Business Strategies of Marks and Spencer: A Comprehensive Report

This report provides a comprehensive analysis of the business strategies employed by Marks and Spencer (M&S). It begins with an introduction that highlights the importance of evaluating strategic plans and their impact on profitability. The report then delves into the influences of the macro environment on M&S, utilizing PESTLE analysis to examine political, economic, social, technological, environmental, and legal factors. It further explores the internal environment and capabilities of M&S, including a SWOT analysis to assess strengths, weaknesses, opportunities, and threats. Porter's Five Forces model is applied to analyze the competitive landscape. Finally, the report discusses various theories, concepts, and models relevant to M&S's strategic direction, culminating in the devising of a profitable strategic management plan. The report's structure systematically examines both the internal and external factors affecting M&S's business, providing a holistic view of its strategic decision-making and competitive positioning.

BUSINESS STRATEGY

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Influences of Macro environment on Marks and Spencer and its strategies.....................1
M1 Contribution of macro environment in strategic management decisions.........................3
TASK 2............................................................................................................................................3
P2 Internal environment and capabilities of Marks and Spencer...........................................3
M2 The structural competence of the Marks and Spencer in relation to internal environment of
firm.........................................................................................................................................5
TASK 3............................................................................................................................................6
P3 Porter’s five force model of applied in the marketplace of Marks and Spencer...............6
M3 Devise effective strategies to improve competitive edge and market position of Marks and
Spencer.................................................................................................................................11
TASK 4..........................................................................................................................................11
P4 Various theories, concepts and models to the strategic direction of M&S.....................11
M4 Devising a profitable strategic management plan..........................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
In this particular report the business strategies developed by the Marks and spencer is
discussed in order to evaluate the effectiveness of developed tactical plan by business
organisation and its positive results to the profitability of business (Gratton, 2010). This
assignment also evaluates the company functioning on the grounds of changing macro and micro
environment which influence the organisation competitive strategies to a large extent.
TASK 1
P1 Influences of Macro environment on Marks and Spencer and its strategies.
PESTLE Analysis:
Macro environment includes the external environment that affect the company in executing
it strategies and then the external environment includes the things like political environment,
social, economic legal and technological factors. Pestle analysis helps in assessing the
international environment which may influence the internal capabilities of firm as well as also
affects marketing strategies of business (Teece, 2010). The various attributes of external
environmental setting influence the business development strategies of marks and Spencer to
large extent so the company should responsibly act towards the changing aspect of macro
environment before coming up to any business growth strategies like Marks and Spencer should
carry out external environmental audit in order to respond to new changes in surrounding
responsibility and confidently. Here are some attributes of macro environment discussed which
may affect strategic plan of marks and Spencer are as follows:-
Political: Development to the free trade, globalisation, liberalisation and privatisation
policy the trade had become easy and it also had made any company to establish itself in any
other market easily any company or organisation can come to any country and establish its
business there free trade and a European integration is made more easy for companies and mark
and Spencer to establish itself in Europe but the company said to work hard and maintain its
position and give stiff competition to the other companies and to establish itself in the market
(Casadesus-Masanell and Ricart, 2010). It has to regularly introduce new things and head to
always innovate new designs with new ideas to be competitive in market the company could
exist without any problem without interfering effecting or violating the countries law and public
order and without interfering in government policies the industrial relationship and Labour Law
1

effects company the most if the company wants to invest in one country it has to follow the law
of the country and without violating Labour Law in addition to providing extra benefits to labour
and country.
Economic Aspects: These are the aspects which influence business development and
expansion strategies to large extent in order to expand business profitably the marks and Spencer
have to evaluate target location on the grounds of economic condition of the target market place
developed economy will contribute in higher profitability of the firm the economic factors like
inflation rate, exchange rate other taxation policies employment rate on largely affect the growth
of an business form and hence also influenced the expansion plan of marks and Spencer in
nearer Marketplace (Birkinshaw and Duke, 2013).
Social factors: Customers taste lifestyle and preference or affect the popularity and sales
of the company but it serves both as opportunity as well as thread to the UK Retail Industry
customers in every market give preference to trendy style instead of the classic 1 the style should
be trendy as well as classy with comfort it could make mark and Spencer more popular among
people in UK the customer have tendency to being loyal 21 brand so this could also be beneficial
for the brand customers have high value then the money spent Mark and Spencer has to be classy
and affordable which could make Mark and Spencer more popular in the UK is market.
Technological aspects: UK industry had witnessed a lot of technological change the
technology head widen the scope as well as market because of Internet and with online Mark and
Spencer Store company has domestic as well as Overseas customers which make company more
competitive in market and increase the level of profit (Slack, 2015). It also widens up Economics
scope this also encourage the paperless operations and introduce the waste.
Environmental factors: The Government of country as well as many company up for
environment friendly atmosphere consumers also nowadays give preference to eco-friendly
environment as well as to renewable resources which nowadays head challenge companies to
maintain their share in the market these old texts had gave mark and Spencer a great concern to
use environment friendly fabric and raw material and also take the proper care of the waste that
has generated from the manufacturing of goods and treat to waste properly the more eco-friendly
(Zott, Amit and Massa, 2011).
Legal attributes: Company has to work according to law and regulation laid by country
also the government see that company should not violate laws of the country and monitored
2

closely according to legal laws National legislation and all ensure the health and safety of
consumers as well as labours and should ensure that the product should be made of renewable as
well as of eco-friendly material.
M1 Contribution of macro environment in strategic management decisions.
The various external factors largely influence the internal capabilities of the firm as well
as the functioning of business organisation. So, this ultimately affects the decision making
process of the higher management in practices (Ready and et. al., 2010). So the higher authority
of Marks and Spencer should carry out external environment audit in order to react actively
towards the changing attributes of macro business surrounding settings like political, legal and
economic aspects to a large extent.
TASK 2
P2 Internal environment and capabilities of Marks and Spencer.
The internal environment of M&S is constitutes from the human resources, finance,
operational department etc. The company is having abundant amount of resources and the quality
of the raw material and its resources add on the competence level of company. This is very much
important to analyse the internal environment of the company before going for any strategic
plan. The tactics followed by a business organisation should be complied with the internal
strengths of company and should have competence to actively and confidently respond to the
external growth opportunities by accessing threats and weaknesses of M&S responsibly.
Internal functional settings and the culture of working organisation reflect the competence
level of firm in marketplace (Meskendahl, 2010). If internal environment of an organisation is
manage strategically and respond as per the developed plan than the frim can react to external
stimuli confidently and make more profit. The strategic capabilities of the organisation can be
determined through analysing the available resources to the firm as well as the level of
competence in functioning of M&S. Marks and Spencer’s is having wide range of resources
some of which are easy to intimate while some are difficult to reproduce by other business firms
or company competitors. Same as the resources of M&S the competence of the company is also
categorises in two types i.e. easy to intimate or difficult to copy.
Easy to imitate Difficult to imitate
3

Resources Threshold resources Unique resources
Competences Threshold competences Core competences
SWOT Analysis:
What is an important business tool that identifies the internal and external factors of
organisation that helps in meeting the objective of company (Bharadwaj and et. al., 2013). It
identifies and have the company to know the strength and weakness internal environment factors
and also the threats and opportunities external environment factor that affects the company this is
very helpful to mark and Spencer or to any other company to prepare reports comma analyse and
understand the business situation and also to know that whether company is lacking behind and
need improvement it also helps the companies to make strategies to improve their business and it
also helps companies to know the nature and taste of the customers.
Strengths:
 Mark and Spencer is a brand that widely deals with almost all type of products from
clothing to home combine, Finance products and furniture products and also with food
items which Widnes its customer base.
 By the data we get to know it is the largest retailer of the UK which means it had a wide
consumer base in UK market.
 It also be used in the food products and had a premium for retailer base which attracts lot
of consumer and doing quite well in the field.
 It had very well established itself in UK and had gained. The trust of the consumer and
head a large base of loyal customers (Dushnitsky, 2011).
 It is doing quite well in the UK market because it creates and innovate new designs in
provide trendy items to its consumers.
Opportunity:
 New innovations and ideas and Alliance with other companies could help Mark and
Spencer to enlarge its presence in the market.
 With the help of technology Mark and Spencer its online stores which has also helped
company to attract Overseas customers.
4

 UK retail market consumer nowadays heading towards to a more value for cash related
product.
 The company is also expanding its base in other countries.
Weaknesses:
 Emergence of new and other companies with lower price had made company to give a
thought to its price.
 With the free trade people had more choices with in there price range which could also
possess the threat to Mark and Spencer.
 Environmental issues like pollution and all are also affecting companies reputation.
 Usually the consumers have perception that the companies offering high price of the
product to them which makes them to try out for the other companies stuff which is
naturally also a great threat to the company (Meyer and Xia, 2012).
Threat:
 There is a very high rate of competition in the retail market in UK and overall world.
 New companies with different styles are great threat to the mark and Spencer.
 With the advanced technology there are many substitutes present in the market which
thread mark and Spencer market.
M2 The structural competence of the Marks and Spencer in relation to internal environment of
firm.
MCKINSEY'S 7S MODEL- This is introduced by McKinsey first time. This model
describes about various resources and competence of the business form which is affected by
management style and culture of organisation to large extent like for example vacancies model
define hard and soft factors differently strategy, structure and style of business from hard factors
and controlled by higher management while still comma style, staff and shared values are soft
aspects of venture which is largely influenced by culture of organisation so in order to work
strategically Marks and Spencer should be responsive towards hard and soft competencies of
firm (Gold, Seuring and Beske, 2010).
5

TASK 3
P3 Porter’s five force model of applied in the marketplace of Marks and Spencer.
Porter's five forces model is given by Potter in order to analyse various micro factor
which influence strategic development of a business firm (Jeffrey Lau. 2017. How Not to Start
from Zero for New Startups). This is pectin model analysis the different attributes against which
form should act confidently through developing competitive advantage in Marketplace like for
instance power of rivalries, threat from new entrants and substitute products why the form
strategic plan in the profitability margin is also influenced by the bargaining power of buyers as
well as supplier to a large extent so Marks and Spencer should take Porter five forces model into
account while developing and expansion strategy for business form the five forces of Porter
model are discussed below.
6

Illustration 1 Porter's five force model 2017.
Source 1 Jeffrey Lau. 2017. How Not to Start from Zero for New Startups.
Level of competition: As there is a stiff competition all over the world in every single
thing is facing competition so the market to facing a lot of competition. Companies are being
exposed to competition and some where it is necessary too ,to have a checking balance and have
new designs products to compete in market (Anderson, Kupp and Vandermerwe, 2010). If a
company is doing well in a single field the chance of popularity in other line increases and give
the stiff competition to other companies like Mark and Spencer dealing in wide range of products
like food, and household items and it also give a good competition to supermarket companies
7

like Tesco, ASDA etc. As well as the clothing brands like CK, Zara etc. There are various
strategies followed mark and Spencer to give a stiff competition by lowering the cost of product
or giving offers etc.
Threats from substitute: Like any other company Mark and Spencer also had threat from
substitutes products in the market by any other company like marks and Spencer also deals in
food products so it always have a thread from company like TESCO, ASDA that its competitor
may introduce new flavour and new product ok and over the price of product which make attract
the consumer of marks and Spencer but it can lower its risk by introducing new things in market
that too lower price which can make it more affordable to consumer and popular too (Dushnitsky
and Marom, 2013).
Bargaining of customers: Economy is the mother of all business so it largely affects the
bargaining in purchasing power of consumer as the change in income indirectly effects the
shopping Trend in country or consumer may choose an alternative or bargain with the retailer. So
like this income affect the bargaining power as well as a purchasing power of consumer
bargaining power of consumer 10 to reduce the price of product and could also affect the goals
of the company. Consumer always sees alternative and choices at lower cost.
Bargaining power of suppliers: This threat may affect the new company or any small
company but Mark and Spencer is a well-established multinational brands so this has no impact
on operation of business strategies of organisation as there is a well organised supply chain is the
marks and Spencer is a big farm and Dale in many products and it is producing it’s on branding
products and the everything is prepared in one factory everything is done in one factory from raw
material to the finishing products it is less dependent on other suppliers and production so
bargaining power of suppliers have no effect on the profit or business strategies of marks and
Spencer (Naidoo, 2010).
Threats to new entrants: As the marks and Spencer is well-established brand dealing in
various products related to supermarket as well as to clothes too so annuitant causes a great
threat and there are less chances of new entrant to establish itself in such a well-established
market. Also the new entered had to work very hard. Mark and Spencer had a great financial
base perfect supply chain and a very well developed market base. So, the new entrant does not
have any impact on marks and Spencer.
8

Balance scorecard- This is an approach of balancing the internal resources of the business
from which date of the strategic goals of the organisation this particular approach develops a
balance between the need of financial resources in operations and requirement of training by
employee balancing with the satisfaction level of consumers and the internal competition of the
organisation this is the method through which Mark and Spencer prioritise the various task on
the basic of available financial resources as well as far with the requirements of consumers
(Business Intelligence. 2012. Balance Scorecard defined).
Illustration 2 Balance Scorecard, 2012
Source 2 Business Intelligence. 2012. Balance Scorecard defined.
Ansoff Matrix- This Matrix helpful in developing various expansion strategies in the
Marketplace this respective models define different grow strategies which can be implemented
by business firm to make continuous profit for the mark and Spencer which are discussed as
below.
9

Illustration 3 Ansoff Matrix, 2017
Source 3 Ansoff Matrix, 2017
Market Penetration- This is a strategic plan which is followed by various companies in
order to increase the market share of business for this is better strategy is used by the marks and
Spencer in order to increase the sales of existing product in the current Marketplace (Jahangirian
and et. al., 2010). This particular extension land help in revenue generation of marks and Spencer
to make for the investment in expansion strategies of business the scatter cheat codes of form can
be achieved through developing a profitable market plan and providing various offers and sales
to attract large number of consumers.
Market development- This is a tactical plan which helps in increasing the market value of
the company through increasing the sales of business for like for an example the marks and
Spencer is developing market development strategic plan in practice to enter into new market
place with existing product line to increase the sales of specific product and contribute in higher
profitability of the firm (Ansoff Matrix, 2017).
10