Business Strategy Report: Marks and Spencer Macro Environment Analysis

This report provides a comprehensive analysis of Marks & Spencer's business strategy, examining the impact of the macro environment through PESTEL analysis, identifying strengths, weaknesses, opportunities, and threats using SWOT analysis, and exploring strategic options via the Ansoff matrix. The report delves into the internal environment using the McKinsey 7S model and explains competitive analysis using Porter's Five Forces. It evaluates appropriate strategies for a competitive edge and concludes with strategic planning recommendations for Marks and Spencer, aiming to enhance market share and achieve higher efficiency. The report emphasizes the importance of adapting to changing customer preferences, technological advancements, and external factors to ensure sustainable business performance and competitive advantage in the dynamic market landscape. The analysis highlights the significance of market development strategies, innovation, and adherence to legal and environmental regulations to achieve long-term organizational goals.

Business Strategy

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
P1 Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies...............................................................3
M1 Evaluation of macro environment.........................................................................................6
P2. Analysation of internal environment as well as capabilities of chosen organisation............7
P 3 Explain the competitive analysing with the help of porters five forces model.....................8
M3. Evaluation of appropriate strategies for competitive edge...................................................9
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation.............................................................................................................10
M4. Evaluation of strategic plan................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
The term business strategy may be referred as clear set of actions as well as plans with certain
objectives and goals that outlines that how an establishment will compete in dynamic business
environment (Campbell, Stonehouse and Houston, 2020). It is imperative for business to frame
strategies so that it becomes easier to attain organisational goals within time frame period. In
today’s business world, customer choices and preferences are constantly changing and it creates
difficulty for business to function as per market trends. So by framing of business strategies,
employees can be aware about their roles and responsibilities which drives company towards
attainment of goals. Marketers of company can opt various business models in order to identify
market trend and to fulfil market expectation. This project report is based on Marks and Spencer,
a multinational clothing and food products retailer in UK. It was commenced by Michael Marks
and Thomas Spencer. This report will cover various frameworks so as to analyse impact of
macro environment factors. In addition to that, it will cover SWOT, Ansoff matrix, McKinsey
Model and Porter’s Five Forces model. At last, it will depict a marketing plan for expansion of
market share.
TASK
P1 Applying appropriate frameworks analyse the impact and influence of the macro environment
on a given organisation and its strategies.
There are various models that company may opt in order to analyse impact of macro
environment along with its factors. In context to Marks and Spencer, PESTEL analysis is used.
PESTEL analysis
This framework is used by many companies in order to analyse impact of external factors that
can positively or negatively influence company’s operations. In addition to that, by opting this
framework, company can frame effective business strategies that helps in attainment of goals
effectively and efficiently. In relation to Marks and Spencer, following are some factor that may
influence company’s operations.
 Political- This factor relates to various government policies that may interfere in
operations of an organisation. Political factors involve trade restriction, change in
government policies and instability in political power can influence company’s
operations. It has been analysed that Brexit have negatively impacted Marks and Spencer

in various aspects. Due to trade restriction outside European union, it may create
challenge for company to export and import products.
 Economic- This factor is directly linked to the performance of economy that may
influence company’s operations. This factor involves inflation and interest rates which
adversely affect M&S. Due to inflation in raw material, it becomes challenging for
company to offer products at low price. This factor influenced in terms of low
profitability and low sales volume. The demand of products of Marks and Spencer has
been decreased due to high inflation rate.
 Social- This factor relates to current market trends and due to rapid change in customer
preference and taste in fashion industry, it becomes challenging for company to operate
business. The core aim of every organisation is to meet customer expectation by
producing quality products at minimum price. This factor includes behaviour, attitude,
and lifestyle of customers. In order to address this issue, Marks and Spencer have to
regularly bring innovation to its products as per latest trends. It will help company in
gaining competitive advantage against Zara and H&M.
 Technological- This factor relates to innovation and development in digitalisation. Rapid
change in technology can impact on company’s operations. Use of artificial intelligence
can be used by company so as to collect data from various sources in order to create
insight of customer data such as buying behaviour, trends and other patterns. It is needed
for company to upgrade its technological resources so that it can bring down overall
production cost and thus offer better price to its customers. It will help company in
maximising profit and can achieve higher efficiency in its operations.
 Legal- This factor relates to various laws and legislations framed by UK government and
it is mandatory to comply with all or company government may impose penalty, in case
of non-compliance. It is important for company to adhere with all laws so that it would
not face any legal issues in its operations. Company have to follow laws such as
employee safety law, wages act and many more.
 Environmental- This factor relates to surroundings which may impact on company’s
operations. This factor may involve sustainable development, tornadoes and climatic
condition (Schawel and Billing, 2018). All these factor may affect supply chain of
company and may face difficulty in meeting customer demand. Company have to take

initiative of sustainable development and replace plastic bags with jute bags. It will
minimise negative impact of company’s operations towards environment.
SWOT analysis
This tool is opted by many companies in order to identify strengths and weakness along
with opportunities that it can capture and threats which may negatively impact on
company’s operations (Cavaleri and Shabana, 2018). It helps in framing of business
strategies and makes it easier to accomplish organisational objectives.
Strengths Weaknesses
 Marks and Spencer have a good
image in market where it positions
itself in a company which sells
premium products.
 Company have a larger workforce
which enables in expansion of its
products in different regions of
countries.
 Due to poor scalability of supply
chain, company is struggling in
meeting customer demand.
 Due to return policy, customers are
returning products and are
switching towards other brand.
Opportunities Threats
 There are various opportunities lies
in fashion industry as it can produce
clothes for a particular segment that
yet not covered by its competitors.
 Cut-throat competition in fashion
industry may be threat for company
and companies like H&M and Zara
may create threat for company.
 Many small clothing companies
may offer similar product but at
lower price than M&S. This could
be threat to company.
Ansoff matrix
This matric is used by many organisations in order to analyse various business aspects of
company. In relation to Marks and Spencer, Ansoff matrix is discussed below.

 Market penetration- In this strategy, company tries to sell existing product in existing
market (Bahadori and et al., 2018). This approach is least risky as compared to other
strategies within organisation. In relation to Marks and Spencer, it sells existing products
to existing market of UK so as to enhance brand equity of company. In addition to that, it
will help company in increasing market share with use of this strategy.
 Product development- This strategy is used by M&S so as to enhance product share.
Company brings innovation to its products and sells in existing market. This strategy
facilitates in gaining competitive advantage within dynamic business market.
 Market development- In this strategy, company tries to expand its business in new
market but with existing product. With this, company can render its products to new
audience. People can be made aware about company’s offering and capture new market.
This approach is risky as entering in a new market seems to be difficult because company
is unaware about tradition, customs and preferences of customers.
 Diversification- This strategy is much risky as company focus on expanding its business
to new market with new product. In some instances, M&S enters in new market so as to
wider its market share across globe. Company conducts market research and based on
that produces product which have potential to meet customer’s expectation.
From the above strategies, it was recommended that company should opt market
development strategy as it has to focus on entering in new market with existing product.
It will help company in capturing new market which contributes in elevation of
profitability. With this strategy, company can enhance market strategy and can achieve
higher efficiency in market. Along with this, it will help company in attaining higher
profits.
M1 Evaluation of macro environment
There are various factors that needs to be taken into consideration while framing business
strategies. It will help company in avoiding uncertainties relates to these factors (Dawes,
2018). Company have to comply with all legal laws so that it can avoid legal penalties. It
has to comply with all rules and regulations framed by UK government. In addition to that,
company have to upgrade its technology so that it can lower down overall production cost.

P2. Analysation of internal environment as well as capabilities of chosen organisation
There are various models buy which company can evaluate its internal environment and
with this frame strategy so as to gain competitive advantage. This will help company in
decision making and in attainment of objectives within time frame period. In relation to
Marks and Spencer, Mckinsey 7s model is used.
McKinsey 7’s Model
This model is used by M&S so as to evaluate success as effectiveness of business
strategies. With this, company can get to know about various areas in which it lacks and
by altering strategies, it can achieve higher efficiency. The seven elements of this model
are discussed below.
 Strategy- By creating blueprint, company can gain competitive advantage and company
ensures that all the strategies contribute in meeting objectives or not. If not, company
takes corrective actions to make it right. It will help company in meeting pre-set
objectives which can bring efficiency to company’s operations. Premium pricing strategy
is used by company so as to capture high class people.
 Structure- The organisational structure of M&S is made up of corporate hierarchy and
involves all day to day functions along with roles and responsibilities of each department.
It gives clarity to employees and they can be aware with roles and responsibilities that
they have to perform within organisation. It follows centralised and decentralised
structure in some instances so as to cope with situations.
 Systems- This element deals with day to day workflow, operations and procedures which
are utilised in company. In context to Marks and Spencer, it has various department
system such as finance, marketing and HR. All those systems collectively aim towards
fulfilment of organisational objectives.
 Shared values- They are commonly accepted standards and norms within organisation
which can influence behaviour of workforce. Marks and Spencer shares value which
signifies various goals that needs to be fulfilled.
 Skills- Each individual has different set of skills which needs to be applied within
organisation so as to attain organisational goals. Company focus on hiring young talent
who has skills and knowledge which drives company towards attainment of goals. Highly
professional individuals facilitate in achieving greater efficiency as well as in generation

of profit. It has individuals who understands fashion industry very well and have potential
to take decision in favour of company’s profit.
 Style- This element relates to leadership style that company follows so as to enhance
overall productivity of company (Rozak, Adhiatma, Fachrunnisa and Rahayu, 2021).
Marks and Spencer opts coaching leadership style in which it guides, instructs and
motivates employees so as to retain existing employees. Leaders of M&S derives peak
potential within employees so that they can work with full efficiency.
 Staff- This element refers to personnel of business organisation and involves how large is
workforce and at what level they are motivated to attain organisational goals. There are
various motivational approaches opted by company such as providing cash prizes, fringe
benefits and appreciation can fill employees with motivation.
Resource based view
By using this model, companies can frame effective strategies which leads to attainment
of goals effectively and efficiently. In addition to that, company can able to maintain
sustainable position in market and gain competitive advantage. It is basically of two types
which are tangible and intangible. In relation to Marks and Spencer, company allocates
its valuable resources in such a manner that it yields higher profit. By optimally utilising
resources, it becomes easier for establishment to accomplish objectives.
M2. Evaluation of internal environment
In order to analyse internal environment, Mckinsey model is being used. With this
framework, it has been analysed that company have framed effective business and
motivational strategies so that it can create a foster environment within organisation. The
organisational structure of company is effective and facilitates in free flow of
communication in decision making process. Along with this, company have highly
qualified professional who contributes their valuable efforts in making company
successful.
P 3 Explain the competitive analysing with the help of porters five forces model
This tool is used to analyse competitive forces that may impact on company’s
performance (Galli, 2020). It is important for company to analyse competitive forces so

that strategies can be made so as to minimise negative impact of those forces. There are
five forces which are discussed below in context to Marks and Spencer.
 Bargaining power of suppliers- This factors relates to power of suppliers in
bargaining (SIMIONIDES, 2022). In context to Marks and Spencer, the
bargaining power of suppliers are low as there are many suppliers who provide
quality raw material at low price. Company opts that supplier which offers better
quality of raw material along with low cost.
 Bargaining power of customers- This factor relates to bargaining power of
customers. In relation to Marks and Spencer, the bargaining power of customers is
significant as there are many competitors which provides similar product at low
price as customers have low switching cost.
 Threats of substitutes- This factor relates to substitute of product over another
product. In context to Marks and Spencer, threat of substitute is high as there are
many companies like Zara and H&M which targets premium customers.
Customer may opt other brand over Marks and Spencer due to high threat of
substitute.
 Threats of new entrants- In context to Marks and Spencer, threat of new entrant
is low because of high brand loyalty of company. It possesses a brand equity in
market and cost may be difficult to survive against big companies like H&M and
Zara.
 Competitive rivalry- This factor relates to competition among different companies
in market. In relation to Marks and Spencer, the competition is very tough and
considered to be competitive. Companies like Zara and H&M are some popular
rivals of M&S.
M3. Evaluation of appropriate strategies for competitive edge.
There are various risks associated with forces that may negatively impact on company’s
operations. In addition to that, this issue can be addressed by framing of business strategies
by analysing strengths and weakness of its competitors and according to that frames
strategies (Razmi, Mehrvar and Hassani, 2020). It will help company in gaining
competitive advantage and competitive rivalry is the significant factor which needs to be
taken into consideration. Due to high competition in fashion industry, M&S can gain

competitive advantage by analysing customer’s expectation along with understanding
market trends so as to meet customer’s expectation.
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for
a given organisation.
Porter generic theory
This model is widely used by companies so as to opt suitable strategy which have potrential in
brining efficiency to company’s operations. In relation to Marks and Spencer, Porter’s generic
theory is discussed below.
 Differentiation- This strategy focuses on bring innovation to its products so that
company can stand out in market. In relation to M&S, it regularly updates its shelf as per
market trend and on producing product which is different from its competitors. It will
attract large customer base and company can generate higher profit.
 Cost- This strategy focuses on bring down cost of products so that it can attract huge
customer base. On some occasions, company reveals offer like “Flat 50% off” and “Buy
One Get Two”. In addition to that, company updates its technology and aims to cut down
overall production cost so that it can offer better price to its customers.
 Focus- In order to attain competitive advantage, company have to focus on two strategies
which are differentiation or cost focus strategy. Both the strategies can bring efficiency to
company and it makes it easier to achieve organisational goals effectively and efficiently.
From the above statement, it has been analysed that company should opt differentiation
strategy as customer majorly seeks for product differentiation. Company which focus on
brining innovation and uniqueness to its products can easily attain competitive advantage.
Company can bring new design to its clothes which are not previously introduced by
competitors like Zara and H&M.
Bowman’s strategic clock model
This model is used by company in order to evaluate effectiveness of current strategies and
what changes can be made so as to make it more effective (Firoz Suleman, Rashidirad and
Firoz Suleman, 2019). There are various elements of this strategy in context to Marks and
Spencer.

 Low price- With this strategy, company can attract larger number of audience by bringing
down overall cost. Company focus on reducing overall production cost so that it can
bring down cost of production and can offer better price to its customers.
 Low value added and low price- This element focus on keeping price low and its benefit
can be applied to all frames of business. This strategy is opted by Marks and Spencer.
 Differentiation- Company focus on bringing innovation to its products such as unique
colour combination, designs and patterns which attracts customers. It creates brand
loyalty of company.
Strategic marketing plan
 Summary- Marks and Spencer is a well-known clothing, food and home products
established in London, UK. Company is planning to expand its horizon in different
segment and this plan will help company in enhancing market share of company.
 Vision of company- The vision of company is to render quality product as compare to its
competitors.
 Mission- The mission of company is to meet customer expectation by providing quality
products.
 Objectives- The objective of company is to increase market share and to generate more
profit.
 Tactics product- Company will offer similar products but tries to bring so that it can gain
competitive advantage in market.
 Price- Company will opt competitive marketing strategy so that it can attract larger
customer base. It cuts down its overall production cost so that it can offer better price too
its customers.
 Place- Company will display its products on both online and offline channel. With online
channel, customer can order directly through company’s websites and gets product right
to their home. It becomes convenient for customer to order product as UI of company’s
website is simple and easy to use.
 Promotion- Company will use social media marketing so as to promote its product by
creating eye catching ad campaigns and by producing engaging content for company’s
website. This promotion tactic is cheaper and effective marketing tool as compared to

other. Company can communicate and promote its products over social media platforms
which leads to higher customer base.
 Controlling and monitoring- Company will monitor each activity and ensures that it is
done as per pre-set criteria or not. If not, what corrective actions are needed to enhance its
efficiency. M&S will keep track of activities along with cost incurred in acquiring each
customer.
M4. Evaluation of strategic plan
As company needs to expand its market share and marketing plan helps company in
achieving objectives. Company sets clear objective, mission and vision along with
marketing mix. It consists of every essential element that a marketing plan consist. M&S
have wisely use digital marketing in order to promote its products over internet. With
this, company can able to attract larger customer base.