Comprehensive Strategic Analysis of Marks & Spencer's Objectives

This report provides a comprehensive strategic analysis of Marks and Spencer (M&S), a major player in the retail industry. It begins with an external and internal analysis using PESTLE and SWOT frameworks, identifying key political, economic, social, technological, legal, and environmental factors impacting the business, as well as its strengths, weaknesses, opportunities, and threats. The report then evaluates the competitive environment using Porter's Five Forces, assessing the threat of new entrants, bargaining power of suppliers and buyers, threat of substitute products, and competitive rivalry. Furthermore, it analyzes M&S's resources and capabilities using the VRIO framework, determining their value, rarity, imitability, and organization. The study also explores different types of strategic decisions available to the organization, evaluates the most appropriate strategy for M&S, and analyzes how a differentiation strategy can be monitored for the company's future growth. The ultimate aim is to provide insights and recommendations for M&S to achieve its strategic objectives and maintain a competitive advantage in the market.

UNIT 32

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
1. Presenting the external and internal analysis of the Marks and Spencer.................................3
2. Analysis and evaluation of the competitive environment.......................................................8
3. Justification of organization existing competitive advantage..................................................9
4. Presenting the strategies and to achieve overall strategic objectives....................................10
PART B..........................................................................................................................................10
1. Presenting different types of strategic decisions available to the organization,....................10
2. Evaluating the most appropriate strategy in Marks and Spencer..........................................12
3. Analysing the ways in which differentiation strategy can be monitored for Marks and
Spencer,......................................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
In this modern era, most of the businesses are implementing different strategies in order to
gain high competitive advantage. Thus, business strategy refers to the set of plan, action and
goals that helps an organization to operate effectively. The current report will shed a light upon
different theories and concepts used regarding businesses strategy. The present report is based on
Marks and Spencer (M&S) who deals in retail industry and offering range of products which
includes home products, clothing, food products etc. Further, the study will identify the micro
and macro factors that affect the business performance by using relevant models. Along with
this, the study also analyse the internal environment and capabilities of quoted business.
Moreover, the study will critically evaluate competitive environment by using Porter five forces.
Lastly, it will identify different types of strategic directions for the chosen firm and then
recommend the same for its future growth.
PART A
1. Presenting the external and internal analysis of the Marks and Spencer
PESTLE ANALYSIS:
Political Factors
This includes the factors such as political stability, taxes, trade policies etc. In the current
situation, if the government increases the taxes due to political instability the prices of the quoted
firm would be increased which will have negative impact on the sales of the product (Marks and
Spencer Pestle analysis,2019). Also, due to free trade policy goods can be travelled easily from
one place to another but with the implementation of the Brexit reforms in UK market, Marks and
Spencer would face difficulty in importing foreign goods at cheaper prices at the store which will
result in higher product cost for the customers.
Economic factors
Economic factors such as inflation rates, foreign exchange rates, economic patterns etc.
affects the business either positive or negative. Further, low inflation in UK has proved to be
positive for marks and Spencer as it has allowed to sell quality products to its customers.
Moreover, rise in the employment level in the country due to the pandemic, customers are ready
to spend more which will help in increasing the sales of the product.
Social Factors

Societal norms, demographic trends, gender composition etc. are the factors which come
under the social factors. To stay ahead in the competition Marks and Spencer needs to focus on
the changing fashion trends in younger generation and hence improve its clothing line in various
regions as they cover the large part of the market internationally. Further, Marks and Spencer has
availed the opportunity to increase its market share by selling more of ready meals as the demand
for such foods have currently increased because of its ready availability and good taste.
Technological factor
With the present era of social media, the quoted firm should focus on increasing its
revenue through online shopping as products are made easily available at one click. Moreover,
Marks and Spencer currently aims in introducing the best technology and so it has introduced a
full self-checkout stores to save time and labour costs. Also, it has installed big screens at the
store where customers can search the products and can place orders at the same time. Such
innovative ideas help the firm to remain competitive in the market. Technology can help in
savings huge costs needed for promotion and selling.
Legal factors
This includes securities laws, employment laws, health and safety laws etc. laid down by
the government which every firm has to follow. Marks and Spencer, conducts training sessions
on health related areas to remain updated every year with the current laws. Moreover, legal
disputes can create problems for the firms to operate smoothly therefore there must be
transparency in work and decision-making activities. This will further help in creating loyalty as
well as brand image among the customers. Besides this, ensuring the correct wage system is also
major responsibility as well as challenge for the firm.
Environmental factors
Using sustainable methods is the major concern in today economy as people now are
more concerned in protecting the environment. The quoted firm is adopting sustainability by
limiting the carbon emissions, recycling the waste products, improving energy efficiency through
solar panels and much more (Mukhtar, Williams and Shaw, 2018). Also, it is investing in
projects that develops parks, gardens and play areas for children. Moreover, market share can be
increased by developing eco-friendly products that cause less harm to the environment.
Therefore, organizing and involving employees in the CSR activities helps in future growth and
job satisfaction.

SWOT ANALYSIS:
The swot analysis is arrangement of factors which influence both internal and external factor of
company. The swot analysis is a detailed study of (strengths, weaknesses, opportunity and
threat). The framework also allows the company to examine the threat and identify the new
opportunities for the development of company.
Strength:
M&S is one of the leading company, they have a lot of strength which enable company to
flourish market. This strength helps in enter into new market and also help in managing market
share.
 Cash flow of M&S is very strong which give resources to company to inspect in new
markets. M&S generally invest in new business which gives good capital return and
profit to company, also it focusses more on new product development.
 Form last so many years’ company have very strong brand portfolio. Strong brand image
helps company to penetrate in new market area. M&S is one of the recognized brand of
UK. They provide the best quality of product to its customer that's why customer prefer
this brand over other.
 Due its old brand image, it is one of the supreme retail business in UK. The company
have good partnership with big firm across the globe. The company have started their
journey from Penny Bazaar. The abundance of experience is very beneficial and big
advantage for M&S.
Weaknesses of M&S:
Swot analysis help in improving the weakness of a company and build up the strategies approach
of a company. M&S have to improve in the area of a weakness. Strategy helps in making
beneficial choice for the company.
 M&S have to invest more on new technology because it helps in expanding the business.
Currently the investment of company is not up to the mark.
 More focus need to be given on finance of company. Finance planning is not properly
managed. The current ratio of company suggest company to use more cash in their
present planning.

 The company has to focus more on internal management (feedback system). Company is
not able to handle the challenges given by fresher and because of that company has lost
its many small businesses.
Opportunities of M&S:
 The company can reduce the transportation cost as it will boost the company revenue and
help in gaining market share.
 Stability in cash flow system gives ample of opportunity to company.
 Contract of free trade with government has also given opportunity to penetrate in new are
of market.
 New technology has given an opportunity to company to practice different price strategy
and which help company in managing their loyal customer.
Threats of M&S:
 The retail market has high competitiveness among the competitors. For example: Tesco,
Gap, Lewis etc. the company have to make effective strategy. If the company brand name
in brand's graph move downward. Then the company will no longer be able to work in
global market.
 Every country has his own liabilities law and it is different for each country if M&S
change any policies of that country or market then they will be exposed to liability claim.
 M&S can also face various lawsuits if they make any change in the standard of product or
to do not follow the law of country.
 Low quality and fraud product is moreover a threat to M&S specially in low income and
new market.
 Increasing strength of local supplier is also a threat for a company as other competitor
pay more margin to them (Jin, 2018)
Evaluation of organization resources and capabilities
VRIO framework
Organization resources need to be identified so that best use can be made. Identification
can be made by applying VRIO model, which helps to know the capabilities (Vrio analysis of
Marks and spencer, 2020).
Resources Valuable Rare Inimitable Organization
Financial resources Yes No Compatible with Financial status is

all rivals sustainable.
Awareness of brand Yes Yes No Yes
Leadership team Yes Yes No Yes
Supply chain network
flexibility
Yes Yes Other competitors
also have flexible
supply chain
Fully utilized
Temporary competitive
advantage
Yes Yes No -
Market position Yes Yes challenging Yes
Valuable
 This includes the resources which are valuable for the business to grow and develop.
Marks and Spencer consists all the necessary resources which are needed to gain
competitive advantage.
 It has also created the brand awareness through various promotion and sales (Vargas-
Hernandez and Medrano, 2020).
 It has developed a strong team to deliver products and handle the queries of the customer.
Employees are also loyal, and high retention levels are found in the organization.
 Competitive advantage and market position are valuable resources to the firm as it has
helped in selling variety of products and services to the customers.
 Distribution network is the valuable resource as it helps in reaching to a large number of
people which ensures greater revenue.
Rare
 The VRIO framework of quoted firm states that resources found are not rare and can be
easily found out in the competitors and offered at low prices in the market.
 The global reach has helped the firm to expand the customer base and gain competitive
advantage.
 It also focuses on developing organization culture to solve problems among the
employees. Also, encourages a higher teamwork, creativity and innovation.
Inimitable

 It offers a high quality product to the consumers which leads to repeat purchases and
increases consumption (Chatzoglou and et.al., 2018). This is inimitable resource for the
company as the prediction are known only to the top management.
 Market position is challenge for the firms as new competitors have already entered into
the market.
 Supply chain network of marks and Spencer is also very costly than compare to the other
competitors. For the similar supply chain competitors have to invest in significant amount
Organization
 In quoted firm financial resources are well organized to gain maximum value. They are
invested in right place to make maximum use of the resources (Mohr and Batsakis, 2018).
 Vrio analysis of marks and Spencer states that brand awareness, teamwork and
distribution network provides a competitive advantage.
2. Analysis and evaluation of the competitive environment.
PORTER FIVE FORCE ANALYSIS
Porter 5 force is a framework which includes business strategies that helps business to
analyse the competition in market (Grebenshchikova and Yakushev, 2017). M&S can use this
framework to expand their business strategies in retail industry. Mangers at M&S can prospect
the profit-making opportunities with help of customer service. These five force includes
Threat of new-comer (weak): Fresher bring new ways and innovatory ideas in company but
along with ideas they bring challenges for company like low price strategy and reduction in cost.
M&S has to make effective strategies to safeguard its competition. M&S scale of economies in
which M&S operate is very hard to achieve. So this make the threat a weak force for fresher
because production cost is high for fresher (research and development). So government
permission and all legal licensee is required to be full fill before selling of product. So it’s hard
for newcomer to enter in industry and as a result, this making this force weak for newcomer.
Suppliers bargaining power (moderate): Every retail company purchase their raw
materials form various distributors. If superior suppliers reduce their margins M&S can earn in
market. In retail field dominant suppliers use their bargaining power to pull out high prices in
customer service sector. Higher negotiating power can evoke the rate. M&S deals with more
suppliers compare to buyer. This means that distributors have less control over the prices. The
distributor provides more standardized product and switching cost of product is also low. So it’s

easier for M&S to shift supplier. So this a weak force but with help of five force M&S can
handle the bargaining power of distributor.
Negotiating power of purchaser (high): The bargaining power of customers is fluctuating
such that they desire to purchase product in low price and at best offer. They put a lot of pressure
on profitability of business in long run. Higher bargaining power of customer slow down the
price limit of M&S and customer seeks for offer and discount (Pádraig, 2017). M&S can attract
large number of customer if they focus more on innovation and standardised product. For buyer
quality of product is very important. M&S can focus more on developing brand loyalty.
Competition among competitors (High): Intense competition with existing competitors can
lead company to decrease the profit and slow down the price rate. If the competition is high, then
company will not be able to manage the feasible profit. M&S has to focus on innovation of
product and differentiate their product from the competitors. If the product of M&S is different
from that of its competitor than action of competitors will have less effect. M&S is a growing
company they should focus more on new customer compare to their existing customer.
Harm from substitute product (high): M&S have to peruse new-innovative ideas to keep
the business going and to maintain the brand position so to meet the new demands of consumer
(Aithal, 2017). The clothing commerce have so many substitutes it is quite easy to copy the
design and get exactly same design at very low cost. If rate of substitute is high, then M&S has
to invest more in research and development.
By inspecting all the 5 force of porter, M&S can make maintain their strategies and opt for profit
gaining strategies. They can identify changing trends which can affect business and can utilize
new opportunity.
3. Justification of organization existing competitive advantage.
Marks and Spencer has gain competitive advantage by providing variety of goods at value
prices than the competitor prices. Customers are ready to purchase such goods at little high price
because of the quality. Also, during the seasonal time it offers more discounts and incentives to
old stock to attract larger group of people. It has also gain competitive advantage by adding more
premium brands in its outlets as people now have more options to shop under one roof. Quality
products at high price creates brand image and maintains customer loyalty which may be not be
found in market which offers cheaper products at very low prices.

4. Presenting the strategies and to achieve overall strategic objectives
The one strategy which can be adopted by Marks and Spencer to achieve the organization
objectives can be the entrance into new markets like India (Grover and et.al., 2018). Expansion
in new markets can be achieved only through spending large amount of money in research and
development. Further, markets can be expanded only when there is clear understanding of the
taste and preferences as well as current fashion trends of the consumers in that market. Also,
political conditions also have to be completely analysed as any political intervention in future
can create huge losses. With the help of expansion strategy the organization objective of higher
sales in compare to the competitors can be achieved.
PART B
1. Presenting different types of strategic decisions available to the organization,
Executive summary
The present strategic plan is based on business strategies of Marks and Spencer who wants to
expand its market into various regions which is briefly analysed through strategies such as
bowman and porter generic strategy.
Mission:
The organization desires at providing the best quality to everyone through its range of products.
Vision:
To provide a standard through which competitors can be measured, to care for the environment,
community as well as working environment for employees.
Objectives
 To expand its business operations in various regions within next 2 years.
 To achieve high sales and profit margins in next 5 years.
Strategies
PORTER GENERIC MODEL
This strategy is divided into 3 categories such as cost focus, differentiation focus, cost leadership
strategy.
Cost leadership strategy
This strategy can be applied by increasing profits margins through reducing costs of products or
by increasing the market share through lower prices.

Differentiation strategy
This involves delivering high quality products through effective marketing. Here the
organization offers new product which is unique from the competitors.
Focus strategy
This strategy focuses on developing low cost or well specified products for the market which
develops brand loyalty among the customers.
BOWMAN STRATEGY
It is the type of model that helps companies to identify their market position in comparison with
their competitors (Quix and van der Kind, 2019). There are 8 positions across the clock which
are briefly explained as follows,
Low price and low value added
In this strategy both the prices and quality of products are kept low as it focuses on the
quantity selling.
Low price.
Here the goods are sold in larger quantities at very low profit margins. This strategy aims
at becoming the lowest cost option for the buyers in the market (Sahani, 2020).
Hybrid
The strategy here aims to focus on product differentiation while keeping low prices
which makes it a hybrid model.
Differentiation
In this strategy business focuses on differentiation where products and services offered
are unique from the competitors by adding high value to it (Echchakoui, 2018). Goods offered in
this strategy are not similar from existing available in the market.
Focused differentiation
Here the business provides high value goods at a very high prices. This strategy is mainly
applied in luxury goods and premium brands.
Risky high margins
Products and services are offered at high prices without much value in return. This type
of strategy is applied when the firm aims to earn high profits.
Monopoly pricing

Here the single firm controls the market where factors such as product and prices are
decided by the firm which owns the market at that particular point of time (Roesler and Szentes,
2017). Customers in this market are too dependent on products and services offered by the firm.
Loss of market share
This is the least desirable as firm is not able to offer products of customer value. This
means the prices of goods are very higher than the standard prices and customers may shift to
other options available in the market (What is bowman's strategy clock ,2019). As a result, the
firm may lose its market share as well as not be able to continue its operations in the future.
Monitoring and review
Techniques applied can be monitored through setting effective benchmark for the
organization which can be internal as well as external for example performance benchmarking.
Continuous review of the strategy helps to identify the loopholes and improve performance.
2. Evaluating the most appropriate strategy in Marks and Spencer.
According to the above strategies of the Bowman and Porter generic strategy the one
which is suitable and can be applied in Marks and Spencer is differentiation strategy as the firm
has variety of products as well as services to be offered under its own label. Also, customers are
ready to pay higher prices for the quality goods. Further, the firm is able to achieve this through
using efficient production techniques in compare to other competitor firms which are not having
enough resources to provide similar quality goods to the customers (Song, 2017). Such
differentiation strategy will maintain competitive advantage as well as market position of the
firm in the market and create customer loyalty among the customers.
3. Analysing the ways in which differentiation strategy can be monitored for Marks and Spencer,
There are several indicators which determines the firms overall long term performance.
These indicators also reflect whether the organization is able to achieve its goals and objectives.
For differentiation strategy of Marks and Spencer the key performance indicators could be
profits which helps to identify whether the organization is earning enough revenue from its sales
or not (Domínguez and et.al., 2019). At the end of the year, if total product cost is equal to the
profits earned than particular strategy will not be continued in the future. Other indicator can be
sales which means with the implementation of right strategy firms will be able to sell maximum
products in the future. Further, customer satisfaction can also be the key indicator where it helps
to identify whether the customers are loyal towards the brand or not.

CONCLUSION
From the above report it can be concluded that in order to determine the internal and
external environment SWOT and Pestle analysis used which determined the factors that might
negatively impact the organization. However, Marks and Spencer has been able to overcome
such difficulties by successfully adopting techniques that has not only created customer
satisfaction but also develop brand image in the global market. Moreover, reports states that
quoted firm has to adopt different strategies to explore new markets and opportunities in various
regions which includes expansion. Also, on basis of Porter model Marks and Spencer has been
able to identify the changing trends and competition in the market. Furthermore, differentiation
strategy present in Bowman strategy model has been proved useful tool for implementing
strategic decisions in the quoted firm as similar products are not available in the other regions.

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