Strategic Analysis and Business Strategy Report for Marks and Spencer

This report provides a comprehensive analysis of Marks and Spencer's (M&S) business strategy. It begins with an introduction to business strategy and its importance, followed by a description of M&S's mission, vision, and core competencies. The report identifies key factors influencing strategic planning for M&S, including cost, communication, financial barriers, and environmental scanning. It then evaluates the effectiveness of techniques like the BCG matrix and Ansoff matrix in developing a business plan for M&S. The report further explores strategic positioning through organizational and environmental audits, including SWOT and PESTLE analyses. It discusses the significance of stakeholder analysis and proposes new strategies for M&S. The document also addresses the selection of a new strategy, the roles and responsibilities for implementation, resource requirements, and the contribution of SMART targets. The report concludes with a summary of findings and recommendations for M&S's strategic direction.

BUSINESS
STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................2
1.1 Brief description of Marks and Spencer...........................................................................2
1.2 Factors to be considered while formulating strategic plan...............................................3
1.3 Evaluating the effectiveness of the techniques while developing business plan..............4
TASK 2............................................................................................................................................6
2.1 Strategic positioning by conducting organizational audit................................................6
2.2 Environmental audit for M&S..........................................................................................8
2.3 Significance of stakeholder analysis in formulating new strategy...................................9
2.4 Preparation of new strategy............................................................................................10
TASK 3..........................................................................................................................................10
3.1 Alternative strategies for M&S......................................................................................10
3.2 Selection of new strategy................................................................................................11
TASK 4..........................................................................................................................................11
4.1 Roles and responsibilities of personnel in implementing the strategy...........................11
4.2 Resource required for strategy implementation.............................................................12
4.3 Contribution of SMART targets.....................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
ILLUSTRATION INDEX
Illustration 1: BCG Growth Matrix..................................................................................................4
Illustration 2: Ansoff Matrix ...........................................................................................................5
Illustration 3: SWOT analysis..........................................................................................................7
Illustration 4: PESTLE analysis.......................................................................................................9

INTRODUCTION
Business strategy can be defined as an art, science and craft of formulating, implementing
and evaluating the cross functioning decisions which help business organization to achieve their
long term objectives. Business strategy is considered as a process of stating the company’s
mission, vision along with their short term and long term objectives. It can be a long term
business plan which can cover a period of 4-5 years or may be longer than that. Further, business
strategies are basically concerned with the scope of business as industries have to decide that
what type of goods and service need to be produced and where it should be produced (Tokatli,
Wrigley and Kizilgün, 2008). By evaluating the business strategies, organizations can develop
their business plans in order to achieve their goals and objectives. Further, business strategies set
priorities for business organization as well as for the management team and after setting the
priorities, venture looks for the talented employees who are multi skilled so that their goals and
objectives are achieved within no time. Strategy is treated as an organization game plan which
focuses on strengthening the performance of business venture. These strategies need to be
constantly reviewed by the top level management of organization by conducting internal and
external environment analysis.
Organization undertaken for the present study is Marks and Spencer (M&S) plc which is
major British multinational retailer having specialization in clothing, food products, home
appliances and luxury items. M&S have almost 800 stores in UK itself and further have strength
of approx. 83,000 employees who are giving their productive services throughout the world.
Further, mentioned company is on increasing state in their financial performance as their
turnover and profit is increasing year by year. This deliberately elaborates that M&S is giving
tough competition to their major rivals like TESCO, ASDA, etc. M&S have announced that they
will be launching dedicated shops for home furnishing in coming time period. Till the year 2010,
M&S were having almost 50 outlet stores and has a great expansion plan for the future. Cited
company has launched a convenience format namely “Simply food” where store sells food items
along with some small selection of general merchandise. Further, M&S have given some of their
retail outlets on franchisee agreement to different companies. SSP group running cited company
stores at mainline airports and railway stations. Moto having stores under the belt of M&S at
motorway service stations and BP is offering Simply food services near 120 petrol stations.
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From analytic perspective, this report is based on understanding the organization mission,
vision, short term and long term objectives along with the core competencies. Further, this report
will showcase the factors which mentioned company has to consider in order to perform their
strategic plan. This study will also have emphasis on environmental audit which comprises micro
and macro environmental analysis. Report will further have focus on appropriateness of
alternative strategies along with the selection of suitable strategy for the mentioned company. At
last this document will show the healthy evaluation of SMART targets for the achievement of
strategy implementation for the M&S.
TASK 1
1.1 Brief description of Marks and Spencer
 Mission statement- M&S is focusing on providing new quality of products in areas of
their retailing like clothing, home appliances, food and financial services. Further,
organization is trying to attract more of the customers through different discount schemes
which will help M&S to develop a strength of large and loyal customer base. Cited
company's another mission is to deliver high quality of products to consumers at an
affordable price (Campbell and Rahman, 2010). Further, organization core emphasis is to
give customers a good value for their money as their needs and wants are satisfied.
 Vision- M&S is transforming from a traditional British retailer to a leading multichannel
retailer and focusing on making the brand more accessible to large customer base.
Organization another vision is to accelerate the food growth to their different outlets
whole over the world. M&S has developed a vision statement 'to be the standard against
which others are measured'. Cited company's aim is to increase the sales and market share
in retail sector. Mentioned company focusing on differentiation strategy by delivering the
fresh quality of products and undertake new innovations to develop large and loyal
customers base (Salem Khalifa, 2012). M&S core focus is to become world's most
sustainable and major retailer by the end of 2015.
 Core competencies- Core competencies of mentioned company is having a strong
marketing extant along with strong quality control. Further, organization has taken step
by entering into financial services which shows mentioned company having strong
managing relationship with the banks. Further, mentioned company having strong and
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outstanding customer service as they take feedback from the customers whosoever
reached to the store. This helps M&S to make sudden changes in order to achieve their
customers trust.
1.2 Factors to be considered while formulating strategic plan
In order to develop suitable strategy for Marks and Spencer, there are different factors
and issues which impact the strategic planning. These factors further affect the vision, mission
statement of the cited company. Points which need to be considered by M&S in order to form
successful strategic plans are given below: Cost- Cost of the product plays a crucial role for M&S as they have to produce best of the
product at an affordable price for attracting large number of individuals. Further,
mentioned company facing a stiff competition from the competitors like Tesco, Sainsury,
Asda and these firms will try to attract the customers with lowest pricing with charming
advertisements (Motwani, Subramanian and Gopalakrishna, 2005). Moreover, company
is focusing on low pricing products only to satisfy the needs and demands of their
customers. Communication- M&S need to opt downward communication process along with
democratic style of decision making in strategic planning process. Employee’s
involvement plays a crucial role as concerned employees will give attention by providing
feedback to their customers for their queries relating to the products and services. This
will lead to successful execution of strategies. Financial barriers- Finance is required by each and every organization in order to
perform their business activities and at times it stands as a major barrier as organization
requires fund to set a new empire to different city or country. For future establishment,
M&S have to effectively manage their cash inflow and outflow for the stability and
neutrality.
 Environment Scanning- Scanning of environment plays a significant role for cited
organization as they have to identify all the core components and factors which
customers expects from business organization (Crumpacker and Crumpacker, 2007).
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1.3 Evaluating the effectiveness of the techniques while developing business plan
Effective business plans will help mentioned company in developing the stable marketing
strategies for their products and services in order to get an effective and competitive advantage
over their competitors (What is the BCG Matrix? 2015). M&S can opt BCG matrix to expand
their existing product into new market. Moreover, this approach is generally based on product
cycle concepts and it has two major dimensions i.e. market growth and the market share
(Miltenburg, 2005). BCG matrix for M&S has been explained below:
 Stars- Stars shows having the high growth and high market share in the market. Marks
and Spencer comes in this category as it is becoming a fast growing retail industry which
focusing on satisfying the needs of their large customer base along with creating the new
ones. Further, stars shows the best of the growth opportunities and revenue as company is
at growing stage.
 Cash Cows- Cash cows have low growth with high market share. Under this segment,
M&S faces tough competition from their major competitors but due to the goodwill the
share price of mentioned company is still high which is a core advantage for M&S
(Porter, 2008).
Illustration 1: BCG Growth Matrix
(Source: BCG Growth Share Matrix. 2015)
 Dogs- Dogs shows the low growth rate along with the low market share. This point is
considered as a decline stage for companies as due to the constant failure business only
have a small future ahead and this will generally lead to loss of capital from business
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organization (Boehm and Turner, 2005). Products are also demolishing with no chances
of reviving as competitors are producing best of the products at an affordable price.
 Question Marks- This evaluates the high growth with low market shares as if shares in
the market remain unchanged then M&S will absorb and try to incur huge amount of cash
into the business.
Ansoff’s Matrix for M&S:
Ansoff’s matrix helps in identifying the strategic direction for mentioned company. This
matrix helps in understanding the strategic options which are available for the organization in
terms of the product and also for the market coverage. Market penetration- This can be done by product development as organization clothing
sector lacks in variety and if they make sudden changes then it can lead in gaining the
competitive advantage in coming time period (Olson, Slater and Hult, 2005).
 Product development- It consists of developing new products and services for existing
market. Mentioned organization can concentrate on Una brand as it is an established and
fastest growing brand in UK. Further, IT sector need to be developed for promoting
online shopping for customers.
Illustration 2: Ansoff Matrix
(Source: The Ansoff Matrix. 2015) Market development- It can be developed by addressing new countries, new customers
and also new segment like infant wear and teenagers in order to give tough competition
to their rival competitors like Tesco, Walmart, etc.
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 Diversification- Diversification is most risky strategy as M&S have to tap new market
and also need to develop new products. It is necessary to as business have to get
expanded into the area outside the core activities. Mentioned company can diverse new
way in food, beauty products, home appliances and also can get into partnership with
other retailers.
TASK 2
2.1 Strategic positioning by conducting organizational audit
Organizational audit help business organization to take enormous actions to move there
venture from where it is standing today and the desired position where it will be placed in future
(Zott, Amit and Massa, 2011). SWOT will help M&S to reach their goals and objectives in
significant manner. It has been discussed below:
Strengths:
 M&S is a giant name in UK Street and mentioned company is known by everyone for the
quality in products and services they are providing to their customers over the years.
 Organization has their own label brands which differentiate them from other competitors.
 Mentioned retail company having more than 1000 stores in 40 different countries around
the globe. M&S have popular designer brands in clothing sector for both men and women which
make them different as they sell best of the products at an affordable price.
Weakness:
 Manually working increasing the cost for the organization as M&S is following the old
techniques instead of opting the new one.
 People have perception regarding the clothing sector that they have the products for men
and women only for the aged people and not for the teenagers and infants (Slack, 2015).
 M&S face stiff competition from other retail brands which mean they have limited
market share.
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Illustration 3: SWOT analysis
(Source: What Is SWOT analysis? 2015)
Opportunity:
 M&S have to develop their website and promote online shopping significantly in order to
increase their sale and productivity.
 Cited Company can introduce new market segment which will increase more profit and
revenue. Organization having well opportunity to expand their market as well as brand into India
as well as in China.
Threats:
 M&S facing a stiff competition from other retail stores namely ASDA, Centra, Tesco,
Farmfoods, etc.
 These retail store is becoming a threat because of their various discount and promotional
offers.
 M&S has significantly failed in tapping the foreign market and also in expanding their
product and services to abroad.
Product positioning
Positioning of product is an important element of a marketing plan as it is the process
which is used by the marketers to communicate the products with their customers. Mentioned
company is focusing on cost conscious group and developing all the latest products and services
which are in reach of customer's (Hills and Thom, 2005). Further, corporate is targeting their
products and services to upper class or upper middle class people as these people wants best of
the services which satisfies their demand and they are ready to pay the worth amount. M&S
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positioning strategy is to produce high quality of products which is within reach of the
customers.
2.2 Environmental audit for M&S
PESTLE analysis is considered as one of the most important framework for micro
environment scanning as it is treated as a part of advanced strategic management. PESTLE
analysis for M&S has been discussed below: Political: The political factors mainly focusing on role of government in order to set up
the taxes, developing the labor policies, different environmental regulations, various
industries norms, etc. Further, M&S have undertaken various initiatives of fair trade by
cutting out the salt and fats from their food products, recycling of products, etc.
Moreover, as far as retail industry is concerned, local body has adopted various
environment and health regulations in UK. Economic: Economic factors constitutes factors like consumer spending, inflation rate,
raw material cost and other elements which play a crucial role in shaping up the
economic environment of M&S (Basili and et.al., 2013). If company's revenue growth is
concerned then it is low around 2% for cited organization.
 Social: Social factor includes components like cultural aspects, population demographics,
buying patterns and different other. M&S having a strong positive brand image which is
setting policies of creating more equal societies and cultures. Further, in UK market,
demands and preferences of customers are changing rapidly and cited retail venture
responding to these changes by generating low price version for many of their products
and services.
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Illustration 4: PESTLE analysis
(Source: MARKETING THEORIES – PESTEL ANALYSIS. 2015) Technological: It comprises the latest form of technology, research and development
(Serafeim and Eccles, 2014). Organization is focusing on technological innovations in
their retail outlets, building strong information and communication solutions, promoting
products and attracting customers with help of social media and YouTube channels. Legal: Legal factors for M&S include various types of law relating to customer safety,
health, environment and various others. In order to meet them efficiently and effectively,
M&S has taken various steps to be compliant with all these laws by encouraging safe and
convenient work environment and also providing customer service for better support
(Chapman, 2005).
 Environmental: Environment has become crucial element of external factor in which any
business organization is operating. It comprises different environmental regulations,
change in climate, reduction in waste elements etc. M&S with its plan A focusing on
becoming the most sustainable retailer in world.
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2.3 Significance of stakeholder analysis in formulating new strategy
Stakeholders broadly consist of those group who have interest in organization activity
like employees, shareholders, customers. For M & S market development plays a crucial role as
it helps organization in developing the new market for their existing products and services. With
market development, organization will develop more of their brand image along with their
revenue and profits. Significance of stakeholder analysis has been discussed below:
1. Customers- Customers are very important stakeholders of companies because growth of
companies business depends on its customers. Companies can create and retain its
customers by providing them quality service at low cost (Adner and Levinthal, 2004).
2. Employees- Employees are very important stakeholders of company because they are
working in an organization and satisfaction of their interests is straight forward depends
on firms HR policy.
3. Shareholders – Shareholders invest in company shares and in return they want
enhancement in value of shares they hold. With increase in share price, shareholders of
M&S will earn good return on investment.
4. Government- The government has an interest in M&S when company want to build a
new franchise. Mentioned organization has to get planning permission first before they
can start their work in any new place (Mama and Kruger, 2012). Government permission
and support will help M&S to work more effectively.
2.4 Preparation of new strategy
As stated in above case too, mentioned company can implement ansoff grid approach in
order to develop new strategy for developing their business organization. For M&S market
development will play an important role as it will enhance business unit in developing new
market with their existing products and services. Moreover, market development occurs when
Enterprise plans to set their venture to some other part of the world. It is genuinely necessary
because there are still many cities that haven't been served with M&S products and services
(Brown, 2013). In context to this, for starting up new venture, M&S surely would be in need of
stakeholder analysis as it is disused above because all elements of analysis plays significant part
for the success of entity.
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