Evaluating Business Strategy and Competitive Advantage at M&S

This report provides a comprehensive analysis of Marks and Spencer's business strategy, covering internal and external environments. It includes a detailed PESTLE analysis, SWOT analysis, and an evaluation of the organization's resources and capabilities. The competitive environment is assessed using Porter's Five Forces model, identifying the company's existing and potential competitive advantages. The report also explores various strategic directions available to the organization, recommending appropriate growth platforms and strategies. Finally, it evaluates methods for monitoring the chosen strategies to ensure success, offering insights into how Marks and Spencer can achieve its strategic objectives.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION ..........................................................................................................................3
PART A...........................................................................................................................................3
Analysis will include a detailed and considered PESTLE and SWOT of the organisation and
an evaluation of the organisation’s resources and capabilities. .................................................3
Analysis and critical evaluation of the competitive environment using Porter’s Five Forces
model...........................................................................................................................................6
Identification and justification of the organisation’s existing and/or potential competitive
advantage.....................................................................................................................................8
Devise valid strategies and tactical objectives to achieve overall strategic objectives.............10
PART 2..........................................................................................................................................10
Critically evaluate the different types of strategic directions available to the organisation.....10
Justify and recommend the most appropriate growth platform/s and strategies.......................11
Evaluate ways and means by which the chosen strategy/ies can be monitored in order to
ensure success...........................................................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Business strategy refers to all the decisions taken for long term growth of an organisation, it
shows the way the to achieve company's desire goals. It plays major role in success of an
organisation in a long run. It is more like gambling if business entered in market without any
proper strategy(PANDEY, 2017). The following report is based on company Marks and
Spencers, which was founded in 1884 and it is a well established multinational retailer that offers
multiple merchandise such as clothing, home products, food products and having its headquarter
in London, England. This report will cover analysis of internal and external capabilities and
environment, porter's 5 forces and strategic management plan of Marks and Spencer.
PART A
Analysis will include a detailed and considered PESTLE and SWOT of the organisation and an
evaluation of the organisation’s resources and capabilities.
Pestle Analysis:
It is a framework which helps in examining external environment of a company by evaluating
all the factors affecting the organisation(Dawes, 2018).
Here are external factors affecting the organisation:
 Political Factor- This factor of pestle analysis states that, how policies made by
government can impact the smooth working of an organisation. Due to political
instabilities, change in policies, change in foreign policies etc can affect the operations of
a company. In case of Marks and Spencers, Free trade policy has a positive impact on the
company's overall profits as it let M&S to import many products at a cheaper price to sell
in their stores.
 Econonic Factor- It refers to factors that influence the purchasing habits of consumers
and has a major impact on company's overall economic growth. Any change in inflation,
interest rates, exchange rates etc, can affect the operations of businesses. In context to
Marks and Spencer, during Covid-19 pandemic it is tough for the firm to manage its
revenue as globally countries were in lock down, firm manages to overcome this factor
by providing essential items with following all th pandemic protocols.
 Social Factors- It refers to the factors which affect the action and attitud of the
consumers towards the organisation. In case of Marks and spencer, company started

outsourcing and supporting its surrounding communities which helped them to cut their
internal cost.
 Technological Factors- These factors refers to modification which relates to the
development of the technology in benefit of organisation and its operations. In case of
Marks and Spencer, firm is planning to introduce and increase the utilization of AI based
checkouts.
 Legal Factor- These factors refers to how judicial aspects can affect the operations of the
organisations. In context to Marks and Spencers, in 2010 firm was accused of paying
Indian workers 25p/hr and was forced to work overtime.
 Environmental Factor- It refers to all ecological factors which affect the smooth
running of an organisation. In context to Marks and Spencer, firm is very concerned
about their impact on environment, so they started an initiative called “Plan A” to battle
climate change, trade ethically reduce waste etc.
SWOT Analysis:
It is a method to analyse internal capabilities of an organisation to know its competitive position
(Bullock, Jennings and Timbrell, 2019).
Factors affecting to the company are:
Strengths
 Company's excellent customer service
is always their biggest strength.
 M&S is majorly focused on their
product innovation in accordance to
trend and demand of their consumers.
Weaknesses
 Other retail brands giving strong
competition to the company which can
lead to limited market share.
 Imitation of similar products which
company is offering.

Opportunities
 Firm can expand its brand in remote
places by initially offering essential day
to day products.
 M&S can increase their sales and
revenues by proper utilization of E-
commerce.
Threats
 Brexit law is a biggest threat to the
organisation's profit margins.
 Trends and preferences of the
consumers are dynamic so it can be a
threat to company's long term growth.
Ansoff Matrix:
It assists marketers to recognize and analyze their strategies to increase revenue by introducing
new services or products into new market (Azubuike and et. al., 2018).
Here Ansoff Matrix has four strategies:
 Market Penetration- This strategy helps organizations to sell their existing products into
their existing markets. Main motive of this strategy is to increase or maintain the current
market share with selling existing services or products of an organization. In context to
Marks and Spencers, in order to generate more sales revenues from their existing
products in their current market place, company can make a strategy in giving more
coupons, gift vouchers, reward points to their clients.
 Product Development- It involves efforts in modifying existing products or innovating
new products to sell in the established market share of an organisation. This strategy is
only successful when company has a strong hold on to their current market (Lazaridou
and et. al., 2019). In context to Marks and Spencers, firm can use this strategy either by
adding new and different features to their existing products or by creating a whole new
product in accordance to requirement of their clients.
 Market Development- It is a technique where an organization tries to sell their existing
merchandise or services by tapping into whole new market. It can also lead to the
expansion of brand into different regions. In case of Marks and Spencer, to drive more
sales company can sell their successful products into different market, it is bit risky task
but with proper research firm can establish itself into a new market.
 Diversification- This factor of Ansoff matrix motivates firms to introduce themselves
into whole new market with all new product segments or services. This factor is bit tough

to apply as selling new products into new market place is not at all easy. In case of Marks
and Spencer, organization can introduce new products into markets to expand their brand
but it requires lots of capital and research to do that and if the diversification fails then
company can face huge loss.
Stakeholder- This technique is used to differentiate stakeholder on basis of their interest and
influence in an organization. It helps in to making strategy of managing all stakeholders
effectively (HRUBÝ, 2021).
Below are four types of stakeholder:
 High power – High Interest- These stakeholder are the decision makers of the projects
and have higher authority and interest in the working of the organization. In context to
Marks and Spencer, top management are their high power – high interest stakeholders as
they full authority decision making and high interest in profit making.
 High power- low interest- These are the stakeholders which are having high authority
in management and decisions but are having low interest due to many reasons. In case of
Marks and Spencers, their employees are these stakeholders as they have high power but
they don't have much interest as they are not key personnel in the organization.
 Low power – High interest- Stakeholders are having low authority in management of an
organization but have huge interest in outcome of the project are included in this
category. In context to Marks and Spencer, their clients can be their stakeholder and
should be adequately informed about the well being of the company and about its
offerings.
 Low power – low interest- Stakeholders having low authority and low interest in the
operations of the organizations are included in this category. In terms of Marks and
Spencers, media can be their stakeholders as they have zero to low power and low
interest and should not required to know lot about company's operations.
Analysis and critical evaluation of the competitive environment using Porter’s Five Forces
model.
Porter's Five Forces analysis :
It is a framework which assists in identifying and evaluating a firm's position and competitive
strengths and weaknesses. It helps in decision making and to make a proper corporate strategy
for company's long term profitability. It also assists in identifying the impact of five forces that

are supplier's bargaining power, buyer's bargaining power, threats of substitutes and threats of
new entrants(Likoum and et. al., 2020). Hence, this framework is explained in brief below:
 Supplier's Bargaining Power-This force refers to the level of pressure suppliers can put
on to their buyers or how casually suppliers can fluctuate the price of their raw material
which they are selling so lesser the suppliers of that particular sector, the more firm
would depend on them. In case of Marks and Spencer, suppliers of the company cannot
take privilege of such power and the cant exerts company on proving raw material on
higher prices until negotiated because Marks and Spencers have many supplier's proving
them with raw material or services so they can take higher stand in negotiation.
 Buyer's Bargaining Power- Buyers are the people who buys and utilize company's
offerings. This factor shows that power that customer posses to drive prices according to
their level of power. Fewer client base are more powerful which means each customer
can easily lower the prices after negotiating. In case of Marks and Spencer, there are
many options for consumers to buy similar product from any other brand in retail
industry. So, this gives customers an advantage to lower the price to their level. In order
to overcome this situation, firm needs to create large base of consumers and should
provide services better then their competitors in the market which will assist in
minimizing the bargaining power of the buyers.
 Competitive Rivalry- It helps in analyzing strengths and numbers of a company's
competitors. When there's intense competition, organizations try to draw in consumers by
lowering their prices in order to survive in the market and when competition is not very
much high, then firm can have lot of competitor power with great profit margins. In
context to Marks and Spencers, company deals in a very competitive retail industry in all
product segments which is not beneficial for organization's long term growth. In order to
overcome this factor company can expand their market size by collaborating with its
rivals or by producing more sustainable products at cheaper prices then its competitors.
 Threat of New Entrants:Every profit making industry tempts new entrants, which can
lead to divide the market share. In simple words, it refers to threat to the existing
companies given by new competitors trying to enter the market by selling same services
or products in the market. In case of Marks and Spencer, firm is globally recognised so it

will be hard for the new entrants to earn and maintain same goodwill as compare to
M&S.
 Threat of substitute products- It refers threat imitation of products and services which
can be sell instead of company's products. In terms of Marks and Spencers, substitute
products can be threat to the company because people can easily switch from one brand
to another to find similar products they required. To overcome this situation company
should know core requirements of their customer and can also do that by fluctuating cost
for the consumers.
Identification and justification of the organisation’s existing and/or potential competitive
advantage.
Resource based views:
It is a framework which is used to influence the important resources a company can utilize to
accomplish its competitive advantage (MURÁRIK, 2020).
There are two types of resources:
 Tangible Assets- It includes all the physical items which contains a value and can be
liquidate easily, these items can be anything land, machinery, inventory etc. In context
to Marks and Spencer, their employees and inventory are their main tangible resource.
 Intangible Assets- Resources which are not physical in nature and still considered to be
valuable to the organisation are intangible assets. In case of Marks and Spencer, firm's
goodwill, patent, etc are their intangible assets.
VRIO ANALYSIS:
It is a framework which assists organizations to evaluate their resources and internal capabilities
which can give firms a competitive advantage (Thomas and Vyas, 2018). There are four
dimensions of VRIO analysis which are mentioned below:
 Valuable- Resources which helps organizations to increase their revenue or consumer
value are considered to be valuable and these are the essential resources which defend
against any threats to the firm. Therefore, it keeps firms above its competitors. In terms of
Marks and Spencer, as company is a multi national brand with consistent high sales
revenue which leads to consistent profits in their balance-sheet, so their financial

resources are valuable as they can eliminate their threats and can invest more in different
opportunities to expand their brand.
 RARE- Resources which are not very common and are possessed by very few companies
are rare resources. If resource of the firm are rare and valuable then it can lead to
competitive advantage. In context to Marks and Spencer, employees of the firm are their
rare resource, as they have highly skilled and efficient employees and managment also
provide them with proper work environment and compensation to motivate them to work
hard which is not same with other organizations.
 IMITATE- Resources which are difficult and costly to copy or substitute falls in this
dimension of VRIO framework. Imitation of products and services can be done either by
direct imitating and or by substituting them. In terms of Marks and Spencer, company has
expanded itself globally, with making their reputation in the market with high brand
value, which is very hard for other firms to imitate the goodwill they made.
 ORGANISED- It refers that a firm should set up their resources in a manner which is
beneficial for them. Resources cannot take advantages of itself so it requires firm to
exploit those resources in an organised way. In case of Marks and Spencer, the flexibility
in supply chain of the organization ensures a constant supply of products are always
available to their customers. The efficiency of their supply chain has enabled them to
gain a competitive advantage within the market relative their competitors.
Mckinsey 7S Model:
It is framework to analyze firm's organizational effectiveness by looking at 7 internal factors of
a company that should allow and aligned together to accomplish its goals(Mandela, 2021). These
factors are categorized in two elements “hard” and “soft” which are explained below.
 Structure- It is the path on how a company is organised, or how teams or divisions are
structured which view on who will report to whom. In case of Marks and Spencer,
company's management structure contains many layers of administration and is properly
hierarchical from small store salesmen to MD and CEO of the company.
 Strategy- It refers to plan of action which can help in getting competitive advantage and
long term success of a company. In context to Marks and Spencer, firm focuses on its
marketing strategy on both online and offline portals to generate more revenues.

 System- It is a routine daily activity of an organization on which decisions are made. It is
the area of an organization which tells how operations are to be done. In case of Marks
and Spencer, management uses ICOS application in many of their stores which contains
data regarding all the products which company offers. It assists in time of billing of
products.
 Skills- It refers to capability or talent of firm's employs and management to perform well
and can lead to achieve the goals of an organization. In terms of Marks and Spencer,
organization's integrity and teamwork skills are reason for their growth on the business.
 Style- It is the way how firm's top level management manage company or it is the way of
management of organization's leader. In case of Marks and Spencer, company follows
consultive style which means management consults to others before making any
decisions.
 Staff- It refers to requirement of workforce in the company and how they get the
motivation, reward, and training in the organization. In context to Marks and Spencer,
organization has almost 80000 employees working globally.
 Shared values- Vision, objectives and values are base of any organization which shows
the standard of company's ethics and employees behaviour. In terms of Marks and
Spencer, brand is built on their core vision which is trust, service, quality and innovation
and their main motive is to provide quality which is accessible to everyone.
Devise valid strategies and tactical objectives to achieve overall strategic objectives.
Strategic capabilities
It offers the division in which all the activities and execution of plan will be develop to
increase the advantages of the business and also to increase the profitability and productivity
growth of the business. As it include all the suitable aspect such as values, ethics, motive,
visions, tools and many more. As such sections will plays an effective role in creating all the
work and the plan of actions that are being attained as per to functional criteria.
Techniques used in strategic planning Benchmarking - This is the broad exercise that are utilised to offers all the essential
section of working and the challengers in respect to acknowledge all the essential
divisions of the factors and the strength of the business.

 Business analysis - It is use to offers all the centred strength and the weakness in the
business and their working fields.
PART 2
Critically evaluate the different types of strategic directions available to the organisation.
PORTER'S GENERIC:
It is a framework which assists companies to identifying their potential niche market to gain a
competitive advantage in any sector. This strategy can be applied to any services or products in
organizations of all sectors (Magnier-Watanabe and Benton, 2017). This model includes four
strategies:
 COST LEADERSHIP- In this strategy a firm should provide products and services at
lowest prices in the industry which can lead to giving competitive benefits to the firms.
Low cost manufacturers should know how to take advantage of all sources of cost
benefits. Companies can reduce their cost by buying low cost raw material, by using
latest technology which can be more efficient and effective. In case of Marks and
Spencer, management should implement this strategy to provide their customer base with
more sustainable and cheaper products which can give them a competitive edge over its
rivals.
 DIFFERENTIATION- In this competitive strategy, organizations make their products
more better then its competitors in the industry. These firms usually focus on bigger
market share to increase their revenues in large scale and in development of a products
firms focus on various measures by considering the demand of the consumers (Tan,
Tahoori, Kim, 2019). In terms of Marks and Spencers, management can develop their
products or services in accordance to requirement of their clients. By developing their
products according to wants of consumer, company can increase their revenue, brand
awareness and customer base.
 COST FOCUS- In this strategy, company tries to lower its cost in a niche market by
knowing all the need and wants of the customers in that particular market. In context to
Marks and Spencers, this strategy is invalid as company provides its various products
globally not in a small market share.

 DIFFERENTIATION FOCUS-This strategy assists in targeting niche market with
supplying selected its products or services to very specific customer base. In case Marks
and Spencer, company can market their low cost essential products or daily use products
to specific remote areas which will assist firm to get new customer base and growth of
their brand in niche market places or target industries.
Justify and recommend the most appropriate growth platform/s and strategies.
Bowman's Strategy Clock:
It is a marketing model which helps in evaluating competitive strength of an organization by
comparing to the products of its competitors (Laela and et. al., 2018).
Below, represent eight different strategies of it:
 Low price and Low value- This strategy includes low value products which are sold at
the minimum price possible. In case of Marks and Spencers, this strategy does not
applicable on the firm as M&S is premium and luxury products.
 Low price- This strategy states that, manufacturing low cost products in a bulk volume
which contains a good value. In relation to Marks and Spencer, this method is invalid as
company deals in premium products.
 Hybrid- In this strategy, company offer products which have high value but at low cost.
In case of Marks and Spencers, company can generate more revenue by attracting more
customer as they are providing high value products at low price.
 Differentiation- Firm use this strategy to offer high quality products at an average price.
This strategy will assist M&S in getting more sales because firm is supplying high quality
products at an average price rate.
 Focused Differentiation- This strategy focuses on high quality products at a high price.
In context to Marks and Spencer, company can target niche market by providing
particular products with high quality and high price range.
 Risky high margins- It is a high risk strategy in which organizations offers products at a
high price without giving much value in return. In case of Marks and Spencers, this
strategy can be bit risky for the company by offering average value products at higher
price (Bowman, 2021).