Strategic Management: Analyzing Marks & Spencer's Position & Plan

This report provides a strategic analysis of Marks & Spencer (M&S), a prominent fashion retail organization originating from the UK. It assesses the company's strategic position by examining its external environment using the PESTEL framework and analyzing the fashion industry using Porter's Five Forces. The report also delves into M&S's strategic capabilities to determine the appropriate strategic direction. Furthermore, it critically reviews the company's strategic direction development and implementation, discussing both successes and failures over a six-year period. The report concludes with key recommendations aimed at achieving and sustaining competitiveness in the evolving business environment, focusing on leveraging strengths and addressing weaknesses to enhance M&S's market position.

Running head: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
Name of the Student
Name of the University
Author Note

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Executive Summary
The report is based on the analysis of strategic position of an organization in the industry.
The company that has been taken into consideration for this analysis is Marks & Spencer,
which is a fashion retail based organization with its origin in the United Kingdom. The
strategic position of the company has been analysed in the report. The external environment
of the company has been analysed with the help of PESTEL framework and the industry has
been analysed with the help Porter’s Framework. Strategic capabilities of the company have
been analysed in the report based on which the strategic direction is decided. The success and
failures of the company has also been an important part of the report.

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Table of Contents
Introduction....................................................................................................................3
Corporate Strategy.........................................................................................................4
Goals and Objectives..................................................................................................4
Mission and Vision....................................................................................................4
Strategy of the firm....................................................................................................5
Analysis of the strategic position of Marks & Spencer..................................................7
Analysis of external environment using PESTEL.....................................................8
Analysis of the fashion industry of UK....................................................................10
Strategic capability of Marks & Spencer.................................................................12
Competency Framework..............................................................................................13
Strategic group analysis...............................................................................................14
Critical review of the strategic direction of Marks & Spencer....................................15
Progress to be made by the company in a period of six years.................................16
Critical discussion of successes and failures of Marks & Spencer..............................18
Strategic Objective Plan...............................................................................................19
Recommendations to achieve competitiveness........................................................20
Conclusion....................................................................................................................21
References....................................................................................................................22

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Introduction
Marks & Spencer plc which is also known as M & S is fashion retail organization of
the British origin which has its operations all over the world. The organization is listed in the
London Stock Exchange. Marks & Spencer mainly specialises in the sales of products based
on clothing, food based products and home products as well. The company was established in
the year 1884 by Thomas Spencer and Michael Marks. It began the sales of branded products
in the year 2008.
Marks & Spencer currently has more than 900 stores all over the United Kingdom.
The company went on to become the first retailer of British origin to register a pre-tax profit
of more than 1 billion dollars (Marksandspencer.com. 2018). The organization had seen
sudden loss after the year 1998 which was quite surprising for the shareholders and the
customers of the organization as well.
The clothing-based sales of the organization has decreased in the recent years due to
the economic issues in UK. The sales of the company based on the food products has
however increased in the recent times. The report will be mainly based on the analysis of the
environment in which Marks & Spencer has its operations. The external environment will be
analysed with the help of PESTEL framework. The industry will be analysed in an effective
manner with the implementation of the Porter’s Five Forces Model.
The analysis of external environment will thereby be helpful for the discussion of the
ways by which the organization can develop strategies which be helpful for its operations in
the future. The recommendation based on successful operations in the future will also be
provided in the report. The sustainable operation of Marks & Spencer is thereby dependent
on the ways by which the company is able to operate with the proper usage of its resources
for different purposes (Marksandspencer.com. 2018).

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Corporate Strategy
Goals and Objectives
The goals as well as objectives of an organization form the base of it and thereby
makes it crucial that the company is headed towards a certain achievement level. The goals
and objectives of Marks and Spencer’s can be stated to be as follows:
1. The Marks and Spencer’s organization aims to improve its employee positioning as
present in the firm and aims to ensure that the firm is successfully able to manage the
different employees as present in the workplace and see to it that this staff is
successfully able to fulfil the goals of the company at large. Hence, Marks and
Spencer’s aims to ensure that the firm will successfully be able decrease the employee
turnover rate by 20% by the year 2020.
2. Other than this, Marks and Spencer’s aims to ensure that it is successfully able to
manage the different operations of the business and that it is able to regain its
leadership with respect to which it has been losing out. Moreover, Marks and
Spencer’s wants to translate this scale and ensure that it is able to make goods of
superior quality, value as well as appeal of the goods. With this, Marks and Spencer’s
would like to increase its market share by 20% by the year 2021.
3. Lastly, the Marks and Spencer’s can greatly improve upon the sales of the firm and
make more room for the sales per foot. The sales per foot can be taken to be as a good
objective of the company and the firm thereby aims to ensure that , it is able to
increases its sales percentage per square foot by 10% in the next one year.
Mission and Vision
The mission of the Marks and Spencer Company is to provide the different customers
with the different new quality products in areas of food, financial services along with cloths.

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Furthermore, the other aspect is to deliver high quality foods which will be beneficial for the
gaining competitive advantage in the entire market. The products are being sold to the
customers at an affordable rate and which are being received by the different customers and
they will be good value for the money as well. The mission of the organization is being
achieved by the organization through providing inspirational quality to the customers as this
will be beneficial for the overall success of the organization in an efficient manner (David
and David 2017).
On the other hand, the vision statement of Marks and Spencer is to become the
standard against which the other competitors are being measured. Furthermore, as per the
vision statement of the respective organization, this can be analysed that organizational goals
can be achieved by the companies which will increase the sales along with market share in
the retailing business effectively. Additionally, the vision of the company is mainly into
continuing differentiation strategy which will help them in delivering proper services and
become the largest sustainable quality of goods and services to the customers effectively.
Strategy of the firm
The generic strategies can be rightfully described as those strategies which are
generally followed by the organization in order to ensure that the firm is successfully able to
achieve its objectives at large. The different generic strategies which are available to the
Marks and Spencer’s are as follows:
1. Low cost retailer: In the given type of the strategy, the organization can provide goods
to the different customers at the lowest price as available in the market, so that the
firm is successfully able to gain a leader position in the market (Serrador and Turner
2015). However, this requires economies of scales and the fact that the technology
needs to be applied in the production procedure at large.

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2. Differentiation strategy: The differentiation strategy aims to ensure that the products
of the company are quite different from that of the different competitors such that the
product can be sold at a premium price as well.
3. Focus strategy- On the other hand, the focus strategy aims to concentrate on the one
particular niche market of the firm (Furrer 2016).
Out of these strategies, the company, Marks and Spencer’s uses the focus generic
strategy whereby the company aims to concentrate on a particular target market base which
can be defined as the executive crowd and thereby provides high end products which are
fresh in stock (Islam 2016). Moreover, the firm also offers attempts to make use of the
differentiation strategy which tends to differentiate it from Tesco, ASDA and top shop.

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Analysis of the strategic position of Marks & Spencer
Strengths
 The brand image is clear in nature as
they have tried in positioning
themselves in the premium brand
products which are being sold by the
company in the entire market
 Multichannel Presence is the other
strength wherein they have
different options for franchising
and this has helped the company
in managing their activities
effectively
Weaknesses
 There is low level of satisfaction
among the different customers in the
market which can be negative for the
entire organization. There are no
such return policies which are being
not provided to the customers
 There is huge inability to penetrate
successfully ion the overall foreign
countries and this can create
negative impact on the different
kinds on the purchases of customers
Opportunities
 There is inclusion of different new
segments which will be beneficial
for the overall success of the firm in
comparison to the other competitors
in the market
Threats
 There are different major
competitors in the market which can
create negative impact on M&S such
as Zara and UCB which can be
competitive in nature

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From the SWOT analysis, this can be analysed that there are different kinds of
strengths of the company such as the premium brand image which can be competitive in
nature for them to become more user friendly in the entire market. The company has tried to
position themselves as the most premium brands in comparison to the other competitors in
the entire market. As per the present scenario, this can be analysed that more than 80% of the
operating goods and this will be beneficial for the overall success of the firm in the
competitive market. Additionally, in the present scenario, this has been noticed that M&S has
been trying to utilize the organic clothes and this has helped them in increasing and
improving the effectiveness of the energy
Analysis of external environment using PESTEL
Political factors – The political factors are mainly based on regulations that are
formed by the government in order to conduct the business operations in a successful manner.
The running position of the retail organizations are thereby affected by political activities.
The trends that are applicable in the shopping and retailing based activities can play an
important part in the ways by which organizations operate. The retail industry thereby has to
face some major challenges that can affect their profitability in an adverse manner (Barros,
Hernangómez and Martin-Cruz 2016).
Economic factors – The strength of the economic situation within a country is an
important factor that is able to affect the operations of retail business. The economic situation
thereby has a direct impact on the successful operations of retail organizations. The change
which takes place in the economic situation of country is an important factor that is able to
affect the operating processes of the organizations. The foreign exchange rate in the country
is also able to affect different operations of the organization in a positive or a negative
manner (Daspit et al. 2017).

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Social factors – The current lifestyle and social change that takes place in the external
environment is an important factor that is able to influence the sales of retail organizations.
The wants and attitudes of the clients are also important factors which play a major role in the
ways by which organizations are able to operate in the environment. The customers have
become much more aware of the products and their demands are changing with a rapid pace.
The organizations thereby need to provide products that can match the desires of customers
(Demir, Wennberg and McKelvie 2017).
Technological factors – The current business environment has gone through many
technological changes and advancements. This has led to the changes in the latest
technologies that have been implemented by these organizations in the industry. The new
technologies have been able to create a special position in the market and in all the spheres of
life as well. The online shopping platforms thereby play a major part in the ways by which
the organizations are able to reach the customers with the help of their products. The new
products and services can be introduced to the customers with the help of online platforms
and this is also able to increase the reach of company as well (Durand, Grant and Madsen
2017).
Legal factors – The legal factors are able affect the retail industry of UK in such a
manner which can lead to the formulation of different policies. The legal implications that
have been implemented by the UK government is thereby important for decreasing the illegal
trafficking based processes. Consumer protection based laws need to be followed by the
organization so that they are able to provide the best levels of services (Dyer et al. 2015).
Environmental factors – Different forms of energy which are used by the retailers in
UK can cause many environmental concerns. The products that are offered in retail shops are
mainly prepared or grown in the environment and it is affected by the changes that have

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occurred in the trends. The government has also imposed ban on different kinds of the gases
or sprays so that the effect of operations of these retail stores on the environment can be
reduced (Engert, Rauter and Baumgartner 2016).
Analysis of the fashion industry of UK
Threats of the new entrants – The new entrants in UK fashion retail industry are
able to introduce new and innovative products and services. This has put immense pressure
on the low pricing based strategy that has been formulated by Marks & Spencer. The
challenges that are faced by the organization due to the entry of new organizations thereby
need to be faced by Marks & Spencer in an efficient manner. Increasing the levels of
innovation and introducing new services and products can play an important role in facing the
new entries in the industry. The company thereby needs to build effective levels of barriers
which can help in creating a competitive position in the retail industry (Dobbs 2014).
Bargaining power of the suppliers – Raw materials that are required by the fashion
retail organization of UK are acquired by Marks & Spencer from huge number of suppliers.
The suppliers are however in a dominant position in the industry and they are able to decrease
the margins based in different products that are offered by the organization. The power of
suppliers can be reduced by the organization with the creation of an efficient supply chain
which consists of multiple number of suppliers. The company can also experiment with the
designs of products in order to increase its margins. The formation of an efficient supply
chain and huge number of suppliers will be an effective step in decreasing the effect of
suppliers and their power to affect the prices of raw materials (Ethiraj, Gambardella and
Helfat 2018).
Bargaining power of the buyers – The buyers in the fashion retail industry are
highly demanding in nature and they tend to get the best offers at lowest prices. This has

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increased the pressure on Marks & Spencer based on the ways by which the company is able
to operate in the external environment. The rapid innovation of new products is also an
important part of the ways by which the company can aim at developing the customer base.
High number of buyers of the organization will be helpful in decreasing their power of
bargaining in an effective way. The development of a huge customer base can be an effective
part of the successful operations of the organization in the competitive retail industry of UK
(Dobbs 2014).
Threats from the substitute products – The retail industry consists of many
organizations of similar types which are able to provide highest levels of products and
services to the customers. The substitutes of the products that are offered by the organizations
are easily available in retail market. This threat can be reduced by the company by making
the operations service oriented in nature rather than operating only in a product oriented
manner. This will help Marks & Spencer to create a profitable position in the market within a
short period of time. Marks & Spencer can effectively create a competitive advantage in the
market with the help of innovative services that can be provided to the customers (Frynas and
Mellahi 2015).
Rivalry among the existing players – The retail industry of UK is highly
competitive in nature and this has increased the levels of rivalry among the organizations
which operate in the environment. The rivalry levels are thereby able to decrease the prices of
products and profitability levels as well. The organization can mitigate this threat with the
help of a sustainable differentiation which can be developed for the purpose of competing in
an effective manner. The levels of collaboration that is created with the other organizations in
the industry can also play an important role in the reduction of rivalry levels among different
organizations. The levels of rivalry among the organizations which operate in the retail