Business Strategy Report: Evaluating M&S's Competitive Forces

This report offers a comprehensive analysis of Marks and Spencer's (M&S) business strategy. It begins with an introduction to business strategy and its importance, followed by an examination of the macro-environment using PESTEL analysis, considering political, economic, social, technological, environmental, and legal factors impacting M&S. The report then delves into the internal environment of M&S, utilizing SWOT analysis to assess its strengths, weaknesses, opportunities, and threats. Furthermore, it evaluates the competitive forces within the market sector using Porter's Five Forces model, analyzing the threats of new entrants, substitutes, and the bargaining power of buyers and suppliers, as well as competitive rivalry. Finally, the report applies various theories and concepts to devise strategic planning recommendations for M&S, concluding with a summary of findings and a list of references. The report highlights the importance of adapting to market changes, managing internal resources, and understanding competitive dynamics for sustained success in the fashion retail industry.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1 ...........................................................................................................................................4
P1 Analyse the impact and influence of macro environment on the organisation. ...............4
TASK 2 ...........................................................................................................................................6
P2 Analyse the internal environment and capabilities of the organisation............................6
TASK 3 ..........................................................................................................................................8
P3 Evaluate the competitive forces of the market sector of organisation..............................8
TASK 4 .........................................................................................................................................10
P4 Apply range of theories and concepts and devise strategic planning for the organisation.10
RECOMMENDATION.................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy is the combination of various plans and decisions undertaken for
achieving the desired goal and objectives. Strategies for the business is generally decided after
analysing the current market situations. This is usually done to make use of the available
resources in the best possible manner. It is also concerned with the plan that management of the
organisation uses for achieving the competitive position in the market. With the help of proper
formulation of business strategy needs and demands of the customer's can be fulfilled. The
organisation will also be able to sustain the market for longer period of time(Baden-Fuller and
Morgan, 2010). The organisation chosen for this report is Marks and Spencer which is the top
fashion retailer of UK. Major topics covered in this report are the impact and influence of macro
environment, analysis of internal environment and its capabilities, various competitive forces
which can affect the working of market and theories which can be used for the strategy
formulation.

TASK 1
P1 Analyse the impact and influence of macro environment on the organisation.
Business strategy is very much essential for every organisation because it helps in
making plans for the future course of action. The major motive behind formulating business
strategies is it will help in achieving the goals and objectives in the best possible manner. If the
manager of M&S wants to achieve a desirable position in the market than focus can be
emphasised upon making proper plans and actions. The macro environment can have the positive
or negative impact on the working of business. This depends upon the plans and actions made by
the top management of the organisation. Macro environment of Marks and Spencer can be
analysed by using the PESTEL analysis in the systematic and coordinated manner. PESTEL
Analysis of M&S is discussed below-
Political Factor- These factors are related with the policies and strategies imposed by the
government or political party of a particular country(Bell and Rochford, 2016). Marks and
Spencer is currently facing many challenges and risk for the government of the nation. It is quite
essential for the M&S to make proper plans before introducing any new strategy for its business
expansion. Organisation was able to increase its business because of the free trade policy. With
the help of this policy organisation was able to trade freely in various parts of the world. As there
were no restrictions imposed by the government. But due to high political instability the business
of the organisation is affected because any change in the political policy can lead to negative
impact of the working of the business.
Economical factor- This factor is related with the inflation rate, economic growth,
deflation rate which affects and influences the business of the organisation. The sale and
profitability of the M&S is largely affected by the economical factor. This is because the need
and preferences of potential customer's change with the change in economic factor. M&S is
performing its business activities in various parts of the world, so it is quite essential for the
management to make plans keeping in mind the economic condition of the particular country.
The global rate of UK is continuously increasing which is a positive sign for M&S(Burlton,
2015). This because with the help of this organisation will be able to expand and increase its
business by introducing products as per the need of customer's.
Social factor- It is concerned with the social value and brand image of the organisation
among the customer's. It is quite essential for M&S to make the products according to the culture

of a particular area. Major focus of the organisation is on making the attire as per the taste of
customer's. Many changes have been made in the clothing line of organisation because
customer's need and preferences was continuously changing. The purchasing power of the
customers of UK was also decreasing. Due to this organisation made some necessary changes in
the pricing structure, so that its sale and profitability can be increased.
Technological factor- This is related with the latest tools and techniques used by
organisation for attracting more and more customer's. M&S is currently using various social
media tools for promoting and selling its products. The management of the organisation is able to
sell its products at the online platform. This has proven to be the best decision for the
organisation because large number was attracted towards the products of M&S. But organisation
needs to make some more changes in the online retailing, so that overall satisfaction of the
customers are increased(Cadle, Paul and Turner, 2014).
Environmental factor- These factors are related with the issues of environment which
directly or indirectly affect the business of M&S. Management of the organisation needs to make
proper plans for reducing the wastage of resources, so that goals are attained in the systematic
manner. Marks and Spencer is focusing on introducing environment friendly products, so that
sustainability in the business can be achieved. Organisation has recently launched a wide range
of menswear which was manufactured by using less energy and chemicals. After introducing
such products, the business of the organisation was increased because management was able to
save the cost in the effective manner.
Legal factor- It is related with the laws and regulations which needs to be taken into
consideration by the top authority of organisation. Such laws can include employment law and
fair pricing law. If the organisation is unable to work according to the laws than its business will
be affected to a great extent. Marks and Spencer was involved in the unethical practice of saving
the taxes, due to this the business of the organisation was affected. As brand image of the
organisation was decreased in the market(Coad, 2011).
It is essential for M&S to properly analyse each and every aspect of macro factor. As
with the help of this better plans and strategies can be made for achieving the targeted goals.
Performing this analyse in the proper manner organisation will also be able to give better
competition to its competitors present in the market.

TASK 2
P2 Analyse the internal environment and capabilities of the organisation.
It is necessary for the organisation to properly analyse the internal environment. As with
the help of this necessary actions and plans can be made for the improvement of business. If
Marks and Spencer is successful in knowing its strength and weakness than better plans can be
made for the enhancement of the business. After analysing the internal environment management
of Marks and Spencer will also be able to know its capabilities for sustaining in the market for
longer period of time. Internal environment basically consist of employee's and organisational
culture. With the help of proper plans for the internal environment management of the
organisation will be able to control the external environment. As if employee's and organisational
culture is properly managed than better plans can be made for managing the external
environment. The internal environment of M&S can be analysed by using the SWOT analysis in
the systematic manner(Craciun and Barbu, 2014). With the help of this strength and weakness
of the organisation can be easily known. The SWOT analysis of M&S is briefly discussed
below-
STRENGHT WEAKNESS
 The brand image of the organisation is
very high among the customer's. This
means customer's gets attracted
towards the products. It is one of the
biggest strength for the organisation.
 Marks and Spencer offer wide range of
products and services to satisfy the
unlimited needs of the customer's.
Products are launched in the market
after analysing the market situation and
competitors strategies. Due to this more
and more customer's are attracted
towards the company's product.
 Marks and Spencer has large number of
 The organisation is unable to penetrate
in the international market. The
organisation mainly offer western
designs to its customer's and is unable
to offer traditional clothes. Due to this
organisation is unable to satisfy the
needs of some customer's.
 The supply chain management of
Marks and Spencer is not up to the
mark. Due to this organisation is unable
to deliver and supply its products at
various locations in the proper manner.
 Management of the organisation is also
unable to make proper plans for its

stores and outlet in UK. Due to this
organisation is able to make the
customer's aware about is products and
services. Organisation has observed
increase the sale because stores located
are within the reach of potential
customer's.
financial resources. Organisation needs
to make better plans for effectively
using its cash. Due this organisation is
not able to make the best use of its
liquid assets.
OPPORTUNITIES THREAT
 Organisation can expand its business in
the new segment. There is high demand
of ethnic and traditional wear among
the customer's. So if organisation is
able to fulfil such demands than its
business will be automatically
increased.
 Marks and Spencer has wide range of
opportunities for developing and
expanding its market in various parts of
the world. By doing this organisation
will be able to gain proper competitive
position in the market for longer period
of time.
 Organisation is facing tough
competition in the market form various
competitors. The competitors of Marks
and Spencer are
continuosuman.mandiausly focusing on
attracting more and more customer's.
Due to this sale and profitability of the
organisation is largely affected. To
overcome such threat organisation
needs to make better plans and
strategies.
 The fashion industry is uncertain and
involves various kinds if risk. This is
mainly because needs and preferences
of the potential customer's keeps on
changing. It is quite essential for the
organisation to overcome such threat,so
that business can be increased.

TASK 3
P3 Evaluate the competitive forces of the market sector of organisation.
Marks and Spencer needs to analyse the competitive forces in the systematic manner. As
with the help of this organisation will be able to sustain in the market for longer period of time. If
proper competitive position is attained by the management of organisation than market share will
be automatically increased(Dana, 2012). Management of the organisation will be able to make
better plans for improving and enhancing its strength in the best possible manner. For analysing
the competitive forces management of Marks and Spencer can make use of Porters five force
model. This model will be used to achieve proper competitive position in the fashion industry.
Porters five force model for Marks and Spencer is discussed below-
Threat of new entrants- The threat regarding new entrant is low for the organisation
because entering in such type of industry generally requires huge investment. It is tough for the
new entrants to sustain in the market for longer period of time(Verbeke, 2013). But it is quite
essential for M&S to make necessary changes in its working structure, so that threat from new
competitors can be decreased. This can be done by providing various discount offers to the
potential customers. After performing such activity it would be difficult for new entrants to
match the efficiency level of M&S, so organisation does not have much threat from the new
entrants in the market.
Threat of substitutes- M&S faces high threat from its substitutes because of large
number of competitors available. There are high chances for the organisation than its customer's
can shift from one brand to another. The designs of M&S can also be easily copied by its
competitors(Déri, 2013). Due to this customer's might prefer buying clothes from some other
brans as they will be available at low cost. To overcome this problem management of Marks and
Spencer can make use of innovative plans, so that customer's can be retained in the best possible
manner(Teece, 2010). Examples: X new organization is entering into the market with new
innovative product in the market and is financially strong. So it can be big threat for Mark
Spencer as they can capture huge market ratio with new creative product.
Bargaining power of buyer- The bargaining power of M&S buyers is very high because
organisation has ever demanding customer's. Buyers of M&S wants best offers at minimum
price. If the organisation is able to make plans according to the needs buyers than its profitability
will be directly increased within limited period of time. The customer's of Marks and Spencer are

price sensitive, so management of the organisation needs to decide the price of its products
according to the paying capacity of its buyer. Whereas if organisation is unable to do this than I
would be difficult for the organisation to sustain in the market for longer period of time.
Example: If in case Mark Spencer is charging high prices for the same product which is
available in the market then buyers can force the organization to lower the prices of the product.
It is because degree of power is more in the hands of customers.
Bargaining power of suppliers- The bargaining power of supplier of M&S is not very
high. This is because organisation has various options to through which raw materials can be
collected. Marks and Spencer is one of the biggest fashion retailer of UK, so the organisation has
wide range of options available for supplying its goods and services to the final customer's. Due
to this organisation is able to conduct its business in the best possible manner(Grandori, 2012).
The supplier of M&S generally do not have much power of negotiating regarding the price of the
product. Bargaining power can be increased by taking necessary changes in the supply chain
management of the organisation. Example: X supplier are few in number in order to supply raw
material to Mark Spencer. There is less option for the company as switching cost will not vary in
prices because number of distributor is less. So Mark Spencer has to pay the amount asked by the
supplier weather cost is high or low in the market. In this supplier exploit consumers and gain
huge profits.
Industry rivalry- The competition in this type of industry is very high due to this
organisation has high risk of suffering loss from the market. There are large number of
organisations which are operating its business in the same industry. It is very much necessary for
the organisation to properly analyse the strategies of its competitors, so that management knows
what is to be done for achieving the desired goals and target. If the organisation wants to give
tough competition to the competitors than prices of the products and services can be decreased.
As by doing this competition level can be maintained and satisfaction level of the customer's will
also be increased. Example: Mark Spencer needs to come with innovative product in the market
so that firm can set standards for other competitors.
With the help of this model management of the organisation will know what is to be done
to achieve a desirable position in the market. In order to sustain in the market for longer period
of time M&S can take help from the its research department(Kalinina, 2016). As with the help
of such analysis accurate results can be drawn for deciding the future course of action.

TASK 4
P4 Apply range of theories and concepts and devise strategic planning for the organisation.
Marks and Spencer can make use of various theories and concepts for increasing and
enhancing its business in the best possible manner. Ansoff matrix can be used for make the
customer's aware about the products and services of the organisation. With the help of this Mark
and Spencer will also be able to increase the market share in the systematic and coordinated
manner. This model is basically divided into four parts the explanation of each part is briefly
mentioned below-
Market penetration- The competition is fashion industry is very high, so it is essential
for the organisation to create a positive image in the market. This strategy can be applied by
decreasing the price of products in the particular market to attract large number of customer's.
After some period of time price can be increased according to the condition of the market.
Manager of M&S can apply this strategy by analysing the pricing policy of its competitors and
promotional campaigns can be launched(McDONALD, 2016).
Market development – The major focus of this strategy is to attract more and more
customer's, so that organisation can grow in the market. This can be done by introducing various
discounts offers to the customer's. Proper market development strategies will help the
organisation in sustaining in the market for longer period.
Product development- It is concerned with making some desirable changes in the
existing product. Development in the product is basically done for capturing large market share.
Necessary changes in the product can also be done by M&S for increasing the brand image in the
market.
Diversification- It is concerned with introducing a new product in the new market. This
means diversifying the product line to increase the satisfaction level of customer's. Management
of M&S can perform its strategy by encouraging its employee's to take part in the decision
making process. As they will be able to provide better ideas for enhancing the business.
Marks and Spencer can make use of the product development strategy for growing in the
market. Some changes in the existing product can be made according to the preferences of the
customer's. Price of the existing product can also be decided according to the paying capabilities
of the customer's(Menet, 2016). Organisation can also introduce a new strategic management
plan for growing in the market. Such plan is briefly discussed below-

Aim- One of the major aim of Marks and Spencer is to expand its business in various
parts of the world.
Vision- Vision of Marks and Spencer is to capture large market share and to provide
maximum satisfaction to the potential customer's.
Mission Statement- Marks and Spencer focuses on providing good quality products to
its customer's. This can be done by using latest techniques and plans for increasing the
satisfaction level.
Values- Organisation believes in conducting its business operations in the ethical and
transparent manner(Murthy, 2012).
Goals and objectives- The major goal of the organisation is to maintain trust of its
customer's. Organisation will also focus on using latest tools and technologies for producing
good quality products.
Strategies and tactics- Marks and Spencer will make use of market penetration strategy
for increasing the profitability. This can be done by using various promotional strategies and also
be providing products at discount rates(Sarsby, 2016).
RECOMMENDATION
It is recommended that SWOT analysis is done so that strengths, weaknesses,
opportunities and threats can be examined properly before entering into new market. Firm
should conduct macro environment in the competitive market place so that effective tactics can
be make to grow business in the international market. Porter's five force model is used so that
degree of power can be examined as according business product can be launched so that it can
sustain and grow in the market. Organization is using certain models so that business can
survive in the cut throat competitive world as well as emerging needs of the customers can be
meet on time.
CONCLUSION
From the above given report it has been concluded that if the organisation is unable to
make plans and strategies for the business than long and short term goals will not be easily
achievable for the organisation. Internal and external environment of the organisation can be
controlled with the help of proper formulation of business strategies. PESTEL and SWOT
analysis can be used by the organisation for making better plans for the future course of action.

Whereas Porters five force analysis will help in attaining the competitive advantage in the best
possible manner. The goals and objectives of the organisation will also be achieved in the
effective and efficient manner. If firm uses Porter's five force model then organization can
calculate the degree of power and accordingly plan to come up with new product in the market.
Some of the models are used so that effective marketing strategies can be framed in order to
meet the desired goals on time.