Analysis of Macro Environment and Internal Capabilities of Marks and Spencer

Business Strategy

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
P1 Analysis the impact and influence of macro environment on Marks and Spencer and its
strategies......................................................................................................................................3
LO2..................................................................................................................................................5
P2 Internal environment and capabilities of Marks and spencer.................................................5
LO3..................................................................................................................................................8
P3 Porter Five Force Analysis.....................................................................................................8
LO4................................................................................................................................................10
P4: Strategic Management Plan.................................................................................................10
CONCLUSION................................................................................................................................1
REFERENCES................................................................................................................................2

INTRODUCTION
Business environment refers to all internal and external factors such as customers,
employees and government that impact on the functioning of business in the market. In this
report Marks and Spencer has been taken as company that operates its business worldwide and
specialized in providing quality clothing, home and food products to its customers. This report
covers market analysis by using appropriate framework that impact and influence macro
environment on Marks and Spencer and its strategies. It also analysis internal environment and
capabilities of company to identify its strength and weaknesses. It also analysis market position
of the company by using Porter five force model. At last this report prepare strategic
management plan that has tangible and tactical strategies priorities and objectives of the
company that helps in expansion of business and achievement of objectives.
LO1
P1 Analysis the impact and influence of macro environment on Marks and Spencer and its
strategies
Pestle analysis: It is an analytical tool that is used to analysis various external factors of
environment that impact on the functioning of business thus helps in gaining competitive
position in the market. Marks and Spencer by analysing external factors such as customers,
government, employees and investor of the company is able to expand its business and gain
competitive position in the industry (Jia, 2020). Thus, it helps in better understanding of
competitive position or current and future position of Marks and Spencer in the market.
Political Factors: It refers to policies, procedure or rules and regulations of government that
need to be considered by the company for smooth operational of business. This factor has
adversely impact on the functioning of marks and Spencer in the market. Due to political
instability and Brexit in UK company sales and profitability has been declined tremendously as
disposable income of customers was low, and they are also less willing to make purchase. On the
other hand free trade benefited company to expand its business across various nation with
minimum restriction. Company is able to survive and grow in the industry by expanding its
business across nation and by using various marketing strategies to induce people to make
purchase. Thus, it can be stated that political factor adversely impact on company functioning
and its strategies as it has to change as per policies of government. It also helps in smooth
functioning of business and achievement of company goals.

Economic factors: It analysis and determine economic condition of country by identifying
factors such as interest rate, employment rate and disposable income of customers. UK is
suffering situation of recession thus it means high employment rate, interest rate and debt of
government and people. It impacts positively to the company as high employment rate means
company can hire suitable candidates at lower price. On the other hand cost of production has
increased due to increase in interest rate, cost of input of raw material that has impact on
company sales and profitability (Dirick, and et.al., 2019). Company by generating large number
of employment and by using various method to enhances skills and knowledge of employees can
reduces cost of production and wastage. It can also provide various promotional offers that
influences customers to make purchase thus it helps in achievement of goals. Thus, economic
conditions of UK has impact Marks and Spencer functioning and strategies.
Social Factor: It includes belief, preferences, values and culture of people living in the society
so company has to consider such factor to gain competitive advantages and enhances its sales. It
has impact on Marks and Spencers sales as it is not able to satisfy needs of youth customers due
to long-standing existence. Most of the people tend to associate brand of company with past thus
company was not able to retain customers satisfaction and loyalty. But company able to expand
and survive in ready meals sectors as there was wide scale increase in consumption of ready
meals. Thus, company by making use of available opportunity in food store is able to expand its
market and able to gain competitive advantage in the industry. Thus, it can be stated that
company by considering social factors and change its strategies is able to expands its market
share.
Technology Factor: It refers to prevailing technology and technological innovations in the
industry that help company in gaining competitive advantages and establishing brand image. It
impacts on the functioning as Marks and Spencer has to update its technology and innovative its
product to differentiate it from other competitors (Kemsa, 2019). Self- checkout and online
shopping are the two changes in technology that impact on the functioning and strategies of
Marks and Spencer. Company by introducing self-checkout in its food stores is able to reduce
cost and able to get quick and fast feedback from customers. On the other hand company by
building strong presence in e-commerce has provided ease to its customers to shop online and
get their product at their doorsteps. Thus, it has change strategies and impact on functioning of
company adversely.