Marks & Spencer's Business Strategy: Environmental & Internal Analysis

This report provides a comprehensive analysis of Marks & Spencer's business strategy, examining both the macro and micro environments impacting the company. It utilizes frameworks like PESTLE and SWOT to assess external influences and internal capabilities. Porter’s five forces model is applied to evaluate competitive forces within the market sector. The report also explores various strategic planning theories and concepts, culminating in a strategic management plan for M&S. Key areas covered include political, economic, social, technological, legal, and environmental factors, as well as internal elements such as resources, organizational structure, and employee skills, using models like McKinsey’s 7S and the Ansoff matrix to devise effective growth strategies.

Unit 32- Business
Strategy

Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
Analysis of the influence and impact which macro environment has on the company and its
business strategies........................................................................................................................3
Analysis of the internal environment and the capabilities of organization using relevant
frameworks..................................................................................................................................6
Apply Porter’s five forces model and to evaluate the competitive forces of a given market
sector for an organization............................................................................................................8
PART B...........................................................................................................................................9
Apply a range of theories, concepts & models, interpret & devise strategic planning for a
given organization.......................................................................................................................9
Strategic management plan........................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
The business strategy can be referred to as the outline of decisions and actions which the
company plans in order to reach the objectives and goals. It mainly defines as to what the
organization wants to do in order to reach the goals so that it help in guiding the enterprise for
the decision making process for resource allocation and hiring. It simply creates the direction and
vision for while company. It is essential that all the people in organization have clear goals and
are moving ahead towards the direction or the mission of it (Suoniemi and et. al., 2020). The
company chosen for this report is Marks & Spencer, a multinational organization which was
founded in the year 1884 and is headquartered in London, UK. This report will deal with analysis
of external environment and internal environment and capabilities. Further it will add outcome of
Porter’s five forces and concepts which can assist company in strategic decisions.
PART A
Analysis of the influence and impact which macro environment has on the company and its
business strategies.
It is very important for the company to identify its macro and micro factors which can
affect the performance of it. The macro environment places the direct impact on the functioning
of businesses so it is important to make analysis of it so that appropriate decisions are taken
beforehand (Murawski and et. al., 2018). For the purpose of this, the following frameworks are
used for Marks & Spencer-
PESTLE Analysis
It is a tool which is used to analyse the forces and influence of the external factors on the
performance of company. In relation to Marks & Spencer, it is illustrated below-
 Political: It is concerned with the political environment of the state wherein the
organization operates. As Marks & Spencer is a global enterprise, it functions all across
the world so it is essential for it to make sure that it expand its business in such place
which has political stability. Moreover, post Brexit, there are many changes being
expected in the rules and policies which can affect its working.
 Economic: These include the factors such as employability rate, inflation rate, etc. The
pandemic of covid-19 has affected the purchasing power of the people that have affected

the business of M&S. Moreover, the conflict with the small retailers on the price of
products which is high may affect the brand value of the company.
 Social: It is concerned with the socio-cultural factors such as demand, spending habits,
etc. M&S deals in the ready meals and is dominating in this industry so the rise in the
consumption of the ready meals enhances profitability of company (Thomas and et. al.,
2021).
 Technological: It relates to adaptation of the new technologies in business. nowadays,
there is adaptation of new technologies in the modern retail stores so M&S has also
introduced self-checkout system so that there is enhanced level of service in the company
which can help in retaining customers.
 Legal: It deals with the adherence to the law and rules in the organization. Over the past
years, M&S have been engaged in many legal disputes which have made it hard for the
company to hold its image at the constant stature. So the organization must make sure
that it complies with the law.
 Environmental: It is concerned with the factors which may affect the ecology. M&S
continuously engages in promoting the sustainable retail industry on many occasions
such as it uses environmentally friendly process of production in manufacturing the
offering.
SWOT analysis
It is a tool which is used to analyse the internal and external capabilities of the business
by way of analysing the strength and opportunities of organization so that threat and weakness
can be overcome. In context to M&S, it is discussed below-
Strength
 The biggest strength for M&S is that it
has strong infrastructure of e-commerce
which helps it to enhance sales by
attracting customers to make purchase
via online mode.
 Another strength is its strong products
and services with the latest trends of
industry which helps it to attract more
Weakness
 Its weakness is that it has more reliance
on the UK market which makes it
vulnerable to the market conditions in
local country.
 Another weakness is that that M&S
have frequent product recalls which
leads to the loss in the customer
confidence (Hallal, HajjHussein and

customers. Tlais, 2020).
Opportunities
 The company can reshape its clothing
segment so that it can match with the
industry trends. M&S can get
opportunity to regularly reshape its
segment of clothing so that more
customers are attracted.
 Another opportunity can be to plan the
investment in the Indian market so that
it can make its presence in Asia and
attract more sales.
Threats
 Biggest threat for M&S is the stiff
competition in the food and clothing
sector of UK which can affect the brand
position of company.
 Another threat is the frequent change in
the trends of clothing sector which may
affect the manufacturing of its products.
Stakeholder analysis
The power interest grid is the framework which is used by the organization in order to
categorize the stakeholders of the company into four categories on the basis of its interest and
power in enterprise. In relation to M&S, it is discussed below-
 High power, high interest: It includes those stakeholders who are fully engaged in the
business and greatest efforts are made in order to satisfy them. In M&S, the top level
management of the company comes under this category as they have high interest and
power in the organization.
 High power low interest: It involves those stakeholders who have less interest but more
power in the organization. The customers of M&S are included in this as they have high
power in company so they are required to be kept satisfied but nor bored with the excess
information (Yamaki, 2017).
 Low power high interest: These are such stakeholders who are required to be informed
adequately and make sure that no such major issue is arisen. The employees are included
in this category of M&S as they are very helpful in the details of project and must be kept
informed about the minute details.

 Low power low interest: These include those stakeholders who must be monitored but
not to be bored with an excessive communication. The government are included in this as
they are only required to be monitored due to their nature of less interest and power.
Analysis of the internal environment and the capabilities of organization using relevant
frameworks.
It is essential for the company to use appropriate tools in order to help the organization
analyse internal environment so that it can evaluate and plan its strategies accordingly. M&S can
make use of different frameworks which can help in making analysis of the internal capabilities
which can help it to expand its business in distinct location (Clarke and MacDonald, 2019). In
context to M&S, these concepts are illustrated below-
Resource based view
It is one of the managerial framework which is used in determining strategic resources
that a company can exploit so that sustainable competitive advantage can be gained. It mainly
emphasises on the inside out approach for the organizational analysis as the theory which
considers the company as the bundle of resources. It mainly underscores that the organizational
differences exist due to the resources and the manner in which it can be combined. Thus, this
theory stipulates that analysis of company begins from the internal environment for M&S.
Mckinsey’s 7S.
It is a model which comprises of the seven internal elements of company which is needed
to be aligned for it in order to be successful. These elements are categorized into soft and hard
elements of which the below mentioned first three are hard and last four are soft elements. In
context to M&S, it is illustrated below-
 Strategy: It is the plan of company for building as well as maintaining the competitive
advantage over the competitors. M&S adopts the differentiation strategy in its clothing so
that it can competitive edge in market.
 Structure: It provides as to how the company is being organized into teams and
departments. Marks & Spencer follows the flat organizational structure as this has limited
level of the management between the front line employees and the administrative level. it
is mainly followed by it in order to encourage the workforce in the decision making
process.

 System: It is concerned with the daily procedures and activities which the staff uses in
order to get their work done. Marks & Spencer concentrates on different strategies in
order to internationally expand their business so it follows quality management system,
performance appraisal system to motivate employees, and many others so that it can grow
the business (Alghalibi and Hoshan, 2018).
 Shared values: It comprises of core values of company and also reflects the general work
ethics. Marks & Spencer is built on the values of service, quality value, trust and
innovation. The main mission of the brand is to make the aspirational quality which is
accessible to all.
 Style: It is concerned with the style of the leadership or management which is adopted by
company. Marks & Spencer follows the consultative style of management wherein the
leader consults the other members before any decision is made. The group influence is
present while making the decision even though the leader has made the decision.
 Staff: It is concerned with the workforce and their capabilities which makes them
productive and efficient. Marks & Spencer is the large multinational company which
have employed more than 85000 employees all over the world and out of which 90% of
them are based in UK.
 Skills: It includes the actual competencies and skills of the employees of the organization.
M&S has skilled and talented employees which helps in the achievement of the
organizational goals. They hire the new designers who are skilled and well qualified so
that they can stay up to date with the latest industry trends (Curuksu, 2018).
Ansoff matrix
It is the tool which comprises of four different growth strategies which helps the
company to plan its strategy in order succeed and grow in the business. As M&S is planning a
business strategy which can help it to grow and succeed, any of the following strategies may be
adopted by it-
 Market Penetration: It is such strategy which focuses on increasing the sales of the
existing products in the existing market wherein the company already operates. It may be
executed in many ways such as increasing distribution and promotion efforts, declining
price in order to attract customers, etc.

 Product development: This strategy mainly focuses on introduction of the new product in
the existing market. It takes extensive research in order to expand the product range of
company and to adopt this strategy, the organization must have strong understanding of
the current market so that it can fulfil the needs of existing market by innovative solution
(Claudya, Suryani and Parulian, 2020).
 Market development: Under this strategy, the company enters the new market but with
its existing range of products so that it can expand in new geographical regions,
consumer segments, etc. It may involve the approach such as to cater to the different
segment of customers, entering foreign market or new domestic market, etc.
 Diversification: This strategy involves moving into new market with new products. It is
one of the riskiest strategy as it is the combination of product and market development
strategy and the risk may be mitigated through the related diversification (Barney and
Mackey, 2018).
Marks & Spencer can opt for the market development strategy so that it can expand its
business in new market. This strategy will be helpful for organization to target new customers
and market so that its sales and profitability is enhanced.
Apply Porter’s five forces model and to evaluate the competitive forces of a given market sector
for an organization.
In order to manage and analyse the general methods through which ll the companies can
generate and manage the effective strategies through which competitive advancement can be
created are considered through Michael Porter's framework. It manages the sustainability in all
the advancement through which the profitability can be enhanced (Landázuri Espinoza and
Montenegro Cazare, 2018). Marks and Spencer use the porters model in order to manage the
opportunities. The application of porters five forces is mentioned thereunder: Bargaining power of suppliers: In M&S the bargaining power of the suppliers is low as
when there is been seen in all the retails sectors they have lot of options and it is
considered with so many suppliers, Marks and Spencer can thereby take the resources
from any of the suppliers. As most of the suppliers use to negotiate and up rise the prices
for all the work. And while in all such things there is being regardless seen that all the
companies can alternatively switch to different person for getting the resources.

 Threat of new entrants: The new entries is the major threat to all M&S so this force is
comparatively high. As when analysed there are so many retail, industries which are
adapted and there is being analysed that all such use to give the same products and
different and lower pricing which eventually is a major threat to all. M&S tries to manage
and adapt some general methods through which they can implement the innovative
techniques so as to manage their image in the companies. Threat of substitutes: This threat is moderate to all as when seen their M&S is a well-
known leading company and they have the brand image through which it maintains the
loyalty of the customers. So the consumers usually focus on them, but as new services
and products use to manage some optimum areas and also attract consumers towards
them can affect the business. Bargaining power of buyers: This threat is high for M&S as retail sector have so many
options and the raising competition can there by effect the business so in order to
maintain the productivity and also to frame the consumers to be towards them, it is
important to make the prices and the quality according to them. M&S try to manage
friendly strategy for pricing and it also frame to maintain the customer satisfaction.
 Competition and rivalry: The major threat of M&S is high as they manage and there are
lot of companies which are concerned with it and this implicate and manage the business
according to it. Their is being seen that all, the nature and the raised competitive is
effecting the business (Echchakoui, 2018).
PART B
Apply a range of theories, concepts & models, interpret & devise strategic planning for a given
organization.
In business it is important to manage the strategies through which all the adaptations are
created as when termed out there is been seen that all the strategies and the concept are made to
manage the development in the organization. M&S use some specified models and theories in
order to manage the working they are like:
Generic Strategies

It is an important model which provides the general working and also manage the
effective working through which all the growth and the advancement is being made. As in
context to M&S, it is being mentioned thereunder:
 Cost leadership- It generally manage all the market share which helps in managing the
restricted areas for the cost leadership and this also focus on making the low cost and the
elimination with the interest rate. M&S manage the capital through which cost cut down
is managed and all the high level performance is managed.
 Differentiation- It is important to serve such ideas and products through which the
company can intellectually manage and obtain the general working through which all the
differentiations is managed. M&S will have to apply all the strategies through which they
try to implement and focus on all superior products and services so as to serve the quality
and also to consider the requirement of customers.
 Differentiation focus- This is when the organization try to make some innovative
products and services through which they can implement and adapt different variability
of services and product among all. M&S can manage this in order to frame the expansion
in the market and also to uplift the growth and culture.
 Cost focus- It is generally to manage the growth in the market the major concern which
is made is to implement the cost focus. As all the lower pricing will effectively attract
customers and this will only be made in small market segments (Desai, 2019).
From all the above methods M&S can implement the differentiation focus so as to
manage the market sedimentation and expansion in order to cover the growth of the company.
Bowman's Strategy Clock
This strategy considers and provide the stargates to manage the competitive advancement
and also to improve the performance in the company as in context to M&S it is mentioned
thereunder:
 Hybrid- It focus on different products through which all the product is managed and there
is being seen that high values and the general working is implemented in order to manage
customers to gain good values of products in order to give the customers value and
consideration.

 Low price low value added- This is generally keeping the price adequate low so as to
manage and frame the customers to receive the loyalty of the customers and by making
them satisfied.
 Focused differentiation- This implement all the high quality of products and services and
the company use to manage specific products to be outlined and managed on luxurious
areas. As M&S can serve and generate the areas through which pre products are being
given.
 Differentiation- It manage the average pricing and the difference in the offers and the
high realm through which customers can be framed and managed.
 Loss of market share- In all this the company try to manage their services and product
and for that they implement and focus on maintaining the average nature through which
the value and the offers are covered (Helmold and Samara, 2019).
 Monopoly pricing- It is when the company is not in any kind ODF fear regarding the
competition and it manages all the methods and the areas.
 Risky high margins- M&S can try to make the high pricing through which they can
implement and manage the high risk factor.
 Low price- This is when the company can try to manage the low pricing so as to manage
and focus on the general working and implementation.
M&S can there by adapt differentiation in order to provide the products through which
growth and production is managed and help for future management and work.
Strategic management plan
It is the plan which helps out to identify and manage all the strategies through which the
future goals and the production can be enhanced and this provides the general method of
upliftment (de Jesús Bustamante-Ruíz, Zúñiga-Collazos and Toro-Jaramillo, 2017). As in
context to M&S it is being mentioned thereunder:
Summary The present strategic plan for Marks & Spencer is to expand the
business in new region so that it can grow and expand the customer
base. The company wants to attract new customers so it is planning to
expand the business in India.
Vision M&S has a vision to expand its business across the world together with

maintenance of quality of its products so that competitive edge can be
taken.
Mission Its mission statement is to maintain the quality of products and make its
offering accessible to all.
Objectives  To increase the customer base by 23% in next 12 months.
 To enhance sales and profitability of company by 31% in next
12 months.
Strategy In order to implement this plan, Marks & Spencer can use market
development strategy so that it can expand the business in new region
and attract new customers with same product range.
Tactics
 Product: M&S deals in the product range of clothing, home
décor and food.
 Price: It will follow the competitive pricing strategy so that it
can compete with the other businesses and make its brand
position in new market.
 Place: The organization will offer its products in store of India
and use e-commerce for attracting more sales.
 Promotion: It will promote its business in new region through
digital media such as social media, emails, etc.
Evaluation For the purpose of monitoring of the plan, M&S will make use of the
benchmarking tool wherein a standard will be set by company and
actual performance shall be compared with plan and standard.

CONCLUSION
It is concluded from this report that business strategy is the action or outline which helps in
planning the new strategy for business. before the strategy is made, it is essential for organization
to analyse the internal as well as external environment and capabilities so that it can get prepared
to mitigate threats and grab opportunities. The external environment is analysed by using
framework such as PESTLE, SWOT, stakeholder analysis while micro environment is analysed
for Marks & Spencer using models such as resource based view, McKinsey’s 7s, and many
others. The industry analysis is also a part of business strategy which helps in taking the
competitive advantage by using Porter’s five forces. Further it is added that strategic
management plan helps the organization to plan its strategy in such manner that growth is

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