Strategic Analysis Report: Business Strategy of Marks & Spencer

This report provides a comprehensive business strategy analysis of Marks & Spencer (M&S), a UK-based retail firm specializing in clothing, home goods, and luxury food items. The report begins with an introduction to M&S, discussing its market presence and recent performance challenges, including declining sales in the UK. It outlines the company's mission, vision, goals, and objectives, emphasizing core competencies and the factors influencing strategic planning. The report then delves into organizational and environmental audits, including SWOT and PESTLE analyses. It explores the significance of stakeholders and proposes a new strategic plan, evaluating alternative strategies based on market entry, growth, and retrenchment. The report also addresses the roles and responsibilities of personnel, resource requirements, and the application of SMART targets for strategy implementation. The analysis covers key factors such as engagement, communication, innovation, and project management. The report also discusses the effectiveness of techniques such as SPACE and BCG matrix to develop and review strategies. The report concludes with an overview of the challenges and opportunities facing M&S, providing a strategic roadmap for future success.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................2
1.1 Mission, vision, goals and objectives with the core competencies.......................................2
1.2 factors that have to be consider while formulating strategic plan.........................................3
1.3 effectiveness of techniques in strategic plan development...................................................4
TASK 2............................................................................................................................................5
2.1 organisational Audit for strategic position............................................................................5
2.2 Environmental Audit.............................................................................................................6
2.3. Significance of stakeholders................................................................................................7
2.4 Strategy for M&S..................................................................................................................7
TASK 3............................................................................................................................................8
3.1 appropriateness of alternative strategies...............................................................................8
3.2 justification of newer strategy...............................................................................................8
TASK 4............................................................................................................................................8
4.1 role and responsibilities of personnels in implementation of strategy..................................8
4.2 Resources required for implementation................................................................................9
4.3 SMART target in achievement of the strategy......................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy is the blood and soul of an organisation. The business strategy is the set
of plan and procedures hat are been used by an organisation to fulfil its vision and achieve its
targeted goals which are been decided by the business owner or the management of the
organisation (Akter, and et.al., 2016). The organisation of context is Marks and Spencer's. It is a
UK based retail firm. It has an expertise in clothing, home goods and luxury food items. It is
operating in many countries like India, Finland, Russia and Spain. In the recent period, the sales
of the clothing brands of M &S have been reduced in UK but, on the other hand it has an
enormous rise in the luxury food products. The company started with the policy of selling only
British goods but with the passage of time and globalisation, it included the brands and products
of various countries at its store. Beside this, the company deals with the clothing and food
manufacturing units that provide the finished products to M&S. In 1957, the company introduced
the stocking and size measuring system. Marks & Spencer's are known for providing its
customers with a products and services that are good value for money. In 1973, the company
began to expand its retail business outside the UK. But, the unfavourable locations and smaller
size of the outlets forced the company to close down 38 stores in UK. IN 2001, the company
started using the credit cards for the mode of payment at its outlets and also redesigned its
business model to gain a sustainability in the market. By 2009, the company had adopted a cost
cutting measure that is been utilized to gain a better utilisation of available resources and reduce
the wastage. In 2016, M&S entered the German and French market with inner wears and kids
wear (Armstrong and et.al., 2015). In the recent time, the company has seen a major decline in its
sales which has deeply affected the performance and profitability of the company. The company
had to take strategic measures to tackle this situation and sustain its market presence. This report
will cover the various missions, visions, goals or objective that is been decided by an
organisation in regard to its core competencies. Besides this, we will also discuss effectiveness of
various techniques while developing a business plan. Also, we will discuss various techniques
that are been used to decide a strategy. The report will include the environmental audit that
covers internal and external analysis. The report will also include the organisational audit
(Buckley, Burton and Mirza, 2016). Apart from this we will also conduct a stakeholder analysis
to gain a better idea about the strategy formation. A new strategic plan is been discussed for the
company to meet its market challenges and its appropriateness in regard to market entry,
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substantive growth and retrenchment. Also, the roles and responsibilities of various personnels
and estimated resource requirements are been considered. Apart from this, the contribution of
SMART targets is been discussed for strategy implementation.
TASK 1
1.1 Mission, vision, goals and objectives with the core competencies.
Mission and Vision: The mission of Marks and Spencer's that wants its services and
products to be accessible by all. The vision is to sustain a long term success and is to be the
largest retail firm in the UK as well as in the world and provide its customers with the effective
value for money products and services.
Goals: The goal of Marks and Spencer's is to gain a better market share on a global level to gain
a better profitability. Besides this the company target to increase the trust level of the employees,
customers as well as the stakeholders that are associated with the company (Dranove And et.al.,
2016). It goal of 'Mission 2020' is to become the largest supplier of the retail goods in the
market.
Objectives: The M&S has the following objectives that drives the company and make it work
for the achievement of its targeted goals. The objectives of M&S are as follows:
 Employee orientation: It is the higher expectation towards the staff of the company that
the company has to take into consideration. It is been followed so that the employees
work in a very successful way and provide them with the job satisfaction (Peteraf,
Gamble and Thompson, 2014). Also, it will attract the employees of higher skill set to
gain a better transformation for the business and deliver high performance to its
customers.
 Organisational objectives: It is been followed to gain a better work efficiency to regain
the leadership in the market. Also, this is implemented to gain a better scale, superior
quality and value generation.
 Sales objectives: the company has certain objectives in regard to improve its per unit sale
at its outlets and reduce goods and service returning to company (Scholes, 2015).
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The core competencies resulted in a development of a strong brand, excellent quality
control and good customer service that will help the company to gain a better idea about the
strength and weaknesses and scope of improvements.
1.2 factors that have to be consider while formulating strategic plan
Every business need a strategic business plan, that is essential to gain a better control
over its business operations and to take the effective measure to improve its productivity and
profitability (Spender, 2014). It includes the identification and implementation of various key
factors that can affect the business. The basic or the most important key factors that are been
taken into consideration by M&S to make a strategic plan are:
 Engagement: It includes the involvement of all the level or departments of the
organisation that helps the company to gain a better productivity. The engagement of the
staff of the M&S in the strategic planning to build a better end plan for the company.
Also, it provides a direction to the organisation (Shimizu and Tamura, 2015). It will
provide them an insight of the internal issues concerns and opportunities and understand
them well. The engagement of the staff employees in the implementation of strategic plan
and will have high success rate of the execution.
 Communication: The efficient flow of communication in the company on all levels will
help the M&S to identify its strength and weaknesses and draft a better strategic plan that
will ensure the company to get a better idea about the scope of improvement
(Kellermanns, Dibrell and Cruz, 2014). Every one in the organisation will give its input
to make the organisation more successful. Also, a better and efficient communication
process will make the implementation of strategic plan a great success.
 Innovation: The innovation will prove as the key factor of the success and sustainability
of the company. The innovative approaches provide the company with not only the better
outlook towards the customer's requirement but also, to come up with some sort of better
products and services that will help the company to gain a better sustainability
(Armstrong and et.al., 2015). The involvement and support of the senior management of
M&S is very important as it will set the guidelines and provides essential resources that
will be required for strategic plan.
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 Project management: the management of the assigned project or the development
process is also very important. It will include the prioritization of the project processes
and working accordingly in order to avoid any sort of restriction or issue (Klettner,
Clarke and Boersma, 2014). It requires high level of involvement and commitment
towards the work processes. Also, it will help the company to manage their time and
resources in a very effective manner.
1.3 effectiveness of techniques in strategic plan development
 SPACE Analysis: It stands for Strategic Position and Action Evaluation. It is a
framework that is useful to develop and review the strategies of the company. It is used at
the beginning as well as the end of a process in the company to evaluate individual
strategic options generated (Dranove and et.al., 2016). It includes the key external issues
like Industry attractiveness and environmental stability along with the internal factors like
competitive advantages and financial strength of the company. The output of these
approach is been given on the statistics of the SPACE matrix. This will help the company
to develop a better idea about the positive and negative points of the company and a brief
idea to manage them.
 BCG Matrix: It is a portfolio planning model based on the observation of the business
units that are been taken into the consideration by the company to develop a better market
growth. It acts as a method to improve the market attractiveness as well as the
improvement of the market share (Johnson, 2017). It includes various categories or
classes under which an organisation is been placed. The categories are:
 Stars: Organisations with High growth rate and High market share.
 Question Marks: Organisations with High growth rate but low market share.
 Cows: Organisations with low growth rate but with the High market share.
 Dogs: Organisations with low growth rate as well as low market share.
This method helps the company to identify its market position and meet the requirements
of the company along with better cost advantage.
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TASK 2
2.1 organisational Audit for strategic position
SWOT Analysis
Strength Weaknesses
 One of the major brand operating in the
retail market.
 Known for providing a value of money
products and services (Pisano, 2015).
 Operating in 40 countries and having
more than 1000 stores with work force
of over 80,000 employees.
 M&S is subjected to face the enormous
and tough competition from other
competitors in the market, which may
affect its market share.
 Being one of the popular brand, it
needs to protect its brand or outlets
from misuse.
Opportunities Threats
 With the advancement of the
technology and the globalisation, the
company can develop its website to
connect with its customers (Armstrong
and et.al., 2015).
 They can introduce new market
segment to improve their productivity
and profitability.
 The local retail stores are the major
threat due to more discount on products
and services (Buckley and Ghauri,
2015).
 Being a global retailer, it is subjected to
the changes in various political and
other factors of various countries.
Ansoff matrix
Market Penetration Market development
 Maintain and increase the share of
existing products and services by sale
promotion, pricing etc (Buckley and
Ghauri, 2015).
 Eliminating the competition using
excessive marketing.
 Developing a market in a new
geographical location using the means
of export.
 Newer product dimension and
packaging.
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Product development Diversification
 Developing a better product or services
to improve the loyalty and satisfaction
of the customer (Dranove and et.al.,
2016).
 Innovating and coming up with new
product to meet customers
requirements.
 Launching a new product in a new
market (Buckley, Burton and Mirza,
2016).
 Having a clear idea about the customers
requirements and market demands to
meet the better strategic plan.
2.2 Environmental Audit
PESTLE Analysis: The PESTLE of Marks and Spencer's is as follows:
 Political: As M&S is operating in multiple countries it is subjected to the political and
other changes that occurs in the political level of the country and affects the business.
 Economic: The economy also plays a very important role as a positive growth in the
economy will help M&S to make its business work (Johnson, 2017). On other hand,
depressive economy may lead to business failure.
 Social: The social factors also plays a very deep role in the growth of the business of
M&S as it will determine the customers type and its demands which is needed to be met
by the company.
 Technological: With the passage of time, there have been many technical advancements
that are needed to be taken into consideration (Leonidou and et.al., 2017).
 Legal: M&S has to be in bide under the laws to regulate its business practices, to meet
the strategic goals of the company.
 Environmental: With the climatic changes, M&S has to adopt strategic changes to meet
the requirements of the business.
Porter's Five forces model:
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 Level of competition: M&S is subjected to meet the competition problems that can
affects its business practices (Spender, 2014). As M&S sells both clothing and food
products, it can face competition in both segments.
 Threats of Substitute: As with the passage of time, M&S can face an enormous threat of
getting its products substituted and replaced by cheap products from its competitors.
 Threats of New Entrants: As new companies are been entering in the retail market,
M&S has a risk of facing a competition that will affect its productivity and profitability
(Shimizu and Tamura, 2015).
 Bargaining power of Buyers: The buyers or the customers will bargain and look for the
cheaper alternative of the services or products that are been provided by M&S which will
affect its revenue generation (Scholes, 2015).
 Bargaining power of Suppliers: the suppliers will also negotiate with the company in
regard to their profit share which will affect the overall profitability of M&S.
2.3. Significance of stakeholders
The stakeholders play a very crucial role in the production and carrying out of business
by M&S. They have a direct or indirect interest in the operations of the company. They include
investors, suppliers, transporters, dealers, employees and even customers who contribute in the
growth and development of the company (Pisano, 2015). On the first level, the analysis of the
stakeholders will be analysed using various techniques.
Then the stakeholders are been identified to get the company an idea about the
requirements and demands of the market to utilize the opportunities. After this, the stack holder
is been held in a communication with the company to get an involvement in the decision making
process (Peteraf, Gamble and Thompson, 2014). This will give them a sense of belonging in the
company and its planning. This will help the company to get better implementation of the
strategic plan.
2.4 Strategy for M&S
After the internal and external audit we can say the M&S can adopt the Product
Differentiation Strategy to get a better share of the market. It will provide the company with a
better competitive advantage by making the company to come up with innovative and superior
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quality of products (Leonidou and et.al., 2017). It will help M&S to avoid its competitors and
gain a better market share. Also, it will help the company to build a better brand loyalty for its
customers by providing them satisfaction and value for money.
TASK 3
3.1 appropriateness of alternative strategies.
 Market entry: M&S can go for the approach of market growth that will help the
company to gain a better control over its functionality as it will allow the company to
explore new market and develop a product or service accordingly (Klettner, Clarke and
Boersma, 2014). It may include processes like import export which will help the
company to build a better foreign relation.
 Substantive growth: It includes the procedure of using the effective measures that will
help the company to gain a better growth in the market as compared to its competitors. It
will help the company to attain a sustainability and stability in the market which will help
M&S to improve its work process and profitability (Kellermanns, Dibrell and Cruz,
2014). It includes exponential growth, competition, wealth creation and setting priorities.
 Retrenchment: This strategy will help the company to cost cut the expenses and provide
M&S a more sustainable financial strategy (Johnson, 2017). It usually involves
withdrawal or discontinuation of selling certain products in case of low revenue or
financial loss.
3.2 justification of newer strategy.
The strategy of Product Differentiation is appropriate for M&S as it will help the
company to avoid unnecessary competition which will cost the company with valuable time and
resources. As M&S is operating in retail sector, providing clothings and food items to its
customers, the requirement of exploring new market segment is minimal (Buckley, Burton and
Mirza, 2016.). Also, the Product Differentiation Strategy will help the company to set its
priorities which will help the company to perform well.
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TASK 4
4.1 role and responsibilities of personnels in implementation of strategy
The personnels or the employees at M&S will work in the implementation of the business
strategies that will be implemented of the company.
 The employees or the staff at the outlets of the M&S will be interacting and meeting the
requirement of the customers.
 Employees will be following business strategy that will help them to meet the targeted
goals and provide the customers with the best of the products and services.
 Besides this, they will also assess the customers demand and will give their input to the
management so that M&S can plan more effective business strategies (Dranove and et.al.,
2016).
 They will regulate the business processes and will analyse the market trends that will help
the M&S to discuss and develop more appropriate plans to gain sustainability.
4.2 Resources required for implementation
Some resources that are been required for the implementation are:
 Financial resources: It is very important to run the newly implemented business
strategy that helps the company to gain a sustainable profitability. M&S can get the
financial help from banks, investors, stakeholders and shareholders (Buckley and Ghauri,
2015.).
 Human resources: the human resource or the employees play a crucial role in
implementation of the new business strategy as they will be the responsible party who
will work at M&S. It will include the assessment of available work force and the
requirement of a new one (Armstrong and et.al., 2015).
 Physical resources: It includes the machinery, vehicles, systems, distribution channels
etc. that will help M&S to carry out the changes that will be made after the
implementation of the new strategy.
4.3 SMART target in achievement of the strategy
The SMART target will help the company to gain a better idea of the goals which are as
follows:
 Specific: the goals are well defined and clear to everyone at M&S.
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 Measurable: Assessing that M&S can attain the goals and when to achieve them.
 Agreed: the targets must be decided after discussion with management and stakeholders
(Akter, and et.al., 2016).
 Realistic: the target must be achievable within knowledge, resources available with
M&S.
 Time based: It must not be time constraint as this will affect the quality of product or
service.
CONCLUSION
Thus, it can be concluded that business strategies are very important for efficient running
of M&S. The Product Differentiation Strategy helps the company to get a better sustainability
and profitability. The roles of the personnels is also very crucial in implementing it in a very
effective manner. Various strategies are been discussed and analysis helps to gain a better idea of
scope of improvement of M&S to implement the new business strategy.
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