Business Strategy Report: Macro and Micro Analysis of Marks & Spencer

This report provides a comprehensive analysis of the business strategy of Marks & Spencer (M&S), a leading UK retail brand. It begins with an introduction to the importance of competitive business strategy and the context of M&S's operations in food, clothing, and home products. The report then undertakes a macro-environment analysis using the PESTLE framework, identifying political, economic, social, technological, legal, and environmental factors impacting M&S. It also applies the Ansoff matrix to explore growth strategies like market penetration and product development. The internal environment is assessed using SWOT and VRIO analyses to evaluate strengths, weaknesses, opportunities, and threats. Furthermore, Porter's Five Forces are implemented to evaluate the competitive landscape. Finally, the report culminates in a strategic management plan, integrating various models and concepts to explain strategic planning, including strategic priorities and objectives, and offering a critique of the information gathered through environmental and competitive analyses to produce valid strategic directions, objectives, and tactical actions, concluding with recommendations for M&S's future strategic direction.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
P1 Application of appropriate frameworks for analysing the macro environment ...............4
M1: Critically analyse the macro environment to determine and inform strategic management
decisions.................................................................................................................................8
TASK 2............................................................................................................................................8
P2 Evaluate the capabilities and internal environment of a company by using appropriate
frameworks.............................................................................................................................8
M2 Critically analyse the internal environment to asses strengths and weaknesses of an
organization’s internal capabilities structure and skill set....................................................13
TASK 3..........................................................................................................................................14
P3 Implement porter's five forces to evaluate competitive forces of a market sector for a firm
..............................................................................................................................................14
M3: Devising of proper strategies to improve competitive edge and market position based on
the outcomes.........................................................................................................................15
TASK 4..........................................................................................................................................15
P4 Apply different models and concepts to explain strategic planning...............................15
M4 : Strategic management plan including different strategic priorities & objective.........18
D1: Critique and interpret information by application of environmental & competitive
analysis for producing a valid strategic directions objectives & tactical actions................20
CONCLUSION..............................................................................................................................21
REFERNCES.................................................................................................................................22

INTRODUCTION
Forming a competitive business Strategy is very important for a business organisation in
for their survival. Present report is based on M&S that is a leading retail brands of UK. They are
offering high quality of products and deal on product segments like food, clothing and home
based products. Present report is based on the discussion of making a macro environment
analysis by use of PETSLE analysis as a macro environment framework and tools like SWOT
analysis, VRIO analysis is used for the purpose of developing a detail overview of internal
strength and weakness that is part of a organisation (Anwar and Hasnu, 2016). Further there is
use of porters five forces analysis for the purpose of understanding external forces that can
posses a influence on functioning of a business organisation. With help of analysis made from all
these frameworks there is development of a strategic management plan that has to be achieved in
long run by a business organisation.

TASK 1
P1 Application of appropriate frameworks for analysing the macro environment
Mission statement:
Mission statement of M&S is to make inspirational quality available to their customers.
Vision statement:
Vision of M&S is to accomplish their future goals and create a platform to lay down behaviour
guidelines that is reflecting in their value statement to offer high quality commodities.
PESTLE Analysis:
This is a macro environment tool that is applied of developing a detailed perception of
various perspectives that are part of external environment and can generate opportunities &
threats for a business organisation:
Illustration 1: PESTLE analysis

Political: These factors are related to the rules and norms set up by the government of a
organisation. Recently Brexit has resulted into huge impact on the functioning of retail brands in
UK.
Positive : When all the rules and regulation are timely followed by a organisation then it leads to
positive impact on their overall brand image.
Negative: Brexit impact might result into loss of certain policies with the European suppliers
and can lead to higher cost for consumers that might impact the present level of sales for M & S.
Economic: There are certain economic factors that is affecting organisations of UK.
Positive: There is a positive impact of economic conditions flourishing in a country such as
decision of M & D to switch to use of foreign suppliers have fuelled these competitors
(Whitehead, 2017).
Negative: Many new competitors in the retail industry are part of UK now and this is affecting in
form of new competitors are leading to loss of market from retail brands such as M&S by
encouraging their customers to have related type of products at low prices.
Socio cultural: This factor is associated with preferences and taste of customers who are part of
society.
Positive: M & S has been able to set up a brand image in all these years that has helped them in
creation of a image for their customers that has resulted into high sales of all products that are
being launched.
Negative: Trendy chains are popping up and is affecting the reputation of M & S as they are
becoming a less updated and trendy brand because of these new entrants (Zhao, Nie, and Shao,
2017).
Technological:
This factor is having relation with use of upgraded technology by a organisation.
Positive: M & S has adopted the latest technology that is part of modern day retail business in
food stores and retail brands like self checkout. This is helping their customers in having a self
checkout experience.

Negative: Timely up-gradation requires high amount of financial investments that lead to a huge
impact on regular course of functioning of a organisation.
Legal:
Legal factors are having relation with legal laws and regulations of a organisation.
Positive: Marks and Spencer is engaged in carrying out training activities and all the updations
that are required to ensure their legal protection.
Negative: Large number of changing rules affect the functioning of organisation and also lead to
higher resistance on part of employees if changes are implemented very frequently.
Environmental:
This is a factor is having relation with the factors that are part of external environment and are
continuously affecting functioning of a business organisation (Lubis, Absah,. and Lubis, 2019).
Positive: M & S is continuous engaged in establishment of policies in form of “Plan A” and
“Plan B” that is affecting their brand image in positive way. They have also announced a 100
point plan for five year so that they are able to re engineer themselves and become a carbon
neutral organisation.
Negative: There is a lot of pressure ion rte retail industry that us to make continuous change sin
their policies of sustainable sourcing and health promotion type of businesses ( Prashar,, 2018).
From the above discussed PESTEL analysis it can be said that each factors is associated with
development of certain opportunities and threats for a business organisation.
Ansoff's matrix
It is a growth vector matrix that can be defined as a strategic tool that can be adopted by
manager of a organisation for the purpose of selecting the best suitable strategy according to
detail analysis. In relation to M & S this framework is mentioned below:

 Product development: This strategy can be used by a organisation while there is a launch
of a new product so that existing customers can be attract towards them. In M & S this
strategy can helpful in earning of higher revenue. Market development: It is a growth related strategy where present products are placed for
a new customer segment so that present base can be enhanced. It will help M & S in
enhancing their sales and profitability ratio (Marks and Spencer plc, 2020). Market penetration: It is a strategy in which a organisation wants to increase market
share by assistance of their present product in the exiting markets. This strategy will be
very helpful in offering complementary services for their customers to enhance share of
market by earning of higher revenue.
 Diversification: This is one of the most high-risk strategy where fresh products are
launched and the market is also complete different from existing markets scenario. If the
product fails then it is a huge loss for a organisation.
From the above made discussion of various strategies Marks and Spencer can make use of
market penetration for the purpose of offering more offers and discounts to their existing
customer base to enhance their revenue share without making high amount of investment in
launching of new products (Dahl, and Fløttum, 2019).
Illustratio
n 2: Ans off matrix

M1: Critically depict the macro environment for strategic decisions.
From the above made discussions of PESTEL analysis and use of Ans off matrix it can be
said that there are certain opportunities and threats that are affecting M & S in long run. For this
there are certain strategies applied for the purpose of strategically accelerating the present growth
and profitability of a organisation (Gong, 2016). Based on the above discussed models and
analysis there are certain opportunities and threats that are part of a business organisation have
been discussed below:
Opportunities:
 M & S can expand their business in Asian and African countries. M & S can make investment in different types of marketing activities by using a low cost
strategy for the purpose of approaching a completely different segment of customers that
is low income group of people who presently are not able to afford products of M&S
because of its high prices(Marks and Spencer to reopen 118 M&S cafes in UK tomorrow
- full list of branches, 2020).
Threats:
 There is a rising threat because of the rapid changing dynamic environment and the
changes taking place in global business operations that can act as a barrier in having
effectiveness in M & S.
 There are major competitors in retail brands like H&M, Zara that is providing tough
competition and can be a big threat for future strategies of M & S.
TASK 2
P2 Assess the ability inner environment of organization
strategic capabilities are regarded as procedures that is related with different strategies
that can be used as action of a organisation to deal with various competitors that are part of
external environment (Raut, Cheikhrouhou, and Kharat, 2017). This has major six elements like
strategic purpose, key goals, action planning, analysis tools, vision and values, these
components are responsible for shaping the process of strategy implementation of a business
organisation.
Resource based view strategy

Resource based view is regarded as a framework that can be use by a organisation for
discovery of certain resources that can be utilized by a organisation for attainment of competing
advantage. There are 2 resources tangible & intangible. Tangible resources include machinery,
land, capital, equipments and intangible resources include physical presence of a organisation
and further includes intellectual property rights, trademarks and brand reputation of a particular
organisation (Galbreath, 2018).
SWOT analysis:
Strengths Weaknesses
 There are high quality products that are
offered by M&S and is helps in
achievement of higher competitors
advantage in the structure.
 M&S has high prices because of high
quality that they offer in their product
and this results into not being able to
cater to acquirement of low income
based group of costumers unlike other
competitors.
Opportunities Threats
 There is a available business strategy
that is use of business explanation in
 There is a threat of losing market share
in coming future because of high
Illustration 3: Resource based view of
organisations

new areas and price penetration to
expand in the present market areas.
competitive strategies that is adopted by
other retail brands like Zara and their
growing popularity can impact the
present market segment of M&S to
switch to these attractive brands.
McKinsey's 7S model
Mckinsey 7s model can be used by a organisation for analysis of organisation design of a
organisation by developing a detail understanding of seven basic components. These components
are below:
 Strategy: It is formulated by a organisation to attainment of a competitive factor in
comparison to their competitors. M&S need to form a robust strategy in order to survive
for a longer duration of time period (PESTLE Analysis Of Marks And Spencer, 2019).
 Structure: It is used for depicting the way in which business are organised and sharing
information to each other. In M&S there is a requirement to have a proper structure to

maintain effectiveness in the organisation it can be divisional, functional or matrix
structure (Amran, and et. al., 2016).
 Systems: It is a process that cab be used for detecting the daily function and process of
decision making in a organisation. There is a need to maintain a appropriate system to
implement any type of organisational change in M&S.
 Skills: It is very important to maintain a competent firework to ensure that there is proper
performance of all the employees in a organisation and help them in handling all the
complex areas of regular functioning in M&S.
 Style: It represents the way organisation is being managed by top management of a
organisation. There is a particular style of leadership that is adopted in M&S that is
democratic in situations where employees view points are considered for decision making
and autocratic when the decision is solely made by top management only.
 Staff: This is a element that is related to number and type of employees that are presently
employed in M&S it consist of employee hiring, training and then rewarding them so that
they are always motivated to contribute towards organisations smooth functioning (
Marks and Spencer SWOT & PESTLE Analysis, 2019).
 Shared values: There are certain norms and standards that are guiding the cations of a
organisation and employee behaviour such as in M&S organisation is willing to provide
higher value to their customers and this value is reflect in their internal-functioning.

VRIO analysis:
This tool is applied by organisation for the intention of identification of several resources
that are available and are related to internal capabilities of a organisation. It is very helpful for
them in achievement of higher competitive advantage, VRIO analysis of M&S is mentioned
below:
 Valuable: It is very crucial for managers in M&S to utilised their available resources and
there are certain resources that have been identified to be extremely important in
providing a competitive advantage to M&S as mentioned like brand reputation,
competent workforce, supply chain network and timely innovations.
 Rareness: This aspect of VRIO model is related with understanding of a organisation
that are the resources rare to be posses by a organisation. In M&S resources like
Competent workforce, brand reputation,, supply chain network are among the rare
resources.
 Imitable: It is very important for a organisation to posses some resources that are
valuable rare and not easily imitated by any other competitor. In case of M&S it consist
of brand image and the supply chain network that cannot be easily copied by other
competitors of this retail brand (Ghezzi, 2013).
Illustration 5: VRIO analysis