Strategic Analysis of Marks and Spencer Using Value Chain Model

This report provides a comprehensive analysis of Marks and Spencer's business environment, focusing on the application of the Value Chain Model. The introduction sets the stage by defining the business environment and its impact on organizational performance, highlighting the importance of both internal and external factors. The report then delves into the Value Chain Model, explaining its components, including primary activities like inbound logistics, operations, outbound logistics, marketing and sales, and service, as well as support activities such as firm infrastructure, human resource management, technology development, and procurement. The analysis is then applied to Marks and Spencer, examining how the company's operations align with the Value Chain Model. The report explores the primary and support activities within Marks and Spencer, assessing their effectiveness and contributions to the company's competitive advantage. The reflection section emphasizes the importance of the Value Chain Model in enhancing client relations, reducing delivery times, and optimizing inventory management. The report concludes by underscoring the value of the Value Chain Model as a strategic tool for organizations. The report stresses that Marks and Spencer can gain a competitive edge and improve its overall performance by implementing and managing the various activities in its value chain effectively.

Reflective Analysis of
Business Environment

Contents
INTRODUCTION.....................................................................................................................................3
Value Chain Model....................................................................................................................................3
Marks and Spencer....................................................................................................................................4
Internal Environment...............................................................................................................................5
Reflection on Value Chain Model.............................................................................................................7
CONCLUSION..........................................................................................................................................8
REFRENCES.............................................................................................................................................9

INTRODUCTION
The business environment comprises of both internal as well as external factors that can
affect an organization’s overall operations including its employees, demand and supply,
customers etc. It can provide an access to several opportunities and help a particular business
improve its overall performance (Aziz, Noranee and Abd Razak, 2020). It also helps in
formulating strategies and cope up with various challenges as well as risks. Organization chosen
for this report is Marks and Spencer, which is a British multinational retailer founded in 1884 by
Michael Marks and Thomas Spencer. The report describes the Value Chain Model and examines
the internal environment of the chosen company.
Value Chain Model
Value Chin Model can be defined as a strategic tool that is used be organizations to
analyze their internal activities. It is a process that allows an organization to identify its primary
as well as support activities that add value to its final products and services in some or the other
way. The main aim of the value chain model is to identify which activities are valuable and
which ones can be improved in order to gain a competitive advantage in the market. The model
was presented by Michael Porter in the year 1985 and comprises of primary activities, that add
value to the final products of the company as well as support activities that also add value to the
products, but indirectly (Value Chain Analysis, 2020). All the activities in the model are
interdependent with five primary activities, namely inbound logistics, operations, outbound
logistics, marketing and sales as well as service. Support activities on the other hand include
procurement, human resources, technology, development and firm infrastructure.
Primary activities are majorly concerned with creating and delivering a product and are
grouped in to five categories. On the other hand, support activities are the ones that assist the
primary activities in standing out against competition in the market. The different categories of
the two activities are explained below.
Primary Activities
Inbound Logistics: It is defined as the goods that are obtained from the suppliers of an
organization and will be used to produce the end product.

Operations: In this activity, the raw materials are converted into final products and value
is added to them as they pass through various stages.
Outbound Logistics: Once final products have been manufactured, they are then
distributed to different wholesales, retailers, distribution centers.
Marketing and Sales: Different marketing activities should make sure that the final goods
and services are targeted towards the right audience (Gould and Taylor, 2017). Marketing mix
can be used to formulate effective strategies.
Services: Once the final goods and services are sold, various support services should be
offered to the customers.
Support Activities
Firm Infrastructure: Ineffective firm infrastructure can affect a firm’s overall goodwill in
the market.
Human Resource Management: A firm needs to recruit, select and hire the right people
for it to be successful.
Technology Development: Technology is of utmost importance for an organization to
gain a competitive advantage.
Procurement: this particular department must obtain the raw material in the best possible.
Marks and Spencer
Marks and Spencer is a multinational retailer that offers high quality household, clothing,
food and beverage products to the customers. The company was founded by Michael Marks and
Thomas Spencer in the year 1884. The company has operations in different parts worldwide and
has a large customer base. Marks and Spencer is considered to be the largest retailer in the
United Kingdom having approximately 300 retail outlets. The company also operates additional
100 outlets in various locations including Europe, Hong Kong, Australia, Canada and so on
(Marks and Spencer p.l.c. - Company Profile, Information, Business Description, History,
Background Information on Marks and Spencer p.l.c. 2020). Marks and Spencer is

headquartered in London, United Kingdom and sells its products through online website as well
as online retail stores. The founders of the felt the necessity for high quality products at
affordable prices among customers.
Marks and Spencer proved out to be one of the most successful because it distinguished
itself and continued to offer good quality products at affordable prices. The employees of
respective company are also engaged, satisfied and committed to their jobs. As a result, they put
in their complete efforts to get the tasks that are assigned to them complete on time (Hoppe,
2018)(Yeoman and McMahon-Beattie, 2018).. The company markets its products through
various promotional strategies like advertising through billboards, social media platforms,
magazines etc. The company has various brands as well as product lines under its name that cater
to the needs of different customer segments. Marks and Spencer faces a lot of competition from
brands like Zara, Gap, Tommy Hilfiger etc. And in order to address the same, it has adopted
various strategies to gain competitive advantage against other players in the market. Lastly,
although being a very old brand, Marks and Spencer still continues to be one of the most
shopped brands all across the world.
Internal Environment
Value Chain analysis can be advantageous for Marks and Spencer in helping it gain
competitive advantage in the market. The overall inflow of materials will also improve along
with assisting it in identifying the activities that are valuable for it and the ones that are not. The
model in context to the company is explained below -
Primary activities
Inbound Logistics: It is important for marks and Spencer to analyze its inbound logistics
wherein it will focus on all the different aspects that are involved in converting the raw material
into finished products (King and Brooks, 2016). The company should also develop and maintain
strong relationship with the suppliers. This is because they deliver and distribute the products
whenever needed.
Operations: This stage includes both manufacturing of the products as well as service
operations. Analyzing these activities will help in improving overall productivity as well as

efficiency. Also, the company will gain a competitive advantage over other brands in the market.
This will further lead to increased profitability and enhancement in economic growth.
Outbound Logistics: Respective company can analyze its outbound logistics in order to
identify a greater number of sources by which it can gain a competitive edge as well as grow its
business (Mayer, Warmelink and Zhou, 2016). Some examples of outbound logistics are
handling material, warehousing, scheduling, order processing and delivering the products to the
customers on time.
Marketing and sales: In this stage, Marks and Spencer will focus on highlighting the
benefits of the final products. Only manufacturing high quality products and offering them at
affordable prices will not be helpful until effective marketing strategies are not carried out. Some
of the marketing and sales activities that are carried out by Marks and Spencer are advertising,
building relations, quoting etc.
Services: Services include both, that are offered before sale as well as after sale of the
products. These services play an important role in developing loyalty among customers. This is
because customers these days prefer services that are offered after the sale of the products to be
more important. Thus, these services will also help in enhancing overall performance of the
company in the market.
Secondary Activities
Firm Infrastructure: Firm Infrastructure includes various activities like legal matter,
quality management, planning, strategic management and financing etc. Effective management
of the firm infrastructure will help the company in optimizing its complete value chain
(Ottenberg and et. al., 2016). This will also help in strengthening the overall position in the
market. Management of the company should control the infrastructure activities, also known as
overhead costs.
Human Resource Management: The management of respective company should analyze
its various human management aspects that include recruiting, selecting, training and
development etc. This will help in reducing the competitive pressure on the employees of the
company and instead enhance their motivation and skills. Hiring and training costs can also be
analyzed with their respective results.

Technology Development: Today, almost all value chains of every company depend upon
some or the other kind of technological support. Marks and Spencer should divide its various
product development activities in its system. Some examples of the same are automation,
customer service supported through technology, data analytics and product design. The research
and development department at Marks and Spencer has been classified in this way.
Procurement: The various activities that are denoted in procurement include purchase of
the inputs like equipment, machinery, raw material, supplies and various other items that are
required for producing the finished products (Richards and et. al., 2019). Marks and Spencer
should carefully its various procurement activities in order to enhance its outbound, operational
as well as outbound value chain.
Reflection on Value Chain Model
While completing the report, I analyzed that Value Chain Model is very important. The
importance of the same is descried below –
Enhancement of client relations – By managing the different factors of the inbound
logistics, the company can easily reduce its costs for the clients. Advertising, income and
provider phases in the price chain help improve customer members of the family. For example,
maximum businesses today have praise applications that increase consumer loyalty and convince
them to buy extra merchandise over a certain length.
Reduction in delivery times – I also understood that through value chain analysis, a
company can reduce the overall time of delivering its finished goods. This will assist in
enhancing relationship as the resellers could be placed higher to coordinate buying and selling
activities. This may also advantage in ceasing customers who will get right of entry to the goods
while all change partners intention to transport goods successfully.
Utilize the inventory in an effective way – The reduction in the amount of time taken to
deliver the products will mean that the raw material in the inventory is utilized in an effective
manner (Xayavong, Kingwell and Islam, 2016). Also, when excess amount of inventory is
ordered, it can create a pressure on the company. Ordering excess inventory is always stressful
and costly to handle as it would end result into wastage. For this purpose, the retailers have better

believe that the manufacturers will deliver orders whilst wanted putting off opportunity for
shortages.
Apart from the importance of the value chain model described above, I learnt that if a
company implements and manages the various activities in its value chain effectively, it will gain
a competitive edge against competitors. This will also help it in enhancing its overall
performance and increasing profitability. Also, the time taken to deliver finished goods to the
wholesalers or retailers take less time. Also, I learnt that by using this model, a company can
identify which activities are valuable for it and the ones that are not (Hillary, 2017). Therefore,
the activities that are not valuable can be improved or worked upon. This will help in standing
out in the market against competitor brands. Apart from this, the vendor management will also
improve and the customers will receive an improved service.
The profitability of the company will also increase as well as it will gain the trust of
customers. The products and services of the company will also improve in terms of quality as
well as costs. I also learnt that through VCA, an organization will be able to identify those value-
generating activities and their cost drivers. By reducing the cost of individual value chain
activities or by reconfiguring the value chain, the organization will be able to create a cost
advantage. A big advantage is that the value chain is a very flexible strategy tool for looking at
your business, your competitors and the respective places in the industry’s value system.
Therefore, value chain analysis is an important concept that should be incorporated in all
organizations.
CONCLUSION
From the above report, it can be concluded that value chain analysis is an important
concept that should be incorporated by companies in their systems. The analysis also helps a
company in gaining a competitive advantage in the industry against other players in the market.
It can also get an access to various opportunities. The raw material can be utilized in an efficient
and effective way and the final products that will be produced will cater to the needs of
customers. This will lead to the company gaining the trust and loyalty of the customers.

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Online
Marks and Spencer p.l.c. - Company Profile, Information, Business Description, History,
Background Information on Marks and Spencer p.l.c. 2020. [Online]. Available
through:< https://www.referenceforbusiness.com/history2/68/Marks-and-Spencer-p-l-
c.html>.
Value Chain Analysis. 2020. [Online]. Available through:<
https://strategicmanagementinsight.com/tools/value-chain-analysis.html>.