Comprehensive Business Strategy Analysis for Marks and Spencer (M&S)

This report offers a comprehensive analysis of the business strategy of Marks and Spencer (M&S). It begins by examining the impact of the macro-environment using PESTLE analysis, considering political, economic, social, technological, legal, and environmental factors affecting M&S's operations. The report then delves into the internal environment and capabilities of M&S, employing a SWOT analysis to identify strengths, weaknesses, opportunities, and threats. Furthermore, the report evaluates the outcomes using Porter's five forces model, assessing the competitive landscape and the bargaining power of buyers. Finally, the report explores the application of various theories, models, and concepts to interpret strategic planning for Marks and Spencer, providing a holistic view of the company's strategic approach and its ability to achieve its objectives within the competitive retail market.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Impact and influence of macro environment on Marks and Spencer....................................1
TASK 2............................................................................................................................................3
P2 Analyse internal environment and capabilities of Marks and Spencer..................................3
TASK 3............................................................................................................................................4
P3 Evaluate the outcomes with help of Porter's five forces model.............................................4
TASK 4............................................................................................................................................6
P4 Application of various theories, models and concepts to interpret strategic planning for
Marks and Spencer......................................................................................................................6
CONCLUSION................................................................................................................................8

INTRODUCTION
Business strategy is a sequence of steps which an enterprise follow in order to achieve its
end goals and objectives. Manager of enterprise formulates this and at the same time, identifies
resources to implement the same. To formulate a better strategy for business, it is essential for
manager to collect information from various sources (Astrachan, 2010). Different factors exist in
business environment such as micro and macro that largely affect the functioning and
performance of business. So, all these must be identified and better evaluate by the manager so
that company can achieve maximum results and positive outcomes. M&S (Marks & Spencer)
multinational enterprise based in United Kingdom is selected in this report for study. At present,
firm offers a variety of products to its customers in order to better satisfy their needs and wants.
Impact of various external factors on business environment and internal capabilities of M&S are
all mentioned in this report. Further, porter's five forces analysis and application of various
theories and models to interpret strategic planning are all detailed in this.
TASK 1
P1. Impact and influence of macro environment on Marks and Spencer
Carrying out an external business environment is essential for an enterprise as this
includes various factors which a firm needs to complete to exist in industry. These are
uncontrollable elements which affect the commercial operations of a firm and the way enterprise
takes decisions and affects its strategies and business performance. In order to carry out the
same, a strategic tool is there which can be used by enterprise known as PESTLE.
PESTLE: This includes external elements such as political, social, environmental, technological,
legal and economic that affect the execution of various strategies of Marks and Spencer.
 Political: European integration and free trade agreements have opened new markets for
United Kingdom and other enterprises to invest in Europe. This largely affects M&S and
influence firm to fight hard to maintain its market share and position in industry with the
help of various aggressive and innovative strategies. One of the main factors which
affect the operations of M&S deal with labour laws and industrial relationships. This
largely put impact on the development of efforts of enterprise in execution of both
international and local operations.
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 Economic: Whole market of UK is highly sensitive to interest rate. Economic recession
of 2009 creates a condition for company to struggle for maintaining its economy.
Customers of UK have become more optimistic and this makes the booming condition
for retail industry. Unstable economic conditions of UK market largely affects the sales
of business enterprises. Other elements which come under the heading of economic
factors include interest rate, tax rate, exchange rate and many more (Campbell, Edgar
and Stonehouse, 2011). To better deal in the condition of economic recession company
decide to offer discount to its customers. This help enterprise in maintain its sales and
market share.
 Social: Whenever a change takes place in preferences, lifestyle and tastes in consumers,
this presents both threats and opportunities for retail industry of the UK. Consumers of
United Kingdom have a tendency to being loyal to one brand. Today customers want to
buy quality and value added products and in a situation of changing needs of customers
at a fast speed it is very difficult for enterprise to better satisfy their needs with different
kind of products. In order to better deal with various changes take place in needs of
customers, company should focus more on production of quality and featured products.
 Technology: Retail industry of UK witnessed number of changes in technology. This
includes internet which increases use of e-commerce in retail industry. In today's
business environment where number of technology development take a fast speed it is
very essential for every business enterprise to use updated tools and techniques in order
to produce featured products (Casadesus-Masanell and Ricart, 2010). One of the main
feature of technology is that it make the enterprise able to maintain the quality of its
products and influence the customers to recognise the brand.
 Environmental: Today, number of companies are there that use renewable natural and
environmental friendly resources in their production which pose a challenge for firms to
maintain its current market share.
 Legal: Various top authorities such as national legislation for food and safety look out
for safety and rights of consumers as well as production of renewable sources during
process of making clothes (Eccles and Krzus, 2010). To maintain in current market share
and to capture a large market share it is very essential for manages to M&S to consider
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legislations in order to offer better and safe working environment to employees so they
can contribute best in company's success.
All these are the main external factors which affect the business operations of an
enterprise. For example, if government of UK has introduced a change in tax rate as well as rules
and regulation related with functioning of business then all this directly affect the business
operations. It is essential for manager of M&S to identify and analyse these factors on timely
basis in order to make changes in its strategies.
TASK 2
P2 Analyse internal environment and capabilities of Marks and Spencer
Different elements are there which affect the internal capabilities of an enterprise and its growth.
For decide future actions of business and to formulate better strategy for business it is very
essential manager to analyse all these factors. This can be done by managers of M&S with help
of a tool called SWOT .
SWOT analysis: This is a popular strategic tool which is used by enterprises to identify
an enterprise internal and external elements which help in meet the stated objectives. It helps in
identify firm's strength and weakness (internal) and opportunities and threats (external) that
affect commercial operation of enterprise (Elliot, 2011). One of the main benefit of this is that it
will help M&S (Marks and Spencer) in identify its current business situation and do
improvements where needed.
 Strengths: One of the biggest strength of M&S is that it offer variety of products to its
customers such as furniture, foods, financial services, clothing, and home products which
creates a large customers base. Company has a strong financial position which is very
essential for running and managing operation of a large firm.
Firm is offering its services to its customers with more than 1500 stores in more than 450
countries. Business operation of enterprise are expand in international market also. Company
carry a positive and strong brand image which influence large number of customers every year.
Company use a mix of various promotional tools to reach more number of customers and
this is increasing profits of company at a fast speed. Further, involvement of firm in CSR
activities increase loyalty and trust of customers towards brand.
 Weakness: Large number of customers are not interested in products and services of
company and firm is facing a number of issues such as pollution (Hahn, Kolk and Winn,
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2010). Huge number of substitutes are available in market and various individuals have a
perception that enterprise offer high priced products which does not influence them to
buy its product.
Firm is loosing its key employees and suppliers on continuous basis which give rise to
cost of business operations.
 Opportunities: Emerging trends of various products provide an opportunity to enterprise
to create a new base of customer (Haley, Haley and Tan,2011). Concept of innovation
and alliances with other enterprises make the enterprise able to more widen its market
presence. Customers of UK are moving towards value products.
With help of segmentation firm can increase variety of products it offer to its customers
and at the same time can better satisfy the needs of its target market.
 Threats: Existing and new competitors in market is one of the biggest threat for M&S.
Economic recession in UK, volatility in prices of raw products and emerging legislation
imposed in UK all serve as threat for M&S.
By identify strengths, weakness, opportunities and threats manager of enterprise can
formulate better and effective policies for business and can better use the capabilities of company
in order to achieve its end goals and objectives. Various tools which can be used by managers of
M&S to assess the internal environment include the following: McKinsey 7-S: Basically this a process which is used by enterprises as a organizational
analysis to identify and monitor changes take place in internal situation of company. As
per this model there are 7 elements which must be there in an enterprise to perform well.
These seven elements include strategy, skills, structure, style, system and staff.
 Core competencies: Main focus of this model is on internal resources of enterprise in
order to identify what make an organisation unique from others (Li and Tan, 2013). This
include review of company's skills competencies, expertise and other qualities both as a
individual and as a team. Main feature of this approach is that it help manager in analyse
the specific features which makes an enterprise unique and different from its competitors.
TASK 3
P3 Evaluate the outcomes with help of Porter's five forces model
Porter's five forces analysis is a tool used by enterprise to the analyse competition of
business. This is divided into five forces that affect ability of an enterprise to serve its customers
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and to make profits. Any variation in these forces influence enterprise to re assess the market
place in order to gather important information. Managers of M&S can use this tool in order to
formulate better strategies for business and to earn more profits. Main five forces of this tool can
be better understood by following points:
Source 1: Porter’s five forces
 Threat of new entry: One of the main feature of retail market is that this consists high
enter barrier due to large amount of capital investments to entered into the market and to
achieve cost efficiency and economies of scale. This is very difficult for a new player to
achieve the same as M&S has. Focus of M&S on quality of its products make the
competition hard for new players for break down the competition of M&S. It is very
difficult for new players to influence customers of M&S towards their products. Along
with this, it would be difficult for new entrants to match the channel’s efficiency of
M&S. Along with this, company has various features such as quality of its products, and
customer based services which make it difficult for other firms to capture the market
segment of M&S.
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 Threat of substitute products: Firm requires to execute innovation on continuous basis
in order to keep its brand position positive in market and to remain unique to better
satisfy the needs of its customers. In clothing sector, it is easy to copy designs and get the
same frame in less price. The food business of M&S is already taken by big stores such
as ASDA, TESCO and Sainsbury which also offer same kind of food products. Private
label product line of M&S still offers some unique features to customers. M&S needs to
focus on its food line in order to get advantages over its rivals existing in the market.
Overall, in case of M&S, the threat of new entrants is very low as this requires huge
amount of capital to be invested to be a successful in chain stores. Lack of knowledge
about this sector serves as a barrier for new entrants to operate in this sector. Bargaining power of buyers: Bargaining power of customer's is relevant. As customers
has may alternatives to choose so switching cost of customer's is very low. In this
situation, M&S needs to build loyalty by offer products to its customers as per their needs
(Mithas and Lucas, 2010). Company face a vulnerable shift in customer's perception in
United Kingdom. Rivals of M&S are also focusing to create strong relationship and in
this case company require to protect its turf. Due to uncertain income of individuals they
shop around more. Bargaining power of suppliers: In early times, main suppliers of M&S were British but
some competitive pressures influence firm to reduce the prices to weakening the
supplier's power. Focus of M&S on private label gives power to enterprise over external
suppliers. Along with this cost of switching supply of enterprise is very low.
 Intensity of competitive rivalry: Competition in retail sector is very string from other
supermarkets in clothing, home products, food products and fashion products. The
competition is rising on continuous basis on online where users like to choose the product
they want to but which reduce costs as compare to in store shopping (Montgomery,
2011). M&S is able to develop its online sales which increase the percentage of sales at a
fast speed. At present company is benefiting from to loyalty program. Strategy of low
cost results in decline the sales of its clothing business. Further M&S announced different
plans to open new stores for its food products. Competition in retail sector is very intense
and firms do various efforts to diversify its business operations in other areas.
Competition for M&S is very vulnerable as firm not only deals in food products buts also
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sale various household items. Due to this company faces competition form both
supermarkets such as ASDA, TESCO and Sainsbury.
TASK 4
P4 Application of various theories, models and concepts to interpret strategic planning for Marks
and Spencer
For formulate a strategic plan it is very essential for managers of M&S to first identify
and examine the factors exist in business environment as all these largely affect business
performance (Scholes, 2015). Before formulate and finalise the strategic plan it is very essential
for managers to have detailed information about the following: Company overview: M&S comes into existence in 1894 and employ more than 65000
employees for running its more than 400 stores. In 2017, company got the place of largest
clothing retailer with a market share of 11.1%. food sales of firm accounted for approx
48% with market share of 4.3%. international business of firm accounted for 7.1% and
increased its stores to 220. Analysis of marketing mix: Strategies formulated by enterprise contribute a lot in
success of enterprise. It is very essential for managers of M&S to better understand all
elements include in concept of market mix and then do efforts to formulate better
strategic plan so enterprise can achieve its end goals and objectives in a better way
(Smith, Mills and Dion, 2012). All this help organisation in maintain the quality of its
products and capture a larger market share. One of the main benefit of this is that it guide
manager in add specific features in product and set right price for product. Further, this
guide firm to use effective promotional channels to attract more number of customers
towards firm's offering. All this help company in capture a large market share and earn
huge amount of profits.
 STP approach: This is one of the effective approach which can be used by M&S to
formulate a effective plan. Under this enterprise first segment the whole population in
smaller groups of individuals who share same needs, interests, income and interests.
After that firm analyse growth of every segment and then choose the most attractive
segment.
Concept of strategic planning is used by manager to set sequence of steps of company's
actions or to set priorities. All this help enterprise in build its positive brand image in market. It
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is very essential that needs of stakeholders and employees should be consider by manager during
formulation of strategic plan (Wang and Verma, 2012). Overall this help enterprise in various
advantages over its rivals. Certain key concepts which can be use managers of M&S during
process of strategic process scan be better understood by following points: Determine position: Before develop and formulate a strategy it is very essential for
managers to first analyse the current market position of company. This can be done by
managers of M&S with help of situational analysis. With this, company can collect more
information about its weak areas. Define objectives and end goals of company: It is very essential for managers to set final
goals and objectives company want to achieve. This end goals should be related with
final mission and vision of company. Situational analysis: This analysis can be done by managers of M&S in order to identify
the elements exist in business environment and impact of those factors on business
actions. With help of this managers can formulate a better strategy for business
activities.' Allocation of resources: Implementation of every business activity require some king of
resources such as financial, social, human resource and many more (Verbeke, 2013). It is
very essential that enterprise should have adequate amount of resources so company can
execute its activities in an effective way. Develop strategy: It is very essential that an effective strategy must be formulate by
managers of firm as this help in provide number of advantages to enterprise (Teece,
2010). In order to capture its market share and to improve business performance strategy
of product development can be used by managers of M&S.
 Implementation and monitor: Manager communicate the develop strategy with all
employees and than do all efforts to achieve effective implementation (Spender, 2014).
Monitor of business activities takes place after implementation in order to achieve set
standards and goals.
CONCLUSION
From the above information, it can be concluded that number of elements and factors are
there which exist in business environment and largely affect the business operation of a firm like
M&S. In order to compete with all these elements it is very essential for manager to first identify
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these and examine the same to formulate better strategies and plans for business. Manager of
M&S can use a approach or tool called Porter's five force analysis in order to execute well in
industry and to make more profits then its competitors. Different tools are there which can be
used by firms to examine the impact of macro environment on business activities. Further,
managers of M&S can use various methods to analyse the internal capabilities of company.
Along with this, firm can apply various tools, methods and concepts, to formulate plans for
business so firm can better achieve its set goals and objectives.
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