Business Strategy Report: M&S Analysis and Strategic Recommendations

This report offers a comprehensive analysis of Mark and Spencer's (M&S) business strategy, commencing with an introduction to business strategy and its significance. The report delves into M&S's external environment using PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors impacting the company. An internal organizational audit is then conducted utilizing SWOT analysis to identify M&S's strengths, weaknesses, opportunities, and threats. Further strategic tools are applied, including VRIO analysis, McKinsey's 7S model, Porter's Five Forces, and the Ansoff Matrix, to assess strategic capabilities and competitive forces. The report then explores Porter's generic strategies and Bowman's strategy clock, recommending growth strategies and culminating in the development of a strategic management plan and competitor analysis. The analysis provides a thorough understanding of M&S's strategic position and offers valuable insights into its business operations and future prospects.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
Activity 1.........................................................................................................................................1
1.1 Environmental Analysis- PESTLE.......................................................................................1
1.2 Organisational Audit – SWOT .............................................................................................4
Activity 2.........................................................................................................................................6
2.1 Analysis of strategic capabilities – VRIO.............................................................................6
2.2 McKinsey's 7S model............................................................................................................7
Activity 3.........................................................................................................................................8
3.1 Porter's Five Force Model.....................................................................................................8
3.2 Ansoff Matrix .....................................................................................................................10
Activity 4 ......................................................................................................................................11
4.1 Porter's generic strategies and Bowman's strategy clock....................................................11
4.2 Recommend growth strategies............................................................................................12
4.3 Produce a Strategic Management Plan................................................................................13
4.4 Competitor analysis.............................................................................................................14
CONCLUSION .............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Business strategy is a roadmap and long term actionable direction which states how an
organisation accomplish its pre determine goal or objective within prescribed time limit. With
the increase in competition between companies or within industry, it has been analysed that
business strategy plays a vital role. This is because it enable an organisation to identify existing
or upcoming trend or demand and based on that it assist firm to maker corrective course of action
which lead them to attain sustainable profitability in a better way (Ajagbe and others, 2016).
Moreover, business strategy mainly focusses on capitalising the strength of the business and
using the same as a competitive advantage in order to position the brand within business
environment in an efficacious mode. Apart from this, it is a part of business plan which defines
the goal and strategies as well as direct the company for achieving the same in an improved way
within stipulated time frame. Additionally, business strategy is considered as major area in
retaining the existing customer as well as empower the establishment to attract new range of
population towards the brand by adopting innovative technologies or novel ideas for maximising
the profit in an amended manner.
In regard of this report, Mark and Spencer has been considered which is one of the
leading and reputed company among UK retail industry and it is commenced in the year of 1884.
It offers a wide range of products like clothing, home products, food items across the globe in a
better and high quality that help them to survive in competing marketplace for a longer period of
time in an amended mode. In this study, it involves the application of PESTLE and SWOT
analysis for examining the external and internal business environment respectively. Furthermore,
implication of Porter's model help organisation to analyse its competitive force among industry.
Finally, development of strategic plan lead a firm to obtain its profit maximisation with an
optimal utilisation of resources in a better mode.
Activity 1
1.1 Environmental Analysis- PESTLE
PESTLE analysis is most widely used strategic planning tool or framework whose main
intent is to seek and analyse the external macro environment that impact organisation decision
making process in order to gain competitive advantage as well as sustainable profitability ratio.
Along with this, conducting PESTLE analysis within business functional areas enable a specific
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establishment to visualise its various factors such as political, economical, social, technological,
legal, environmental for framing better decision that lead firm to acquire best positioning among
present industry in an amended way (Chang and Tsai, 2016). Due to an intense level of rivalries
between firms, it challenge Mark and Spencer to implement best action for attaining amended
way of profit margin in a desired time period. Therefore, company makes an attempt to acquire
the PESTLE analysis in its business function that assist them to examine its capability,
opportunity and threat and also help them to take corrective course of action by improving the
brand image in a better mode. The implication of PESTLE tool in M&S are discussed below:
Political: Under this factor, it signifies how and to what degree government interfere in
the economy. Some of its elements are political stability, foreign trade policy, government
policy, trade restriction and so on. However, in UK, an introduction of Brexit which means
withdrawal of UK from European Union effect heavily over retailing sector in terms of
productivity and profitability. In context of Mark and Spencer, Brexit impact negatively over its
brand image as it generate several modification or alteration in each and every employment
regulation as well as impact its sales performance because EU was the key source for M&S sales
growth. Therefore, Mark and Spencer takes an initiative to determine its current growth scenario
in UK market that help them to take corrective course of action by acquiring the benefit from
EC's free trade agreement by receiving goods or services form other countries in cheaper rates
compare to M&S higher cost structure (Demuijnck, 2015). Due to this action, it assist them to
decrease its sourcing cost which attract large number of population towards its brand image and
reflects in enhancement of company's volume of sales. Additionally, the political stability of UK
help M&S to cope up with emerging modification in government policies in a better manner that
strengthen its productivity and sustainability among UK marketplace.
Economical: In this phase, it states that how an organisation does its business and how
profitable they are in particular market for accomplishing its business goal in an amended way.
For e.g. economic growth, interest rate, exchange rates, disposable income of consumers and
many more. Hence, in the few years back, there was an huge recession took place which totally
hampered the business cycle of UK retail industry that challenged negatively on M&S
productivity ratio. However, in order to overcome this negative impact, Mark and Spencer
acquires the modified tax and interest rate which lead them to deliver the product in lower cost
that help firm to capture the attention of wide range of population towards their brand during
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recession period. Along with this, fulfilling the policies or legislation of government, aid
organisation to accomplish its strategy i.e. being an international, multi-channel retailer and
reduce the dependency on UK economic cycle.
Social: It is the element which is concerned with shared belief and attitudes of the
targeted population. Some of its components are population growth, age distribution,
demographic factor, customer taste and preference and etc. that directly influence over its
decision making process. In case of UK, there was a huge demand among population regarding
trendy and fashionable clothes which threaten Mark and Spencer's profitability within existing
marketplace. Therefore, company makes an effort to examine the current trend or demand among
UK individuals and according to that they produce trendy and fashionable clothes in a affordable
price which strengthen its sales performance in an amended manner (Fletcher, De Massis and
Nordqvist, 2016). Along with this, another demand among customer is about company's CSR
activities that influence negatively Mark and Spencer decision making potentiality. However,
M&S carries out various CSR activities like donates returned clothes to charity New Life who
funds medical research and awareness campaigns for disabled and terminally ill children and
many more. With the help of such initiation, Mark and Spencer is able to acquire best brand
position within competing retail industry in an improved manner.
Technological: In this factor it is relate with innovative or latest technology, novel ideas,
advanced techniques and many more which contains huge impact over organisation profit
margin. In regard of Mark and Spencer, it has a strong presence in social media platform and
online which lead them to serve their products or service across the globe in a modern style.
However, there was a recent trend among UK population i.e. mobile commerce and online
retailing to in-store purchases which hinder M&S to capitalise its avenue within competing
industry. Therefore, to tackle over obstacle Mark and Spencer make an effort to build up its
online presence more effective by developing application for online shopping i.e. Mark and
Spencer mobile commerce website in which customer can find around 24,000 products of all
segments like clothing, food or home products and etc. (MARKS & SPENCER MOBILE
COMMERCE, 2019). Due to such formulation, M&S is able to strengthen its digital medium in
order to acquire full advantage within competing marketplace.
Legal: In this component, it is concern with those aspects which is related to government
legislation, rules, regulation, policies and so on and each of them has strong influence over
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organisation's capability in obtaining sustainable profitability. However, due to Brexit, M&S
undergoes with several threats that directly effected its productivity and reputation among
competitors in UK retail industry. One of the major difficulty which Mark and Spencer faced due
to modification in government policies is that it find obstacle in processing its omni channel
experience to customer i.e. a service of home delivery and in store pick up. Therefore, company
implements best strategic decision in terms of strengthening the overall performance of its sales
activities that lead them to do optimal utilisation of resources for obtaining profit maximisation
in an effective and efficient manner (Geissdoerfer, Bocken and Hultink, 2016). However, the
biggest advantage which Mark and Spencer acquires is that it is very sensitive in following all
legal requirements that help them to reduce the invention of government within its business
function and it improves its brand image in UK retail market.
Environmental: Under this, it is related to saving or preventing environment from all sort
of pollution by developing ozone-friendly product which effect establishment goodwill and
proficiency ratio. IN regard of M&S, it undergoes with a challenge from UK population as there
was a huge demand about environmentally product or way to control pollution from surrounding
which impact negatively over its potentiality in acquiring competitive advantage. Therefore,
Mark and Spencer takes an attempt to design environmental friendly application i.e. Greenpeace
whose key intent is to take out the toxic chemical form the production process. With the
implication of such initiation, it enhance its market share or size as well as help them to gain
competitive advantage in an innovative and creative style without any hindrances within
prescribed time frame.
Henceforth, the above explained PESTLE analysis help Mark and Spencer to examine its
existing or upcoming trend or demand and also empower them to take corrective course of action
in order to obtain sustainable profitability as well as aid company to acquire best position within
UK retail industry.
1.2 Organisational Audit – SWOT
In order to survive among competing marketplace, an effective and productive business
environment assist them to accomplish its desired goal or objective in an effective way.
However, SWOT analysis is one of the integral component which aid an establishment to
improve its overall performance in an amended manner (Gonzalez, Rodriguez and Sossa, 2017).
SWOT analysis is an instrumental framework which assist a concern to identify its strength or
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potentiality in order to make use of all opportunities and also to cope up with all emerging threat
in an innovative and effective way . Therefore, to gain competitive advantage, Mark and Spencer
utilise this analysis within its functional area for strengthening firm's productivity which is
described below:
Strength
 Mark and Spencer has high recognition of brand within UK retail industry as it contain
wide range of products which helps them to capture the attention of large number
population that enrich M&S brand image in competing market in an innovative and
creative style. The another advantage which Mark and Spencer contains that it has a strong focus on
enhancing customer experience as well as company operate its business operation in
multichannel presence i.e. brick and mortar as well as online stores where customers
from across the world shop and acquire increased level of satisfaction in a better way.
Weakness
 The major drawback of Mark and Spencer is that it is heavily reliant on British suppliers
which limits its market size and share whereas its competitors make use of foreign
suppliers for low cost product. This impact directly over its productivity within UK retail
industry. In compare to its competitors, Mark and Spencer do not offer discounts sales during
festivals like Christmas and Ester which reduces its sales performance as well as decrease
the consumer buying behaviour.
Opportunity In retail industry, fashion segment is evolving new trend or ideas that render huge
opportunity for Mark and Spencer to position its brand image in a best position.
However, as per the recent evaluation about taste or preference of customer in terms of
trendy clothes, it has been examined that there is huge demand among UK population
regarding ethnic and traditional wear which paves the way for M&S to enlarge its market
size or share in an improved manner. However, utilising this growth platform in an
optimal manner, Mark and Spencer can improve its overall performance and also can
increase its proficiency ratio in an innovative and creative way.
Threat
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 The industry where Mark and Spencer operates contains intense level of competition or
rivalry that challenge company in acquiring high level of profit margin in stipulated
period of time. Some of the main competitors of M&S are Uniqlo, Gap, Tommy Hilfiger,
Zara, United Colors of Benetton and many more. However, adoption of appropriate
technique enable Mark and Spencer to accomplish its business objective in an effective
and effective way within prescribed period of time without any obstacle.
Therefore, the preceding explained SWOT analysis assist Mark and Spencer to examine
its strength or potentiality which aid firm to make best strategic decision in order to obtain profit
maximisation in an amended mode.
Activity 2
2.1 Analysis of strategic capabilities – VRIO
VRIO framework is considered as one of the strategic analysis tool which enable an
establishment to protect the available resource and capabilities for future purpose that render
them long term competitive advantage in an innovative and creative style (Haans, Pieters and He,
2016). However, for enhancing the internal capabilities Mark and Spencer adopts VRIO analysis
within its business function that is given below:
Valuable: This aspect is concern with if an existing resource add value to organisation by
enabling business function to exploit opportunities as well as cope up with threat in an improved
manner. These resources are also considered as valuable for the establishment, if they improves
the perceived value of the customers. A regular review and monitoring of these resources is
essential for Mark & Spencer as continuous changes in micro and macro environment can
decrease the value of them and lead the selected organization to competitive disadvantages.
Rare: Rare resources are those which are available or acquired by very few companies
due to the lack of that resource and high prices. The organizations which have precious and rare
resources can take some competitive advantages over the market (Hill, 2017). The competitive
advantages provided by rare resources for Mark & Spencer is temporary or for short time as the
competitors can simulate the resources quickly.
Inimitable: Business resources may be hard to imitate if they are protected by legal terms
or extremely expensive such as copyrights, trademarks or patents. The resources are considered
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more precious and provide competitive advantages if they are valuable, rare and costly to imitate.
In case of Mark & Spencer quality of the products is a resource that is difficult to imitate
Organised: All the resources which are valuable, rare and hard to simulate can provide
high competitive advantages only if they are well organised to capture organizational values by
supporting the structures, cultures and procedures (Holliman and Rowley, 2014). The M&S is
only capable to achieve long sustained competitive benefits if it exploit its rare and valuable
resources.
Resources Valuable Rare Inimitable Organised Competitive
Implications
Brand Reputation Yes Yes Yes Yes Sustained Competitive
Store Location Yes Yes No No Temporary Competitive
Quality of Goods Yes Yes Yes Yes Sustained Competitive
Multi-channel Yes Yes No No Temporary Competitive
Innovative products Yes Yes Yes Yes Sustained Competitive
2.2 McKinsey's 7S model
McKinsey's 7S model is an analytical tool which claims that every organization has some
hard and soft internal components which are utilized for evaluating organisational effectiveness.
These soft and hard internal components affect business culture, governance and structure and
bestow to business activities and confirms success. These elements are elaborated as below:
Soft Elements:
Skills: This element is considered as quality or capability that performed by an employee
with adequate and right strength with purpose to amend an individual efficiency and
effectiveness which are demanded by Mark & Spencer to achieve professionalism needed to
meet global standards.
Style: Differences in culture and climate has been reduced with usage of specific style in
developing work based culture, leadership, environment and behaviour in this leading entity to
have morale or visionary lessons to other organizations.
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Staff: This element majorly talks about hired people with purpose to accomplish self or
business goals in business organisation, either intention to earn or build up their own career (Lee,
Cho and Kim, 2015).
Shared Values: Values such as business sustainability, ethical power and fair practices
are necessary to conduct business functioning in well-structured way or manner. These values
are shared to combine the objectives and achieve an overall outcome.
Hard Elements:
Structure: In context with Mark & Spencer, structure elements of McKinsey model lead
business positively towards world wide expansion to nation such as Mozambique, Australia,
Canada, Gabon, etc. and enhances its structure, size and strategic planning.
Strategy: Various kind of strategies such as marketing, research and development,
product development, etc. helps in planning, which the respective organization develops to
achieve long term business competition & advantage and also successfully compete with
competitors (Lipitakis and Phillips, 2016).
System: This are structured process and check out procedures of any business entity,
which have control on business activities on regular basis and which also facilitates how decision
will be made or implemented for organisational benefits.
Activity 3
3.1 Porter's Five Force Model
Porter's five forces model is the that helps the business in identifying and analysing their
strength and weaknesses in comparison to their competitors. This theory was commenced in
regard to determine the attractiveness and intensity of the firm within the market. Through the
implementation of porters five forces model it can easily understood that where does the firm lies
in the competitive market and what is its position (Massa, Tucci and Afuah, 2017). This also
provides certain amount of benefits to the business by determining all the factors which are
affecting the firms profitability and its market situation. Below mentioned are the core five
components that are to be taken into consideration in order to determine the firm competitive
strength.
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Threat of substitute: Every brand has its own substitute products exist in market, it rises
the likelihood of consumers as they shift towards alternative product in response to price
increases. Due to this, it decreases both the power of suppliers as well as attractiveness of
market. In terms of Mark and Spencer, its threat of substitute is relatively high because of
existence of several brand within retail industry. However, company need to pursue continuous
innovation as it aid them to keep its brand in best position and also
Threat of new entrants: The position of an organization in the market can be affected by
the ability of new people or organizations to enter into the market. This ability can be analysed
by evaluating certain factors such as cost of entering into the business, regulations in the
industry, growth of the market, etc. In case of M&S, retail industry needs a huge investment into
the business setup and there are already a big competition into the industry but process of
entering and conducting business is pretty easy hence the threat of new entrants is moderate.
Bargaining power of supplier: Bargaining power of suppliers is also a considerable
factor in analysing competitive market. The number of suppliers in the market, uniqueness of
their products and services, switching cost of suppliers, etc. (Parnell, Spillan and Mensah, 2014).
are the factors that can affect the consistency of suppliers to increase or change the prices. In the
retailing business, there are numerous suppliers of the products and raw materials are available in
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the market and switching cost is cheap for Mark & Spencer so suppliers' bargaining capacity is
low in the market.
Bargaining power of buyer: Bargaining power of customers or buyers can decrease the
prices of the products and services and reduce the profit margin of the organization. It totally
depends on number of buyers, size of the orders, switching cost or cost of substitutes, strength of
the customers to dictate terms, etc. Mark & Spencer is conducting its business since 1884 hence
it has a loyal customer base and lots of customers to buy its products but cost of competitors'
products are also cheap so it can be considered that buyer bargaining power is moderate.
Rivalry among competitors: Strengths and number of the competitors in the market also
affect the business. Competitiveness of those firms can be evaluated by the quality of their
products and services, their technology, promotional strategies, etc. High number of competitors
forces to aggressive price cuts. There are so many retail companies in UK that provides good
quality products in UK market which are competition for M&S such as Gap, Tommy Hilfiger,
etc. and rivalry among these firms are very high (Wu and others, 2014).
3.2 Ansoff Matrix
Ansoff matrix which is also known as product-market matrix is a model or framework
that is used for planning the marketing strategies and looking for organizational income growth
by developing or introducing new products or services into the new or existing marketplace. This
model is utilized to analyse organizational opportunities to accelerate sales volume by opting out
alternative combinations. The four strategies described by this model are as shown:
Market penetration strategy: Market penetration strategy of this model analyse the scope
of growth with the existing business offerings in the existing marketplace. This method develops
plan for penetrate the market with more developed and advance products (Peake, Davis and Cox,
2015). For Mark & Spencer, this segment is helpful in developing strategies for development of
new products and focus on current UK retail market.
Product development strategy: Product development strategies are utilized for analysing
the scope of developing new products in the existing market. It evaluate the strategies for
introducing new products to the customers of current market place. Mark & Spencer can develop
technological advancement strategies and new products launching plans with it.
Market development strategy:This strategy is related to expand the current business
offerings into the new potential markets. If the establishments wants to enter into the new
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