Business Strategy Analysis Report: M&S, Macro and Internal Factors

This report provides a comprehensive analysis of Marks & Spencer's (M&S) business strategy. It begins with an introduction to business strategy, highlighting its role in achieving organizational goals and objectives. The report then applies various analytical frameworks to understand M&S's macro environment, including stakeholder analysis, PESTLE analysis, Ansoff matrix, and SWOT analysis. It explores how these frameworks inform strategic management decisions. Furthermore, the report delves into M&S's internal environment and capabilities, discussing strategic capabilities, the resource-based view, and the McKinsey model. The application of Porter's five forces model is also examined to assess the competitive landscape. Finally, the report applies a range of theories, concepts, and models to interpret and devise strategic planning, concluding with recommendations for M&S's future strategic direction. The report is structured to meet the requirements of a BTEC Level 5 Higher National Diploma in Business, Unit 32: Business Strategy assignment.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Apply impact and influence of macro environment on given organisation and its strategies3
TASK 2............................................................................................................................................8
P2 Analyse internal environment and capabilities of given organisation....................................8
TASK 3............................................................................................................................................9
P3 Apply porter’s five forces model............................................................................................9
TASK 4..........................................................................................................................................11
P4 Apply range of theories, concept and model interpret and devise strategic planning..........11
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business strategy defines as an analytical term that reflects the set of decisions and tactics
that is helpful for manager to attain the goals and objectives. It refers to an outline plan that is
implemented by the firm for gaining competitive advantage in the marketplace (Chen and
Keung, 2019). This project is based on M & S that is one of the largest British multinational
companies in UK that deals in manufacturing of cloth, food and home ware items. It includes the
impact of macro environment on business enterprise. Further it involves several analytical
frameworks that helps in acknowledge the macro environment effectively. It also explains
internal capabilities and environment and also includes the porter’s five forces model that helps
the firm to gain high competitive advantage so that it can be sustain for longer period of time. At
last it involves models, theories to effectively understand the strategic directions of the
organisation.
TASK 1
P1 Apply impact and influence of macro environment on given organisation and its strategies
Vision- The major vision of M&S is to become largest multinational retailers by fulfilling the
global standards by matching their business performance.
Mission- Main mission of the M&S is to offer the high quality products to their customers that
will attract the people attention. This helps in enhancing the customer base and enhancing high
profits.
Objectives- The major objective of M&S is to achieve the high market position in clothing and
food sector. This will developed to become the global brand that helps in competing with the
rival firms (Delimpasis and Kitsios, 2018).
Strategy refers to a plan that is designed to attain the long term objectives and aim of the
company. It reflects the direction that is follow by the organisation so that high profits and
revenues can be gained in their future terms. By developing the effective business strategy,
business enterprise can able to decide what is profitable so that implementing that strategy so
that beating the competitors within market can easy. In this achieving the sales and profits by

following the strategies helps in providing the correct direction so that customers values the
brand. By implementing the effective strategy M&S can attain the gal of national and
international market.
Different strategic planning techniques
 Business analysis- For examine the business and their operations in an effective and
efficient way organisation that is M&S can recognize their capabilities as strength and
weaknesses in appropriate manner so that right decisions can be taken out and positive
results can be gained.
 Benchmarking- In includes the comparison of several metrics with rival firms within
business industry. In this M&S can able to analyse the market position by comparing
their market competitors with their overall performance that helps in implementing the
suitable business strategy for gaining high profits and revenues (Desai, 2019).
Various analytical frameworks for macro environment
Stakeholder analysis
It refers to the procedure of examining the people who directly or indirectly affect the
business and their performance before starting of any task. In terms of M&S this analysis helps
in understand the interest and power of several stakeholders in the company project. it involves
basic three steps that are shown below:
 The first step is to determine the several stakeholders by preparing the list of the
stakeholders who impact the company and their projects. In context of M&S manager can
examine the key stakeholders that are government, shareholders, employees, customers,
suppliers etc.
 Secondly, after identifying the several stakeholders organisation can prioritize them as
per their interest and power so that task can be done in appropriate manner. this can be
elaborated as :
 High power, high interest- This type of stakeholders are very beneficial for M&S and
company can highly focus on these type of stakeholders for enhancing the business
performance. These are mainly shareholders.

 High power, Low interests- These stakeholders are containing high power on
organisation working rather than interest in project within M&S.
 Low power, High interest- This type of stakeholders are involve in the project so that
problems and issues can be removed effectively and efficiently (Bolisani and Bratianu,
2017).
 Low power, Low interest- These stakeholders are not containing high power and
interest in the working and activities of the company.
 At last M&S can communicate with all their stakeholders as per their interest and power
so that objectives can be attained in effective way.
PESTLE Analysis
Pestle analysis refers to that framework which helps in analyzing the key factors that can
influence the business enterprise externally. In case of M&S these external factors can be shown
below:
 Political factor- It refers to that factor which involves tax regulations, government
stability, tariff rates and many more. In this UK is highly stable due to which their tax
regulation on business is also less that will helps M&S to operate their organisation in
successful manner (Haines, 2016).
 Economical factor- This involves purchasing power of people, GDP, inflation rate etc.
that will affect the economy of country. In this growth rate is high in UK due to this
people earning are also good that helps in spending in purchasing the goods and service.
Due to this customers are bought M&S offerings effectively that will enhance profits.
High inflation rate affect the company overall profit margin that reflects negative in terms
of organisation.
 Social factor- In this attitude, behavior, values, perception of people is included. In UK
people are very modern and open minded that will affect the M&S positively as they
offer the quality products their customers that will maximize the profits and revenues.
 Technological factor- Country like UK are majorly focus on advanced technology where
people are using technology in their regular day to day activities. In this M&S can highly
emphasis on improving their overall technology in machineries, distribution process as
per the market demands so that company can effectively fulfill the customer’s demands.

 Legal factor- This factor involves the laws and regulations that was imposed by the
government for the welfare of customers and employees that will beneficial for business
in their sustainability. in this manager of M&S can follows all the legal regulations so
that they cannot pay high penalties in law disobedience.
 Environmental factor- In this M&S can integrate their manufacturing process to the
environment safety so that it will not harm the environment in drastic way. This will
maximize the sales and profits of the company.
Ansoff Matrix
Ansoff matrix refers to strategic planning that helps company to maximize their future
growth. It includes four strategy in which firm selects the appropriate one. In case of M&S, this
strategy helps in growth that can be shown below:
 Product development- In this strategy M&S can focus in introducing the new products
within current market for attracting the new customers and retaining the old ones so that
firm’s profits will increase. It will also helps in gaining competitive advantage and
revenues (Humphrey, Gillson and Ziervogel, 2020).
 Market development- This growth strategy related to entry into new market with
existing products by enhancing the large market position and attracting more new
customers. Adopting this strategy by M&S can enhance their sales and profit margin.
 Market penetration- In this organisation can tries to attracts the large customers base
within their exiting market and current products by provide some benefits,
complementary schemes, offers, discounts etc. to their buyers so that they will maximize
their market share and also increase their revenues.
 Diversification- This strategy in ansoff matrix is more risky that other types of strategy
because in their firm will enter into the new market with new offering. If this scheme is
fail than firm will face the major loss on the other hand if it is successful than it will
maximize the market share, position and profits of the overall M&S.
By analyzing above strategy it is evaluated that M&S can adopt market development schemes in
which they provide their customer’s offers, discounts and other complementary services to their
customers within existing market so that high profits can be earned. It enhances the company

revenues and sales without investing the financial resources in introducing new products and
services.
SWOT analysis
It refers to an effective application that helps M&S to examine their strength,
weaknesses, opportunities and threats appropriately so that they can adopts the best strategy for
future success by reducing the threats and weaknesses within company. The SWOT analysis of
M&S can show below:
Strength Weaknesses
 The major strength of M&S is their
high brand recognition and their global
presence that will attracts the millions
of customers globally.
 The major weakness of the company is
that they do not offer the fashionable
products for adults customers in their
clothing sector (Kunc and O’brien,
2019).
Opportunities Threats
 M&S major opportunity is their global
presence that helps the customers to get
the products and services effectively.
 High competition within marketplace is
the major threat for the M&S and it
also affects it sustainability and profit
earning.
Critically analyse macro environment to determine and inform strategic management
decisions
To above analysis on macro environment it is analyse that M&S can follow the use of
PESTLE, Ansoff, SWOT , stakeholder matrix to examine and taking information so that best
strategic decision can be taken out. In this adopting all their tools and models helps in analyzing
the positive and negative factor which affects the operations of business enterprise so that best
strategy can be select for future growth. All this helps in enhance in the profits and revenues so
that company will sustain to a longer period of time.

TASK 2
P2 Analyse internal environment and capabilities of given organisation
Strategic capabilities and key components
Strategic capability refers to a process in this several strategies can be designed and
implemented so that firm will gain high profits against the competitors. It has six components
that are key goals, purpose, action, plan, tools and analysis, values and vision. All these
components can be executed for gaining the profits in effective way.
Resource based view strategy
It refers to a managerial framework that is adopted by the organisation in examine the
resources that can be useful for gaining the competitive advantage. In terms with that strategy
there are two types of resources which are tangible that involves machinery, building, land,
capital etc. and intangible that does not have physical presence such as trademark, patent etc. but
essential for M&S success and brand image (Lloret, 2016).
McKinsey model
It refers to that tool that helps in designing the company by using seven key internal
components. These determinants are effective for M&S in attaining goals and objectives that can
be elaborated below:
 Strategy- It refers to that which helps the M&S in achieving the goals and beating rivals
in appropriate way. If company has not had effective strategy than they face the loss by
reducing customer base and profits.
 Structure- In this manager of M&S can devise the organisation by sharing information
effectively. If it is not structured appropriately than competitors can take the advantage of
attracting customers.
 System- It involves the day to day activities and related decision making of organisation.
In this if M&S can maintain proper system than employees can adopts the change
effectively.
 Skill- It includes competencies and capabilities of workers at the time of performing task
in M&S. As this helps in handling the complex situation effectively.

 Style- In this company is organized by top authority where employees can take the orders
to their superiors. In M&S manger adopts democratic style so that employees
involvements are also shown.
 Staff- It involves the number of working manpower within M&S and in what manner
they need training, hiring and motivation.
 Shared value- It includes norms and standards that are follow in M&S so that employees
can work effectively in proper manner.
Critically evaluate internal environment to assess strength and weaknesses of organisation
internal capabilities, structure and skill
In this M&S can adopts the use of McKinsey model for analyzing the internal capabilities
and strength. As this model is very effective because it helps in done the work systematically and
productively that helps in gaining competitive advantage. But at the same time this also contain
some weakness is it includes high cost and time due to this overall operating cost of firm will be
affected (Orji and et. al., 2017).
TASK 3
P3 Apply porter’s five forces model
Porter’s five forces model defines as a framework that is helpful to analyzing the
competition that was present within business industry. It also helpful in analyzing the future
results rather than only current situation. In context of M&S this framework can be shown
below:
 Bargaining power of suppliers- In business industry there are number of organisations
who deals in retail multinational sector sepecially in clothing and food sector. In this
power of suppliers related to bargaining are high. If other retail sector company pay high
price to their suppliers than suppliers cannot give materials to M&S on low price due to
this business enterprise may not earn high profit margin.
 Bargaining power of customers- In case of M&S bargaining power of customers are
high because there are number of competitors are present within market. If firm charge
more price on their goods to customers without providing satisfactory material that

buyers can shift their preference to other organisation. It is very essential to offer the
quality goods to their consumers.
 Threats of new entrants- This factor is containing less power in terms of M&S because
it is a leading multinational company that deals in global level. due to this it is very
difficult for new business to invest as much quantity to perform their business functions
effectively and gain high profits. This is because new company cannot sustain in front of
M&S. in this concerned company also lead with high customer base, market share and
position that will difficult for new one to beat this.
 Threats of substitutes- In context of M&S the threat of substitute’s products are
possibly low because there is no substitute for cloth and food. In this if the products of
the M&S are not good than customers hesitate to buy the goods.
 Rivalry of the firm- In case of M&S there are many rivals are present in the global
market like, ZARA, H&M etc. that will place major threat for the company in terms of
customers base, profits and revenues. Due to this organisation can set their prices on the
basis on competitive pricing strategy so that they will increase their customers and
profits.
Devise appropriate strategies to improve competitive edge and market position based on
outcomes
To the above analysis it is consider that evaluating all forces helps M&S in analyzing
their profits and sales within competitive marketplace. In this firm will majorly focus on
developing the new strategy for beating their competitors within market so that they can enhance
their customer base and market shares effectively (Tukdeo, 2016). To removing the high barding
of suppliers firm need to focus on signing the suppliers so that fix rate can do of required
material that are cost effective and not affect profit margin. To overcome the issue of
competitor’s enterprise will highly focus on offering quality products that will raise high profits
and growth.

TASK 4
P4 Apply range of theories, concept and model interpret and devise strategic planning
Porter's generic strategies: Porter's generic strategies are the ways of benefiting competitive
advantage. In other words it is the method of analysis and implementation of right strategies for
the organisation's growth. There are four ways of getting these strategies are follows:
 COST LEADERSHIP- This is the strategy in which Mark & Spencer can decrease the
price of their product so that company can earn more profit. Also firm can increase
market share by charging lower price, It will help in expand of the organisation (Van Der
Pijl, Lokitz and Solomon, 2016).
 DIFFERENTIATION- It involve the innovation of the product or manufacturing unique
product than your competitors. Mark & Spencer can adopt differentiation strategy to
build unique product. It will help in competition and earning more profit than other firms. COST FOCUS- This is the strategy which focuses on lowering the cost in comparison of
competitors, so that firm can earn more profit and create goof brand image with customer
retention. Mark & Spencer can focus on cost cutting and providing best product at
affordable price DIFFERENTIATION FOCUS- This involves the focus on singularity of the product or
offering unique product to their customers. Mark & Spencer should emphasis on
innovation with new ideas for the product development.
Bowman's strategic clock
This model is assisting a business to examine best strategy for their organization in order
to attain prominent position at marketplace in respect of their product or services. In this purpose
this strategy is elaborated as under:
Low price and low value added: Mark & Spencer is having proportionate costing for
their products and in the absence of product differentiation Mark & Spencer may loose their
customers (Wanjohi and et. al., 2019).

Low price: Within this aspect Mark & Spencer is required to establish them at cost
leader by keeping their prices low. Here Mark & Spencer is keeping their margin low but due to
high customer high profit is earned by the company.
Hybrid: This strategy is defined as mixture of low cost and product differentiation and
may be proven as one of the best strategy for the organisation.
Differentiation: Within this concept Mark & Spencer is focused on providing
differentiated products to their customer in order to enhance their customer base.
Focused differentiation: Under this strategy Mark & Spencer is focused on some class
of people so as to attain market prominence.
Risky high margins: Within this strategy Mark & Spencer is setting high prices for their
product in order to deal with risk of failure.
Monopoly pricing: Within this strategy Mark & Spencer can set price for product in the
manner they want to for those products that are exclusively manufactured by Mark & Spencer.
Loss of market share: Under this position due to lesser market share this is considered
as the worst market situation for Mark & Spencer.
In the context of Mark & Spencer differentiation strategy can be used by Mark & Spencer
in order to attain huge portion of market and to become market leader as well. This strategy is
helpful for them so as to attain high profits and to enhance their market capture as well.
Strategic Management Plan
Strategic Planning: Strategic management plan is defined as inclusion of marketing
strategic tactics that can be used by organisation for undertaking decision making process and to
utilize their resources to fuller manner in order to attain marketing objectives within stipulated
time.
Company overview: