positive
manner to import foreign goods at cheaper prices. Free trade helps the business to
earn large amount of revenue (Dzwigol, 2020).
Brexit
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Brexit is an another factor that impacts the business performance of Marks &
Spencer resulting to loss of free trades which further increases the financial burden
to the pockets of the customer with increased prices of products and services and
other negative impacts such as freezed recruitments, restrictions for exports and
imports and others
Economic factors
With stability of economic condition in UK that majorly impacts positively to the
businesses operating in the country. One such factor that impact the business
performance of Marks & Spencer is:
Discount competitors of Marks & Spencer
There are new competitors in the market place that produces products and services
the way the premium brand that too at cheaper prices as a result it loses the market
share and revenue of Marks & Spencer and other premium brands in the country
(Gallus and Frey, 2016).
Social factors
The two social factors affecting the association and discussed below:
Non-trendy
As Marks and Spencer is an old retailer, there are different new and trendy retailers
in the market that negatively impacts the business performance and reputation of
Marks & Spencer as it becomes less trendy brand for the targeted customers
especially for the younger section of the society.
Technological Factors
With high technological advancement in the country where in UK is known as the
fourth advanced technological country in the world. The impact of technological
factors on business performance of Marks & Spencer can be seen as:
Self-checkout
Marks & Spencer implements the self-checkout across its food stores in order to
improve the customer experience and save the business cost incurred for paying to
the cashiers.
Online presence
Marks & Spencer has established e-commerce website so that customers can order
products via internet irrespective of their location, the online presence of Marks &
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Spencer has become a great success with the technological advancement and the
increasing reliance of the people on internet (Jabbar and Hussein, 2017).
Legal factors
Legal factors are such factors that are to be mandatorily adhered by all the
businesses of the country, as these are defined by the government of the country.
Marks & Spencer adheres to all the business Legislations for operating the business
in UK. These include minimum wages to the employees, health and safety in the
workplace and so on in order to reflect the ethical brand identity of the business in
the market place.
Environmental factors
Sustainable produce
It is important to maintain a brand identity as a luxury brand company in the global
marketplace. Marks & Spencer Promote the concept of sustainable approach by
reducing the carbon footprints and other eco-friendly measures in order to establish
a strong customer perception (Jenkins and Williamson, 2015).
Application of the Porter’s Five Forces Model for the
selected organisation
Porter five forces model is used to determine the competitive advantage and
the business positioning in the external marketplace. It is important to determine the
industry attractiveness and identify the challenges and opportunities that the
business face and how the business responds to the external macro factors. Porter
five forces model has five different factors such as threat of substitute, Threat of new
entrants, bargaining power of buyers, bargaining power of suppliers, level of
competition. Porter five forces model on Marks & Spencer is conducted as per:
Level of competition
Competition in retail industry is extremely high, wherein new businesses emerge
every day in the retail industry. New businesses in the retail industry produces clown
products or first copy offered by the brand and sells it at lower prices. The lower
prices approach attracts large number of customers in order to purchase the
offerings of the company and this way new businesses captures large market share
in the retail industry (Johnsen, 2015). In order to deal with the competition in the
external marketplace, Marks & Spencer produces differentiated products with unique
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features and qualities that are not provided by any other retailer in the market. Marks
& Spencer delivers products and services which are truly value for money in order to
sustain and accomplish the competitive advantage.
Threat of substitutes
There are different businesses in the retail industry that substitute the products such
as food and apparels offered by Marks & Spencer, wherein people can easily find
substitute of the products at variety of product features and prices where people can
easily compare and make the purchase decision. Thus, threat of substitute is high in
retail industries.
Threat of new entrant
Threat of new entrants is low as it takes a lot of capital investment for new
businesses to maintain a sustainable and a strong position in the marketplace. Until
and unless the new entrant market is mature, there is always uncertainty that the
business would get positive or negative responses or the large foreign companies
entering into new market would also faces uncertainty due to lack of knowledge and
experience in the new market. Marks & Spencer is a well-established global brand
that earns people reliability and loyalty which also makes the organisation as a
leading brand. Apart from that Marks & Spencer holds huge market share and
financial strength in the global market. Thus, the threat of new entrants is low (Joyce,
2015 ).
Bargaining power of buyers
The bargaining power of buyers is high as there is large number of choices and the
switching cost is low. Apart from that income of people is also uncertain in UK. It
makes a huge challenge for the association, Marks & Spencer promises to deliver
value for money products so that the customer feels reliable and satisfied and make
repeated purchases.
Bargaining power of suppliers
Bargaining power of suppliers is low. As Marks & Spencer is a huge public limited
Organisation with strong financial strength and earning less revenue. Marks &
Spencer is not dependent on suppliers as it delivers products to the customers of
own brand. Which also means that Marks & Spencer purchases raw materials from
the suppliers and not the finished goods That turns favorable for the revenue margin.
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A review of the selected organisation’s strategy
By focusing on the micro environmental factors, macro environmental factors,
business positioning and the competitive analysis of the business in the market
place, Marks & Spencer formulate different strategies in order to accomplish
business sustainability and positioning in the market place. Marks & Spencer
clothing and Marks & Spencer food is the chief revenue generators for the business.
Wherein the main vision and mission of the organisation is to deliver value for money
products and services and quality at exclusive ranges. The association strategize for
customer oriented marketing approach, wherein customer satisfaction and loyalty is
the major asset for the business.
External business environment strategies
Company’s website
With the increasing reliance of people in internet platforms, Marks & Spencer
focuses for enhancing the online presence by delivering varieties of products and
services and collaboration with other brands in the Marks & Spencer website. The
association also formulate strategies to deliver products from a host of other labels
such as Jack & Jones, Joules, White Stuff and other brands to be sold via Marks &
Spencer website. The association also formulate strategies in order to deliver a one-
stop solution wherein the customers can buy all of these brands in the physical
stores as well. The association focuses each of the age group such as branded
clothing ranges for kids to be launched from brand machine group (Pozdnyakova
and et.al., 2017).
Environmental safety measures
With the increasing concerns of the environmental issues, Marks & Spencer
launches strategies that addresses the environmental issues such as climate
change, waste reduction, ethical trading, sustainable and health. Marks & Spencer
has also introduced the concept of sustainable approach by reducing the energy
consumption and using renewable sources such as wind energy, apart from that the
association has also turned down its carbon emission, other approaches includes
recycling the waste.
Healthy lifestyle
With the rising health concerns in the society Marks & Spencer has launched new
product ranges, online diet forums and health newsletters in order to aware
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customers about nutrition and health. Apart from that Marks & Spencer have also
improved its food products by eliminating all the artificial flavours and colours.
Services
Marks & Spencer formulates strategies for enhancing the online services and brick
and mortar services. Marks & Spencer introduced free shipping for purchases more
than £50, free returns. It also enhances his food sector by launching start zoning in
food halls.
Marketing and sales
Marketing strategy of Marks & Spencer focuses on delivering quality and exclusive
ranges of the products. The association also developed a story telling the brand
identity of its market offerings. Marks & Spencer uses social media platforms such as
Instagram and Facebook with millions of users and followers in order to deliver
marketing objectives to the customers of the new launches, occasional sales and
other offerings delivered by the company.
Outbound logistics
Marks & Spencer has established multiple channel operations in order to enhance
customer experience. These multiple channel operation delivers convenience in
delivery options including online shopping. The company has established super
warehouses for maintaining the stock availability apart from that The business has
also formulated strategy for managing the supply chain more efficiently (Yin,
Kiliccote, and Piette, 2016).
Internal Business environment strategies
Employee development
In order to encourage professional development of the employees Marks & Spencer
introduces learning program and career path training for the employees in order to
enhance and boost their capabilities and skills. Marks & Spencer also promises to
deliver positive working conditions with best or higher salary packages for their
employees.
Conclusion
From the above discussion, it can be concluded that organizational strategies
play an important role that determines a structure and framework for accomplishing
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organizational objectives. These business strategies define the overall functioning of
the business of how the business operates, why the business operates, what are
business objetives and purpose and so on, it delivers a complete detail about the
business core activities. The report delivered the vision, mission and purpose of the
business and the related strategies and activities that the business run in order to
accomplish those. Businesses formulates strategies by analyzing the micro and
macro business environmental factors, the business positioning in the competitive
market and how the business will respond to the market demand and trends.
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References
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