Business Strategy Report: Analyzing Marks & Spencer's Performance

This report provides a comprehensive analysis of Marks & Spencer's business strategy. It begins with an introduction outlining the company's focus on food, home products, and clothing, and its strategic planning. Task 1 analyzes the macro-environment using PESTLE analysis, examining political, environmental, social, technological, legal, and economic factors influencing the company. Task 2 evaluates the internal environment through SWOT analysis and VRIO analysis, assessing strengths, weaknesses, opportunities, and threats. Task 3 applies Porter's Five Forces model to assess competitive advantages. Task 4 explores strategic management planning. The report concludes with a critique of the information and data, applying environmental and competitive analysis, and provides references.

Business strategy

INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analyse the impact and influence of macro environment in a organisation..........................1
M1 Critically analyse the macro environment to determine and inform strategic management
decisions......................................................................................................................................2
TASK 2............................................................................................................................................3
P2 Evaluation of internal environment in organisation capabilities............................................3
M2 Critically evaluate the internal environment to assess strength and weaknesses..................5
TASK 3............................................................................................................................................5
P3 Porters five forces model........................................................................................................5
M3................................................................................................................................................7
TASK 4............................................................................................................................................8
P4 Strategic management planning.............................................................................................8
M4 Produce a strategic management plan that gives tactical and tangible strategies objectives 9
D1 Critique and interpret information and data applying environmental and competitive
analysis......................................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy refers to a set of competitive actions and behaviours that an
organisation uses to attract many peoples, strengthening the performance of workforce,
compete successfully to achieve to goals of an organisation. It is an internal part of the
organisation so that they strategically plan the task and formulate and implements the
tactics for accomplishing the task effectively and efficiently. Marks and Spencer is one
of the British retail multinational company, headquartered in Westminster, Londen. It is
specialises for selling food products, home products and premium quality clothing. This
project includes the analysis of macro micro environment and its strategy and their
capabilities, structure and skills of an employees and the particular company. Further it
evaluate the porter's five forces model for competitive advantage in the current market
place. And at last it focusing on theories, concepts and model to understand the strategic
directions so that they will earn more profits and revenue(Akter and et. al., 2016).
.
TASK 1
P1 Analyse the impact and influence of macro environment in a organisation
Macro- environment
It refers to that condition that helps in analysing the external environment and the
economy as a whole. It includes the various factor like inflation, gross domestic
product, employment, spending and monetary policy. In context of Marks & Spencer
manager use to analyse the macro environment so they identify the opportunities and
reducing the threats after analysing all the facts and figures related to that. It includes
PESTLE analysis for examine the extrinsic environment that are explained
below(Higgins, Omer and Phillips, 2015).
.
PESTLE Analysis
It refers to that tool that is very helpful in analysing and identifying the macro-
environment factor that affect the overall performance of the organisation. It is especially used to
those company which is expand and grow their business in international level or earn more
profits and revenues. This factor can be examined below.
 Political – The political factor of a country can be affecting the business of a Marks and
Spencer in two ways i.e. positive and negative form. The free trade policy that has been
followed in the country to do a business on global level affects very massively and gives
more benefits to the Marks & Spencer. But due to Brexit occur in the nation UK; affect
their sales in other European countries. And it also affect the role of high tax rate this will
affect the cost of production of an organisation(Woerner and Wixom, 2015).
 Environmental - This factor related to that where a people live and the business operates.
In this every firm need to take precaution in using the resources. They use those
resources that do not harm the environment and the people who live in the society. In
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context of Marks & Spenser, manager must focus on the resources they used because it is
the retail sector where lots of raw materials are used to make a good. For this they need
to be very careful about the natural habits and the effects of an environment. Using
environmental friendly resources helps in earning more profit and growth(Leonidou and
et. al., 2015).
 Social – In today’s environment every customers need, wants, taste and preferences are
different and on the basis of this every company need to be make their products so that
they ensures more sales and market growth. In context of Marks & Spenser, they
manufacture the product offering according to the needs and demand of the today’s
customers and the changing trends in the UK. This helps in grabbing the more new
opportunities in the new market.
 Technical - Using advanced technology helps in earning more revenues with large
market share. In current market trend use of online marketing is very fashionable. In
context of Marks & Spenser, manager use various promotional techniques i.e. social
media, online website and their official company portal to promote their product in front
of large audience.
 Legal – In context of Marks & Spencer, they use health and safety act and equality act to
protect the right of every customer as well as every working employee so that they
achieve their targets on time with productive results and ensure and manage the customer
loyalty by using health and safety act.
 Economical – This type of factor affect the overall economy and the business in a
particular country. Marks & Spenser is one of the best retail sector in UK, and the
changes and any fluctuation done in the tax rate and interest rate affect the overall
business activities. For this they purchase their raw material from another country to buy
it on low cast and by this their cost of production are also lower. This helps in earning
more and more profits and increasing the sales of the organisation(Martinez-Simarro,
Devece and Llopis-Albert, 2015).
M1 Critically analyse the macro environment to determine and inform strategic management
decisions
From the above mentioned criteria of external in which Marks and Spenser use PESTLE
Analysis to know and determine the facts and figures on the basis of which they do their
business activities. From this they examine the opportunities and finds the solution to
reducing the threats from using this six factors. It also assists in generating more sales and
revenues in the current market place.
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TASK 2
P2 Evaluation of internal environment in organisation capabilities
SWOT Analysis
It refers to a strategic plan that is made up to analyse the internal factors of a company. It
includes four quadrants i.e. strength, weakness, opportunities and threats. In context of Marks &
Spencer, manager used this tool to examine the situation in a current business environment that
are as follows.
Strength Weaknesses
 Strong brand portfolio
 Good and better cash flow
 Need more investment in new
technology
 Planning for budget and financial
resources cannot be done properly and
efficiently.
Opportunities Threats
 Low inflation rate
 Internationalisation
 Maximum competition
 Laws follows in different countries
 Strength – It refers to a internal factor that a manager of Marks and Spencer can use to
know the company image and their financial condition that will help in longer survival of
the organisation in the market place. It helps in build and enhances the business in future.
o Strong brand portfolio- The brand image of the Marks & Spenser ensures the
profits for long term and this also assists in making a new product categories and
selling it to a customer with increasing brand loyalty.
o Strong cash flow- It assists in manufacturing the more and more products
according to the demands of the customer. In Marks & Spenser they follow a
proper cash flow and make a records of it so that they easily get the resources on
the time and expand and explore it into the new projects(Soltanizadeh and et. al.,
2016). Weaknesses – It is the internal part of the business environment where a company can
reduce the risk and resolve the arising problem that will create for loosing the profits and
growth.
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o Need more investment in installing new technology- The biggest challenge that
was faced by the manager of a company is that for using advanced techniques to
expand and improve the productivity of an employees they need to install the new
technology and for this they needs more funds.
o Budget and financial resources – Manager of Marks and Spenser does not make
the financial budget efficiently and effectively this will affect the cost of
production and their sales and market growth. It is the biggest weakness company
can facing. Opportunities – It simply means to examine the firms outside environment to exploit and
explore the business unit in all over the world and earns more and more profits. Marks
and Spencer can find some opportunities that helps in making the firm one of the leading
business enterprise all over the world.
o Low inflation rate – Due to low inflation rate in the country Marks & Spenser can
buy the raw material at low cost and make producing at cast cost this helps in
earning more profit margins by increasing the sales.
o Internationalisation- to operate a business at global level is one of the best
opportunities that respected company can enjoy. It helps in earning more foreign
currency this affect the economy of the nation and stables it. It also helps in
buying and selling very easy by using social media and their official website. This
will attract more people and wide range of customers. Threats - it refers to the process of analysing the outside company problems that affect
the overall business activity.
o More competition- Increasing number of rival firms can reduce the sales of the
organisation and indirectly also affects the brand image. To reduce the
competition Marks and Spenser can innovate their products so they gain the
competitive advantage.
o Laws in different countries- Globalisation of business in different countries helps
in earning more profits buy the major threat that the Marks & Spencer can follow
is that different country have different laws and regularise all the legal right
according to the country law demand make tough for the company and it mention
more cost in it.
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VRIO Analysis
RESOURCES VALUABLE RARE IMITABLE Organisation
Positive Market
reputation
YES - - -
Leadership team YES YES - -
Food products YES YES YES -
High people
rating
YES YES YES YES
This analysis helps the Marks and Spenser to minimise the workers turnover and reduce the cost
of buying the resources. It also improves the performance of the employees by this they receive
actionable and clear input. It also helps in increasing the growth of the form by maximising the
profit margin through more sales. It crestes accountability and lead to recognition and benefit to
the company, customer and employees(Moseley III,2017).
M2 Critically evaluate the internal environment to assess strength and weaknesses
By using SWOT analysis Marks & Spenser identify the abilities and capabilities of the
business of doing and completing the overall task. It also helps in analysing the strength and
opportunities and make more work on them and reduce and eliminate the problems that was arise
in generating the revenues. This also increase the brand image in the eye of the many people
TASK 3
P3 Porters five forces model
Porter’s five forces model encompasses a framework which is used for examine competitive
position and strength of an organisation within industry. This model is chiefly utilize in analysis
of industry in which company is operating its functions and operations. This theory is based on
such assumption that there are five essential elements are present in industry that are need to be
consider by organisation for its long term survival and growth. These particular forces concept
evaluate and measure competitive intensity and attractiveness of market. This framework enables
firm to find out where it power lies in terms of business conditions. Also, this is helpful in
assessing strength of an business enterprise in existing competitive market as well as
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opportunities through which company can enhance its position. Marks and Spencer is one of
flourish and leading multinational retail organisation of UK. Company offers fashionable
clothing, home ware products, fresh as well as luxury food items through its offline stores and
online portal websites. M&S owns more than 1300+ stores worldwide and serves it products to
approx 33 million customers. It is necessary for management to understand and determine these
forces in order keep its sustainable competitive position and enhance productivity and
profitability for long term period. These following forces are explained below in context of
M&S(Eaton and Kilby, 2015).
1. Industry rivalry: this particular force justifies the degree of competition exists in industry
and how much these competitors are capable to eliminate other firms from market. If
huge number of competitors are available in industry along with compatible and identical
products. Then power of company will be lesser as suppliers and buyers will get option to
seek better products or deals at specific prices. On contrary, when competitive rivalry are
low then high power lies with organisation(Yuliansyah, Rammal and Rose, 2016).In case
of M&S, company is operating its business in retail sector which has fierce and growing
competition. Due to which M&S is facing high degree of intense rivalry from its top
competitors which are ASDA, TESCO, Sainsbury and other supermarkets chains. As
these firms are offering identical products. Due to this reason, impact of this force is
comparatively high.
2. Threats of new entrants: this particular force depicts that profitable and potential target
market attracts new players or entrants which influence profitability of existing
organisation. Through entry of new organisation it affects power of company. If there is
less barriers or restriction on entry then it may become easy for new firms to enter as they
have to bare less costs and time. As result, it will significantly weakened position of
existing firm. In case of M&S, force of new entrants is low because in order to enter in
such intense retail industry, new players required to invest huge capital to setup a store or
supermarket chain. As current market is highly mature so new competitors required to
bring something unique and radically new to attract customers from existing competitors.
3. Buyer’s Power: this force reflects bargaining power of customers. This explains the
degree at which end-user are capable of taking down prices associated with products
offered by companies. It refers to evaluation of how easily buyers negotiate with prices. It
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can be assess by how larger base of customers company has?, how essential are they for
an organisation. If company has limited consumers and strong client base then each buyer
has power to bargain for lower prices and attain better deals. In Case of M&S, buyer’s
power is low because company has large customer base and enjoys loyalty as it offer
high quality products. Due to huge buyers base, M&S has a privilege and advantage to
pose effective prices for its products.
4. Supplier’s Power: this force determine how easily and effectively dealers and suppliers
are capable of increasing rates or prices of inputs and raw material. Power of suppliers
are highly depend upon circle of suppliers is available for each input, uniqueness of
products, strength of suppliers etc. if there are small number of suppliers are available in
market then there power will be relatively high as compare to company. In case of M&S,
impact of this force is low as company operates its business and produce its products
across worldwide. Also, company is not reliable on one British suppliers as there are
large number of dealers are available. In addition to this, suppliers cannot charge higher
rates as they do not want to loose connection with such big company.
5. Threats of substitution: this force reflects that how many close substitutes are available
in market. It increases possibilities of buyers may switch to other alternate products if
company increases prices. If threat of substitution is high then it reduces power of
suppliers as well as attractiveness of market. Companies that produce unique products
and services which has no close substitute in market will have high power in favourable
terms as they have a liberty to charge high prices. In case of M&S, impact of this force is
moderate as there are other competitors who are engaged in producing identical products
such as clothing, quality food etc. this provide wide range of options in front of
customers to choose suitable products. Such competitors are ASDA, TESCO, Sainsbury
and other super chain stores.
M3
By analysing all these five forces it can be understandable that impact of these components are
relatively high in some areas which may influence competitive position and survival of M&S.
Company required to address some new strategies and policies in order to sustain its business in
retail industry. To prevent threat of new entrants company can produce more innovative food
products as well as stylish and trendy cloths according to requirements of existing and new
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customers. This strategy will help firm to increase its brand loyalty and goodwill. Company can
make effective chain and network of suppliers and distributors so that it enables firm to keep its
product accessible in target market. In order to prevent rivalry, M&S can build sustainable
differentiation in its products and can collaborate with its competitors to raise its market share
size.
TASK 4
P4 Strategic management planning
Bowmen's strategic clock model
It refers to the model that helps a company to explore the options and opportunities for
product positioning and give a competitive advantage of it in the market place where it operates.
It includes two options on the basis of which business can make their strategy plan i.e. perceived
value and price. Manager of marks and Spenser, analyse and adopts this model to know the
position in the current market environment to make their quality and valuable products with the
appropriate price that are as follows(Anwar and Hasnu, 2016). Low price or low value added – This model of Bowmen’s clock strategy shows that the
firms sales its product with low quality and in low price without any differentiation in the
product. However those organisations unable to modify and innovate their product to
gain competitive advantages will remain in this category. In context of Marks & Spenser,
it is concerned with selling their products in premium pricing with segment in their
products to attract more and more people. For instance, its is not useful strategy for the
company to gain the market share(Hart, Sharma and Halme, 2016). Low price - In this company can lowering the price of their goods that often associated to
economies of scale. To be successful, the prices of goods are low but with high volume of
output will take because of earning high profits and high market growth. In this strategy
Marks & Spenser only target to earn profits by selling their quality products to their
customers, because of this manager of a firm cannot use this model for strategic
positioning. Hybrid – In this situation organisation is dealing in the moderate price with moderate
differentiation. In this they lowering the cost compare to the competitors price but at the
same time differentiate their goods offering from their rival firms. In this Marks &
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Spenser could use this strategy by selling their products to their customers after adding
some modification in their product offerings from the rival firms. This will create loyalty
base people for the organisation. Differentiation - It simply means to differentiate the goods and services from other
companies in the same industry. This helps in increasing the value of cost of the products.
In context of Marks & Spenser, they succeeded in providing the innovative and
differentiate product to their customers for this, company add some value and increased
the line of product range like women wear, kids wear and premium pricing products. This
will attract more and more customers to buy and it helps in increasing the revenue and
growth in the market. Therefore it also helps in gaining the competitive advantage in the
current business environment. Focused differentiation- In this clock strategy only those company can involved who
mainly focused on the luxury and the exclusive product and services and have high
quality with premium price. In context of Marks & Spenser, manager mainly focus on the
differentiate thier quality products from their competitors so that they earn high profits
and for this they sold their goods and services at high price. This also helps in maintain
the brand image in front of the customers and in the market. Increased price/ standard product – In this strategy company set the high price for their
standard products and this will risky for the company. In context of Marks & Spenser,
manager can focus on the valued products that attract more customers and have contains
some value in it. This strategy is risky for the company because of high price sometimes
it discourage the people to buy that product Monopoly - This mainly refers to that market where there is only one seller and number
of buyers are present. At this time they set the price according to the market demand. In
context of Marks & Spenser there are many competitors present in the market so they
will not use this strategy for positioning the brand in the market.
From the above explain strategy, Marks & Spencer should choose differentiation strategy to
attract more and more people and cover wide area. It also helps in increasing the brand
positioning and gain the competitive advantage. .
M4 Produce a strategic management plan that gives tactical and tangible strategies objectives
Strategic Management Plan
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It refers to a document that is very helpful and useful method to transferring the
information related to business, its goals and objectives, set priorities and resources to
their ultimate employees. It also ensures that worker and other stakeholders have done the
work according the task allotted to achieve the project and goal on time. Manager of
Marks & Spenser used to make the strategic business plan to understand the various
stakeholders, know their financial resources and their employees who work properly as
per the set vision and mission(Mellat-Parast and et. al., 2015).
Vision – The vision of a Marks and Spenser is to set the standard against which that the
others are measured i.e. benchmarking. Thy work for earning profits by selling premium quality
products to the rich class people and become a one of the largest retail sector all over the world.
Mission – It is based on the Marks & Spencer vision where they plan and make the
strategies as per their set vision of earning high profits for this they make inspirational quality
accessible to their competitors firms. And they also provide healthy working environment to
thier employees so that they work very effectively and gives the productive results to the
business.
Objectives - The main objectives of Marks & Spenser is to make quality products,
effective and unique services and make innovation in their product offerings and build a trust of
their customers. On the basis of these objectives they produce a good and promote in the market.
This will earn more profit and market growth.
STP Process
 Segmenting – in this respected company can segment the market in different sections to
earn more profits and higher growth. In this Marks & Spenser can segment their market
in demographic, geographical and behavioural segments . in geographically they open
thier stores in different locations of the world, in demographically they provides and
dealing in various sectors like means, kids and women wear. This helps in earning more
profits and revenues. They use quality product with premium price this will attract the
most to the high class people.
 Targeting- In this Marks and Spenser target the high- elite people and the high class
society people where money does not matter only brand and quality matters. In UK
almost all people are brand conscious and they buy the products from that stores who
provide loyalty to their customers.
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