Strategic Management Report: Analysis of Marks & Spencer's Strategy

This report presents a strategic analysis of Marks & Spencer, a multinational retail company. It examines the company's strategic direction over the past five years, evaluating its objectives and operational strategies. The report reviews the external environment using the PESTLE model, assessing political, economic, socio-cultural, technological, environmental, and legal factors impacting the business. It also discusses the company's competitive advantages using Porter's Five Forces model, analyzing threats from new entrants, substitute products, and the bargaining power of buyers and suppliers, as well as the intensity of competitive rivalry. Furthermore, the report explores probable industry scenarios, strategic drift, and the alignment of the mission and vision statements with market demands. It assesses the company's strategic capabilities, conducts a SWOT analysis, and concludes with recommendations for defending its core business and addressing resource implications. The analysis covers various aspects of Marks & Spencer's operations, from market dynamics to internal capabilities, providing a comprehensive overview of its strategic position and future prospects.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Strategic direction that followed by the company in past five years..........................................1
TASK 2............................................................................................................................................2
Model to review the external environment of the company.......................................................2
Critical discussion of the company's competitive advantages among its direct competitors......3
Probable industry scenarios facing company within its existing market domain.......................4
TASK 3............................................................................................................................................4
Extent to which company facing strategic drift..........................................................................4
Mission and vision statement are aligned to demand of the marketplace...................................5
Company's strategic capabilities.................................................................................................5
Business Canvass Model to portray and describe rational with core logic ................................7
TASK 4............................................................................................................................................8
Possible strategies that company could follow to defend its core business................................8
TASK 5..........................................................................................................................................11
Resource implications of recommendations that company need to address.............................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic management consist with long term benefits in the organisation that include
planning and drives to focus on internal environment. In this consideration, several people
encourages and setting challenges that helps to accomplish personal and professional objectives.
Furthermore, it also focuses to ensure operations effectively and efficiently develop in successful
manner (Ocasio, Laamanen and Vaara, 2018). Main aim of every company to implement this
strategy is that goals and milestones develop with plan to make strategic decisions.
Present study based on Marks and Spencer which is retail sector enterprise that deals in
different nations as multinational retailer. It is public limited company which served several
operations to generate more income in the business.
In order to focus on the present study, it comprises review of external environment of the
company which include PESTLE model. Furthermore, it covers critical discussion on company's
competitive advantages among several competitors. Moreover, it considered mission and vision
statement that are aligned with demand of the marketplace. In addition to this, strategies
followed by the enterprise for defend its core business. At last, resource implications with
recommendations has been successfully developed to address business issues.
TASK 1
Strategic direction that followed by the company in past five years
Marks and Spencer successfully lead to accomplish their goals and objectives with
multinational retail products and services. In this consideration, from 1884 the company
operating with more than 1382 stores in all over the world. In the selected business, the planning
school strategy direction has been followed from past five years which considered actionable
items/objectives which elaborate on the following aspects (Ambrosini, Jenkins and Mowbray,
2015). Strategies considered as a result of control, formal planning and breaking down in certain
steps that support by techniques. Responsibility of entire process successfully develop with
leader. Strategy needs to be made in more explicit in term of objectives, budget, plans, etc. Objective setting stage: In this stage, Marks and Spencer determined objective of the
company which is increasing profitability in all the stores in different areas of the world.
1

 External audit stage: Furthermore, the chosen business need to focus on external
auditing that helps to accomplish objectives with more assessment (Ferreira, Mueller and
Papa, 2018). Internal audit stage: In this stage, internal environment analysis considered which helps
to determine effectiveness with using several tools and techniques. Strategy evolution stage: Moreover, this stage ascertained with evolution which assists to
focus on desired level of performances.
 Strategy operationalisation stage: At operational stage, Marks and Spencer considered
several operations and functions that helps to regulate functions and operations to
increase more profits (Sullivan, Thomas and Rosano, 2018).
TASK 2
Model to review the external environment of the company
PESTLE analysis framework determine different kinds of operations and functions that
potential affect to its operations. With examine this, the chosen company can take better position
which helps to minimise future risks. It includes following factors that impact on Marks and
Spencer: Political factors: In this consideration, it can be stated that Marks and Spencer impacted
favourably by political factors. This is because, European Commission's free trade assists
to make much easier that led to decrease sourcing costs. As compare to higher cost
structure, the chosen business also suffer to enter in new areas of the world. With global
uncertainties, substandard infrastructure and decrease profitability in new market lead to
see overseas operations. Economic factors: There are different kinds of economic factors that impact on Marks
and Spencer. This is because, the chosen company emphasis on higher quality products
and better consumer satisfaction so that they are closely focused on preference and desire
which seek to value and quality. In order to maintain significant advantages, it can be
stated that the chosen business need to maintain their market share with increased price
sensitivity(Honggowati, Rahmawati and Probohudono, 2017). Socio-cultural factors: In the market, trends and customers demand change day by day
so that socio-cultural factors influence to Marks and Spencer. In this consideration, the
2

selected business need to focus on contributing positively to attract more people in the
business. With this consideration, they have to focus on ethical concerns about socio-
environmental costs of different brands which is used to maintain sustainability with
related activities. Technological factors: Furthermore, technological factors also influence to the chosen
business to set strategic position and enjoy benefit of altering media with proliferation of
social networks. Marks and Spencer need to deal with advance technology which cover
speed and latest trends that communicate to satisfy several customers at workplace. Environmental factors: Moreover, environmental factors are also influencing to Marks
and Spencer to follow all rules and regulations in different international level and
increasing consumer pressure. Major international retailers and brands examine life cycle
of its products to reduce waste and helps for stakeholders communities.
 Legal factors: Health and safety regulations also consist important role in business to
maintain safety. In this regard, company's legal environment to maintain ethical
consideration (Ambrosini, Jenkins and Mowbray, 2015). Furthermore, it can be stated
that it provide greater transparency to stakeholders of Marks and Spencer.
Critical discussion of the company's competitive advantages among its direct competitors
Porter's model successfully describe and designed to develop competitive intensity and
attractiveness. In this regard, following factors influence to Marks and Spencer that are as
follows: Threat of new entrants (Low): Marks and Spencer has low threat of new entrants
because in respect to enter in market there is huge investment required. Customer loyalty
has been gained with market maturity and strong brand so that company's need to focus
on quality products and long established network(Honggowati, Rahmawati and
Probohudono, 2017). Threat of substitute products (High): As critical evaluation, threat of substitute products
for Marks and Spencer is very high because it keeps brand consistent with ever changing
customer base. Marks and Spencer largely deals in competition so that they have threat
by shifting customer preferences who look for similar products at low cost. For instance,
Tesco, Sainsbury, etc. deals in this line (Ocasio, Laamanen and Vaara, 2018).
3

 Bargaining power of buyers (Moderate): In the country, Marks and Spencer operate for
customer bargaining power which is high. Increasing price sensitivity of customers
seeking on classical designs (Al Shobaki and Naser, 2016). As critical evaluation,
bargaining power of buyers is weaker so that consumer confidence affect to sales growth
and result on needs of consumers. Bargaining power of suppliers (Low): Bargaining power of suppliers is low because
Marks and Spencer have several suppliers from they can easily buy raw material at
competitive pricing. Declined in bargaining power of its British suppliers is currently low
(Albers, Baum and Delfmann, 2017).
 Intensity of competitive rivalry (High): As critical evaluation, Marks and Spencer facing
high competition in the market because of several businesses' involvement in this sector.
The company is facing intense rivalry from supermarket chains so that food business is
being rivalled by supermarket such as Tesco, Sainsbury, etc.
Probable industry scenarios facing company within its existing market domain
During the years regarding financial crisis, Marks and Spencer continued deal with strong
brand momentum to maintain premium pricing ad backing with more investment on
advertisement. Therefore, sales and share price of the company decline in 2008 that followed
with more improvements on discounted prices. The chosen business committed with social,
ethical and environmental business commitment that helped to build strong brand positioning
centred and reduction in waste (Ferreira, Mueller and Papa, 2018). Furthermore, in respect to
follow UK's decisions to exit EU it is essential to solve legal issues and problems. Free
movement of people, IP rights, international contracts and more assists to take appropriate
decisions that imposed with reducing buying power in existing market domain.
TASK 3
Extent to which company facing strategic drift
Strategic drift can be defined as gradual deterioration of competitive action that results in
failure of Marks and Spencer to acknowledge and respond to change in the business
environment. In the chosen company, strategic drift followed by ill-thought with turnaround
plans (Bailey, Mankin and Garavan, 2018). Therefore, they fascinating case of the enterprise
because strategic and financial health has slipped which can be a caused and compounded with
4

its internal management and culture. In addition to this, the selected business operating to look
for current dilemmas and evolution in successful manner. Building brand also get past success
that is depends on philosophy of quality, money and services (Analysis - Retail - M&S at the
crossroads, 2018). As a result, company is trying to deal with quality location and relatively
simple product ranges. Competitive advantages of Marks and Spencer gained in min 1990 which
based on M&S brand, value for money, high market share in niche markets, etc.
Mission and vision statement are aligned to demand of the marketplace
Mission: Marks and Spencer has mission to deal in inspirational quality accessible to others.
Therefore, it reflects to gain more success and goals that assists to focus on desirable results in
the business. Along with this, the company make aspirational quality accessible to all people so
that it assists to deal in creativeness in the chosen business (Sullivan, Thomas and Rosano,
2018).
Vision: Furthermore, Marks and Spencer has vision to follow all standards in which other
programme can be successfully measure to gain more profitability at workplace. In addition to
this, they are also focusing on customer satisfaction to increase several numbers of people in the
business. As a result, it helps to accessible effective demand that ascertained with desired
outcomes at workplace (Al Shobaki and Naser, 2016).
Company's strategic capabilities
Marks and Spencer capabilities consist effective aspects in the business with changing
environment. It is largely profitable business that founded with unique set of resources and
capabilities to work together that ascertained with competitive advantages. In changing business
environment, the chosen business set prime of properties in retail locations that helps to achieve
occupancy costs well (Bailey, Mankin and Garavan, 2018). Furthermore, brand reputation with
wide base of customers not required reinforcement and building with advertising or promoting.
Employees loyalty also leading in lower than average turnover which is cost effective.
Furthermore, they deal with different range of products and services with lower cost and higher
quality. As a result, it helps to follow flat management structure that is combined with effective
management systems.
There are different aspects with strategic capabilities successfully develop in Marks and
Spencer such as innovation, architecture, reputation, etc. Relationship successfully develop
5

within the firm that contributing to gain more profits and revenue. Furthermore, relationship also
develop with buyers so that the chosen business able to gain competitive advantages.
SWOT analysis
Strength
 Marks and Spencer deals in more than 1,382 stores in all over the world. Therefore,
international expansion and strong competitive advantages successfully gained with UK
businesses that trading in all over the market.
 The chosen company has strong food business which managed to make high growth and
maintain its margin with outperforming in market (Bailey, Mankin and Garavan, 2018). They are focusing on products with consumer focused strategy that is beneficial to the
selected business. The selected business deals in providing superb experience which
include selling with online sector to make high growth in Marks and Spencer.
Weaknesses
 Multiple initiatives includes adding some new sub-brands so that Marks and Spencer
need to provide training and development program to their employees continuously.
 Due to high competition, the chosen business losing their key employees as main
competitors. Hiring and training of new employees is major risk which is becoming
readily available to competitors (Demir, Wennberg and McKelvie, 2017). Furthermore, the company is also facing issue in technical difficulties and privacy
breaches on its website when introducing club and card scheme.
Opportunities
 There are several opportunities in front of Marks and Spencer with successful speciality
in increasing sales. Expanding network of convenience stores and planning for the fastest
food store (Al Shobaki and Naser, 2016). Marks and Spencer recently launch current account facility with no monthly fee so that
this initiative has been largely praised to operating in strong performance.
Threats
 High competition in the market create major threat to the organisation which effect the
recession and decline sales of the company.
6

 Increasing terrorism attack also impact on food, clothing and home wear stores so that
safety measures must be considered in appropriate manner (Ocasio, Laamanen and
Vaara, 2018).
Business Canvass Model to portray and describe rational with core logic
Business Canvass model defined as plan for successful business operations. In this
consideration, resources of revenue has been identified with target customer base, products and
details of financing (Bailey, Mankin and Garavan, 2018). In this consideration, several
advantages will be gain such as easy to understand and focused to remove obstacles from Marks
and Spencer.
Key partners
Platforms
Key activities
Research and
development
Value
proposition
Quality products
and services
Customer
relationships
Online delivery of
services
Customer
segments
Kids
Young people
Old peopleKey resources
Facebook
Twitter
Instagram
Channels
Social media
Cost structure
Platform cost
Content owner
Revenue streams
Advertisement
Promotion
 Customer segments: In Marks and Spencer, there are different age groups of people
attracted those are taking products and services. For instance, kids, young age group, etc.
Furthermore, there are different appliances also provided by the organisation for
developing significant advantages (Ocasio, Laamanen and Vaara, 2018). Value proposition: Quality products has been sold by Marks and Spencer to satisfy their
customers. As a result, it helps to deal in innovative functions and operations at
workplace.
7

 Channels: Social media used by the chosen business as channel to deal with different
types of customers in all over the world. In this consideration, partnership activities also
successfully develop to attain desired level of goals. Customer relationship: Customer relationship build in Marks and Spencer with using
online services that continuously increase profitability and productivity in the selected
business unit (Albers, Baum and Delfmann, 2017). Revenue stream: Moreover, revenue generated with selling of goods and services which
assists to attain overall goals and objectives. In this regard, social media helps to increase
more effectiveness with using valuable outcomes to promote products and services. Key resources: Sales and marketing team of the chosen organisation is key resources that
helps to deal in different kinds of products and services in systematic manner. In this
consideration, it can be stated that Facebook, Twitter, Instagram, etc. are important tools
that helps to attain overall goals and objectives (McMillan and Overall, 2016). Key activities: Research and development is major key activity that assists to get success
in the business. In this regard, management activities helps to deal with desired level of
outcomes. Key partners: There are different platforms where Marks and Spencer deals with their
products and services. As a result, it includes online and physical store to increase sales
of the company (Dagnino, King and Tienari, 2017).
 Cost structure: Platform cost and content owners determine cost structure of the chosen
business.
TASK 4
Possible strategies that company could follow to defend its core business
Value chain analysis is the strategic tool that is used to identify activities which lead in
creation of products and services. Therefore, it includes following: Inbound logistics: Inbound logistics concern in Marks and Spencer successfully develop
with transport, storage and delivery of goods that are coming in business. In order to
consider successful plan, supply chain award for implementing disruptive and ahead with
its competition with regards to social and environmental impact. As a result, it can be
stated that the chosen business is most sustainable retailer in all over the world (Popkova,
8

Abramov and Gandin, 2015). Moreover, company also decreased former dependency on
full service vendor and provided more corporate control of its supply chain. Operations: Marks and Spencer also invested multitude of sub-brands with improved
customer experience. In this consideration, changing needs of customers successfully
developed with qualitative products and services (Ocasio, Laamanen and Vaara, 2018).
On the other hand, in 2014-15 company experienced difficulties due to online operations
and distribution. At the end of 2015, the selected business temporarily shut down their
website to maintain security breach. This is because, poorly integrated IT systems in the
company are being experienced. Outbound logistics: Outbound logistic concern with transport, storage and delivery of
goods. Marks and Spencer has multiple channel operations which assists to allow
customers flexibility in term of order and delivery. It includes programme to make supply
chain more efficient (Köseoglu, Okumus and Law, 2018). Marketing and sales: Marketing strategy of Marks and Spencer emphasis on quality and
style of products. In this regard, for modernising and simplifying distinct brand across
various offering develop with brand identity. As a result, it is investing in digital
development that is evident to launch products and services (Turner, Way and Witteman,
2017). There are several people engage with social media platforms such as Facebook,
Twitter, Instagram, etc. Nowadays, the selected business invested in TV and magazine to
increase advertising with visual merchandising. Promotional activities also develop to
focus on creating better value for customers and increased sales.
 Services: With respect to despite in store services, it can be stated that in-store services
increasing number of out of stock items and online services as well (Starr, Ganco and
Campbell, 2018). The chosen business investing in customer services with increasing free
delivery on certain amount of products which is beneficial to increase staff members in
the store.
Porter generic strategies
In order to accomplish competitive advantages, it can be stated that porter generic
strategy could be adopted in Marks and Spencer. This kind of strategy relate with extent that
increase scope of business activities which seeks to differentiate its products. Key strategic
challenges has been find in a way to achieve sustainable outcomes in the firm (Bell, Filatotchev
9