Strategic Analysis & Management Plan for Marks & Spencer (M&S)

This report provides a comprehensive analysis of Marks and Spencer's (M&S) business strategy. It begins with an organizational overview, including the company's mission, vision, goals, objectives, and core competencies. The analysis includes a PESTLE analysis, SWOT analysis, and an evaluation of M&S's strategic capabilities. Furthermore, the competitive environment is assessed using Porter's Five Forces model. The report also evaluates different strategic directions available to M&S, justifies a recommended growth platform, and presents a strategic management plan with strategies, objectives, and tactics. The conclusion summarizes the key findings and recommendations for M&S. Desklib offers a wide range of study resources, including past papers and solved assignments, to support students in their academic endeavors.

Unit 32: Business Strategy
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Table of Contents
Introduction................................................................................................................................3
Organisational Overview...........................................................................................................3
• MISSION............................................................................................................................3
• VISION/STRATEGIC INTENT........................................................................................4
• GOAL.................................................................................................................................4
• OBJECTIVES.....................................................................................................................4
• CORE COMPETENCE......................................................................................................4
Part A (P1, P2 and P3)...............................................................................................................5
Analysis will include a PEST/LE and SWOT analysis of the organisation and an analysis of
the organisation’s capabilities....................................................................................................5
PEST/LE Analysis.....................................................................................................................5
SWOT analysis...........................................................................................................................7
Analysis of Strategic Capabilities..............................................................................................8
Analysis of the competitive environment using Porter’s Five Forces model............................8
Part B (P4)................................................................................................................................10
Evaluation of the different types of strategic directions available to the organisation............10
Justify and recommend the most appropriate growth platform and strategies.........................11
Produce a strategic management plan with strategies, objectives and tactics..........................12
Conclusion................................................................................................................................17
Reference List..........................................................................................................................18
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Introduction
Strategy implies the process which is followed in order to marshal and allocate the resources
in an efficient manner to aid the development of a cause. Strategy is a cumulative output of a
method or plan which is executed in order to bring forth a desirable outcome, ranging from
the achievement of necessitated goals or solution for the problems confronted with.
Strategic intent implies to the structure which forms the philosophical base supporting the
process of strategic management. The strategic intent is classified as the purpose which the
organisation aims to achieve. The strategic intent enables the organisation to grasp a
perspective related to the means, formulated as a statement which enables the organisation in
achieving the stated vision.
The organisational strategy must be accentuated with the application of a compatible strategic
direction which will enable the organisation to enhance the business acumen and further the
efficiency of the production with a competent approach. Strategic direction refers to the
course of action which is necessitated in order to accomplish the goals which are elucidated
in the organisation’s strategy. The entire strategic direction is compiled as the basis of the
functioning oversight which would essentially enable the organisation to function with
increased efficacy and thus help in the accomplishing of the goals in a planned process
(Drucker, 2017).
Organisational Overview
Marks and Spencer Group Plc is one of the major players in the British Retail Market sphere,
based in the city of Westminster, London. The foundation for the giant in the retail sector was
laid by Michael Marks and Thomas Spencer in 1884, branching in to include several other
products and essentially enhancing the product portfolio. The specialisation of the products
which M&S deals with includes clothes, luxury products and home products. The retail
acumen of the organisation is evident from the company’s listing on the London Stock
Exchange, accumulating annual revenue of $1.1b in the 2016-17 fiscal years. The
organisation is ranked 55th in the terms of capitalisation of the market as put forth by FTSE
100.
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• MISSION
M&S operates with the organisational mission embedded in the operational process which is
implemented by the company. The mission of M&S is to enable the availability of products
of aspirational quality for the consumer segments.
• VISION/STRATEGIC INTENT
The vision of M&S is to compile and present an international, multi-channel and sustainable
retail business.
• GOAL
The goal of M&S is to proliferate newer market segments and successfully emerge as the one
of the biggest retailer with a sustainable market perspective.
• OBJECTIVES
The objectives of M&S are to design appealing and innovative products for the customers
within the affordable range for the different economic stature of the customer base.
• CORE COMPETENCE
The core competencies of the brand can be stated as the development of an associated strong
brand, quality control of excellent measures and a proficient customer service (Jones, 2016).
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Part A (P1, P2 and P3)
Analysis will include a PEST/LE and SWOT analysis of the organisation and an
analysis of the organisation’s capabilities
PEST/LE Analysis
The external attributes which affect the functioning of the organisation is deduced in a more
efficient manner with the inclusion of the PESTLE analysis. The factors are described below-
Political:
M&S has benefitted from the trade norms put forth by EC, agreements of Free Trade has
resulted in a decrease in the sourcing costs expedited by the organisation. The onus of the
political domain following Brexit has shifted from a decentralised trade norms and
regulations to a more centralised paradigm, substantially altering the modus operandi of the
organisation. The drastic blockage in the inflow of cheap labour accentuated by the instability
in the political domain has resulted in the reengineering of the operational methodology being
employed by M&S. The higher cost structure has had detrimental impact on the
organisation’s portfolio in the past, also the CSR initiatives of the organisation has been
hindered by the vague nature of the legislative amendments post-Brexit. The legislative
regulations pertaining to the domestic VAT structure and the tax reforms has minimised the
market potential of the retail business (Hannington, 2016).
Economical:
The discounted pricing strategy, which is being implemented by the different retail
organisations, has affected the operations of M&S to a certain extent. However, the sales of
M&S have since been buoyed by the uncompromised quality of products being dedicated.
The financial instability of the market narrative has had a detrimental impact on the approach;
the emphasis is on more sustained sales with keeping the price sensitive segments of the
market in the locus. The fall in the oil prices has affected the performance of the stores in the
Gulf countries.
Social:
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The shifting in the paradigm of the demographic segments of the market, form the retiring
baby boomers to the uprising generation X and the millennial, has prompted the organisation
to shift the business strategy in accordance to the narrative which is functioning in the global
market sphere. The segments accorded prime consideration is the millennial and the
generation X, M&S has formulated a strategy with inculcating the features in accordance to
the needs and demands of the generation with an in-depth profound examination of the
market discourse. The locus of the operations has been conceived with the effective inclusion
of the green and organic products in order to project an appealing image in the market and
foster the relationship with the customers with a more methodological rigor (Fernie and
Sparks, 2014).
Technological Factors:
The global market discourse factors in the inclusion of technological developments in the
approach in order to put impetus to a more holistic model of sales. M&S with a strong and
calculate image in the market and is poised to capitalise in these avenues. The strong online
and media presence has accelerated the sales with the contextual trends functioning. The
preference of the customer base to engage in the online shopping and mobile commerce has
been satiated by the different e-retailing approaches taken by M&S (Islam, 2016).
Legal:
The decision executed to Exit the European Union may result in the implementation of
certain legal norms, which will alter the business structure of the retail agencies, affecting the
supply chain and the logistics associated with management. The Omni-channel approach of
M&S, effectively build by the factoring of a flexible business medium, i.e. ease of accessing
the store pickup and home delivery options might be hindered with the recent legislative
amendments following Brexit. The amendments in the Company Act of 2006 following the
increment in the Domestic VAT levied on the business are bound to slow the progress of the
business to an extent.
Environmental:
The success of Plan A, implemented and executed to garner a more commanding position in
the retail market sphere. Greater emphasis must be leverages in order to capitalise o0n the
success, with the objective of formulating a stricter regulations pertaining to the
environmental issues and increasing the pressure on opting for ethical and green practices
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(Chkanikova and Mont, 2015). The business is well positioned to take the advantage, since
the approach borders on the premises of operating with a concern for the environment and
minimising the carbon footprint in the future and existing business endeavours (Nizam and
Hoshino, 2015).
SWOT analysis
SWOT analysis tool is used for analysing the internal business environment and its factors
that affect the business organisations (Yu et al., 2014). The different attributes, which affect
the internal functioning of the organisation, can be deduced with the help of SWOT analysis,
the attributes are described below.
Strengths:
The customer perception associated with the brand is inculcated with a greater efficiency in
application. The quality and the convenience of making a purchase in M&S, with a
synonymous “value for money”, have enabled the brand to position them in a dictating
position. The strong 80000+ global workforce with over 1000+ stores in 40 countries form
the operational structure of M&S, the branded labels along with the plethora of products in
the portfolio has been incremental in advocating the brand image in newer segments of the
market.
Weaknesses:
The misappropriation of the products, fake labels and imitations present in the market disrupt
the image associated with the business. The strong completion in the retailing sphere limits
the market share of the organisation and the strategies which are introduced must be
calculated and assessed for their compatibility (Sullivan and Gouldson, 2015).
Opportunities:
The emerging business market in the Indo-Pacific region, accentuated with the lack of market
competition and an untapped market potential poise for a great opportunity for expanding.
The proliferation in comparatively newer market share enables the business to extract more
profitability form the market. The interface presented for interacting with the customer and
the business through the e-retailing mediums must be user-friendly and appealing for the
business to accumulate new customer segments (Ramanathan et al., 2017).
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Threats:
The Government policies for the retail stores pose a serious threat of the functioning of the
retail organisations. Since M&S have a global footprint, the operations overseas are subjected
to the wide milieu of regulations and norms pertaining to the functioning legislative narrative
of the domain they operate in. The approach of the other retail chains, operating with
minimised pricings strategies will deteriorate the customer outreach.
Analysis of Strategic Capabilities
Analysis of the competitive environment using Porter’s Five Forces model
The five forces which influence the functioning of the industry, essentially helping to deduce
the attractiveness and the competitive intensity, are mentioned below,
Threats of new entry (Low)
The current retailing sector operating in the UK market poses a relatively low threat to M&S.
The cumulative factors associated with the advent of new companies such as high investment,
domination of the prevailing brands and market maturity effectively deter the new entrants to
enter into the market (Lotila, 2014). The strong loyalty of the customer segments of M&S,
augmented by the strategy of the organisation to focus on the quality of the presented product
and the extensive supply chain management put forth a barrier of considerable measure for
the newer entrants. Thus it can be concluded that the threat of new entrants is comparatively
low.
Threat of Substitute Products (High)
The market structure demands that the organisations, must adapt with the inconsistency of the
requirements and suitable modify their functionality to accommodate the nuances of the
customer segments. The competition is further accelerated with the emergence of stores
which rely on foreign imports, much cheaper and imitating the existing designs. The food
products offered by Tesco and Sainsbury have threatened to disrupt the traditional foothold of
M&S. The organisation must accord paramount significance in protecting the premium
position of the organisation in order to adapt with the high threat of substitute products
(Rhodes, 2015).
Bargaining Power of the Buyers (High)
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The Bargaining power of the buyers in the retail landscape is high, since most of the
supermarkets chains invested in the sectors are opting for a more customer centric approach
and providing products with low cost. The customer base is increasingly shifting to the price
sensitive approach, with the preferences for the imported products seeing a rise. The
bargaining power of the buyers will be high considering the multitude of the options and the
supermarket chains operating in the retail market (Mohr et al., 2018).
Bargaining Power of the Sellers (Low)
Post 1990 with the decline of sales of M&S, the retail sector was subjected to a fiercely
competitive environment. The global outsourcing of the various similar supermarket chains
offered products at a much-depreciated price (Hickman and Silva, 2018). This shifting of the
balance resulted in a decline in the power of the British Suppliers, which subsequently
resulted in the decline of the bargaining power of the sellers.
Intensity of Rivalry (High)
The intensity of Rivalry in the retail landscape is high; the different competitors such as
ASDA, Tesco and Sainsbury continue to challenge and bring forth measures to assert their
dominance. The retail sector is categorised as highly competitive with the functioning of
several high profile supermarket chains, which threaten to disrupt the operations of M&S.
The change in the retailing landscape with the rise of the online catalogues, which presented
the customer with a more enhanced ease of shopping, hit the retail stores hard. The 132-year-
old strategy of the company to focus on the quality is subjected to the duress of the market
narrative, effectively focusing on the lost cost strategy to acquire the new customers
(Morgan, 2015).
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Part B (P4)
Evaluation of the different types of strategic directions available to the organisation
Porter’s generic strategies was developed in 1985, published in a book called, Competitive
advantage: Creating and Sustaining Superior Performance. Porter’s strategies include
Differentiation, Cost Leadership and Focus strategy. Focus strategy was later sub-divided
into two parts called cost focus and differentiation focus. According to Michael Porter,
competitive strategy is all about being completely different from others. In simple words,
organizations should aim to develop different set of activities and functions in order to deliver
superior and unique mix of value. The best strategy for an organization to increase its
profitability is to gain competitive advantage over its rivals (Panwar et al., 2015). Two basic
kinds of competitive advantages that an organization can implement are low cost and
differentiation. These lead to three generic strategies that are explained below:
Cost leadership strategy
An organization following cost leadership strategy primarily aims to develop into the low
cost producer in the industry. The structure of the industry and variations in cost advantage
determine its sources. Organizations may follow the special access to raw ingredients,
detection of economies of scale and proprietary technology. In simple words, this strategy
involves leading the industry or market in terms of cost. Organizations usually try to cut
costs, and instead they charge average prices compared to all rivals in the industry. This
enables the organization to increase the market share by reducing their prices, all the while
still making good profits by reducing their costs as well. In order to implement this strategy,
an organization needs to have huge financial resources to incorporate technology for reducing
costs and efficient logistics system (Walsh et al., 2017).
Differentiation strategy
This strategy lays focus on making the products and services different and more appealing
than all the similar products available in the market (D. Banker et al., 2014). Organizations
commonly focus on changing or altering the products features, functionality, support and
durability. They also concentrate on improving the brand image. In order to follow this
strategy, organizations require good market research and innovation capabilities. They need
to deliver higher quality products and adopt efficient marketing and sales strategy.
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Organizations need to stay flexible with their new product development processes in order to
follow differentiation strategy; otherwise there is always a risk of attack from competitors
following focus differentiation strategy. Organizations, which are able to successfully
implement this strategy, are highly rewarded in the market.
Focus strategy
Organizations that follow this strategy focus on selective markets, by understanding the
dynamics of the market and needs of its customers. They tend to develop fresh and well-
specified products for the market (Bell et al., 2017). Organizations concentrate on satisfying
their customers and taking initiatives to build brand loyalty and high brand image. The
additional features that organizations often add in their products and services result in
reducing costs and increasing differentiation. This generic strategy mainly focuses on
selecting a narrow competitive scope or area of the industry. The organization targets a
particular segment or groups of segment in the sector and tries to implement strategies to
exclude all others. The selected segment needs to have buyers with exceptional needs
otherwise the organization may alter its production and delivery system to attract customers.
Hybrid strategy
As the name suggests, this strategy is a combination of both focus and differentiation
strategy. This allows the organization to enjoy the benefits of both the strategies if
successfully implemented. This depends upon the ability of the organization to provide extra
benefit to their customers at low prices and in addition achieve sufficient margins for
reinvestment. The main advantage of this strategy is that it helps in increasing volumes of
sales and revenue. Organizations can use this strategy while entering any new market.
Marks & Spencer can achieve leading position in UK markets by adopting hybrid strategy.
This strategy is the most suitable for the organization, as it will help to achieve all it
organizational goal and objectives. Gaining high market share and building high brand
perception in the minds of customers is all achievable through this strategy.
Justify and recommend the most appropriate growth platform and strategies.
There are several strategies that an organization can apply in order to promote growth and
productivity. Some of these are elaborated below-
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Retrenchment strategy: This strategy is often used by organizations to reduce the diversity
of their activities (Ung et al., 2016). The main aim is to decrease the costs and thereby
increase profits in order to build strong financial strength. Mainly it involves discontinuing of
selling few products or stopping operations in certain market. There are two types of
retrenchment strategies, which are turn around and divestment. Turnaround strategy refers to
withdrawing from a particular market while divestment strategy refers to selling of a portion
of business. Divestment is usually followed if turnaround strategy fails to be successful.
Substantial growth strategy: This strategy includes horizontal integration, related
diversification, unrelated integration and vertical integration. Vertical integration involves the
process of one organization merging with other organization within its supply chain
management system. Horizontal integration refers to growth strategy that accompanies new
production units. Related diversification refers to the process of adding new features to a
product or a similar product in their existing product portfolio. Unrelated diversification
refers to introducing a different product to expand in the market (Caruana, 2015).
Limited growth strategy: This strategy mainly refers to avoid debt that organizations
accompany while following expansion or growth strategy. This includes three segments
called product development, market development and market penetration. Market penetration
refers to expanding the existing product or service in the present market by adding additional
features. Market development refers to launching the existing line of products into a new
market, while product development strategy involves launching new products in the current
market (Johnson, 2016).
Among all these strategies discussed above the most suitable one for Marks & Spencer will
be to adopt market development and product development strategy. This is because for the
simple fact that both the methods will promote the growth and performance of the company.
Introducing new product into existing market will assist in the expansion of business and
increasing the market share. These strategies involve innovation and understanding the needs
of customers in order to serve them better.
Produce a strategic management plan with strategies, objectives and tactics.
Strategic Plan
Mission and Vision
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