Business Strategy Report: M&S External & Internal Environment Analysis

This report provides a comprehensive analysis of Marks & Spencer's (M&S) business strategy, examining its external and internal environments. The analysis begins with an introduction to M&S, its vision, mission, and objectives. It then delves into the macro environment using PESTLE analysis, evaluating political, economic, social, technological, legal, and environmental factors and their impact on M&S. The report also utilizes the Ansoff matrix to assess strategic options. The internal environment is evaluated through SWOT analysis and McKinsey's 7S model, assessing strengths, weaknesses, opportunities, and threats, as well as the organization's structure, systems, and skills. Furthermore, the report applies Porter's Five Forces model to assess competitive forces within the market. The report concludes with a strategic plan, including tangible and tactical strategic priorities and objectives. The report offers a detailed competitive analysis based on strategic directions, tactical actions, and objectives.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
P1 Analysing impact of macro environment on a organisation and its impact on strategies of a
organisation............................................................................................................................4
M1 Analysis of macro environment in determine strategic management decisions..............8
TASK 2............................................................................................................................................8
P2 Analysing internal environment & capabilities of a organisation ....................................8
VRIO ...................................................................................................................................12
M2 Critical evaluation of internal environment for assessment strength & weakness of a
organisation internal structure, capabilities and skills..........................................................13
TASK 3..........................................................................................................................................13
P3 Application of Porter's five force model or evaluation of competitive forces in a present
market sector........................................................................................................................13
M3 Appropriate strategies for improvement of competitive edge & position in market based
on outcomes..........................................................................................................................15
TASK 4..........................................................................................................................................16
P4 Applying concepts Theories for preparation of a strategic plan in a particular organisation
..............................................................................................................................................16
M4 Strategic management plan having tangible & tactical strategic priorities & objectives22
D1 Competitive analysis based on strategic directions, tactical actions & objectives. .......23
CONCLUSION..............................................................................................................................24
REFERENCE.................................................................................................................................25

INTRODUCTION
Business strategy plays a very important part in every organisation and is helping in
achievement of overall objectives which have been laid down in a organisation. This is
sometimes denoted as a master plan which is implemented by a individual so that competitive
edge can be gained in market (Buckley, Burton and Mirza, , 2016). This report is based on M&S
which is a UK based manufactures and retailer at same time and deals in categories such as
clothes, food items and other home furnishing products. M&S was This report is based on
various different aspects which are related with how organisation is making decision in concern
with strategies of business. There is analysis which is of external environment and internal
environment. Different models & theories are applied so that a strategic business plan can be
created for achievement of overall objectives in a business.

TASK 1
P1 Analysing impact of macro environment on a organisation and its impact on strategies of a
organisation
Overview: M&S is a UK retailer brand. This organisation was founded ion 1884 by
Thomas Spencer & Michael Marks. This company is dealing in high quality products of different
categories such as clothing, food or home segment. They are presently having 900 stores in
market of UK. They provide huge competition to other similar companies dealing in same
segment of products.
Vision: M&S has a vision of providing high quality products to their customers. This will
lead to having a large base of customers which will pose a positive impact on this brand.
Mission: In M&S mission of this brand is to become one of highest retailer in UK.
Objective: M&S has a objective of becoming leader in food & clothing industry. This
will help them in becoming a globally well known brand. This will also help in building up of
competitive advantage. Presently M&S is focussing on increasing their market share by a rise of
15% in coming quarter of year 2020.
PESTLE analysis
This is a framework which is applied by organisations as a strategic tool so that they can
understand the various factors which are prevailing in external environment.

Political factors: This is a factor which is concerned with different regulations such as
stability, taxation etc. UK is a country which is affected by stability of various laws formed by
government of their country.
Positive Impact: If there is a stability in political condition of UK then it will lead to stable
regulations, laws and legislations which will lead to stability in functions of M&S.
Negative Impact: If a organisation is willing to make expanse in a new market then there are
many sustainability issues which can pose a negative impact on management of M&S.
Economic factors: These factors are related with different factors such as interest rate,
GDP, inflation rates and purchasing power posses by citizens of a country (Burlton, 2015).
These factors determine level of sales of a organisation.
Positive Impact: M&S considers all the policies which have been developed by concerned
authorities and as these can pose a impact on prices, demand & revenue.
Negative Impact:Overall market share of M&S might get affected by various changes which are
taking place in overall economic system and affects whole profitability of organisation.
Illustration 1: Pestle
analysis

Social factors: These are factors which are in concern with social factors such as
attitude, opinion and belief (Chen, Eshleman, and Soileau, 2016). UK is a county where people
posses a broad mindset and this is related with their purchasing habits as they are preferring
advanced product with less consideration given to prices.
Positive Impact: Individuals of UK posses a preference for western clothes which is helping
M&S in increasing their profitability by launching variety in such products.
Negative Impact: Many times M&S is not considering and making product according to their
customer requirement this affects overall profitability of this company.
Technological factors: UK is a country where citizens are involved in usage of digital
technology and sources of Internet which is helping them in smooth running of daily business
functions.
Positive Impact:Different competitors in market are posing a positive impact on increasing
goodwill of M&S as, they are having a differentiation edge in terms of quality which provide.
Negative Impact:Many times techniques used by management in M&S may be adopted before
by competitors this can also affect them in a negative manner.
Legal factors: This is also a macro factor in UK in this there are lot of rules & legal
regulations which may have a impact on functioning of a company (Eaton and Kilby, 2015).
Positive Impact:M&S has to take care of all legal factors in a more effective manner so that they
are able top maintain reputation and good will of their brand.
Negative Impact: There are many regulations which may affect process of policy making and
this in turn will have a impact on management and overall performance of M&S.
Environmental factors: This is a factor which is related with external environment in
which business is functioning.
Positive Impact: M&S has made policies so that they can control any hazardous emission hich
they are making in their manufacturing process.
Negative Impact: There are many excess cost which M&S has to incur on policies made with
concern for environment which has negative impact on profitability of this brand.

Ansoff's matrix
Ansoff matrix is a strategic tool which is related with how companies are planning to
adopt a right strategy for achievement of success in their laid objectives.
Illustration 2: Ans off Matrix

 Product development: In this strategy company is making efforts to introduce or launch
their product in external market which can help them in attracting more customers. Market development:In This exiting products are offered to a new segment of customers.
In M&S efforts are being made to provide services which can help in increasing market
share. Market penetration: This strategy is helping M&S in achievement of high share of
market by existing product only and there is no new launches which will be done by
company In case of this strategy (Grayson. and Hodges, 2017).
 Diversification:This is one of strategy with maximum amount of risk. In this strategy
both products and market are new which leads to presence of high risk for M&S.
From above discussion it can be conclude that for M&S best course of strategy according
to present situation is market operations as this will be benefiting them in increasing their market
share and there is no extra cost which has to be incurred in launching of a new product.
Stakeholder mapping:
It is define as the visual procedure of laying out all the stakeholders of project, idea and
product into the one map. The advantage of stakeholder map is to get a representation visually of
all the individuals who can impact a project & connected with it. Moreover, it also help an entity
to gain an insight about the stakeholders of company.

Stakeholder analysis: There are two types of stakeholders in a organisation primary
stakeholders and secondary stakeholders. Primary stakeholder are those that are involved in
economic transactions. In context of M&S these stakeholders are customers, shareholders,
suppliers, investors, creditors, employees and investors.
For M&S this is of crucial interest as customers are the ones who are part of high power and
highly interested.
Secondary stakeholders are those that are part of external interested parties and are outside the
organisation., these stakeholder are not participating directly in economic activities of
organisation. Example of these stakeholders of M&S who are part of secondary activities include
communities, media, tare unions, government, competitors like Tesco, sainsbury, Morrisons for
M&S and finally the activists who play a very crucial role in affecting the way organisation are
functioning.
M1 Analysis of macro environment in determine strategic management decisions
Macro environment plays a very important part as this is helping in making a detailed
analysis of all threats and opportunities which are present externally and has a impact both in
positive and negative manner (socialHiggins, Omer and Phillips, 2015). Such type of analysis is
very helpful in making strategies which can reduced negative impact of such threats and positive
impact can be maximized in terms of availing profitable opportunities.
TASK 2
P2 Analysing internal environment & capabilities of a organisation
SWOT
This is a tool which is helping companies in analysing strength, weakness of company.
This is also helping in understanding various threats & opportunities available with company.

Strength Weakness
There is a established brand image of M&S in
having a differentiation advantage (Lehmann,
2016). This is helpful in achieving increased
sales for this brand.
People in UK posses a mentality that M&S has
a range of products which are outdated and not
according to latest fashion this leads to a
negative impact on brand image of M&S.
Opportunities Threat
M&S has a opportunity as they can increase
their marketing & promotional activities
which might lead to increase in overall sales of
this brand.
There is constant changes taking place in the
external environment such as events such as
BREXIT which posses a negative impact on
overall internal functioning of M&S.
Illustration 3: SWOT
Analysis

McKinsey's 7S model
Mckinsey's model is a tool which is used by organisation so that they are able to examine
the overall designed of organisation. There are seven components which are a part of this model
and which are assisting M&S in achievement of their objectives.
Strategy: This is a plan which is developed by a organisation so that they are able to
achieve a competitive advantage in market (Linder and Williander, 2017). In M&S timely
strategies are formed which is helping them in increasing their overall customer segment.
Illustration 4: Mckinsey 7s Model

Structure: This is defining way of organisation and its divided which has to be organised
and managed. In M&S there is requirement of a proper structure which can help them in sharing
of information which is critical in overall functioning of organisation.
Systems: This is the process of organisation in which there is a relation with the decision
making process of organisation (Marx, 2015). Effective system has to be maintained in M&S so
that all major functions are taking place in a appropriate manner.
Skills: This is related with the competence & potential of working staff in a organisation.
In M&S It is very important that the company is able to hire and retain a competent working staff
which in turn will help in achievement of laid objectives by top management of organisation.
Style: this is related with way in which organisation is controlled by top authorities. In
M&S there us participative style which has been adopted by organisation (Moseley III, 2017).
This is helping them to motivate their employees and have their view in process of decision
making.
Staff: This is a factor which is having association with employees who are working in
M&S. They are motivated and their morale is increased so that they can provide their maximum
contribution for this company (Parnell, 2016).
Shared values: This is last element of this model which is dealing with various norms
which is providing guidance to M&S and is helping in sharing of opinion with their overall staff
members.