Strategic Management Report: Analyzing Marks & Spencer's Strategy

This report provides a strategic management analysis of Marks & Spencer (M&S), examining its business environment and competitive landscape. The introduction highlights M&S's history and global presence. The main body compares strategic theory and practice, focusing on PESTEL analysis (political, economic, social, technological, legal, and environmental factors) to understand external influences on the company. It also explores competitor analysis, identifying key rivals like Tesco and Sainsbury's, and utilizes Porter's Five Forces model to assess industry dynamics. The report emphasizes the increasing competition in the retail industry and M&S's strategies to maintain its market position. It also discusses the importance of adapting to changing customer demands and technological advancements. The conclusion summarizes the key findings and provides insights into M&S's strategic challenges and opportunities.

STRATEGIC
MANAGEMENT

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Compare theory and practice.......................................................................................................3
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic management is having a formed strategy for the business so that the goals and
objectives of the organization can be met. Strategies can make the organization get in a lot of
changes so that the satisfaction level of the customers can increase in the market. Marks &
Spencer is having its headquarters in London, United Kingdom and has been operating in this
industry from 136 years which is from 1884. The founders of this business are Thomas Spencer
and Michael Marks and now the business is operating worldwide. There are more than 80,000
employees working in the organization as of 2020. The competitive analysis of the organization
is going to be discussed in the further report and the measures the business is taking to be able to
compete in the market. The external factors of the business will also have to be understood so
that the decisions of the business are going to be effectively and the company can maintain their
standards and reputation in the market as well.
MAIN BODY
Compare theory and practice
The demand in the market is increasing which is why the company will have to
understand this aspect and make changes accordingly. There are tools which the business can use
like competitive analysis, business environment analysis and comparative analysis positions so
that the company will be able to achieve their objectives and goals.
Business environment analysis
There are a lot of environmental factors which can be understood and then further
decisions for the company can be taken (Kools and George, 2020). There are a lot of changes
which take place in business but before that there have to be better frameworks which have to be
used to analyse the market effectively. There is a lot of information collection which has to be
done so that the company will not just be able to complete but get a competitive advantage as
well.
PESTEL Analysis

There are a lot of external factors which are going to have an influence in the company to
be able to operate effectively and efficiently in the bazaar. The external factors include the
political, social, economic, technological, legal and environmental factors which will have to be
understood by Marks & Spencer have to be able to operate effectively in the market. The needs
and expectations of the customers from retail industry are high therefore the businesses in this
industry must select their measures effectively.
 Political Factor
The government is stable in United Kingdom which is a great advantage for M&S which is
because the policies and laws are the same in the country. There is a stable strategy and measures
so that there is going to be a better sense of direction which would be present in the company.
The taxation laws and trading laws have to be understood by M&S so that they can take the right
measures accordingly which is going to be good for the company (Punt, 2017). Due to Brexit
there have already been a lot of changes in the organization which were negative but the
company over came those factors. There are cultural, religions, etc which have to be maintained
in the organization which is going to be good for the company as well. There are a lot of
restrictions which are present in M&S because of Brexit and that factor will have to be controlled
by the organization.
 Economical Factor
Economic stability also needs to be present in the company because there are a lot of
investments which a business makes so that there is going to be a good balance which would be
present. The company has to make sure that there have to be good economic strategy which the
company is using so that they can invest accordingly and make the organization get the
maximum profits (Höglund and et.al., 2018). M&S has to have a long term goal so that there is
going to be a good functioning. Inflation is increasing which has to be controlled by the
organization and the currency values which are changing also have to be considered for pricing
the products in different countries so that there is going to be a better functioning.
 Social Factor
The customer’s needs and trends are changing and for that the company will have to
understand the culture and religion of the customers so that there are going to be better decisions
which can be taken (Alnoukari and Hanano, 2017). The social factor does make a lot of

difference becase the companies in the market work so that the satisfaction level of the
customers can improve. The information and right of customers is taken very seriously in M&S
because they are very essential for the company. M&S has already lost its little market share to
other businesses because the productivity in the market was not up to the market therefore the
organization has taken decisions accordingly so that they can compete and make the working
environment healthier for the employees.
 Technological Factor
There are a lot of improvements which are taking place in the technological aspect in the
market which can be taken advantage of. The employees of M&S are trained and developed
according to the technological changes which are taking place which is going to help the
company be able to operate effectively. There is a lot of investment which the company does in
this field so that there is going to be a better functioning (Berisha Qehaja, Kutllovci and Shiroka
Pula, 2017). There are online strategies which the company is using so that there would be a
higher sales and the communication with the customers is going to improve as well. There are
more marketing campaigns which the organization is going to increase the sales with the help of
the right equipments. Technology also helps with innovation and productivity of the products
which are being produced by the organization so that the demands of the customers are going to
be fulfilled which is a great factor for the portfolio of M&S and the organization will find it
easier to expand themselves globally.
 Legal Factor
This is a very essential factor which needs to be followed by the company so that there are no
legal actions which can be taken for the organization as well. Legislature and laws are made by
the government of the countries and they differ from one place to another and for having smooth
operations of the organization must follow them. There are minimum wages, data protection,
equality laws, etc which the government has put for the employees and the customers as well so
that the company can have a better functioning. The companies which follow these laws there is
a healthy internal and external environment of the organization which is good for a long run.
M&S makes sure that all of these factors are being used in the organization and they are even
mentioned in the guidelines of the organization as well so that the employees are also aware of
the organizations steps for them (Wudhikarn, 2016). The actions taken by the business have to be

acceptable in the legal aspect so that the performance and disturbances are not present for the
company.
 Environment Factor
The company is aware of the environmental changes which are taking place and they are
affecting the company’s functioning altogether. There are a lot of measures which the company
has taken so that they can make this factor improve. M&S has taken zero carbon footprints for
themselves in the market so that the company will be able to operate effectively and also increase
the brand value in the market (Bindra, Parameswar and Dhir, 2019). There are a lot of
restrictions which government has also put on the companies which are functioning so that the
environmental harm can reduce which is going to be very good for the future functioning. M&S
understands the need to implement the changes and laws effectively in the organization so that
there is going to be a better functioning which is going to make the organization have more sales.
The company will have to take measures for themselves according to the above
mentioned factors so that the organization will be able to operate effectively (Bromiley, Rau and
McShane, 2016). The activities have to be planned and designed in such a way which is going to
make the organization have a smooth functioning and the organization will be able to achieve
their objectives and goals.
Competitor Analysis
In the past few years there has been a visible growth in the market regarding the increase
in the competition in retailing industry. M&S has already expanded themselves in a lot of
products and services for the customers like Food, Clothing and other products. The basic needs
of the customers is being focused on by the organization at a low price so that the organization
can gain profit from it and for making the customers loyal the company is providing the
customers with quality services (Grant and Baden-Fuller, 2018). The needs of the customers are
aggressively increasing which will have to be monitored by the organization so that the company
will be able to performance better. There is a growth which is by 5% which is a great threat for
the company because the market share will be decreasing because of this factor. M&S has been

in this industry for 136 years and in that time they have gathered a strong base for them in the
market which is going to be very good for the performance level of the organization.
The competitors of M&S creates a great threat for the sales and profitability fo the
organization who are Tesco, Sainsbury’s, etc. Tesco is the larger competitor of M&S because
Tesco also has a lot of experience of the market as well (Aliewi and et.al., 2017). There are a lot
of methods which have been used in the company according to the situation which rises in front
of M&S. This can only take place when the organization is having knowledge of the market and
the industry as well.
Stores have to be present in different locations so that the customers can find it easier to
approach the organization to get the services and products that they wish to have. Using the
internet is another most essential strategy which the company can take to another level for
themselves so that the sales of the company can increase. The company will be able to fulfil the
needs of the customers globally as well which is a great advantage for the organization for more
profit margins. The sale have increased by 6% each years of the company getting online which is
a great factor and there is 33% growth rate in the country as well.
Porter’s five forces model
There are a lot of frameworks which are present in the market for the company to be able
to get a competitive advantage. Porter’s five force model is one of the most effective models
which can be used to understand the functioning of the business and the future decisions can be
made accordingly. There are forces which impact on the operations and productivity of the
market which makes the company lose their market share which is not good for long run.
 Competition in industry (High)
It is very important for the retailing industry companies to get a competitive advantage
because there is a high competition level which is present in the market. There are a lot of
companies which are entering this industry because the growth of this industry is high (Abosede,
Obasan and Alese, 2016). The demands and expectations of the customers are just increasing and
more the companies the demands will be met. M&S has gathered themselves a loyal customer

base in the market over the years the company has been operating in the market. It is very
important that M&S makes the right decisions for them to be able to operate efficiently in the
market. Getting online or choosing the social media platform is the best decision which the
company has taken to be able to get more customers and get attention of the customers as well.
In United Kingdom there is a growth in retailing industry by 6% which is a great threat because
the customer base will shift and the profitability of the company is going to be affected. There
are a lot of small stores which the company has started and also gotten online so that they do not
have a lot of threat for themselves in the market and trying to make the customers not shift to the
other organizations as well.
 Potential of new entrants in market (Medium)
M&S has a strong base for them in the market which is why the other businesses do not want
to entire this market. There is a requirement of huge investment for businesses to come in the
competition in the market which is not a threat for the company because there must be
experience as well which is required (Doyle and Brady, 2018). There are changes which have to
take place in different kind of situations so that the company will be able to operate effectively.
There is a lot of responsibility which the stakeholders and employees have in M&S so that the
organization will be able to adapt to the changes and make the retailing company be able to
achieve their objectives and goals on time so that the company can compete.
 Power of supplier (Low)
Retailing industry has developed a lot therefore there are a lot of suppliers which are present
in the market as well. For having an advantage over the suppliers the organization must have
good contacts in the market and analyse the suppliers effectively. The products and services must
have a good standard which matches with the standards of the company so that the organization
will be able to get a competitive advantage. The suppliers in the market are dependent on the
large organizations which is why they cannot increase the pricing of the products that effectively.
M&S have a lot of suppliers ready if this is the case of the suppliers so that company shifts the
supply to another person (Barbosa, Castañeda-Ayarza and Ferreira, 2020). The raw material
should be good so that the company can maintain the end products and the respect of the
customers which have a huge trust in the organization which is going to make the brand value of
the business increase globally. There are changes for which there would be a requirement of

good suppliers as well but the company has good contacts to be able to maintain this factor
effectively and the company will be able to get profitability in the market.
 Threat of substitute products (Medium)
There are a lot of companies which come under retailing industry which are Sainsbury’s
Tesco, etc which have similar products like M&S have in the stores. The customers can shift
from one organization to another very easily therefore it is very important for M&S to be able to
have a good performance and productivity so that they can fulfil the needs and demands of the
customers on time (Carroll, Primo and Richter, 2016). M&S gives a lot of discounts and offers to
the customers and the communication with them is also very strong so that the customers are
aware about the changes and improvement which the organization is going for them. The
clothing line of M&S is very strong because they follow the trend and designs which are popular
with the customers so that they can have a good sales by using a good strategy for them to have
higher profitability in the market.
 Power of customer (High)
The needs and demands are increasing of the customers and to be able to maintain the
reputation and the faith of the customers is going to remain in one organization. Pricing for the
products and services is the other factor which the company must understand their customers and
then plan it accordingly so that there is going to be a loyal set of clients which Marks & Spencer
can have for themselves in the market. There are a lot of strategies which Marks & Spencer has
used and keeps on developing new strategies for themselves so that the organization can increase
their performance level in this competitive market. The products have to be improved and
changed according to the customers wants from time to time which requires a lot of investment
by the organization to be able to get this unique factor for them in the market. There are cost
friendly innovations and invention products which are being served to the clients of M&S so that
they can be more satisfied and be loyal as well (Tonelli and Cristoni, 2018). It is very easily to
make the customers get attracted from one company to the other which will have to be
maintained by the organization so that they can increase the trust of the customers in the
organization. The customers follow the trends which are coming in the market which have to be
understood and changes must be made by the organization so that there is going to be a higher
standard of the company for their betterment.

CONCLUSION
There must be a balance between the internal and external factors of the business so that
there is going to be a good functioning which can be concluded from the above report. There is a
huge growth which is present in retail industry with the competition in the market so that there is
going to be a higher operations and productivity which is going to make the company have
higher profitability. The competition in the market is increasing which is why the organization
will have to take a lot of measures and strategies for themselves so that they can compete and get
a higher market share. The demands and needs of the customers have to be met so that the
reputation of the organization can increase and the importance of the organization has been
developed over a long time so that there is going to be a global recognition of the business.

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