Strategic Leadership Report: External Environment of M & Co Company

This report provides a strategic analysis of M & Co, a Scottish clothing brand, examining its external business environment, including PESTEL analysis and Porter's Five Forces. It reviews the organization's strategy, identifies key issues, and proposes strategic developments to address challenges in the competitive clothing industry, particularly in light of increasing online activity. The report analyzes the company's resources, capabilities, and uses tools like the BCG Matrix, Business Model Canvas, VRIN Model and Value Chain Analysis to assess its position and suggest ways to reduce production costs and adapt to changing consumer preferences. The study identifies survival and success factors, explores strategic options, and offers recommendations for sustainable growth and competitive advantage in the face of industry changes and online competition.

Strategic Leadership

Table of Contents
Executive Summary...................................................................................................................2
Introduction................................................................................................................................2
Analysis of the external business environment as faced by the company.................................2
PESTEL Analysis...................................................................................................................2
Porter’s Five Forces................................................................................................................2
Review of the organizations’ strategy........................................................................................4
Issue identification and proposals for strategic development....................................................4

M & Co Cloth Company
Executive Summary
The cloth industry has been facing many challenges in the current period of increase in the
use of the internet. This industry is also characterized by a high level of competition with
some of the major players coping the strategies of the competitors. Apart from this, the
changing needs and wants of the consumer creates challenges for any marketer. This strategic
analysis is one of the important methods for any organization to build competitive advantage.
There are a number of successful clothing brands in the market like H&M, Zara, Primark, but
the recent increase of online activity by the consumers is affecting the sales of these
companies. The review of the case indicates that there are a specific number of the process
followed to provide the type of clothing as required by the consumers. Thus there are high
costs of operations as faced in this industry. Therefore in order to be a survivor, a company
need to strategically reduce its cost of production and continue to change according to the
tastes of the customers.
Introduction
M & Co is a Scottish clothing brand which was established in the year 1834 by Len
McGeoch. The organization deals in products like clothes and homeware products. The
company is one of the major producers of men, women and children garments and has around
300 stores which caters to the needs of its customers. The company has also supplied its
products through online mode where the customers can directly place an order for the
products.
The company has always been a pioneer in making strategic changes in the company based
on the changing external business environment. This has also been one of the contributing
factors towards the sustainability of the business over the last 50 years. Recently there have
been many changes in the industry as faced by the company. These are impacting the
performance of the business in the short and long term.
The purpose of this report is to identify the factors of the external business environment as
faced by M & Co and suggest strategic changes which will help it to grow and sustain in such
a challenging environment.

Analysis of the external business environment as faced by the company.
PESTEL Analysis
The PESTEL analysis of the business environment as faced by M & Co would be as follows:
 Political
 Economic
 Social
 Technological
 Environmental
 Legal
Porter’s Five Forces
The level of competition in any industry is analyzed through the use of Five forces
framework which was proposed by Michael Porter to identify the intensity of various factors
of competition in a market.

 The threat of New Entry
 Bargaining power of the buyers
 Bargaining power of the suppliers
 Threat of substitutes
 Competitive Rivalry
The table below indicates the strength of each of the factors at different stages of life-cycle.
Introduction Growth Maturity Decline
The threat of
new entry
Bargaining
power of buyers
Bargaining
power of
suppliers
Threat of
substitutes
Competitive
Rivalry
Survival and Success Factors
The table below identifies the survival and success factors as faced by the company in the
industry.
What are the wants of the
customers?
What are the survival factors
for the firm?
What are the key success
factors?

Review of the organizations’ strategy
The strategy of an organization can be reviewed through the analysis of its capabilities and
resources and by using the models of Business Model Canvas, VRIN Model and Value Chain
Analysis.
The advent of the internet and computer technologies has increased the number of people
using such technology for their daily activities. For example, more people are now seen using
such technology for making an online purchase.
In response to the external business environment as faced by the company, the company
moved towards providing its products through online mode. If we use the BCG Matrix to
analyze this change, it would be considered as ‘stars'. This is one of the strategic movement,
where the company operates in a high growth market with high market share.
Growth-Share Matrix
However, despite this strategic change, the market share of the company is decreasing as the
competitor companies like Zara, H & M, Primark is capturing a part of the market. Therefore
this matrix does not provide a relevant picture of industry attractiveness.

Review of the resources and capabilities of the company
The resources and capabilities as possessed by M& Co indicate that it has sufficient cash
reserve and financial assets to undertake investment and growth opportunities. For example,
the total assets of the company for the financial year 2018 has been
The status of human resource asset of the company also indicates that the company has the
right, expertise and a team of a knowledgeable professional which can undertake
responsibilities of high performance.
The board of directors and executives of the company also contain a team of professionals
which can lead the organization towards its strategic goals.
Capabilities
The capabilities as possessed by M & Co indicate that the company has the necessary skill
the create fashionable garments which suit the tastes of the customers. The company
continuously upgrades its technologies which helps it to produce quality garments.
Some of the financial ratios of the company indicate that it has been operating at a high-
efficiency level and putting its resources to the best use.
The company also experienced a high staff retention rate in the industry through appropriate
training and development. It provides the company with a staff base which can accomplish its
strategic goals.
The organization also invests heavily in research and development through which it identified
the changing tastes and preferences of the customers. As the fashion trend of the industry
evolves, the company changes its designs and trends.
Resources
Tangible Financial
Physical
Intangible Technology
Reputation
Human Resource
Business Model Canvas

Porter's Value Chain
Issue identification and proposals for strategic development
Organization’s response to the changing macro environment.
Firm’s strategy to explore new markets.
Strategic Options
Conclusion