Strategic Evaluation of Marks & Spencer: BMP6002 Management Report

This report provides a comprehensive strategic analysis of Marks and Spencer (M&S), a British multinational retailer. It evaluates the company's strategic direction by examining its purpose, vision, mission, and objectives, supported by examples from the organization. The report employs the VRIO framework to assess M&S's resources and capabilities for competitive advantage and conducts a PESTLE analysis to understand the impact of macro-environmental factors. Porter's Five Forces model is used to analyze the competitive landscape. The report concludes with a review of M&S's organizational strategy, offering insights into its strategic positioning and potential areas for improvement. This document is available on Desklib, a platform offering study tools for students.

Strategic Management

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Purpose, Vision, Mission and Objectives in setting the strategic direction of Organizations-3
VRIO analysis........................................................................................................................4
PESTLE ANALYSIS OF MARKS AND SPENCERS.........................................................6
Porter's Five Forces Model -..................................................................................................7
Review of Organizational Strategy -......................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic management is defined as a management of company's resources in order to attain
objectives within set time period. It mainly includes setting of objectives, identifying internal and
external environment, develop strategies, analyze competitive environment and many more. It is
important for an organization to manage its resources as it help in maintaining performance an
attainment of competitive advantage at marketplace. (Gursel and et.al., 2019) It also help an
organization to take effective decisions an implement activities effectively and appropriately. For
the present study, Marks and Spencer is taken into consideration. It is a British multinational
retailer which was established in year 1884 and headquartered in London, UK. The company
specializes in selling home products, clothing, food products and many more. It has presence in
around 1463 locations which shows the company has high market share and presence. The report
will cover purpose, mission, vision, objectives and strategic direction of the chosen organization.
In addition to this, VRIO analysis and pestle analysis is conducted of the chosen company in
order to identify its source and impact of external factors on organization. Moreover, Porters five
force model will be used to analyze the competition. In the last, the review of organization's
strategy with the help of frameworks is elaborated in a proper manner.
MAIN BODY
Objectives, Goals and Aims in context to the Strategic Direction of Company-
M&S is considered to be one of the popular retail organization in the UK with there
operations in international market. The organization follows there principles in order to deal with
employees, suppliers and customers.( Todorov and Akbar, 2018). They aim to provide best
customer services with high standard products. There are various Business strategies followed by
Marks and Spencer which includes -
• Customer Rewards- The Company in order to boosts there sales in all their product line
uses various Reward programs.
• Customer Relationship – The Company maintains a healthy relationship with customers
in order to understand them better.
• Innovating new ways of Working- The company in order to innovate new working

ways had restructured there supply chain and started delivering directly and setting up e-
commerce distribution centre with latest IT platforms and in addition to that they uses
sustainable business model and renounced Plan A project to ensure growth by taking
extra measures. Marks and Spencer clear purpose is to engage with millions of people
and inspire them to visit their shops and enhancing their lives.
• Vision – M&S vision is to provide quality products and services , building customer's
trust and innovating new products.(Anyika, Ethie and Oghojafor, 2019)
• Mission – M&S mission is to provide good quality products to customers worldwide and
at the same time aims to offer diversified products.
• Objectives – The company's main objective is to serve their customers with excellent
services with high standard products and it aims to become a international organization
and establishing itself as a Renowned company. The company is taking initiatives to
generate more sales by taking measures to create a sustainable environment and focuses
on attracting customers through advertising techniques.
• Both the company and suppliers maintains standards according to international and local
standards in order to maintain regulations related to environmental and legal safe
standards and moreover reducing usage of plastic and various steps are taken by company
towards becoming carbon neutral and helping people, employees and customers to live a
healthier lifestyle. It ensures that proper inventory is maintained in warehouses, stores
and sites.
The organization respects their employees and maintain the standard to ensure both local ,
national and international laws are met and follows all the necessary regulations required for
employees and their working. The company established a set of standards with suppliers to make
sure correct and appropriate specifications are achieved and are supplied to all destinations
across the world. Towards managing the risk the company has adopted various steps to evaluate
risks in sites of operations. Through implementing proper strategies, M&S has achieved success

and tremendous growth which depicts there potential to main consistency in operations.
VRIO analysis
It is defined as a strategic planning tool which is used by an organization to know about its
resources and capabilities so that they can attain competitive advantage at marketplace. It is
basically helpful for make broad range of offering products to make an effective opportunities to
get a practical competitive advantages. This explain the systematic changes and growth to work
appropriately and manage different perspective to manage their competitive advantages. The
VRIO analysis in context to Marks and Spencer is given below:
Valuable: The resources are fully utilized and valuable for the company to manage their
perspective and make a great opportunities to get an practical competitive advantages. This is
effective and helpful for generalizing the statement and manage strong competitive advantage in
market. In relation to Marks and Spencer, the company has an effective and flexible supply chain
because of which it is able to execute activities on time (Doz, 2017). This further help company
to attain competitive advantage at marketplace.
Rare: These are those resources which are valuable and expensive and is help an
organization to fight with its rivals in an effective manner. The marks and spencer have rare
supply chain, market position and good leadership to work effectively and manage their position

into the market and gain competitive advantage. The rare market position help company to attract
large number of customers and maintain its performance level effectively and appropriately.
Imitable: This is very costly for the competitors of the company and make their different
challenges in the appropriate marketing cost. It is significant for an organization to maintain its
imitable resources so that it can attain competitive edge at marketplace (Intrama, Uiyamatiti and
Vadhanasindhu, 2019). With reference to Marks and Spencer, its imitable resources is supply
chain and market position which is not easy to copy by its competitors.
Organized: This is very effective and deal with the major challenges to achieve higher
position in market and make productive image for gain valuable resources. It is basically helpful
for considering different sources and achieve higher amount of profit to make effective
decisions. In relation to Marks and Spencer, its supply chain is organized and effective that help
company to implement activities and offer its products as well as services to its customers on
time period.
PESTLE ANALYSIS OF MARKS AND SPENCERS
It is defined as s tool which is used by an organization to analyze the impact of macro
environmental factors on business functions and activities. Through this framework managers get
idea about surrounding environment of a firm related to various element of this analysis which
are as follows:-
Political:- This element is related to governmental impact and command over industry in which
firm is operating through alteration in trade tariffs, international relations etc. Marks and Spencer
lost it's some customers because it had to increase price of products which it used to sell outside
united kingdom because of (Brexit Leiblein, Reuer, and Zenger, 2018).
• Positive:- It can dilute competition in domestic market, if government adopts favourable
trade policies.
• Negative:- This can reduce company's sales if government impose additional taxes on
these products.
Economical:- This element can directly effect firm's strategies and plans if there are any
changes in exchange rate, credit cost, interest rate etc. Marks and Spencer is majorly influenced
from this type as small changes in exchange rate cost them huge amounts they can avoid this by
keeping constant watch on these rates. Positive and negative aspect of this are:-
• Positive:- Company can gain from these economical fluctuation if there financial

department work in smarter way.
• Negative:- Increment in interest rates and credit cost can increase cost of production of
firm which in turn increases it's price thereby reducing it's sales.
Social:- This element include various factors such as purchasing pattern of population, age
structure, social mentality, education level etc. All these factors can influence sales of Marks and
Spencer for instance – in economically backward area it's high end clothing and home products
have less sales. Positives and negatives of this factors are as follows:-
• Positive:- if analysed properly company through this element can know much about
market and can excel easily.
• Negative:- if company randomly place it's product in any market it may lead to no growth
in it.
Technological:- this element might directly influence firm's operation to any degree which
depends on which industry it is operating (Phornlaphatrachakorn, 2019). Marks and Spencer
have a indirect influence of this factor, as it can use updated machinery which may helps in
reducing cost of production. Positive and negative are as follows:-
• Positive impact - using latest technology helps company in reducing cost, increasing it's
efficiency etc which may let them earn more than usual.
• Negative impact:- regular up gradation and maintenance of machinery might be too costly
for firm.
Legal:- This element may affect internal as well as external environment of company by
influencing various plans and strategy of them. Legal element includes employment laws,
consumer protection law and various laws as per industry. Marks and Spencer have separate
legal department which looks after all this.
• Positive impact: - abiding these factors may fetch some subsidy from government.
• Negative impact:- firms avoiding these may invite huge penalties.
Environmental:- This element includes factors related to physical environment and ecology,
various aspects are recycling procedure, carbon footprints, waste disposal etc. Marks and
Spencer are giving due importance to these by following social corporate responsibility.
Positive impact: This increases goodwill of company as consumers are now-a-days
considering these factors before choosing companies
Negative impact:- Avoiding this element degrades surrounding physical environment which

might degrade their product’s quality which in turn cost more to maintain standards.
Porter's Five Forces Model -
This model is often used for analyzing if the new products or services are profitable or not.
Analyzing different Business Organizations can help a Business to identify areas of
Opportunities and Threats .( Rauter and Lammerer, 2021). According to Porter's Five Forces
Model should be used in Industries in order to study a Company's Strategic Position. In
reference to Marks and Spencer Group, there managers uses this model to maintain a strategic
place and presupposes opportunities.
New Entrants Threat -The threat of New Entrants is low when it Comes to M&S as they
have a strong brand image with huge capital and trust of customers. Also being a food and
clothing retailer, an entrant need to offer something really unique and different in order to stand
out in market and attract customers. In addition to that its really tough for competitors to break
their customers as they already have strong position in market and had focused on quality since
years and is not easy for new entrants to compete with them.
Bargaining Power of Suppliers -Due to purchases from British suppliers the Bargaining
power of M&S suppliers had become low. In addition to that there suppliers are mostly from
developed regions and in order to achieve large customer base, each supplier wants M&S goods
on their wishlist. Moreover, they are not fully dependent on suppliers as they sells own branded
products through other stores.
Bargaining Power of Buyers -In reference to M&S , there bargaining power of Buyers is
high. They need to build more customer's loyalty and provide affordable products in order to
achieve large customer's base. Customers attracts towards offers and discounts and in context to
that the company needs to develop innovative offers and products in order to reduce there
bargaining power and this will also lead to more opportunities for the firm.
Threat of Services or Substitute Products -In order to safeguard them from threats
related to Substitute products or Services , M&S need to focus more on enhancing their services
with more product development. In order to tackle the threat, the organization need to understand
their customers and increase the switching cost. By doing this the firm would be able to stand out
in market against there competitors and both current and new customers will get attarcted
towards their products and services.

Rivalry among the Existing Competitors -In reference to M&S, there rivalry among
competitors is Intense. In order to deal with existing competitors, the organization need to
develop startegies and build a scale of operations to stand out in the competition. In addition to
that, they need to get together with competitors and increase the size of market. The company
already operates in a very competitive retail sector and in order to increase their profitability they
need to build a sustainable differentiation. By studying all the five startegies , the company can
gain a competitive advantage through proper understanding of changing needs and responding in
favour of upcoming opportunities.
Review of Organizational Strategy -
Various strategies are available to companies which can uplift the working of organization. It
involves Cost Leadership, Differentiation and Focused Strategy. In reference to M&S, it uses
Focus generic strategy as they concentrate on a particular Group of buyers. It has also started
developing products in UK and to deal with competitors they have started reducing prices of
their products as compared to competitors. In order to implement new strategies, it is essential to
understand the organization's position in market. For new strategy development, there innovative
culture can act as a positive influential factor. In order to achieve objectives it needs to expand
its products and services in various different geographical area and to formulate corporate
strategy for M&S they need to apply various approaches to target segments and arrive at valuable
suggestions. After analyzing the above strategies, it is depicted that there are growth potential in
all the identified areas and to face several parameters for success within competitors.Its difficult
to forecast and identify constraints to put right strategy implementation in an
organization.Output can be monitored and maintained through customer responses, market
share and market demand. On basis of customer feedback, financial profitability performance,
demand for product and customer feedback can be valued. The main tool to measure market
responsiveness are focus group analysis where a business aims to introduce new products into
existing markets. This strategy may require the development of new competencies to develop
modified products which can appeal to existing markets. M&S financial service and banking are
some example of new products.

CONCLUSION
From the above study, it has been concluded that strategic management allow an
organization to optimally utilize its resources and achieve competitive advantage in an effective
and appropriate manner. In addition to this, it is analyzed that with the help of VRIO analysis a
company is able to know about it resources which assist to fight with competitors and prevail in
the marketplace for longer time period. By the assistance of Pestle analysis, an organization get
to know about the impact of external environment on its activities and functions which further
help to develop strategies in dealing with any issues associated to external environment.
Moreover, it is determined that Porter’s five force model is used by company to determine the
level of competition prevail at marketplace which further help to develop strategies to fight with
competitors and attain higher profitability within the market.

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