Business Strategy Report: Marks & Spencer Analysis, UK

This report provides a comprehensive business strategy analysis of Marks & Spencer, a British multinational company specializing in clothing, home products, and food. The report begins with an introduction to business strategy and its importance for achieving a competitive edge and maximizing profits. The first task focuses on the macro environment, analyzed using the PESTEL framework to assess political, economic, social, technological, environmental, and legal factors impacting Marks & Spencer. The second task delves into the internal environment, utilizing the RBV framework, VRIO analysis, and SWOT analysis to evaluate the company's resources, competitive advantages, strengths, weaknesses, opportunities, and threats. The third task applies Porter's Five Forces model to analyze the competitive landscape and strategic positioning of Marks & Spencer within its industry. The report critically evaluates the findings, offering insights into how Marks & Spencer can adapt to its dynamic environment, achieve sustainable success, and gain a competitive advantage.

Business
Strategy

Contents

INTRODUCTION
Business Strategy refers to the different types of competitive moves as well as actions
which are undertaken by an organization so that it can acquire a distinct competitive edge within
the market in the future time period (Akter and et.al., 2016). By setting a right business strategy,
an organization can set short-term and long-term goals for the future time period. Thus it is the
role of the managers of a company to make sure that they are able to prepare a business strategy
which will assist them a lot in getting strategic directions which have to be followed in the
future. This will ensure sustainable growth and maximization of profits of the firm. For this
report, Marks & Spencer has been selected. It is a British multinational company which
specializes in clothing, home products and food products. In this assignment, detailed focus will
be made on analysis of impact of macro environment on an organization, assessment of internal
environment. Additionally, use of Porter’s five forces and application of models, theories and
concepts will also be discussed as a part of this project.
TASK 1
P1: Macro environment of an organization
The macro environment of an organization consists of different types of external factors
which are required to be considered by its managers to ensure that the right strategic direction is
provided to the company for the future (Amran and et.al., 2016). It can be analyzed using
PESTEL analysis. The analysis in the context of Marks & Spencer is as follows-
Political factors- These factors can affect any organization. This is so because political
conditions in some countries can change very quickly which will lead towards creation of an
impact on the business operations of the companies. Marks & Spencer is affected because they
can either increase or decrease its level of profits.
 Positive impact- If the government policy in a particular country is in firm’s favor then it
will lead towards creation of a positive impact on the business operations. Thus in this
way the profits of Marks & Spencer can rise.
 Negative impact- If there is no political stability then it can lead towards problems and
issues for the organization. In this case the profits of Marks & Spencer can decrease.
Economic factors- These factors are important for a company because they are
dependent on the economic conditions which are dynamic in nature and can change
anytime (Anwar and Hasnu, 2016). Marks & Spencer is also affected by the influence
which they put on its operations.

 Positive impact- Booming economic growth of a country can create opportunity for an
organization to grow. In this case, Marks & Spencer can witness rapid growth in the
future.
 Negative impact- If there is a fall in exchange rate then this can create problems and
issues for the organizations dealing internationally. Thus for Marks & Spencer this
situation leads to lower profits.
Social factors- They are important for the companies because they create an impact on
the social situations which the firm is facing in the society. Therefore the managers of
Marks & Spencer are required to consider them seriously.
 Positive impact- If there is a change in the lifestyle attitudes of the customers then it can
be beneficial for organizations. Thus companies like Marks & Spencer can benefit a lot
from it.
 Negative impact- If there are cultural barriers present in the society then it can affect the
firms. Companies like Marks & Spencer can get affected due to them.
Technological factors- They are quite necessary for the organizations because
technology changes very fast and therefore this can affect the companies. The managers
of Marks & Spencer are required to take into consideration these factors.
 Positive impact- If the companies are able to innovate using the correct techniques then
the technological factors will have a positive impact on their operations. Thus Marks &
Spencer needs to consider this.
 Negative impact- If the firms are not aware about the technological change then this can
create problems for them. Therefore Marks & Spencer can get affected.
Environmental factors- These factors are important for the companies because the
customers nowadays have become environment-conscious (Anwar, Shah and Hasnu,
2016). Therefore the managers of Marks & Spencer are required to take these factors into
consideration.
 Positive impact- If the companies are able to adopt eco-friendly policies then this will
lead towards increase in their profits. Therefore the managers of Marks & Spencer have
to consider this.

 Negative impact- If the firms are not able to adopt eco-friendly policies then this will
affect their profits and can lead to a decrease in the profits. Thus Marks & Spencer can be
affected.
Legal factors- These factors are important for the companies because there are different
types of legal rules and regulations which they are required to follow (Evans and et.al.,
2017). The management of Marks & Spencer is required to consider these factors.
 Positive impact- If the companies are able to follow the legal rules and regulations set by
the government then this will lead towards increase in their level of profitability. Marks
& Spencer’s management has to make sure that the company follows rules and
regulations.
 Negative impact- If the firms are not able to follow the rules and regulations then this
can create problems and issues for them. Therefore it can also impact Marks & Spencer.
M1: Critical analysis of macro environment
The macro environment of the organizations is very important for them. This is so
because it can either create a positive or a negative impact on them. For the companies it is
crucial that they are able to make sure that they can adjust to its ever-changing dynamic
requirements. In this manner they will achieve sustainable success in the future time period
without issues and problems. The managers of Marks & Spencer need to prepare a detailed
strategy for its factors so that a positive impact is created on them and thus this will make sure
that goal and objectives are achieved. The employees in the company are required to make sure
that they can adjust to dynamic changes of macro environment quickly.
TASK 2
P2: Internal environment of the organization
Internal environment of the organization refers to the various types of factors which are
required to be considered by the managers for the purpose of identifying the best tactics to be
applied to earn higher profits in the future time period.
RBV framework-
This framework can be used by the companies so that they are able to identify their
resources which provide them strategic advantage over their competitors (Ghemawat, 2016). It
can be used by Marks & Spencer. The analysis of this framework is as follows-
 Tangible- These refer to the resources which can be seen by the organizations. For
example- Land, Building, Plant, Machinery etc. Marks & Spencer has these resources.

 Intangible- These refer to the resources which have an impact on the organization but
cannot be seen. For example- Brand Reputation, Trademarks, Intellectual Property,
Goodwill etc. Marks & Spencer has these resources.
Assumptions of the framework-
 Heterogeneous- The framework assumes that the resources of the organization are
heterogeneous in nature. This means that the resources of a particular company must
differ with another one. Therefore the managers of Marks & Spencer need to ensure that
their resources are different from the competitors.
 Immobile- The framework also assumes that resources are not mobile and thus cannot
move from one company to another. Thus the managers of Marks & Spencer are required
to make sure that their resources are immobile.
VRIO resources- According to this framework, the resources of the organization should
have VRIO characteristics so that they are able to provide the required competitive
advantage. The managers of Marks & Spencer have to ensure this.
Competitive advantage- This framework also provides that the resources of a company
should be able to provide them with the desired competitive advantage in the future.
Marks & Spencer is required to ensure this.
VRIO analysis-
VRIO analysis is a technique which is used for identification of those resources which are
very much useful for the organizations and provide them strategic advantage (Habib and
Hasan, 2017). VRIO stands for Valuable, Rare, Inimitable and Organized.
The analysis in the context of Marks & Spencer is as follows-
Resources Valuable Rare Inimitable Organized
Skilled
Employees
   
Brand Image   
Customer Base  
Technology 
Valuable resources- Skilled Employees are valuable for a company because their
services are required by the company. Brand Image is valuable because through it the
company can establish goodwill in the market. Customer Base is valuable because it is
necessary to have it. Technology is valuable because it is essential for innovation.

Rare resources- Skilled Employees are rare for the company because it is hard to find
such dedicated workers. Brand Image is rare because not every company has it. Customer
Base is rare because the company has many loyal customers. Technology is not rare
because similar technology is also used by the other companies.
Inimitable resources- Skilled Employees are inimitable because their skills are not easy
to find. Brand Image is inimitable because it is created with a lot of efforts. Customer
Base is not inimitable because many other companies have it. Technology is not
inimitable because other firms have it.
Organized resources- Skilled Employees are organized because many of them have
been working since a long time with the company. Brand Image is not organized because
sometimes it can be affected. Customer Base is not organized because though most of the
customers are loyal some of them can shift to other firms too. Technology is not
organized as it changed very rapidly.
SWOT analysis-
SWOT analysis an analytical framework which is used by the organizations to assess
their internal environment (Hart, Sharma and Halme, 2016).
SWOT analysis of Marks & Spencer
Strengths Weaknesses
 Customer Base- The massive
customer base of Marks & Spencer
is its biggest strength.
 Goodwill in the market- Marks &
Spencer has an established goodwill
in the market which acts as its
strength.
 Marketing strategies- The
marketing strategies adopted by
Marks & Spencer leave a lot to be
desired.
 Low product quality of some
products- Some products of Marks
& Spencer do not have good
quality.
Opportunities Threats
 Expansion- There is tremendous
opportunities which are available
for Marks & Spencer to expand its
business.
 Innovation- There is opportunities
available for Marks & Spencer to
innovate and earn higher profits.
 Higher competition- Higher
competition prevailing in the
market can affect Marks & Spencer
by reducing its profits.
 Higher tax rates- If the
government increases the tax rates
then the profits of Marks & Spencer
can reduce.

M2: Critical evaluation of internal environment
The internal environment of an organization has to be considered by its managers. RBV
framework, VRIO analysis and SWOT analysis can be effectively used for this purpose. In this
manner, Marks & Spencer’s management can make sure that it is able to achieve the desired
goals as well as objectives in the future time period without problems and issues. Therefore this
provides the right strategic directions for the company to be followed in the future time period to
gain a competitive advantage over the competitors.
TASK 3
P3: Porter’s five forces
Porter’s five forces is a model which helps in determination of position of an organization in the
market with reference to the industry in which operates in to provide strategic directions
(Leonidou and et.al., 2017). Its application in the context of Marks & Spencer is as follows-
Competition in the industry- It refers to the level of competition which is being faced
by the players in the industry (Lieder and et.al., 2017). It can influence firms because it puts a
direct influence on the prices charged by them. Thus in a market which has high competition the
firms are required to reduce their prices to sustain themselves in the market. In a market where
there is low competition monopoly can be obtained by the companies quite easily. In the context
of Marks & Spencer this force has a very high power because the industry in which it operates
has a very high-level of competition.
Potential of new entrants- It means the potential which the new entrants have in the
market in a particular industry (Maniora, 2018). These entrants can impact the performance of
the companies which are currently present in the market. For Marks & Spencer, this force has a
high power because there is a lot of potential which the new entrants have in this market by
acquiring a substantial base of customers.
Power of suppliers- It means the power which the suppliers hold in the market (Nagy
and et.al., 2018). It can influence the various types of decisions which are taken by the
organizations. These suppliers can control and influence the prices of different types of inputs in
the market. In the context of Marks & Spencer, this force has a very high power because the
suppliers can control the prices of inputs easily.
Power of customers- It refers to the power which the customers hold in the market
(Paulus-Rohmer, Schatton and Bauernhansl, 2016). It can influence the type of products and
services which are being provided by the companies in the market because they need to bring
changes in them if desired by the customers. In the context of Marks & Spencer, this force has a
very high power because the customers of the firm can exert their choices according to which the
company has to act quickly.

Threat of substitute products- It means the threat which is posed by the substitute
products in the market (Sia, Soh and Weill, 2016). These goods are available at cheaper rates as
compared to quality goods and thus can affect their sales if certain customers opt for them
instead of quality products. For Marks & Spencer, this force has a low power because its
customers are willing to pay the price which is required for quality products for ensuring their
satisfaction.
Justification- In the context of Marks & Spencer, it can be seen that 4 out of 5 forces
have a high power. Only one 1 force has a low power. Therefore for its management it is
required that they are able to make sure that they can devise the right strategy for growth.
M3: Devising of appropriate strategies to improve competitive edge and market
position
For this Ansoff Matrix can be used. It is a matrix which determines the best growth
strategy to be adopted by the organizations. Its analysis in the context of Marks & Spencer is as
follows-
 Market penetration- In it the company can analyze how it can sell more of its products
and services in its existing market.
 Market development- In it the firm can identify the strategy which it can adopt to enter
into new markets.
 Product and development- In it the company can identify how it can develop new
products for its market.
 Diversification- In it the company can identify the ways which it can use to move into
new markets with new products and services.
Justification- Marks & Spencer should make use of Market penetration strategy because
through it the company can increase its sales as well as revenues in the market which will
therefore lead to an increase in the profits.
TASK 4
P4: Application of a range of theories, concepts and models to devise strategic
planning for the organization
An organization has to make sure that it uses various ways for devising strategic
planning. For a company like Marks & Spencer it is quite important that it is able to adopt the
right approach.

Porter’s generic strategies-
Porter’s generic strategies can be used by the organizations to identify the strategy they
have to adopt in the future time period so as to achieve sustainable success in the future time
period (Soltanizadeh and et.al., 2016). In the context of Marks & Spencer one of these strategies
can be used to provide the right strategic direction.
These strategies are as follows-
Cost Leadership Strategy- This strategy can be chosen by the organizations by making
sure that they can reduce their costs effectively and thus target the potential customers in the
market with reduced costs (Yuliansyah, Gurd and Mohamed, 2017). In the context of Marks &
Spencer this strategy can be very useful for the purpose of achieving the desired results.
Differentiation Strategy- This strategy can be adopted by the companies by making sure
that they are able to differentiate their various types of products (Yuliansyah, Rammal and Rose,
2016). By differentiating their goods from the competitors Marks & Spencer can make sure that
it is able to achieve the desired results and obtain a strategic edge over them in the market by
maximizing the profits.
Cost Focus Strategy- In this strategy, the companies focus on particular segments of the
market to reduce their costs. Marks & Spencer needs to adopt this strategy for different
segments in the market where it can earn higher profits by reducing costs.
Differentiation Focus Strategy- In this strategy, the companies can put their focus on
differentiating their different types of products in certain segments of the market (Zakaria,
Hashim and Ahmad, 2016). In the context of Marks & Spencer, there is a requirement of making
sure that the company is able to differentiate its products quite effectively from the other
competitors.
Justification- Marks & Spencer needs to focus on the use of Cost Leadership Strategy so
that it can reduce its costs effectively and efficiently and can therefore earn higher level of profits
in the future time period.
Strategic planning- Strategic planning is an organizational management activity which
can be used in order to set priorities, focus energy and resources, strengthen operations, ensuring
that employees and other stakeholders are working towards common goals, establishment of
agreement around intended outcomes and assess and adjust the organization’s direction in
response to the changing environment (Strategic Planning Basics, 2020).
Strategic plan of Marks & Spencer
Particulars Details
Mission The mission of Marks & Spencer is to make

available the quality products to the customers
which can provide them satisfaction.
Vision The vision of Marks & Spencer is to ensure
that it can provide the value to its customers
with its products and services.
Core Values  Quality
 Value
 Service
 Innovation
 Trust
Marketing Strategy Product- Marks & Spencer sells various
products in the market which are consumer
goods relating to various categories.
Price- Marks & Spencer follows the pricing
strategy of competitive pricing so that it can set
prices according to the prices charged by
competitors.
Place- Marks & Spencer operates its stores
across the world and makes its products and
services accessible to the customers.
Promotion- Marks & Spencer uses traditional
as well as modern techniques of promotion.
Objectives  The company aims to increase its
overall sales turnover.
 The firm aims to increase its level of
profits.
 The organization wants to add more
customers to its customer base.
 The enterprise has an aim of increasing
its market share.
Strategies to be adopted  For improving the sales turnover the
company needs to provide more quality
products.
 For increasing the level of profits the
firm needs to reduce costs.
 For adding more customers to the
customer base the organization has to
provide the existing customers
satisfaction.
 For increasing its market share the
enterprise must aim to increase its
number of customers in the market.
M4: Producing of a strategic management plan
For companies like Marks & Spencer it is important that their management prepares
strategic management plan quite regularly. In this way they will be able to make sure that they

can achieve their goals as well as objectives in the future time period without problems and
issues. This will make sure that a strategic edge can be acquired.
D1: Critique and Interpretation of information and data
The information and data is required to be analyzed effectively and efficiently so that the
right strategies and tactics can be framed by the management. In the context of Marks &
Spencer, it is necessary that its managers are able to provide the right strategies and tactics so
that they are able to acquire a distinct competitive edge over the different competitors in the
market and ensure that they are able to achieve a higher market share than others. This will make
sure that the company achieves sustainable success in the future time period.
CONCLUSION
From the above report, it can be concluded that Business Strategy is prepared by different
companies for their own purposes. These can be enhancement of profits, higher market share etc.
For achieving these aims, it becomes quite necessary for the management to prepare it. If
prepared correctly it offers them various types of advantages and benefits. In this manner they
can make sure that they can take the right steps for obtaining sustainable success in the market.
Thus the managers are required to prepare it and apply it correctly using the appropriate tactics.
Macro environment of an organization consists of different types of factors. Internal environment
can be analyzed using the techniques like RBV framework, VRIO analysis and SWOT analysis.
Porter’s five forces help in analyzing the market situation. Different types of theories, concepts
and models can be used by the managers to assist them with strategic planning for the
organization.