LSBM306: Strategy, Enterprise, and Innovation - M&S Analysis

This report provides a comprehensive analysis of Marks and Spencer's strategic enterprise and innovation approaches. It begins by critically evaluating the internal resources and capabilities that provide the organization with a competitive advantage, utilizing SWOT and VRIO analyses to assess strengths, weaknesses, opportunities, and threats. The report identifies key drivers of change in the external environment using PESTLE analysis and evaluates their impact on the entrepreneurial activities of the organization. Furthermore, it employs Porter’s Five Forces framework to assess the impact of competitive forces on entrepreneurial activities and profitability within the retail industry. The analysis covers threats of new entrants, bargaining power of suppliers and buyers, threats of substitutes, and rivalry among existing competitors, concluding with strategic recommendations for Marks and Spencer to mitigate challenges and enhance its competitive positioning.

Strategy Enterprise
and innovation

Table of Contents
INTRODUCTION...........................................................................................................................1
Critically analyse the internal resources and capabilities that give the organisation a
competitive
................................................................................................................................................1
advantage................................................................................................................................1
Key drivers of change in the external environment and evaluate their impact on
theentrepreneurial activities of the organisation.....................................................................3
Using Porter’s Five Forces framework and/or any other relevant tools, evaluate the impact of 5
the main competitive forces that are influencing entrepreneurial activities and profitability
within......................................................................................................................................5
the industry............................................................................................................................5
CONCLUSION................................................................................................................................6
.........................................................................................................................................................6

INTRODUCTION
Strategy is an action that managers take to achieve one or more of the organization goals.
Strategy also defined as a general direction which is set for a company. Strategy also gives
output from the detailed strategic planning process. Enterprise refers to a legal entity which
possessing the right to conduct business on its own. E.g. to enter into contracts, own property,
and establish bank accounts (Teece., 2021). An enterprise may be a corporation, a non-profit
institution, or an unincorporated enterprise. Innovation is the practical initiatives of ideas that
gives output in introduction of new products or services. Innovation also refers to improvement
in offering goods and services to consumers. The company chosen for SWOT analysis in this
report are Marks and Spencer Group which is a multinational retail company and its headquarter
is located in London, UK. Company was established in 1884 and have aim to serve the best
quality products to their customers.
Critically analyse the internal resources and capabilities that give the organisation a competitive
advantage
SWOT Analysis -
It is a tool which is used by an organization to identify its strength, weakness,
opportunities and threats related to business competition. In context to Marks and Spencer, they
used SWOT Analysis to analysing competitors which are described below -
Strength includes -
 Clear Brand Image – They positioned itself as a high end value products which targets
which targeted the premium customer or premium segment.
 Private Labels – For selling the branded products such as Louis Vuitton, Vero Moda and
so on. Mark and Spencer also has their own labels in almost all categories such as Indigo
collections etc.
 Innovation – Innovation in marks and spencer is also associated with creativity and
communication and people across various levels (Cassiman. and Veugelers., 2020).
These all are encouraged to think widely and also suggest new ideas where they feel
necessary.
Weakness include –
1

 Customer Satisfaction – Customer satisfaction is very low towards their company. It is
because of the issues related to return policy of company.
 Supply Chain Scalability - One of the biggest problem that Marks and Spencer are
facing continuously that is of supply chain.
 Weak Operating Performance – Due to huge expansion of company, they are not able
to control their stores effectively in many places, these issues arises because of huge
demand of products by customers.
Opportunities includes -
 Expansion of Company – It is a very good opportunity for company to introduce of
new branded product in their store for increase their profit.
 Online Shopping – In the covid pandemic company have the opportunity to increase
the digital platform service for their customers because in covid customers want safety.
Threats -
 National Economic Crisis – National economic crises gave threat to the organization's
growth and performance because this creates barriers for the company to sell their
product.
Supermarket Competitors – Competitors are threat for organization because they use various
strategies to reduce our profit. Due to this organization must analyse the competitor and then
execute the plane to get success.
VRIO Analysis:
It is an analysis is abbervied as value, rarity, imitable and organisation. This is a strategic
tool that is used by companies to identify their available resources and internal capabilities (Levy
and Germonprez., 2019.). This will help them to accomplishing high competitive advantages
towards mitigate challenges and mapping the competitors rivalry. In following there is overall
high performance effective performance in competitive market place of Mark and Spencer:
RESOURCES VALUABLE RARE INIMITABLE ORGANISABLE
Brand Image Brand Image - - -
Manufacturing
Capacity
Manufacturing
Capacity
Manufacturing
Capacity - -
Innovation
Capabilities
Innovation
Capability
Innovation
Capability
Innovation
Capability - -
2

Human
Resources
Human
Resources
Human
Resources
Human
Resources Human Resources
Evaluation
 Valuable: It is important for the manager of Mark and Spencer would utilise their
resources so that tough competition to rivals can be given in proper way. If the
organisation posses where some valuable resources where they can earn high profits from
it. For example: in perspective of Marks and Spencer is having brand image,
manufacturing capacity, innovation capabilities and human resources to bring more
profitability.
 Rareness: This aspect benefits a firm towards better understanding that if the product to
be prepared by them or not. Through rare product that offered Mark and Spencer which
would gain more customer loyalty due to which this would raise the revenue will increase
the considerable manner. For example: M&S believes in providing through Unique and
innovative products to their customers due to which firm rareness. The manufacturing
capacity, innovation capabilities and human resources are rare but brand is not consider
into rare factor is because there are high competitors in market.
 Imitable: The Marks and Spencer is needed to offer those product which can not be
copied by other companies. The products offered by M&S will be copied then rivals can
sold them in less amount. With this, people will not prefer to buy those services of
products which are offered by M&S. Raw material for producing food item and clothes
are imitable resources for company.
 Organisation: This is important for business organisations such as M&S to manage their
existing resources in an optimal manner (Li, Cui and Zheng., 2021). If resources and
materials of a company will not be used in systematic way, it will results in enhanced
cost of company. This will reduce revenues for company due to which competing against
rivals will became a difficult task. Different resources in this context are employees,
suppliers, investors and stakeholders of company.
3

Key drivers of change in the external environment and evaluate their impact on
theentrepreneurial activities of the organisation
Pestle Analysis: According to this framework is a strategic tool which is used by the
business organisation so that it acknowledge about external business environment and market in
more proper manner. In case of Marks and Spencer there is Pestle Analysis mentioned below:
 Political Factor: This kind of factor is concerned with the tariffs rates, tax regulation all
these factor makes recommended the stability through central government. Through UK
is politically stable is having tax rates for business organisation is less due to which
would be beneficial for Marks and Spencer company.
 Economic factor: Growth rate in UK which is having high and people earns disposable
incomes due to which these people are capable to buy offered products by Marks and
Spencer enhanced inflation rates due to great recession which this Marks and Spencer
would get highly impacted.
 Social factor: This is different through social aspect are concerned with attitude, opinion,
belief and attitude people are living in a place. As the UK is having wide range of
population where they can use modern product and services. Somehow, Mark and
Spencer company can approach demographic and geographic factor attain more people
target with effective manner. If the Mark and Spencer is offered the high quality of
product and services to their customer on which sales and revenues have increased.
 Technology factor: UK is a technological advanced nation where the people use the
internet and digital media platform to attain their daily activities (Filieri and Alguezaui.,
2020). Mark and Spencer to update their technology where the machine distribution of
process with market if requirement with interest to maintained the product of company.
 Legal Factor: According to this factor involves all legal rules and norms which have
introduced by the UK government to secure the welfare of customers or employees form
business companies and vice versa managers company is needed to follows the legal
procedure so that Marks and Spencer to pay heavy penalties because law of
disobedience .
 Environment factor: According to these factors are linked with protecting ecology and
environment from the hazardous activities firms. Following environmental laws will
4

benefit the company in sustaining a positive image within marketplaces where M&S is
operating. Due to this, sales and profits of company will be high.
Evaluation:
On the basis of above Pestle analysis explained in perspective of Mark and Spencer. But
for Entrepreneurial Activity there are two main factor which makes major roles effectively:
 Political Factor: This factor can be positive for Entrepreneurial ones by provide them
international business policy on which they can attain more business benchmark to attain
more positive outcomes. The negative factor of political aspect is that to measure in UK
that Brexit market can reduce the chances of commence business.
 Technological: It is the major part of business that would create more development
opportunities through which advanced technologies would used by Entrepreneurial can
used to enhance their efficiency. But there are some unethical technological resources
which can not use to develop the entrepreneurial behaviour.
Using Porter’s Five Forces framework and/or any other relevant tools, evaluate the impact of the
main competitive forces.
Porter five forces is strategical framework which has been taken decision by considering
future outcomes rather than analysing only present competition. There are five aspects of this
framework which is determined below in context of Marks and Spencer are:
 Threats of new Entrant: Threats from new entrant is Low in Marks and Spencer is
renowned organisation which is operating at global level. It is not possible new
organisation to make invest an much Marks and Spencer investing while performing their
business through operation activities. Due to this, new firms in the market that are not
capable to compete with Marks and Spencer in terms of customer base, market shares and
offering with product and services.
 Bargaining power of Suppliers: As there are many large organisation in retail sector
industry where they deals ion food, cosmetics and home products. Due to this, bargaining
power of suppliers are high. If there is other firm will pay suppliers high they may not be
able to give Mark and Spencer all the required material and resources due to which
business Marks and Spencer to earn and effective high profits and revenues.
 Bargaining power of buyers: The same quality of product are offered by other
companies in affordable price then the bargaining is high (You-hong, 2021). If company
5

will charge high prices from their customers without giving satisfactory product then they
can shift their preferences towards the products which will be offered by rivals.
 Threats of Substitutes: There is probably may be no substitution for clothes and food.
Due to this threat from substituted product is low in case of Marks and Spencer.
 Rivalry among existing competitors: Here are many retail organisations which are
operating in UK and global level such as H&M, Zara etc. Threat from these competitors
is very high in case of M&S.
Evaluation:
From above Porter five forces of Marks and Spencer company to mitigate challenges as
the company is faces the issues regarding of suppliers, buyers and heavy market competitions
(Chen, Tao and Gong, 2020). For this, the Marks and Spencer need to implement strategy to
reduces the prices in their product and services.
CONCLUSION
From above report is summarised about strategic enterprise and innovation has described
some of internal and external factor. To scrutinised or measured about challenges and
opportunities on which market competition trend get to analysed effectively. For industry
analysis porter five forces get to analysed where suppliers, buyers and high competition to attain
high competition advantages.
6

REFERENCES
Books and Journals
Teece, D.J., 2020. Business models, business strategy and innovation. Long range planning,
43(2-3), pp.172-194.
Pisano, G.P., 2015. You need an innovation strategy. Harvard business review, 93(6), pp.44-54.
Cassiman, B. and Veugelers, R., 2020. In search of complementarity in innovation strategy:
Internal R&D and external knowledge acquisition. Management science, 52(1), pp.68-82.
Levy, M. and Germonprez, M., 2015. Is it egalitarianism or enterprise strategy? Exploring a new
method of innovation in open source. In 21st Americas Conference on Information
Systems, AMCIS.
Li, R., Cui, Y. and Zheng, Y., 2021. The impact of corporate strategy on enterprise innovation
based on the mediating effect of corporate risk-taking. Sustainability, 13(3), p.1023.
Filieri, R. and Alguezaui, S., 2021. Extending the enterprise for improved innovation. Journal of
Business Strategy.
You-hong, C.H.E.N., 2010. Studies on Destructiveness Innovation Strategy of Small and
Medium-Sized Enterprise Development in Zhejiang [J]. Technoeconomics &
Management Research, 3.
Silva, C. and Ramos, I., 2021. Crowdsourcing innovation: a strategy to leverage enterprise
innovation. Academic Conferences and Publishing International (ACPI).
Meyer, M.H., Anzani, M. and Walsh, G., 2005. Innovation and enterprise growth. Research-
Technology Management, 48(4), pp.34-44.
Chen, L., Tao, Q. and Gong, X., 2021, July. A study on the integration of enterprise technological
innovation and institutional innovation basing on synergetics. In 2013 Suzhou-Silicon
Valley-Beijing International Innovation Conference (pp. 199-203). IEEE.
7