Analysing Marks and Spencer's Organisational Strategy & Future Options

This report provides a comprehensive analysis of Marks and Spencer's organizational strategy, evaluating both internal and external factors through SWOT and PESTLE analyses. It examines the company's current strategic position, highlighting strengths such as brand image and diversity, weaknesses including limited global presence and customer satisfaction issues, opportunities like expanding into Asian markets, and threats from competitors. The report also assesses future strategic options using Porter's Generic Strategies, concluding that a differentiation strategy aligns best with Marks and Spencer's focus on high-quality products. The analysis underscores the importance of addressing customer satisfaction and expanding into new markets to sustain growth and maintain a competitive edge. Desklib provides a platform for students to access similar solved assignments and past papers.

Organisational Strategy

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Current Strategic Position............................................................................................................3
Consideration of Future Strategic Options..................................................................................6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Organizational strategy are road of plan a company decides to map the route to their
vision and goal. Those strategies could be for different goals, it could be for creating brand
awareness and recognition, boosting sales, new product or service introduction in the market or
other different goals. There could be more than one goal of created strategy. Strategy could be
changed or modified and adapted to any changes in the organization and in some cases if those
strategies are not brining any benefit it can also be dropped. It helps in effective goal settings.
While making a strategy a specific goal is decided, the specificity helps in measurements, mostly
quantifiable.
In the following report, the strategical analysis of Marks and Spencers would be
discussed, considering both internal and external factors and some future strategies that could be
adapted by them would also be discussed.
MAIN BODY
Current Strategic Position
Marks and Spencer is a British multinational retail company, specialized in selling home
products, clothings and food products. To understand their strategic positioning both internal and
external factors are considered with SWOT and PESTEL analysis:
SWOT Analysis:
 Strength — Marks and Spencer has created a brand image with high-end value.
They are known for their quality products, with clothing line they are known to
have a collection of quality, stylish, sophisticated and modern cloths.
Additionally, they sell premium brands in their stores like, Versace, Louis Vuitton
and Vero Moda and their in-house private labels like, Autograph, Per Una, Indigo
Collection, Classic Collection and North Coast. One of their other strength is
diversity in their organization. They have around 80,000 employees working in
their showrooms and offices around the world (Puyt, and et.al, 2020). They
encourage diversity among the teams, hence, having people from different ethnic
background, gender and religion. Lastly, the company has multichannel presence,
having both online stores and brick and mortar, also offering franchising options.

 Weaknesses — Although Marks and Spencer have presence in Europe and USA
market they lack in having presence elsewhere in the world. They have stores in
Asia and Middle East, yet they couldn't gain success because of lack of traditional
design, as they have focused only on westerners. They have also been facing issue
in low customer satisfaction that shows drawbacks in their strategy. Customers
have shown their dissatisfaction in company's return policy and their in-store
experience. This resulted in poor loyalty with brand and has increased brand
switching. The biggest weakness of Marks and Spencer is their poor scalability in
supply chain. They haven't been able to scale up supply chain to deliver global
locations.
 Opportunities — Marks and Spencer have a good reputation for their clothing
stores and lines. As everything is getting global and increasing global GDP is
allowing people to follow trend more freely (Phadermrod, Crowder, and Wills,
2019). Fashion industry is constantly evolving and new segments are welcomed
on regular basis that create new opportunities for the company. Also, they can
turn their weakness as their opportunity to grow in Asian market. As they have
only dealt in western designs, by entering Asian market they can start targeting
traditional design too. This will make them sustain in global markets and create
new opportunities to grow and generate more profit.
 Threats — Threats are factors that can resist growth of a business (Namugenyi,
Nimmagadda, and Reiners, 2019). For the company like marks and Spencer that
deals in fashion, food and lifestyle industry, they have many strong competitors.
Brands like Zara, Tommy Hilfiger, Gap, Uniqlo and United Colors are some to
name of. Since the customers of M & S has shown dissatisfaction in the
company's service like their return policy, they have many choices to switch in
the industry, making company's brand loyalty vulnerable. Also, their weak
presence in Asian and Middle east market can result in loss of investments.
Lastly, poor scalability in supply chain will only add up to their losses.
PESTLE Analysis:
 Political — The company has many stores around the globe in different countries.
As every nation has different political situations the existing company has to

adjust to those situations and deal with it accordingly. More stable government
policies makes business practices more stable. Marks and Spencer has their
headquarter in UK which give them benefits of Europe Commission's agreements
which leads to decrease in sourcing cost. The company believes, in order to
protect their legitimate interests they need work closely with the government.
There are two factors that majorly affects organization's operation, political
stability and taxes. Increase in government taxes can increase product cost that
will have negative impact on the sales.
 Economic: Economies in each nations works differently from each other. The
GDP, inflation rate, foreign exchange rates, interest rates and other economic
factors affects business operations. For the UK market, the government has strong
financial status and also maintained low inflation rates which is favourable for the
company. The company has strategy of providing quality products, however,
financial crisis can decrease the demand of high prices quality products which
could have negative impact. They have been affected by financial crisis as
consumers do not have much disposable income, so, they had to make job cuts.
Also, the recession made the company's decision of discounts on Christmas drop.
 Social: The social factors like, trends, age, gender, ethnicity, demographics,
religion, everything affects businesses which operates in the society. Consumer
purchase is highly depended upon those factors, they follow what is trend among
peers, for example, in few years the cheap clothing industry has seen boom in
their business as people are investing in less expensive products to support
themselves in crisis like Covid-19. In past when credit cards were new to the
market and catching up the trend Marks and Spencer took advantage of situation
by providing customers credit transaction in their stores. These opportunities help
companies to retain in the market and gain loyalty from the consumers.
 Technological: Innovation in technology is the driving force businesses in the
current scenario. Digitalization has allowed people to shop from their mobile
phones, so Marks and Spencer have joined the trend by giving consumers online
shopping and home delivery services. Marks and Spencer recently has announced
their Technology Transformation Programme in which company will be enabled

to become first digital business and deliver diversified customer experience. The
company understands the importance of technology in this industry and aiming
for commercial and faster technology operating model, so they can exploit new
technological advancement in trend. Marks and Spencer are focusing on
delivering flexible, agile and simpler consumer focused products with their new
transformation to digital market.
 Legal: It is organizations responsibility to follow legislation of countries they
operate in. The company was accused of failing to protect their workers and
employees from potential threat of asbestos, as their store in Broad Street was
under renovation when ceiling tiles fell down on the floor which had cancer-
causing material. Public accused them, yet they turned blind eye to the whole
situation which resulted in two lawsuits against them, one of them being accused
under Health and safety at Work Act 1974. After that, they were convicted for
both and also were fined by huge amount. Since then, they have been conducting
training sessions on health and updates them with current law and legislations
every year.
 Environmental: The environment condition is getting worse day by day, many
institutions, organizations and individuals came forward to control the global
warming. It is company's responsibility to contribute in the well-bing of nature
(Kirchoff, and Falasca, 2021). Marks and Spencer has been working closely with
Better Cotton Initiative to engage in sustainable practices for processing and
procurement of cotton. They have constantly engaged in sustainable practices,
like removing trans fat from their food products or reducing the usage of energy
in the office and production and also promotes fair value of trade. The
organization is trying to engage in such practices more and develop a sustainable
environment in the company as well as outside the company.
Consideration of Future Strategic Options
Marks and Spencer have some strategies that are working in favour of them and some
that are driving them to loss, there are some consideration that should take for future strategy
(Kabeyi, 2019). Below are Porter's generic strategies discussed observing which work best for
them:

Porter's Generic Strategic:
Porter uses four strategies that any organization can choose from in order to beat competitors and
retain in the market. The four strategies are discussed and bests strategy for Marks and Spencer
is analysed below:
 Cost Leadership Strategy: This strategy suggests company to target larger
market and offer the lowest possible price to the customers. In cost leadership
there are two options given, either keep company cost as low as possible or ensure
large share of market with average price (Aziri, and Zeqiri, 2020). Companies
who opt for this strategy have substantial investment capital at their disposal
successfully, low costs of materials and labour and efficient logistics.
 Differentiation: With this strategy, porter implies that companies should focus on
a broad market while keeping product and service with unique features. It will
make the product and service exclusive and help them stood out from the
competitors, making it east to reach consumer's interest (Islami, and et.al, 2020).
This strategy requires innovation, research and development and company's
ability to deliver high quality products and services. The organization who opt for
this option focuses on outside world and believes in creative approach.
 Cost Focus: In this, the organization targets a “niche” or “focused” market and
provide them the lowest possible price to the consumers. The focused market will
have little competition and allow them to focus only on product/service and
consumers. They should gain all the information about the market and understand
the dynamic and wishes of your consumers and ensure the cost remain low
(Desai, 2019).
 Differentiation Focus: This strategy also implies on choosing a niche market.
The market should be analysed and studied in detail and product or services
provided must be unique to others, that can attract the consumers in that market.
Innovation, research and development is key for this strategy to succeed in the
market. The organization must be aware of their strengths and competencies.
In the above points, Porter's Generic Strategy was discussed. According to Marks and
Spencer the first strategy of cost leadership will result in loss of quality for them even if they try

to target a large market. It is their unique selling proposition to provide high quality products to
consumers by different brands like, Louis Vitton, Versace, and Vero Moda, and will only
decrease their quality if they went for cost leadership. It would also result in financial cuts and
affect customer experience which would result in dissatisfaction among them (Thongsookularn,
2019). They would also require to be copycats in order to provide cheaper products contradicting
company's vision. Also, with cost focus, they might not need to compromise on the product
quality, but they won't be able to target bigger audience which may limit their future growth and
offer lower rates of equipment utilization. It also may focus on a demographic that is temporary
which will not work for their current position in the market. Similarly, differentiation focus
strategy may work for their quality products and customer satisfaction, yet it will limit their
future growth and focus on a temporary demographic.
Marks and Spencer has been focusing on giving quality products to their consumers and
this has become their USP. They still lack in making their market sustain in Asia and Middle
East due to lack of traditional options for the designs (Muafi, and et.al, 2019). They have also
lacked in customer satisfaction which also should be resolved as soon as possible or it will
damage their brand reputation. According to analysis of Porter's generic strategies they should
opt for Differentiation, in this strategy they would be focusing on making their product unique
from rest of the market to stand out from competitors (Putra, 2018). They would need to do
market research and develop products accordingly. In this strategy they not only will focus on
unique product development but also focus on reaching to larger market. While targeting larger
market they would take the social aspect of different environment in different nations and fill the
pre-occurred gaps in their strategical implementation in those countries. Their problem with
customer satisfaction might also resolve through this strategy, as better focus would be given on
that. They would need to think out of the box in order to opt for this creative approach and
develop those products that give value for the price that will be paid by the consumers. The
differentiating approach can take several forms, they can create something that will be perceived
as unique industry-wide. It can include creation of brand image that is never done before,
technology that is latest or exclusive for few, quality customer service that will assist the
customers effectively, dealer network or any other dimensions. If the strategy is implemented
efficiently then it will give insulation against other competitors in the market as the brand loyalty
of customers will be installed through the discussed changes that will also lower the sensitivity

towards the price of products. The use of this strategy can help in providing barriers for
competitors and retain customers. It will also increase the margins, which will help in avoiding
the need of position of low-cost. Their need of creating a brand name in other market like Asian
and Middle-Eastern has increased, this strategy will allow them to focus their demographical
area, and adapt to the culture and tradition through creation of new design to target those market.
By targeting those market they will be able to grasp success and expand their market over the
world. Differentiation will make the organization to yield for higher margins which will deal
with the supplier power. It will leave no comparable alternative of the consumers as the product
will be unique to the market which will help them achieve customer loyalty and will be easy to
differentiate itself to others with the brand recognition it will be provided through this strategy
(Aithal, and Aithal, 2018).
CONCLUSION
In conclusion of this report, organizational strategy is a plan that help organizations of
create a route to reach their set goal. It helps in determining the needs and path to which they can
create a business which will intrigue the customers. A strategical analysis of Marks and Spencer
was done by determining their strengths, weaknesses, opportunities and threats through SWOT
analysis, which concluded that their brand value in Europe, USA and western country is stronger
than the eastern continents and countries like Asia. Their PESTLE analysis showed how different
nation's environment affect the business activities of Marks and Spencer. Through Porter's
Generic Strategy, the needed strategy the brand should opt for was discovered as Differentiation,
by which they would create a product that is unique to the market and provide value for their
product by which they would be able to focus on larger market and resolve their pre-occurring
weaknesses.

REFERENCES
Books and Journals
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Business, Marketing, Management and Tourism, 7(13-14). pp.87-98.
Desai, C., 2019. Strategy and strategic management. In Management for Scientists. Emerald
Publishing Limited.
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organizational performance using differentiation strategy instruments–an empirical
analysis. Business: Theory and Practice. 21(1). pp.158-177.
Kabeyi, M., 2019. Organizational strategic planning, implementation and evaluation with
analysis of challenges and benefits. International Journal of Applied Research and
Studies, 5(6). pp.27-32.
Kirchoff, J. F. and Falasca, M., 2021. Environmental differentiation from a supply chain practice
view perspective. International Journal of Production Economics. p.108365.
Muafi, M., and et.al, 2019. Business strategy, organizational structure, work processes: are the
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Namugenyi, C., Nimmagadda, S. L. and Reiners, T., 2019. Design of a SWOT analysis model
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Phadermrod, B., Crowder, R. M. and Wills, G. B., 2019. Importance-performance analysis based
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Putra, Y. S., 2018. Analysis of Differentiation Strategies to Create Competitive Advantages in
Facing Global Markets. KnE Social Sciences. pp.254-269.
Puyt, R., and et.al, 2020. Origins of SWOT Analysis. In Academy of Management Proceedings
(Vol. 2020, No. 1, p. 17416). Briarcliff Manor, NY 10510: Academy of Management.
Thongsookularn, S., 2019. Strategic Formulation Meaning, Definition and Explanation.
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UNIVERSITY JOURNAL OF SOCIAL SCIENCES, HUMANITIES, AND ARTS).
pp.418-431.