Business Strategy Report: Macro and Internal Analysis of M&S

This report provides a comprehensive analysis of Marks and Spencer's business strategy. It begins with an introduction to business strategy and then delves into the application of frameworks to analyze the macro environment, including PESTLE and stakeholder analysis, and its impact on the organization. The report then examines the internal environment and capabilities of Marks and Spencer using relevant frameworks like SWOT analysis, followed by an evaluation of the competitive forces within the market sector using Porter's Five Forces model. Finally, the report interprets and devises strategic planning for the organization by applying various theories, concepts, and models, including Ansoff's growth vector matrix, to develop a strategic management plan with tangible strategic priorities and objectives.

Business Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1Applying appropriate frameworks to analyse the impact and influence of the macro
environment on a given organisation and its strategies..............................................................1
M1- Critically analyse the macro environment to determine and inform strategic management
decisions......................................................................................................................................4
TASK 2............................................................................................................................................4
P2- Analyse the internal environment and capabilities of a given organisation using
appropriate frameworks..............................................................................................................4
M2- Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set..........................................................6
TASK 3............................................................................................................................................6
P3- Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation............................................................................................................6
M3 Devise appropriate strategies to improve competitive edge and market position based on
the outcomes................................................................................................................................8
TASK 4............................................................................................................................................8
P4- Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation...............................................................................................................8
M4 - Produce a strategic management plan that has tangible and tactical strategic priorities
and objectives..............................................................................................................................9
D1 - Critique and interpret information and data applying environmental and competitive
analysis to produce a set of valid strategic directions, objectives and tactical actions. .............9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy refers to the firm's working plan which helps in achieving vision and
objective of the firm and meet the expectation of its customers. It also helps in optimising the
financial position of the firm with its business model. Strategies are made by keeping in mind
firm's strengths, opportunities, resources, competitors and its market. Strategies helps to
strengthen the performance of the business. The present report is based on Marks and Spencer, a
multinational retail company which was founded in 1884. Its headquarter is situated in London.
Marks and Spencer is famous for clothing, luxury food products and home products and financial
services. It has 800 stores all over the world. This report will cover, the impact and influence of
the macro environment, the internal environment and capabilities, the competitive force of
market sector and the range of theories, concept and models.
TASK 1
P1Applying appropriate frameworks to analyse the impact and influence of the macro
environment on a given organisation and its strategies
Pestle for environmental analysis :
Political factor :
The change in the government policy and taxation policy influence the trading of Marks &
Spencer. The government has set regulation, if company do not follow then it might get close. If
government has increased the duties it will directly impact on the sale of the company and
products will get costlier but company can cover its cost from the customers (Matt, Hess and
Benlian, 2015). The most important factor which can impact the growth of the company is
financial regulation of any country, as every nation does not have the similar mindset on
business. There may be chances that where the organisation want to expand the enterprise is not
open to foreign direct investment.
Economical factor :
The company's retail sale got affected as people do not have extra money to buy luxury goods.
At the time of recession the purchasing power of the customer reduced which have directly
impact on the sale but company can overcome by giving discounts, offers. Also, the conflict
between the small retailers over the rise in the price of the product affects the sale but company
1

can collaborate with them (Eaton and Kilby, 2015). The status of economic activities in any
country also have a severe impact on how organisation is going to perform over there. Recession
in any region can affect the sales of Marks and Spencer while it can also lower down the
purchasing power of the consumer. It might happen the revenue of the organisation is also been
down.
Social factor :
The firm will look after the proper management of social conditions and activities that will help
in effective rise in capabilities. This will involve the proper management of work force and their
needs and demands. Keen analysis should be made by company on cultural aspects of the people
where they are going to spend the business. Product should be designed on the basis of that and
organisation must not be involved in creating commodities that hurt the religious sentiments of
people. Market researches on taste, preferences, values of the consumers should be done by
company in order to gain competitive advantage.
Technological factor :
Technology plays a very important role. Changes need to be brought out according to the needs
of the customer and the latest technology otherwise the costumers will not buy. Innovation and
creativity is necessary to attract the customers (Spender, 2014). Use of all new techniques should
be made by company with advancing time. Like for example they can sell their product online
with the help of internet. It will attract more consumers, also it will make more easy for them to
purchase any product.
Legal factor :
The legal regulations keep on changing. The company needs to keep up to date with new laws
and regulations to survive in the competitive market. The changing laws of the country can lay
impact on the growth of Marks and Spencer. Like for example alteration in taxes or rules related
to export and import of clothes can hamper the business of the company.
Environmental factors : Company should also take care of the environment, where they are
performing business. They should lay emphasis on sustainability and also investment must be
done in CSR activities. For example Marks and Spencer is also involved in paper bags instead of
2

polythene. They also encourage consumers to dump waste in proper place and keep their
surroundings clean.
The government is pressuring the company to change their way of using material.
In stake holder analysis, firstly identify who are the stakeholders because they are the
people who get affected by the company's work (Bentley-Goode Newton, and Thompson, 2017).
They have interest and power over it. The stakeholders are shareholders, government, customers,
suppliers, interest group, public, key advisors.
Secondly, prioritising the stakeholders on the basis of people with high power & high
interest are managed closely, high power & less interested people keep them satisfied, low power
& highly interested people keep them informed and people with low power & less interested
keep them monitored.
Thirdly, understanding the key stakeholders. Company must have better understanding of
the needs and demands of shareholders. They must make policies where role of investors are
hilly appreciated.
SWOT analysis :
Strengths:
Marks and Spencer is the most powerful retail brand. It has around 1000 stores all over
the world and more than 70,000 thousand employees. This helps the organisation to handle the
business operations and have high productivity (Fontana, Sastre-Merino and Baca, 2017). The
strength of the company also includes quality of the product. It is highly recommended by the
consumers. Also, they offer wide variety and range of goods. Apart from fashionable clothes, the
company is involved in selling beverages, fruits and vegetables. They have also opened number
of stores across the region.
Weaknesses:
The lack of proper customer strategy and fashion measures is the major drawback that
causes the firm to have restricted productivity and lack of proper customer base. The enterprise
has also not adopted advanced technology to promote their products. They are only involved in
designing goods which focuses only on aged people, Marks and Spencer have not laid emphasis
on youth and teenagers.
3

Opportunities:
The firm has a major opportunity to improve its business performance by implementing
effective strategies and business operations and activities that will impact firm's performance.
Company has chance to grow their business by expanding their share in Indian markets. They
can also increase their activities by introducing new variety of clothes for adults as well as youth.
Expanding their business online can also act as an opportunity for the organisation.
Threats:
The lack of proper innovation in clothing and carrying out of effective customer
communication is the major threat factor that impacts the customer performance to a greater
extent (Hughes, Cox and Akhir, 2016). The changes in trend of clothing can also act as a threat
to company. Organisation should be involved in doing market research of competitors product,
in order to improve their services and also to have an idea about the risk related to substitute
goods.
Ansoff's growth vector matrix
Various strategies have been taken in consideration by organisation to have a better and
effective strategic positioning in market. It involves the following factors that have been taken in
consideration by organisation are:
 Market development: It is a strategy to enter within a new market, using the existing
product range. This is a cost effective and most safe approach of having a strategic
positioning within market. The company could expand their business in new market
either in their region or across the world. They can also develop their industry by offering
new range of products. New distribution channel may also be considered by Marks and
Spencer in order to increase their revenue.
 Market penetration: this approach will include M&S to use its existing product
portfolio within the existing market of operation. This will support the firm to have
minimum financial loss (Grover, 2016). The method can be achievable by company while
growing the market share of current goods. To implement the technique organisation
needs to lay focus on their sales and promotional activities.
4

 Product development: This strategy will lead M&S to develop new and high quality
product and services that will help in improving the quality of product and services that
will lead to effective rise in business operations and activities. The commodities can be
developed by company through keen analysing consumers needs and demand. Market
research should be done by organisation to gain competitive advantage and increase their
revenue. They can also be involved in expanding their brand by offering new variety of
commodities.
 Diversification: this strategy involves the practice of launching new products in new
market. This is the most risky and costly approach to be followed by a business
organisation. One of the best example of diversification is Samsung, which started as
trading company and now it has been expanded into securities, insurance, and retail. The
market presence of Samsung is now diversified global set of business which consist of
appliances, watch making, music services and home equipments.
Following of these approaches will help in effective assessment of macro environmental
factors that will help in increasing the quality of services and products (Buckley, Burton and
Mirza, 2016). These frame works will help in proper utilisation of resources and have a good
market share (González-Rodríguez and et.al., 2018).
M1- Critically analyse the macro environment to determine and inform strategic management
decisions.
The effective management of macro environmental factors like political, cultural,
technological and environmental factors will help the firm to define and draft an effective
strategy. It supports the significant growth and development of various business operations and
activities. The assessment of external environmental factors will help the business organisation
to carry out business operations and activities and develop appropriate strategies that will help
the firm to grow and develop effectively. It will support a good growth of business
functionalities by M&S. Other than this, it leads the organisation to have strategic management
decisions. The macro analysis tool is useful to find whether a new product, service or business
have the potential to be profitable or not. While doing macro analysis Marks & Spencer will be
forecasting trends based on what company know about their environment. Once, the company
5

has understood the macro environment analysis, it will continue to scan for information for its
factors such as by watching or reading the newspaper.
TASK 2
P2- Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.
The strategic capabilities are the processes that have been implemented within an
organisation that helps in improvement of competitive advantage of firm. This helps in proper
utilization of organisations assets, resources and market position that will help in effective
handling of business strategies (Pisano, 2015). The major key components of strategic
capabilities are:
Physical: this involves the machines, infrastructure, data bases etc. The age, condition, limit and
part of every assets will decide its usefulness for the company. These are tangible in nature that
are used in business operations and other supports the action of the company.
Financial: it involves balance sheets, cash flows, funds etc. It is basically the money available to
a company for spending in the form of liquid, securities, cash and credit lines.
Human: includes managers, partners, suppliers and customers. It is concerned with all those
activities that impact the individual's behaviour to implement the strategic needs of the business.
Human resource responsibilities involves hiring, firing, and keeping up to date with state and tax
laws.
In order to analyse the strategic capabilities of cited retail enterprise, VRIO assessment is
been carried out within the organisation that will help in suitable management of business
activities and operations. VRIO assessment of M&S is as follows:
Value: the effective and well placed strategy within a business organisation will help in proper
assessment of activities which will further help in expansion of business and its operations in an
effective way (Amran and et.al., 2016). The products and services offered by M&S are well
known for their high quality and value. Resources are also determined as valuable if they help
the firm to expand perceived customer value. If, none of the company's resources are considered
valuable, the firm is likely to have competitive disadvantage.
6

Rarity: Many of the products and services that have been taken into consideration by Mark &
Spencer are quite rare for its competitors. This helps the firm to have a good market and
competitive advantage that supports a good rise in capabilities and meeting of the goals and
operations within the organisation (Klettner, Clarke and Boersma, 2014.). Getting a rare resource
it little tough for the company, and it is extremely valuable if it receives one. Rarity of resources
in the firm leads to competitive advantage in an organization. There are generally two conditions
to be satisfied for rarity to keep a competitive advantage. One is resources and other is
capabilities, they are very hard to find and should be last longer because their supply is always
short.
Imitation/substitution: Few of the products and services that are been developed by M&S are
very difficult to imitate or copy. This gives the product and services offered by cited retail firm a
uniqueness which helps in meeting its aims and objective. M&S with rare resources and
capabilities is hard to imitate by other firms gain an advantage of competitiveness in the market.
The level of imitation of M&S also depends upon the cost factor.
Organisational capabilities: the effective business framework, expansion and competitive
advantage are some major factors which help in good growth and development of cited retail
enterprise. Marks & Spencer formal structure, compensation policy, and management control
system decides the M&S organising. It is determined that without the correct organisation to get,
use & monitor the available resources, even companies with rare, valuable and imperfectly
imitable resources will not be able to create a competitive advantage.
Besides this, the effective use of Value chain analysis which will help in effective
planning of the strategic capabilities of a business organisation in an effective manner. The
Value chain model of M&S is as follows:
 Inbound logistics: the goal of these activities is to provide the customer a level of value
that exceeds the cost, therefore, increases profit margin. Inbound logistic refers to the
process of receiving and warehousing of raw materials and then distributing them to
manufacturing. It involves the business operations and activities that have been followed
within Mark & Spencer that helps in proper receiving, storing and distribution of inputs
or raw material to produce an effective product and services. It helps the company to
carry out its supply chain in an effective manner (Hammond and et.al., 2015).
7

 Operations: M&S is now targeting to improve its customers experience and thus is
spending more funds on the improvement of customer welfare. The operations related to
shopping and providing of other retail services has been improved to such a greater extent
that it has helped the firm to retain its old buyers. Proper implementation of IT tools and
carrying of supply chain has helped in increasing quality of business operation's that are
been followed within cited retail firm. It is determined that if the operations are up to the
mark and the manufactured product is in the right manner and meets quality standards,
this will lead to major increase in the customer value.
 Outbound logistics: it involves the proper stacking, manufacturing and distribution
activities that are been carried within the organisation. It involves the improvement of
accessibility of products and services that are been offered by M&S. Other than this, it
also involves proper warehousing and distribution of goods and services like clothings,
food and groceries in an effective way (Leonidou and et.al., 2015). If the outbound
logistic activities are carried out in time and with minimum cost & the product is
delivered to the final customer without affecting its quality then the value chain receives
a boost.
 Marketing and sales: the proper promotion and raising the awareness of a business
entity will help the cited retail entity to undertake suitable measures which will help
M&S to improve its market share and profitability. The suitable use of marketing
techniques will help the firm to increase awareness about their products and services.
This is required to be handled with great care and capability in order to carry out the
business activities and operations in an effective way. Any loop hole or restriction within
the promotional activity may lead to have negative consequences on growth and
development of a business entity in a significant manner. Marks & Spencer exists to
make profit and if profits can be increased by sales & marketing then the company has to
use these tools. However, to build brand equity marketing has to be done in a right
manner and sales should also be done in a proper channel to add value to the finished
product.
 Services: It involves the services or customer care that is been offered by the firm to its
buyers after they make the purchasing. This helps the organisation to improve the good
8

will and meet the business operations in a very significant manner. The effective
following of these activities and operations will help the firm to adopt proper measures
and execute them with elaborative concern in order to improve the customer satisfaction
level. Also, it will help in improving the quality of operations and meeting the needs and
demands of their customers (Peng, 2017). If the service of Marks & Spencer is not proper
and up to the mark then no customer will buy its products and the brand will lose its
market share & there are chances that it may be taken out of the market. Thus, service is
very important in the value chain.
Besides this, additional factors like technology, infrastructure, procurement strategies and
HR of firm also impacts the business activities and operations in an effective way.
M2- Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set.
The internal assessment of business operations and activities help in suitable rise in
strategic capabilities and business activities that are been followed within a business entity in an
effective way. This will help in suitable rise of various operations and business activities. The
internal capability will help in improving the quality of services that are been undertaken by
M&S to meet their customers needs and demands. The handling of internal capabilities, structure
and skill set will help in improving the quality of products and services. The responsibility of
marketing management is to attract customers and establish a strong relationship with them by
making them satisfied. The internal micro environment of Marks & Spencer include, suppliers,
customers, distributors and competitors. From the SWOT analysis, the most important factor for
the company is to satisfy needs of the consumer. The disadvantage of the firm is that it lacks in
clothing market segmentation that affects it to lose its brand awareness.
TASK 3
P3- Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation.
The effective application of porter five force model will help the cited retail firm to
improve the performance and quality of services that is been offered by M&S. The effective
planning of business operations and activities will help in suitable placing of strategies and
measures that will help in effective placing of business operations and activities. The assessment
9

of business activities and operations will help in suitable planning of the firms strategies and
activities. This will help in effective rise in meeting of retail functionalities. It will help the firm
to handle the risk factors that are been associated within the firm. The Porter five force model of
M&S is as follows:
 Threats of New entrants: this is the major factor that is required to be handled with
effective knowledge and skill set. As with the increase in globalisation, many new retail
firms are emerging in the retail market that are creating a stiff competition for the firm.
The case of peer's is different, however, Marks & Spencer popularity and focus on
quality would make competition fight hard for breaking its loyal customers. However, the
cited retail firm is well established and recognised to be affected by entry of new retail
organisations. But Marks & Spencer requires undertaking certain preventive measures
that will help the cited business entity to carry out its operations with efficiency. The
effective assessment of these factors and operations will help in suitable rise in its
competitive advantage.
 Threat of substitution: Marks & Spencer requires constant innovation to keep its brand
position strong & to stay distinctive to meet the demands of the customer base. Thus, in
order to carry out business actions and activities, the cited firm needs to look after the
proper management of business operations and activities that will help in suitable growth
and development of firm. Moreover, the company focus on its food line which is
expected to offer clear advantage over the competitors. Effective market research,
assessment of customers demands and requirements and coming up with effective
product line. This will provide a uniqueness and competitive advantage over its rival
firms like Morrisons. Sainsbury etc. This will help the organisation to gain a good
customer satisfaction level (Matt, Hess and Benlian, 2015).
 Bargaining power of buyers: The buyers or clients of Marks & Spencer that forms its
loyal customer base are required to be managed effectively by cited retail business entity.
Marks & Spencer needs to build up its loyalty and offer its consumers unmatched value
& comforts that are difficult to match. The suitable pricing strategy over products and
services that is required to be carried out by the cited retail business entity which will
help in effective execution of operations and meeting of cited retail enterprise. Failing to
maintain the effective costing, the buyers are tended to be move away from cited business
10