Strategic Management Report: Analysis of Marks and Spencer Strategies

This report provides a comprehensive analysis of Marks and Spencer's strategic management. It begins with an introduction to strategic management and its importance, followed by an examination of Porter's Five Forces model to assess the competitive landscape, particularly in the context of M&S's potential expansion into Russia. The report then explores different strategic management approaches and delves into the problems faced by Marks and Spencer, such as declining sales and issues with stock and consumer focus. A recovery plan is proposed, and recommendations are offered to address these challenges. The report concludes by summarizing the key findings and emphasizing the significance of strategic management for Marks and Spencer's success. The report covers the importance of strategic management, steps involved, analysis of internal and external factors, strategy formation, implementation, monitoring, and control. The report also discusses the industrial organizational approach and the sociological approach. Finally, the report analyzes the problems faced by Marks and Spencer, including issues with stock, lack of focus on women's wear, and consumer focus.

STRATEGIC
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
Porter's five forces model ...........................................................................................................2
Approaches of strategic management ......................................................................................4
Problems faced by Marks and Spencer .....................................................................................5
Recovery plan for Marks and Spencer........................................................................................7
RECOMMENDATIONS ..............................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES .............................................................................................................................10

INTRODUCTION
Strategic management refers to initiatives taken by management for the formulation of
objectives and goals by top management. It provides the direction to company for designing
plans and policies to achieve pre-determined targets (David, 2011). There are steps by which
enterprise can formulate the policies and implement them to achieve the aim of organisation.
Company selected for the particular report is Marks and Spencer which is the leading clothing
and luxury food product company in UK. In this report, various aspects of strategic management
have been discussed. Along with that, fundamental issues are highlighted in this report. Also,
different theories and concepts are compared here related to strategic management.
TASK
Strategic management refers to the procedure by which company formulates plans and
implements the same in an effective manner so that firm’s set targets can be achieved on time.
This is a continuous process and enterprise needs to work on it time to time. Large and small
companies both considered these factors(internal and external). So that enterprise can face the
external factor forces. These strategies adopt for different reasons. Such as expanding the
business, increase the revenues, trained the employees and others (Barney, 2012). Following are
the steps that company should follow to implement strategic management: Goal setting: The first step is to set the goals, vision and mission of company that they
want to achieve within a stipulated time period. By setting the objectives manager can
take the business decisions. There are different goals for distinct companies like meeting
the sales target, higher revenues, expanding business, etc. For all these issues, company
make the plans and strategies. Analysis internal and external factors: By the strategic management, company
identifies the strengths and weaknesses of enterprise. The company analyses its external
and internal factors to identify new technologies and new competition in the market. The
enterprise makes goals by which they gain strengths and ability to overcome their
weaknesses. By this, business unit can adopt the new technology that can improve their
production to attract more customers (Hill, Jones and Schilling, 2014). Strategy formation: Next step is develop the action which can help organisation to
achieve their goals. Enterprise collects the information, then analyses it and after that,

data is prioritized. On the basis of same, and final decision regarding business is taken.
Company can find a new way to increase its profits and gain competitive advantages. Strategy implementation: Company put complete planning in a practical scenario. In
this step, the firm arranges all resources which are required to implement the strategic
plan. Enterprise meets the financial requirements by making the budget. For the success
of implementation plan, it is very important that coordination is maintained in between
the managers and employees.
 Monitoring and controlling: After implementation, the enterprise needs to regularly
control and monitor the strategic plan made (Hitt, Ireland and Hoskisson, 2012). The
firm needs to compare the standards set and actual performance to know the actual
results. After that, business unit evaluates the results and analyses the same if any
changes are required. This can help manager to understand the plan for changing needs.
Along with that, manager can adopt different methods to evaluate the results. Mark and
Spencer when formulating and business strategy they regular monitor those strategy so
that they can perform well in the market and whatever the steps they took it should be
implemented properly. s
Porter’s five forces model
When any company enters in a new market, to analyse the environment is very important
(Wheelen and Hunger, 2011). By analysing the environment, company can find the chance of
entering in a new market. The enterprise can comes to know about the the foreign competitors
in the market and their strength, weakness. t opportunities the firms have if they expand there
business in other countries. the enterprise can do the market anyasis using the five force porters
model. This model considers five factor on which company’s profitability is based. To
understand the market, this model can help company a lot. This model states that the enterprise
should be competitive enough so that they can beat other organisation in the market.
Company’s profitability does not depend upon the goods and services that enterprise
produces. It depend on the competitive advantage which organization has this can take the
institution for the further success. This model helps business unit to decide whether firm invest in
the particular country or not (Swayne, Duncan and Ginter, 2012). The firm analysis the return on
investment of the different projects Marks and Spencer is planning to expand its business in

Russia. Before expanding, firm needs to analyse the Russian market. For that, firm adopts 5
forces model to study the market. Level of competition: There is intense competition in the retail sector. There are big
players in the UK who are successfully running their business in retail sector like Tesco,
ASDA, Topshop, Zara, etc. Every company is going for the diversification to bring more
profits. M&S is in the sector of clothing and luxury food items as well as they give
vulnerable competition. In this, company faces competition from clothing as well as from
luxury food and house hold products. According to porter’s five forces model, company
can adopt three generic strategies such as low cost, differentiation and hybrid
(Hodgkinson and Healey, 2011). The company try to make its apparel more unique but
they are not successful in the market so recently company started the cut prices for the
apparels. . The customers prefer clothes which are new in fashion and have a unique
design with comfort. Marks and Spencer position its products as the value for money.
There are many competitors in Russian market such as River Island, Topshop and H&M.
These brands are very famous for in retail industry and specialised in the clothing. Threat of substitutes: There are less substitutes for company in the Russian market. As
Russian people are willing to pay any amount for the food if they get high quality, so,
company has a large scope to expand their business in Russian market. In Russia, there
are many other brands like H&M which provide the designer clothes in cheap prices
(Bettis and et. al, 2014). The design and cloth material are loved by their consumers.
M&S needs to make their clothes which can give high competition to other companies.
Price is another factor which company needs to consider. The prices of products of M&S
product is very high as compared to other brand. Threat of new entrants: The threat of new entrant is low in Russia. So, institution has the
advantage to enter in this nation and expand scope of business. Russian people are fond
of food. So, organization can serve the luxury food to these people. Organisation can
enjoy the brand loyalty in Russia as there, the employment level is high as well as
enterprise can come up with new fashionable clothes to give the different experience to
the Russian people. The firm can gain the advantage in the food industry. The enterprise
should have experience and knowledge about the Russian market as only then they can
provide goods according to customer’s needs and wants.

 Bargaining power of buyers: Here, the bargaining power is high as there are many other
strong brands present in Russia (Keupp, Palmié and Gassmann, 2012). This is the reason;
prices here are influence by the customer’s demand. The buyers are the king of market
and according to consumer’s taste, company needs to change the products and bring
variations in the same. The prices of products of M&S are very high and so, they need to
focus on same and reduce cost to increase the demand. There is positive and negative
impact of consumer behaviour on the demand of products and services. In case if there is
increase in the income of person, then he/she buys more and if income is low that their
purchasing power comes down. In Russiathe consumers are highly price sensitive. The
Russian people only pay for the goods and services for which they feel is value of
money. If company is offering them high range of products, consumers do not buy the
product.
 Bargaining power of suppliers: The suppliers are those who provide raw material and
other finished goods to the retailer. In case of M&S, the bargaining power of suppliers is
low as company is not dependent on them. They sell their own brand products. They
company sell the products by having its own label rather having the label of others brand.
(Priem, Li and Carr, 2012).
This porters model help to analyse to see the scope of expanding the business in Russia
market and the model help the company to formulate the strategy by which they can reduce the
cost, target the customer and design the product in manner so that they can get the competitive
advantage. The model gives success to the organisation. They opened various brand outlets in
the Russia. By the same, company will gain the benefit of high demand in Russia for their luxury
goods and clothing. Company has adopted an effective marketing strategy by which they give
competition to other brands in Russia. Firm is having less market share and so, they need to
expand their business in a manner that they can increase the market share.
Approaches of strategic management
There are different approaches which enterprise can adopt to formulate their plan and
policies in the management. These approaches deal with different problems in distinct situation.
Company faces the problem to perform well in the competitive market and for the same, they
need to control the performance and take all steps by which they can continuously improve their
performance to sustain in the market. Following are the strategic approaches:

 Industrial organisational approach: This approach deals with the issues of competitive
rivalry, resource allocation and economy of scales. Company needs to overlook these
factors. This helps the enterprise to allocate resources effectively so that company can
achieve its objectives and gain competitive advantage.
 The sociological approach: This approach deals with the human interaction. In this
approach, enterprise needs to focus on the consumer behaviour and their satisfaction
level. This can help the firm to retain its customers and sustain the growth for longer span
of time (Hitt, 2011).
Problems faced by Marks and Spencer
Earlier, Marks and Spencer faced the problem of decraese in the sales of mark and
Spencer products. Company has faced the challenge in decreasing sales of their merchandising.
The enterprise faces this issue because of limited stock. They have to increase and decrease the
sales during different weathers (Killen and et. al, 2012). The company appoint the new executive
director so that the performance of the company can improve. Director give the guidance and
advise by which company can improve its performance. The main reason of declining sales is as
follows: Issue of stock: The first reason of decline in sale is that company is not able to maintain
sufficient stock. For this reason, customers are not getting what they except from
company. The variety, size and colour are not available at the stores. Customers get the
dissatisfaction from company services and thus, enterprise is losing its customers. Lack of focus in women wear: Another reason of decline in sales is the the collection
of women clothing is very less compare to the men clothing. . The clothing business is
growing because majority of women purchase the goods. But in Marks and Spencer,
they have more variety of men clothing. This is one of the main reasons that the sales of
company is decreasing. Consumer focus: Another problem is the target on which customers focus. The age
group which M&S targets is old generation. In research, it is shown as the younger and
adult generation that spends more on clothing. Because of this reason also, sales are
declining and company is bearing losses. It has been assessed that consumers get
difficulty to find the range of products.

 Store layout: The layout is another problem which company is facing. The structure of
layout is designed in a manner that consumers are not able to find the products and it
has a huge impact on company’s sales. The store is sea of merchandising because of
this customer need to find of the things they want to purchase and that create the chaos.
This method of layout is out of fashion and because of the same, competitors have the
advantage (Boyd and et. al, 2012).
These are the problems which company faces and that result in the decrease of sales of
company’s products. M&S is facing the losses in the financial year. Following are the solutions
by which company can improve their sales and business performance. Turning sub brands into real brands: The company is planning to improve the
clothing business. The enterprise is planning to improve the design, fashion, style to
attract the new customers. The organisation make its sub brand to the real label brands.
The enterprise focus on the fashion make the clothes more unique and fashionable for
all the ages. The pattern of the clothing should be change. As the brand is focusing on
decent wears they should go for the fashionable wear with comfort. The company is
highly committed with the strategies and by this the brand is successful to make its
customer satisfy and happy. New store formats: The company changing the formate of its store so that the customer
can easily find the products. This store working on differentiate brands. The design and
outlets are made according to the modern style (Vogel and Güttel, 2013). The company
can systematically arrange the clothes in a manners so that the consumer find easy to
try the products. The company also focusing on the variety of the clothes the proper
stock is maintained. The availability of size, colour, type of the clothing is improved.
 New management: The company is making the changes in the structure of the
organisation. The division of merchandising is take place in the business unit. The
company make the effective decisions about the management. The enterprise make
changes in the roles and responsibilities of different levels, authority having with
different department and also try to communicate the goals with the employees. So that
workers understand the objectives and work accordingly. The firm emphases on the
leaders and managers performance and encourage them to work harder. These are

solution is for increasing the sales of the mark and Spencer and the recovery plan is for
overall improvement in the organisation.
Recovery plan for Marks and Spencer
To improve the performance, company can adopt recovery plans in which they can
decide to reduce the prices of clothing (Harrison and John, 2013). There are so many brands
which give better products to the consumers in lesser prices. Because of this reason, Marks and
Spencer is losing their customers. So, they decide to reduce the prices, give high quality of
products and bring new designs along with innovation in their clothing and luxury food items.
Brand also increases the range of products. This can improve the customer satisfaction and
consumer retention. Marks and Spencer is also reducing the promotion which can save cost to
the firms. Main focus of Marks and Spencer must be on customer value. It can be said that for
M&S, strategy of price reduction may prove to be highly successful in the future.
The luxury food item business is performing well and the company is managing to grow
its market shares. Through five points mentioned below, company can bring recovery in their
business performance:
 Create the new brand which gives the new emotions to the customers
 Cherishing core shoppers
 Listening to customers
 Making decision on the evidence
 A focus on long term brand objective rather than short term plan
This can increase the brand loyalty of business among customers. The enterprise can increase the
sales of the products and recover to the profit stage. These are important steps which company
need to take to grow its business.
Risk management strategy refers to the structure which helps in identifying, assessing
and managing the risk which firm is following to face challenges incurred outside and inside the
organisation (Hill and Jones, 2011). Risk management is an important factor of enterprise. It
helps the firm in many ways like to identify the consumer expectations, trends in the market,
competitor strategies and many more. There are different types of risk management strategies
which company can follow to solve the problem. The following strategies are given as below. Avoidance of risk: The first way to manage the risk is simply to ignore it. It the most
acceptable strategies by the corporates. This kind of strategy takes place when business

refuses to get engaged in the particular activities. Some of the business activities are not
suitable and important for the firms so they simply ignored it. If Marks and Spencer is
purchase the location for their store opening but the risk is associate with that location is
its is not generating the adequate revenues. so company reduce the risk by reducing
cost in the other operation activities. (Greco, Cricelli and Grimaldi, 2013). Risk mitigation: This is another strategy used by company. Business can manage the
risk by mitigation and managing the overall activities(Harrington and Ottenbacher,
2011). This strategy takes place when risk cannot be avoided. Company can manage its
risk by giving offers to the customer like discounts, coupons, samples to retain them. Transfer of risk: In this type of strategy, risk is to be transferred by giving extra
premium to the insurance company to minimize financial losses.
 Risk acceptance: In this kind of strategy, company accepts risk and find solution for the
same. Company takes the risk to change its existing product and launch the new one in
market to retain customers.
RECOMMENDATIONS
Marks and Spencer needs to make many changes to gain customer’s trust and leading
position in the market. Company can hire new designers and experts to bring new clothing styles
and also, to check the quality of clothes. Firm can go for new development and new market
strategy to sustain in the market. The enterprise should also make changes in the prices of
clothes. They should compare the prices with their customers and then, they need to fix the same.
Other than this, company should make changes in the promotional activities and try to attract
more customers.
CONCLUSION
From the above report, it can be concluded that Marks and Spencer is the leading clothing
and luxury food items company in UK. It is important for company to understand the customer
needs and wants and serve them according to their expectations. Firm follows porter’s five forces
model to analyse the market situations. This model can help company to expand its business in
other countries. The enterprise is facing problems like decrease in sales. For this, they need to
make many changes in the organisation. It has been assessed that to remain competitive,
company needs to improve the layout of showrooms, understand the customer needs, maintain

proper stock level and decrease its prices. Apart from that, firm needs to do risk management so
that they can manage the risk for their future growth.
REFERENCES
Books and Journals

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Keupp, M.M., Palmié, M. and Gassmann, O., 2012. The strategic management of innovation: A
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Pearson Education India.
Online

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