Strategic Analysis of Marks and Spencer (M&S) in UK: Bus3005 Report

This report offers a comprehensive strategic analysis of Marks and Spencer (M&S), a prominent department store chain in the UK. It begins with an introduction to strategic management and its objectives, emphasizing the importance of adapting to changing environments and gaining a competitive advantage. The main body of the report delves into M&S's business model, exploring its strengths, weaknesses, opportunities, and threats through SWOT analysis. It also examines external factors affecting the company using PESTLE analysis, covering political, economic, social, technological, legal, and environmental aspects. Furthermore, the report applies Porter's Five Forces model to evaluate the competitive landscape, analyzing competitive rivalry, the bargaining power of buyers and suppliers, the threat of substitutes, and the threat of new entrants. The analysis underscores M&S's market position, challenges, and strategic considerations for future success. The report concludes by summarizing the key findings and implications of the strategic analysis.

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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................8
REFERNCES...................................................................................................................................9

INTRODUCTION
Strategic management's objective is to develop successful business strategies in order to
fulfil the organization's long-term goals. The strategy is developed in response to changing
environmental conditions and client behaviour. In order to thrive in the market, a good business
plan aids the organisation in gaining a competitive advantage. The primary goal of strategic
management is to maximise profits. Setting targets, evaluating methods, and analysing causes
and trends in the external environment are all part of the process. Strategic management aids the
organisation in achieving its objectives and gaining a competitive advantage in the market
(Pintekova and Kukacka, 2021).
The essay emphasis on the strategic analysis of Marks and Spencer in the UK. The strategic
analysis of the essay is supported by business models such as SWOT analysis in order to identify
strength, weakness, opportunities, threats and further, Porter’s five forces model to evaluate
competitive advantage in the market. Also the essay highlights the external factors in the
business environment through PESTLE analysis. Thus, the essay basically examines the business
idea about the various business model used by taking the instance of M& S Company, to face the
fierce competition in the marketplace.
MAIN BODY
Michael Marks and Thomas Spencer were the founders of Marks and Spencer. It is one of
the most well-known department store chains in the United Kingdom. This company sells food,
beverages, clothing, and household items, among other things. They expanded their firm by
adding a new line of financial products, such as credit cards and insurance, to their portfolio. The
M&S Company aims to provide high quality accompanied by excellent service to its potential
customers in order to achieve its desired goals effectively and efficiently (Debellis and et. al.,
2021). The company have to deal with fierce competitors and require to gain competitive
advantage so as to survive in the competitive market. The Marks & Spencer derives 90 percent
of its revenue from the market of the United Kingdom.
The SWOT analysis comprises factors which influence the internal and external
environment of the company. It helps to identify the strength, weakness, opportunities and
threats of the company. Anecdotally, company formulates its strategies and policies so as to
attain to improve its presence in the marketplace. The prominent strengths of the company are,

firstly, well experienced and brand image, as the company is one the leading retail market in the
UK. Even the company has good reputation of providing high quality product to its potential
customers. Furthermore, the company is the second rated among the other chain of supermarkets
in the UK. Secondly, variety of products, the company aims to facilitate variety of products and
services in accordance with the evolving needs of its customers. The brand made healthy
relationships with local farmers so as to serve better quality of products to the customers. The
brand sells 500 different types of veggies, fruits and salad to its customers. Thirdly, strong e-
commerce infrastructure of the company is one of the vital piece of strength which helps the
company to maintain its global presence. Lastly, the company focuses on enhancing customer
experience through effective campaign in order to attract its customers and attain the objective of
customer satisfaction. Whereas, the weakness M&S includes, vulnerable market, as the company
focus and rely too much on the markets of UK (van Nistelrooij, 2021). As result the sale declined
in year 2019 because on non- availability of products in the stores. Another drawback of the
company is that it rely mostly on manual operations which lead to more time consuming
processes. Even the frequent recall of products may led to loss of confidence and trust amongst
its customers and ultimately effects brand image.
On the hand, the opportunities of the company may help the company to achieve its desired
goals in effective and efficient manner. It involves the company’s online presence in order to
boost sales as well as the market position. The company amid pandemic situation opted this
opportunities and able to maintain its position in the market. E-commerce retail in pandemic
helps people to purchase by avoiding public and crowded places. One of the main opportunity
which can help company to establish strong presence is the global expansion in the developed as
well as developing countries like Russia, India, Brazil, and so on. The brand is require to open
more of its franchise in other countries. Market segmentation by reshaping strategies will be
beneficial for the company to maintain cost and ultimately the profits margins. Whereas, the
threats the company faces are, firstly, fierce competitors, such as TESCO, Morrison, Gap, and so
on establish tough competition in the market for the company (Chanchitpricha, Swangjang and
Morrison-Saunders, 2021). For instance the stores of the company is shutting in UK and China.
Secondly, changing trends among the customers is also a company’s threat and thus, the
company is require to evaluate effectively the needs and demands of its customers. Furthermore,
the depreciation caused by the sterling Brexit effect and caused decline in the company’s

revenues. M&S has not entered the e-business arena, which is why they lag behind competitors
such as ZARA, Sainsbury's, and GAP, among others. Even the people, like the civilization, are
dynamic in nature. People's decisions are influenced by their changing lifestyles, and
organisations must adapt accordingly (Azar, 2021). M&S is unable to meet the changing
demands of its clients.
The company operates in the UK market, thus it's critical for the selected organisation to
understand the external aspects that influence their operations. A variety of elements influence
and affect the company's operations and performance. The PESTLE analysis is conducted to
identify these. This tool is used to understand out that how external factors influence a
company's success. The M&S Company is chosen to better understand the external factors
influencing potential business. The external factors includes, firstly, political factors, there are
various changes in the framework of trade activities that cross international borders as a result of
Brexit. This has resulted in political instability as well as a detrimental influence on the economy
relatively high unemployment rate. The regulations governing a company's operations have been
unknown since the approval of BREXIT (Bracci and et. al., 2021). Secondly is the economic
factors, Interest rates, inflation, and other variables are examples of variables. Increased interest
rates will result in lower revenues due to the excellent quality of Marks & Spencer's products.
These elements include labour expenditures and other expenses that have an impact on the
company's functions. This has a significant impact on the company's profit margin. Increases in
cost and price for the company will result in a drop in profit margin, which will have a direct
influence on the firm's revenue. M&S has lately introduced a 20 percent discount on all wines
and champagnes in order to keep up with its competition. Thirdly is, social factors, Marks &
Spencer is a global corporation, and keeping up with market developments is critical in order to
suit the needs of its customers. M&S hires designers to create fashionable garments for its
customers in order to match their preferences. This demonstrates how changes in societal
elements have an impact on corporate tactics. Thus, company develops initiatives towards
Corporate Social Responsibility in order to satisfy its targeted audience.
Fourthly, technological factors, M&S began offering online shopping to their clients as the
world became more sophisticated in the pace of technology. The company is require to upgrade
its technology in order to remain competitive in today's industry (Alizadeh and et. al., 2021).
M&S is a company that does not innovate. M&S never kept up with technical advancements.

Due to a lack of technological understanding, the company is unable to compete with its
competitors, resulting in higher costs. Fifth is the, legal factors, to avoid foreseeable issues as a
result of non-compliance, Marks & Spencer must follow all laws. It is critical for the
organisation to adhere to all rules and regulations set forth in the country's local and international
legislation. Even the consumers are well aware about the laws and regulations. As a result,
companies like M&S must keep legal considerations in mind both during marketing and during
production. Lastly is the, environmental factors, Marks & Spencer is utilising its environmental
initiatives to persuade viewers to order from their website, which is beneficial in terms of saving
customers' gas and time (Elkamhi, Lee, and Sadik, 2021). The company is also prepared to
collect discarded plastic bags in order to recycle them and develop products that are both
environmentally friendly and helpful to customers. Marks & Spencer has put in place
environmental policies in order to ensure that the company's actions do not influence to
environmental issues.
In addition, Porter's Five Forces model is utilised to assess the industry's long-term
viability. The approach aids in determining profitability across various industries. Furthermore, it
aids in the examination of the marketplace's competitive advantage. It enables the company to
make an informed decision about whether or not to enter the market. The forces includes
Competitive Rivalry, the number of rivals in the industry is determined by this force. It increases
the level of competition. When there are a large number of competitors in a market with equal
power, there is a lot of competition such as Gap, Morrisons, and so forth. They compete in a
variety of areas, including customer service, brand trustworthiness, comfort, and cost. Because
M&S has such a large position in the UK market, it confronts tough competition (Lauer, 2021).
Next is Bargaining Power of Buyers, the force investigates the influence and control that
suppliers wield. The fewer the suppliers, the more power they gain. When there are many
suppliers in the market, the firm performs better. The majority of M&S customers are sensitive
to price changes, and the customer shifting cost is modest. In general, the company is up against
pricing competition. As a result, it has a lot of negotiating leverage. M&S's product-oriented
strategy is another factor for the high buyer power. The company focused on products rather than
consumers, while its competitors were concentrating on customers. Competitors' customer-
centric strategy results in a loss of customers’ loyalty and, ultimately affects the brand image.

Furthermore, the Bargaining Power of Suppliers, The force affects how much power and
control customers have. These are the critical stakeholders who must be kept happy. The market
is competitive in order to provide the best services to consumers. In the instance of M&S, the
supplier's negotiation power is limited. This is because M&S does not rely only on suppliers
because they offer their own goods. This organisation primarily purchases raw materials rather
than finished goods. This is advantageous to the company since it allows them to pursue a high-
margin foundation. The company must look after its suppliers because anything bad that
happens to them can harm the company's reputation. As a result, has as high bargaining power in
the marketplace. Whereas, threats of substitutes customers' switching power towards
competitors. It creates a situation where client demand exceeds supply, resulting in a limited
quantity of profit in the sector. Other retail enterprises are posing a challenge to the company,
resulting in strong market competition as the customers can drive the company’s sales offshore
by using local services. Even the foreign clothing can be considered as threat to the company as
they also maintains strong competition in the market (Mustow, 2021). These foreign clothing can
cause danger to the company since they believe in offering products at reasonable price. Some
customers are ready to give up the quality in order to save money. Lastly, threats of new
entrants can result in market competition power being influenced. The business is threatened not
only by established competitors, but also by newcomers to the industry. New entrants confront a
number of challenges as they try to break into the market. The M&S is old and trusted band and
thus, appears on safer side in case of new entrants in the market. The company is well known
brand and for other business capturing its potential customers entering the competitive market is
difficult. Another aspect for creating barriers for new entrants is the lack of knowledge and
expertise. Thus, it works as a stumbling block for new entries into the market.
Accordingly, the M&S Company is require to make effective strategic decisions in order
to derive results effectively and efficiently. The company must shift apart its focus from product
– oriented strategy to customer- oriented strategy (Franco and et. al., 2021). As the survey, the
company has not implemented a change in the management strategy. It is because the company
engages in various areas which ultimately led to face business challenges and competition in the
market. Furthermore, the strategic report 2020-21 of the company provides various hygiene
measures amid pandemic situation. These measures are taken with an aim to build confidence
and trust amongst the customers in this period of crisis. The COVID-19 pandemic situation

caused a change in demand of e- commerce and thus, made the company’s range of food
available online for the first time. If not for the survival of the combined food and clothing
business model and the incredible commitment of employees, the impact on the business would
have been far more dramatic. The company is require to restructure its supply chain management
after the BREXIT affect (Borovikova and et. al., 2021). The company is facing serious issues in
respect of ongoing digital transformation of its business operations. The fluctuated customers’
confidence and fall of buying power has adversely impacted on the sales growth. As per the
strategic report, the company is accelerating its transformation programme so as to increase the
brand relevancy amongst the customers. The company must upgrade its communication strategy
via social media so as to provide customers with highlights of the company. In short the
company is require to accelerate its online solutions in order to serve isolated customers
effectively and efficiently. Marks & Spencer is require to adapt effective strategies so as to gain
competitive advantage in the marketplace. The company must create core capabilities that will
aid in combating the global rivalry in the competitive market. The company is suggested to
concentrate on the evolving needs and demands of the customers rather on product innovation
(Spencer, 2021). Thus, M&S must be advanced in terms of technology as well as customer
happiness, according to the findings, and only then will it be able to establish skills that set it
apart from its competitors.

CONCLUSION
The above essay concludes key strategies issues which the industry faces in the changing
business environment along with their implications on the development of industry. The Marks
& Spencer Company is chosen to better understand the significance of strategic analysis in the
business environment. The essay discussed various business models in brief to provide clear
understanding of both internal and external environment. The SWOT analysis is conducted to
support the internal analysis of the company by effectively identifying the strength, weakness,
opportunities and threats exists in the competitive business environment.
Furthermore, PESTLE analysis is discussed in the essay to identify external factors which
are causing impact on the performance of the business. Even the essay concludes the Porter’s
Five Forces model to evaluate competitive forces in the environment. The M&S overall market
study reveals that there are numerous fierce competitors in the market, who unlike M&S
concentrate on customer strategies. The company has cut its workforce due to the unstable
economy which resulted in poor customer satisfaction.

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