Business Strategy Report: Marks and Spencer (M&S) Strategic Analysis

This report provides a comprehensive analysis of Marks and Spencer's (M&S) business strategy, examining its mission, vision, goals, and objectives to inform strategic planning. It includes an analysis of internal and external factors, organizational and environmental audits, and stakeholder considerations. The report explores the effectiveness of various strategic techniques, such as SWOT, PESTLE, and the BCG growth matrix, in assessing M&S's market position and growth potential. It also delves into the roles and resource requirements for strategy implementation, and evaluates the contribution of SMART targets. The report provides an overview of M&S's competitive landscape, including market penetration, development, and diversification strategies. The analysis focuses on M&S's strategic choices, offering insights into the effectiveness of their approach within the retail sector. The report concludes with an evaluation of M&S's strategic decisions and their implications for future business performance and market expansion, particularly in Asian markets.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION..........................................................................................................................1
TASK 1............................................................................................................................................2
1.1 Analysis of business, mission, vision, goal and objective to inform strategic planning.. 2
1.2 Important factors to be considered in formulation of strategic plan................................3
1.3 Effectiveness of techniques used for development of strategic business plan.................4
TASK 2............................................................................................................................................4
2.1 Organizational audit to determine the strategic positioning.............................................4
2.2 Environmental audit for Marks and spencer....................................................................6
2.3 Important analysis of stakeholders in formulation of business strategy...........................7
2.4 Presentation of new strategy.............................................................................................8
TASK 3............................................................................................................................................9
3.1 Effectiveness of alternative strategies relating to market.................................................9
3.2 Justification behind selection of strategy.........................................................................9
TASK 4..........................................................................................................................................10
4.1 Roles and duties of personnel implementing strategy....................................................10
4.2 Requirement of resources for strategy implementation..................................................10
4.3 Contribution of SMART targets towards strategy implementation...............................10
CONCLUSION............................................................................................................................10

INTRODUCTION
Business strategy is an essential aspect that consists of plans and policies that are
formulated and implemented by management of every business enterprise in order to achieve
some important objectives related to business. Development of business strategy is very complex
task which requires a lot of planning and research about various business aspects and requires an
analysis of internal and external factors that affects the business and operations (Doeksen and
Symes, , 2015). It mainly provides direction to enterprise through which the company will be
able to meet the vision, mission, objectives, goals and expansion of core competencies of
enterprise. This report will provide an information about international retail organization Marks
and spencer, which has achieved growth in its business operations by developing various
effective strategies. Company has total of ….. stores in UK and across the countries. It has
started its business operations….. And has developed its relationship with various retail sector
organization in different nations like US, Japan, Australia and other countries etc. Further, with
an increase in competition in market company has also faced various problems like decline in
market, decrease in sales turnover and impact of political factors due to exit of Britain from
European Union countries. Business environment of country has been changed continuously
from monopoly to competitive environment (Niederwieser and et.al. 2016). In order to sustain to
sustain in competitive business environmental and increasing the sale of products and services,
management of enterprise to adopt new and effective business strategy by analysing the
strategies of others. There is some business enterprise like TESCO, ASDA and Sainsbury also
aims at achievement of High market share in retail sector and they also developed strategies to
influence the customers of different countries. Therefore, M&S also needs to analysis there
policies and take effective decisions so that they will not be able to provide any impact of
business and operations. Moreover, strategic planning is considered as an important process that
is used by business enterprise in order to its plans, strategy and making decision related to
allocation of resources to implement the strategy. PESTLE and SWOT analysis of company is
done to provide an understanding about factors that affects the growth and development of
enterprise in industry. Some important techniques are analysed which are used by organization
for development of strategic business plan.
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TASK 1
1.1 Analysis of business, mission, vision, goal and objective to inform strategic planning.
Business strategy is considered as long term planning or action which has been designed
by organization in order to achieve some specific goals and objectives (Grünig and Kühn, 2015).
These important strategies being formulation through effective research and analysis company
situation in market for enhancing business operations as well as achievement of business vision,
mission , objectives and core competencies. In this context, this analysis has been done in order
to get information about the Vision, mission of Marks and spencer which is international retail
chain of stores in order to analyse the factors and techniques of strategic planning. This
important information is determined above:
Mission: It is statement that provides a reflection of company’s long term plans of organization
where it wants to see in near future. It also states nature of business and its purpose. Further,
Mission of M&S is “To Make inspiration quality accessible to its customers”. It will support the
enterprise in development of effective and success strategic plans.
Vision: It is most important statement developed by organization that describes the reason that
why organization exists in market. As per the analysis, vision statement of M&S is “To become a
most high valued business enterprise in retail sector between their customers, communities in
which they have their business operations.”
Goals and objectives: These are considered as general guidelines that the company have the
willingness to accomplish in a specific of predetermined time duration (Mor, Kaur and Khaiwal,
2016). Further, Objectives are considered as stages to achieve the goal. There are some important
goals of objectives of M&S is described above:
 Enhancement of business in different market segment within one year.
 To become successful retail brand of product and services.
 Development of retail services in other countries.
 Increasing the market share by 20% in ever quarter.
 Market expansion in Asian countries.
Core competencies: It can be considered as skills of individuals working in an enterprise and
provides supports to them in achievement of competitive advantage over its rivals. In this
context, the core competencies of M&S are identified as customer’s loyalty, wide
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communication channels, effective marketing strategies, highly qualified employees, effective
supply chain and major brand focus on different segments of market.
1.2 Important factors to be considered in formulation of strategic plan.
Strategic planning is considered as an important process that is used by business
enterprise in order to its plans, strategy and making decision related to allocation of resources to
implement the strategy (Grünig, and Kühn, 2015). It is also considered as important procedure
that requires accomplishment various activities in order to sustain in competitive business
environment. It also provides some guidelines for application of strategy. As per Ansoff matrix
analysis, M&S can also analyse various that they need to consider in formulation new product
and market growth strategy. These important factors are explained above:
 Market penetration: It refers to the strategy in which the company will sell its products
and services in existing market. M&S should serve the same quality of products and retail
service without any change or variations so that they will be able to maintain their brand
recognition and name which they have achieved within several years.
 Market development: It is also important factor that M&S has considered in which they
will sell there similar products and services in new market (Mathur, Mathur and Kenyon,
2012). It is presently targeting people of premium customers and middle income group
who always desire to buy quality products and able to pay prices.
 Product development: In product development strategy, organization always desire to
launch new or existing product or service within market in which they exist. Further, the
major of M&S to success is considered as innovation, in order to provide somethings new
to its customers with latest technology for maintaining customer loyalty.
 Diversification: In this strategy company will sell in new products and service in
different or new market where they will find their customers (Kernbach, Eppler and
Bresciani, 2015). This approach is mainly considered as risky but sometimes it might be
beneficial for enterprise and provide high results in form of profitability. Moreover,
market expansion within other Asian countries needs a lot of market research and
launching a new product and services by M&S as the difference in the perception of
individuals in those nations.
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1.3 Effectiveness of techniques used for development of strategic business plan.
As per the given scenario, BCG growth matrix is used that classifies the organization’s business
units in major four different categories based on the growth rate and brand position, share of
enterprise in retail market. Further, that Matrix is explained above:
 Question mark: Making investment within Asian countries is considered as questions mark
stage for M&S as it has estimated high growth from the market but because of low brand
recognition in those nations, share and sale in market of company will be less as compared
to others in these markets.
Figure 1: BCG growth matrix
(Source: BCG growth share matrix, 2017)
 Star: The retail business of M&S in British countries is presently in star category as they
have are showing continuous market growth and strong value in market as compared to
others. The company being in new areas have potential to achieve the success and growth.
 Cow: From starting when M&S has been in its business operations in UK and other
European countries, the enterprise has sustained its brand value and recognition among the
people. Hence, they have a stable growth rate and never offered a high rate of growth.
These major business units of company are considered in cash cow stage.
 Dogs: This factor growth matrix considers those units business enterprise which are low in
terms of growth and market share. In global market, organization does not have any business
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unit that lies in this category. Further, if the company expands its operations in Asian
countries, if does not provides desired results then the company can termed it as in stage of
dogs where they will either sell their assets and make investments in other subsidiaries and
get more profits.
TASK 2
2.1 Organizational audit to determine the strategic positioning.
This organizational audit is considered as program that supports the enterprise to regulate
its business by analysing its internal business structure, processes and ways to implement
strategy in accordance to continuously amending environment of business (Leitner, Meissner
and Martyna-David, 2015). The process of audit will also assist M&S through identification and
verification of organizational policy and key business subsidiaries, analysing the support of core
business teams and also helps in allocation of appropriate resources which are required to
implement the strategy in business structure. Further, various approaches have been used by
M&S for accomplishment of organization audit which are as follows:
SWOT Analysis of Marks and spencer
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Strengths
 Strong brand recognition and high
market publicity in European countries.
 Firm is a concentration on awareness of
local people and needs of individuals in
other nations.
 High and strong business growth and
core competencies.
 Strong financial position and market
share is also high (Teece, 2010).
 Wide range of products with high
quality and competitive price.
 Constant and accurate understanding
about retail market.
 Ability of providing innovative
products.
Weaknesses
 Little brand consciousness and be
wilderment with M&S brand in Asian
countries and eastern market.
 As per the high competition in market,
price flexibility for demand of brand
has become very low and there is low
customer’s switching cost and loyalty.
 Major dependency on European
market and especially on UK in order
to finance its own internal changes.
 Various product prices are high as
compared to some competitors.
 Low level of growth in sales of
company in developed markets of
Europe.
Opportunities
 Expansion in international markets like
markets of Asia with their stable
position in socio economy, in secure
intensity within the UK market.
 Continuous increase in per capital
earning in the South Korea markets and
also in countries like Brazil, Russia,
India and china etc.
 Making collaboration with other
business organization in Asian
countries.
 Major growth of M&S is possible in
Health care and beauty products.
Threats
 Aggressive and high competition in
retail sector which has reduced its
margins on products and services.
 Fluctuations in currency rate of
exchange which creates impact on tax
savings and earnings.
 Major difference in local perception
and desire of consumers towards the
products and services.
 Rise in growth of competitors which
have their global presence similarly like
M&S.
 Political implications and economic
reforms of country with impact on
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business operations of Marks and
spencer.
Thus, it can be said that company has major strengths through they will be to implement
their new strategy and new products development process. It is also analysed that enterprise has
need to focus on overcoming its weakness by effective business decisions and changes in ways
of regulating business. Further, by using the opportunities organization will be able to achieve
the desired future goals, objectives, vision and mission. In order to achieve the success, company
also need to remove its major threats like competitors and economic reforms which can influence
the strategies of organization.
2.2 Environmental audit for Marks and spencer
It is also an important method which focuses on analysis of company’s market situation
and various factors that affects the business and operations in external environment of country
(Astrachan, 2010). It has been organized by organizations in order to develop strategic decision
for maintaining there market position. Further, PESTLE analysis of organization is done in order
to recognise various factors which are needed to be considered by M&S in order to formulate
effective business strategy.
 Political factors: These are considered as influence of policies which have been made by
the political parties operating in different countries related to trade regulation. These
factors include employment conditions, economic policies, health and safety,
environmental policies Etc (Hoejmose, Brammer and Millington, 2013). In present
context, business operations of Marks and spencer have also been affected by these
policies and they have needed to comply with these policies which are developed by
government and political parties within UK. Further, if these policies are not followed by
organization then they will have face restrictions on expansion of business operations.
 Economic factors: Most important aspects external analysis, which consists of
concentrates on impact of economic growth, fluctuation in currency values, inflation and
income level of consumers that influence the sales and profitability of every business
enterprise (Parnell, 2010). In present scenario, Economy of UK has achieved a major
growth after rise in contribution of retail sector towards the GDP. Rise in growth of
economy has also resulted in increase in income level of consumers and change their
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focus on purchase of quality of products and services. Further, it can be said that
economic factor will provide positive impact on business and operations of M&S.
 Social factors: In order to expand the business operations, company needs to analyse the
impact of social factors which includes income level of consumer, their perception,
thinking and loyalty towards brand. M&S will influence the customers to perception of
consumer towards their brand by providing quality at lowest prices as compared to
consumer like TESCO and ASDA etc. thus, these social factors will provide both
position and negative impact on sales and profitability of enterprise.
 Technological factor: Rise in technology environment within country is also considered
as major factor that affects the sales and brand recognition as well as profitability of
organization in market (Liedtka, 2010). By using the various new technologies, company
has enhanced the promotion of its products and services. Rise in online market, digital
advertisement and social media applications are considered as major communication
channel through which the organization is able to gets the business strategy restricted.
Further, with digital technology the M&S will be able to expand its sales and
profitability.
 Legal factors: These are considered as laws and regulation which every organization
needs to follow in order to carry out business and operations. Different countries have
developed their own rules and regulations which affect the operation of M&S while
expansion of business in other country. These legal factors include health and safety act,
employment act, harassment act, contract labour and Environmental sustainability act etc.
Hence, these factors will create a negative influence on position of company in UK.
 Environmental factors: It includes various aspects like pollution, waste management
and sustainability that negatively impact on M&S, if they will not follow such policies
them they have to face problems in expansion of business plan.
2.3 Important analysis of stakeholders in formulation of business strategy.
Stakeholders are considered as those important parties that support every business
enterprise in regulating operations and increasing sales in market. In present context, important
stakeholder’s analysis in business operations of M&S is analysed through determinations of
various company’s stakeholders.
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 Employees: Both the organization and its worker always have impact on each other.
Further, the work standards concerns related health and safety (Woerner and Wixom,
2015). Other than this, excellence and innovation are considered as priority factors of
M&S. Company needs to provide importance to their employees and should take their
participation in making strategic decisions and planning.
 \Suppliers: These are considered as partners of enterprise distribution channel and also
important or crucial for business procedures. Suppliers always focus on core values
which have been classified in there management of supply chain of products in market.
 Shareholders: They have their major role in inflow of capital of M&S because they are
considered as large investors to develop and implement business (Bentley, Omer, and
Sharp, 2013). They have interference in organization’s strategic business decisions as
they life line of enterprise in providing funds for accomplishment of business activities.
 Customers: It is major belief that it is necessary to provide in return to society when
they are using resources of society in achievement of business profits. R&D functional
unit of company are continuously making efforts to improve their core functions.
Thus, these are some important stakeholders of M&S whom they have to provide importance and
benefits in order to gain there support in implementation of strategy.
2.4 Presentation of new strategy
Principle strategy of international firm M&S is to create values and concentrates of
providing satisfaction to its customers. As per effective research practice, the best and suitable
strategy for the enterprise will be new product development strategy (Yuan, Bao and Verbeke,
2011). In product development strategy, organization always desire to launch new or existing
product or service within market in which they exist. It will enable company to meet its different
requirements of its own as well as customers through offering new quality products at
competitive prices it would enable them to generate large amount of revenue from market and
also creates further business expansion opportunities in Asian countries markets.
TASK 3
3.1 Effectiveness of alternative strategies relating to market
For the expansion of business, company can also select the other strategies which they
will consider suitable for them. Effectiveness of some other alternative strategies have been
described above:
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 Market entry strategy: It usually involves regulating business operations in the form of
organic growth, merger, acquisition, strategic alliance etc. Merger will be effective for
organization for expansion of business in Asian countries as it convers less risk and
requirements of funds will also be less. Moreover, Acquisition of well-established business
in other country will also be beneficial enterprise in achievement more sales and
profitability.
 Substantive growth strategy: This strategy consist of ways like related, unrelated
diversification, horizontal and vertical integrations etc. (Bocken and et.al, 2016). It is
effective for M&S if company introduces new products in new market.
 Limited growth strategy: In this, market business opportunities that have been taken in to
consideration that has been taken in to consideration. It includes major strategy involves
market penetration, development and product development etc.
 Retrenchment: This major strategy includes turnaround, liquidation and disinvestment
strategy that is being used to convert an underperforming company to profitable company. It
is applied on sick or distressed company in order for resolution of financial crisis and
improves its financial performance.
3.2 Justification behind selection of strategy.
Most important objective of Marks and spencer is to be considered as success full
business retailer brand. For the accomplishment this goal company needs to adopt strategy of
market development. This strategy helps the company to starts its business activities in Asian
countries through adoption of health care, food and cosmetic retail items (Weber, Geneste, and
Connell, 2015). Further, it can also make relationship with other companies in the form of
strategic planning. Also helps to expand further policies that can raise their revenue. After the
company successful enters in to new business segments or market than it can adopt strategy of
product development to differentiate its products and services from the other rival brands.
TASK 4
4.1 Roles and duties of personnel implementing strategy.
Marks and spencer needs to understand the experienced personnel needs to be delegated
responsibility to implement the strategies. It requires personnel who can be able to lead over
other employees and make effective distribution of work according to roles and level of
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