Strategic Management: Analysis and Recommendations for Marks & Spencer

This report provides a strategic analysis of Marks and Spencer (M&S), a British retailer in the food and clothing sector, founded in 1884. It evaluates the company's internal and external competitive environment using SWOT and PESTAL analyses, identifying various strategies employed to enhance overall performance. The PESTAL analysis covers political factors like free trade and Brexit, economic factors such as inflation and discount pricing, social culture aspects including new product development and demographic targeting, technological factors like social media marketing, legal disputes, and environmental sustainability efforts. The SWOT analysis highlights strengths like brand name and a wide product portfolio, weaknesses in supply chain management, opportunities for global expansion, and threats from competitors. The report further assesses the pros and cons of strategies related to healthy products, waste management, social media, and low pricing. Recommendations are made for aligning strategy with vision, promoting the brand, and increasing advertisement budget. Desklib provides this assignment as a solved example for students.

STRATEGIC
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Existing strategy of Marks and Spenser.......................................................................................1
Recommendations........................................................................................................................6
Various contemporary issues.......................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCE...................................................................................................................................9

INTRODUCTION
Strategic management is an outline that set the goals, object and the procedure of the
firm in order to make the organization more competitive in the environment. In simple words it
can be state as the bundle of decisions that manger undertakes that contributes in the
performance of the firm. Moreover, it is nothing but the process of planning for reducing the
future threat of the business.
The present report is based on British retailer Mark and Spencer (M&S) that deals in food
and clothing sector. The company was founded in 1884 by Michael Marks and Thomas Spencer
in Leeds, UK. Currently the organization has 959 stores across the United Kingdom with
headquarter in London, England. The organizations serving their service worldwide with help of
digital marketing and with 78000 employees. Furthermore, M&S has their own brands such as
Per Una, M&S collection and Blue Harbour that contribute in increasing the total revenue of the
firm (Marks and Spencer information.,2021).
Along, with this the study will critically evaluate the internal and external competitive
environment of the quoted firm with help of SWOT and PESTAL analysis. In addition, to this
the report will identify the different type of strategies use by the firm in order to improve their
overall performance. Lastly, the study will recommend the company for improving the current
strategies used by the firm.
MAIN BODY
Existing strategy of Marks and Spenser
PESTAL
PESTAL analysis can be defined as the method of evaluating the macro environment such
as external force that impact on the company growth. It stands for political, economic,
sociological technological, legal and environmental. Although, this force is not in the control of
the firm so it may affect the performance of the company in the competitive environment.
Political: This factor mainly includes government policies such as fiscal, trade tariffs
and tax policies that affect the business to a great extent. Two factor that are affecting Marks and
Spencer are free trade and Brexit (Pan, Chen and Zhan ., 2019).Moreover, the free trade policies
has provided the company with the huge benefits as this policy allowed the company to sell
foreign product in their stores at lower price compare to other competitors that has contributed in
maintaining the healthy profit. On the other hand, the company faced huge loss due to Brexit
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cause it has increase the production cost and high tax has affected the brand shipping outside the
UK.
Economic factor: This factors includes foreign exchange rate and economic factors that
affect the business in negative and positive way. Moreover, the low inflation rates has been the
positive factor for the company as it allowed M&S to sell the premium product to the customer
at the low price that has contributed in raising the sales of the company. Furthermore, the
company has adopted the discount pricing strategy that has benefited the company in
maximizing the profit as it allow the firm to acquire new customer and earning the repeat
consumer (George, Walker and Monster., 2019). However it has also negatively affected on the
quality of the services and product offer to the customer. Hence, discount allows the consumer
to compare the prices with the competitors that affect the cost structure of the company.
Social culture: This factor is consist of alternation in the demographic patterns such as
ageing, population, migration and trend. The company has used the new product development
strategy that has benefited the company in attracting the large customer that has contributed in
increasing overall sales of M&S. However, the negative impact was that the company
operational cost has increased because making innovative product good quality of machinery are
required such as advanced machinery and technology (Kools and George., 2020).
Moreover, the company is mostly focusing on the youth demographic that has contributed in the
low revenue of the firm. The company needs to set their demographic segment for the middle
age people as it will help the firm to increase the sale. In addition, to this the company has also
counter the factor of ready meal that has been increasing rapidly in the market of UK. This
trend has allowed the firm in covering the large market areas of the United Kingdom (Berisha
Qehaja and et.al., 2017).
Technological factor: Nowadays, every retail sector is making use of the technological
factor such as digital marketing. The company has currently started using the SMM (social
media marketing strategy). That has positively benefited the firm in expanding their business
globally as well allowed the firm to know the taste and preference of the customer. So,company
can make product according to the consumer needs. That has contributed in building the strong
relationship with them. However, the company also faced disadvantages such as negative review
of the customer on company website adversely affect the reputation of the firm. M&S offer the
various range of product such as clothing, house furniture and food stuff on their official website
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also the firm provide the home delivery services to their customer (PESTLE Analysis Of Marks
And Spencer.,2021).Hence, this factor has contributed in increasing the overall revenue and has
established the brand name in online marketing.
Legal factor: This factor generally include the laws made by the government such as
employment law, safety and security law that every organization has to follow while conducting
any business activities. Currently, the company has faced legal dispute with the Frascati
Landlord that has affected the brand image of the firm (Kabeyi., 2019). Moreover, the Britain
trade law post Brexit has also hugely affected on the performance of Mark and Spencer.
Environmental factor: This factor mainly impact on the ecological factor of the
business. This factor mainly include weather condition, climate change, temperature and natural
disaster. The company is maintained their brand image with the help of sustainable method such
by involving in CSR policies and making environmental friendly product. Furthermore, the
company is adopting sustainably by recycling the waste product and improving their energy
efficiency with help of solar panel (Teece., 2019). Hence, this factor has allowed firm to be
unique in the market of UK.
Internal environment-
It consists of those factors which can influence the company internally. It includes
employees, machine, equipment, partners, shareholders etc. marks and Spenser have such
corporate environment which motivate their workforce to work hard and achieve company's
objectives. With the help of swot it can be explained. Swot framework gives detail knowledge of
the internal environment of the organization.
SWOT:
Strength:
The biggest strength of marks and Spenser is their brand name. As since many years they are in
the market. They also have wide product portfolio which helps in attracting various customers.
Nowadays consumers have become food conscious, as health problems are increasing day by
day. So company have designed strategy in which they are encouraging customers and
employees to eat nutritious food by bringing healthy product range. They have also started
online diet forum in which they provide advises to their customers for healthy living (Wirtz,
Müller and Weyerer, 2021). In their healthy diet range they have removed adding artificial
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flavors and colors from their food products. Company is working hard to meet healthy food
standard.
Weakness:
It is observed that marks and Spenser sales have started declining because of poor supply chain
management and stock out many times. There were many situations and festivals in which
company were not able to fulfill demand of customers and that has impacted its brand image.
There is the perception of consumers that company does not offer clothes which are trendy.
Because of this perception sales of company decreases because teenagers only prefer such brand
which offers trendy products to them.
Opportunities:
Global expansion is the opportunity for the company. Although company have stores in many
countries but can expand in those countries where they are not having any store. Company have
made waste management strategy. Company observed that there is lot of waste which does not
get recycled which is affecting the environment. The waste which is not recycled properly takes
many years to decompose. Marks and Spenser have started managing waste and recycled almost
88% of their waste. This strategy is helping company in attracting customers because customers
get attracted towards those company which carry their business operations without damaging the
environment (Alnoukari and Hanano, 2017). They have also made strategy to promote their
products through social media so that they can target audience easily.
Threats:
Competition is the biggest threat for company. There are various competitors which are Asda,
Tesco etc which are giving tough competition to marks and Spenser. In order to beat the
competition, marks and Spenser made strategy to offer products at low price as compare to their
competitors and adopting low pricing strategy. When company started offering products at low
prices then it has attracted large number of customers towards company. Along with low price
product company also manufacture luxury products for which they target high income customer
group. So by doing this Marks and Spenser will be able to cover wider market segment and also
attain growth.
Healthy product strategy-
Pros:
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it will help company in increasing sales because customers prefer to purchase products which
are healthy for consumption. Healthy products are consumed by young people, adults, older
people etc. so it is also helpful in increasing market share.
Cons:
healthy products comes with pricing which means that they are expensive. Expensive product
will decrease the market share of company because everyone cannot afford buying high pricing
products.
Waste management strategy-
Pros:
This strategy will help company in managing their waste properly. This will also helps in
improving their brand image in the market (Meyer, Neck and Meeks, 2017). It will also attract
customers because customer purchase product from such company's which recycle their
products and save the environment.
Cons:
waste management is the expensive and time consuming process. It will be the extra cost which
Marks and Spenser will incur.
Social media strategy-
Pros:
This strategy will help company in targeting their potential audience. Every social media
platforms are having billions of users, so it would be easy for company to target their customers.
It also helps company in doing easy marketing. With the help of social media company can do
marketing easily.
Cons:
the biggest disadvantage is that company will not able to target those customers which are not
available on social media platforms. Mostly old people does not use social media. So company
will miss on them.
Low pricing strategy-
Pros:
it will attract customers because customer wanted to purchase products of low prices (Simandan,
2019). It will help Marks and Spenser in increasing sales because when company will sell
product at less price then more customers will purchase it.
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Cons:
there are such customers also which will think that low price means poor product quality. There
is mindset of many customers which think that when company is selling product at lower prices
then it means that they are compromising on quality. So this strategy can even decrease
company's sales.
Recommendations
In order to become more successful Marks and Spenser should set strategy according to
their vision. When their vision will match their strategy then it will help company in achieving
objectives. Vision means the aspiration of company in regards of what they want to attain
success. It is very important to define targets. It is found that growth barrier is occur when there
is poor targeting. So before making strategies company should identify niche, on which
company should focus (Trigeorgis and Reuer, 2017). Company should focus more on promoting
its brand. Not only relay on traditional marketing method but should also adopt modern
marketing method. Although Marks and Spenser does social media marketing but still they
should increase their advertisement budget. Power of branding will help company in becoming
successful in the market. Promotional activities are the vital thing and it will be helpful in
regaining the market share. Another important thing is to update product offerings. If company
will provide something new then they will be able to meet demand of customers. When demand
of customers are met then it will help company in increasing market share and also helpful in
retaining customers. Providing new and innovative product is the continuous process and for this
company have to work on its research and development team.
Strong R&D will help company in manufacturing products and items which will satisfy
customer needs. Along with low pricing strategy they can even adopt medium pricing strategy
because it will attract those customers who can pay little more for good quality of product. So
making changes in their pricing strategy can be also useful for the company (Barney, 2020).
Marks and Spenser have adopted waste management strategy but they should even work on
using renewable resources because in that manner they can save environment from getting
polluted. Using renewable resources can be expensive for company at initial stage but will save
lot of money of the company in the long run. Only increasing market share is not important but
maintaining them is also important. It is always observed that company which have more market
share have skilled and well qualified employees. So Marks and Spenser should also focus on
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employing qualified workforces. Success of company depends on their employees. If employee
will work hard then company will also grow.
Hiring talented workforce will help company in reducing turnover and also saves training
expenses of the company (Fedushko and et.al., 2021). It is also important to make competitive
advantage. Marks and Spenser should concentrate on the advantages what their products are
providing to the customers over other products. As customer will purchase your product only if
it will have unique features attached to them. Company must also develop strategy for after sales
services. Getting new customers are easy but retaining old is not. In order to retain their existing
customers, company should have provide better customer services to give better customer
experience.
Various contemporary issues.
Contemporary issues are the recent problems which today's companies are facing. There are
various issues which are as follows:
Covid 19 can be called as the contemporary issue because companies got affected with it
due to lockdown. Lockdown has drastically decreases the sales of the company (Wheelen and
et.al., 2017). There are some companies which does not able to survive because they have
started incurring losses due to covid and they have no option expect dissolving the company.
Brexit is another issue for those company's which are operating in UK. It has imposed ban on
free movement of workers from European Union. Before Brexit workers are allowed to freely
move within UK and European Union and now they cannot. Innovation is also an issue.
Innovation is the constant demand of market. So it is important for the company to adopt
innovation, if they want to survive in the market for long run. Government regulations and
policies are also issue. Policies does not remain constant. It changes with the change in the
government.
Changes in the political environment is always problematic for the companies. When
policies changes then it also affect decision making of company. So company have to mould
their decisions as per the imposed policies. Supply chain is also considered as an issue, problems
in supply chain also affects company's performance (Sullivan, Thomas and Rosano, 2018).
Supply chain planning can be affected by weather disruptions or increase in the competition for
raw material can be the challenge for the company. If company will make strategy for supply
chain management then half of their problem will get solved because proper supply means
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company will not go out of stock in the market. This way company will also able to retain their
existing customers because if products are always available in the market then why they will
shift to rival firms.
Evolutionary approach:
this is the strategy theory which means that market changes takes place very quickly for
companies, so it is very important to have strategy planning. Strategy which is selected by the
company should have focus on the company survival in the marketplace. It is observed that at
the time of covid crisis, Marks and Spenser has faced difficulty because their survival strategy
was not effective. Covid situation or any other situation like this require better survival strategy
because in this way only company can able to survive in their difficult times. It is found that in
case of Marks and Spenser, employees are not able to resist change easily. After the
announcement of lockdown, workers have to work from home only. For every employee
working from home is not easy and that has affected their productivity level. This is also the
biggest reason that M&S face difficulty in surviving at covid times. So in order to face this
M&S, should have recreate their survival strategy and they should have also provide training to
their employees so that they can easily adopt changes (Veselovsky and et.al., 2019). Here
effective managers are required, managers which have convincing power can motivate their
subordinate of adopt changes.
CONCLUSION
Through this report it can be concluded that strategic management is the important
business activity. Effective strategies will only help company in achieving their goals and
objectives. Existing strategy of Marks and Spenser are many. Social media marketing strategy,
company have adopted this strategy in order to get their potential customers. They have
understand the power of social media so that is why M&S are using social media as their
promotional tool. They have also adopted low pricing strategy to increase their marketplace and
there are many other strategies of the company which is discussed in this report through swot
and pestle model. They should have build effective R&D department which can produce
innovative product for them. Strong R&D can be helpful for enhancing company's reputation.
Company should also start using renewable resource. Through this way they will be able to save
environment from getting polluted.
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REFERENCE
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management theory. Academy of Management Discoveries. 6(1). pp.5-7.
Berisha Qehaja, A. and et.al., 2017. Strategic management tools and techniques: A comparative
analysis of empirical studies. Croatian Economic Survey. 19(1). pp.67-99.
Fedushko, S. and et.al., 2021. Development of Methods for the Strategic Management of Web
Projects. Sustainability, 13(2), p.742.
George, B., Walker, R. M. and Monster, J., 2019. Does strategic planning improve
organizational performance? A meta‐analysis. Public Administration Review. 79(6).
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Kabeyi, M., 2019. Organizational strategic planning, implementation and evaluation with
analysis of challenges and benefits. International Journal of Applied Research and
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Kools, M. and George, B., 2020. Debate: The learning organization—a key construct linking
strategic planning and strategic management. Public Money & Management.40(4).
pp.262-264.
Meyer, G.D., Neck, H.M. and Meeks, M.D., 2017. The entrepreneurship‐strategic management
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Pan, W., Chen, L. and Zhan, W., 2019. PESTEL analysis of construction productivity
enhancement strategies: A case study of three economies. Journal of Management in
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Simandan, D., 2019. Iterative lagged asymmetric responses in strategic management and long-
range planning. Time & Society. 28(4). pp.1363-1381.
Sullivan, K., Thomas, S. and Rosano, M., 2018. Using industrial ecology and strategic
management concepts to pursue the Sustainable Development Goals. journal of cleaner
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Teece, D. J., 2019. A capability theory of the firm: an economics and (strategic) management
perspective. New Zealand Economic Papers. 53(1).pp.1-43.
Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management. Strategic
management journal. 38(1). pp.42-63.
Veselovsky, M.Y. and et.al., 2019. Strategic management of innovation development: insights
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Wheelen, T.L. and et.al., 2017. Strategic management and business policy (Vol. 55). Boston,
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Wirtz, B.W., Müller, W.M. and Weyerer, J.C., 2021. Digital pandemic response systems: a
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Online
PESTLE Analysis Of Marks And Spencer., 2021. [Online]. Available through
<https://www.marketingtutor.net/pestle-analysis-of-marks-and-spencer/>.
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Marks and Spencer information., 2021. [Online]. Available through
<https://www.referenceforbusiness.com/history2/68/Marks-and-Spencer-p-l-c.html>.
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