Business Strategy Report: M&S Macro Environment and Strategy

This report provides a comprehensive analysis of the business strategy of Marks & Spencer (M&S), a British multinational retailer. It begins with an introduction to business strategy and its importance in guiding business operations. The report then delves into the macro-environment of M&S, utilizing the PESTLE and SWOT frameworks to examine political, economic, social, technological, environmental, and legal factors. It analyzes how these factors impact M&S's decision-making. The report further explores M&S's internal environment and capabilities using VRIO analysis, assessing its strengths and weaknesses. Additionally, it applies Porter's five forces model to evaluate the competitive forces within the industry and suggests strategies to improve M&S's competitive edge. The report concludes with an overview of the key findings and recommendations for M&S's strategic direction, supported by references to relevant academic sources.

Business Strategy

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Frameworks to examine macro environment of organisation................................................1
M1 Analysis of macro environment to inform strategic management decision..........................3
D1 Application of environmental and competitive analysis........................................................3
TASK 2............................................................................................................................................4
P2 Analyse internal environment and capabilities of entity........................................................4
M2 Examine the internal environment to assess strengths a nd weaknesses............................5
TASK 3............................................................................................................................................5
P3 Porter's five forces model to evaluate competitive forces......................................................5
M3 Appropriate strategies to improve competitive edge............................................................6
D1 Interpret information to determine valid strategic direction..................................................6
TASK 4............................................................................................................................................6
P4 Application of concepts, theories and models........................................................................6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy refers the action plan follow by entity to execute all its commercial
activities and to achieve its set business objective. One of the main benefit of this is that it guide
manager and employees to work in a specific manner which help ensure effective completion of
business operations (Ackermann and Audretsch, 2013). This provide a map to management to
perform all business operations. Various factors exist in business environment affect the actions
and decision taken by firm to achieve its end goal so it is very essential for manager to identify
and examine the various factors exist in environment for formulate better and effective strategy
for organisation (Auzair, 2011). This help manager in get a control over all activities and this
save time and cost of entity. M&S, a British multinational retailer that deal in various types of
products such as food products, home products and clothing is taken under this report for study.
Major factors of macro environment and its impact on organisation is all mentioned in this
report. Further, internal capabilities of Vodafone is also described in this. Application of Porter's
five forces model for examine the industry and strategic plan for entity is all discussed in this.
TASK 1
P1 Frameworks to examine macro environment of organisation
Macro environment: This refers to a mix of various factors that affect the business
decision and working style of an entity. Macro environment is also known as external
environment in which various elements such as political, legal, technological, social and
economic factors exist. Identify and examine all these element is very essential for M&S as this
affect the decision taken by entity (Bharadwaj and et. al., 2013). One of the main benefit of this
analysis is that it help manager in formulate better and effective strategy that support business
entity in attain its set goals and objectives. M&S (Marks & Spencer) operate on international
level and study of macro environment is very essential for entity to maintain its position in
market. For examine macro environment, various tools and techniques are there which can be
use by M&S. PESTLE AND SWOT are the two major tools that help in analyse external
environment and at the same time highlight strengths and weakness of entity. Framework known
as PESTLE, can be understood by the points given below:
 Political: Government set rules and regulation for every enterprise to abide by such as
planning for identify hazard, assessment and control of risk and many more (Grover and
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Kohli, 2013). When entity do not abide such rules then it results in legal action. M&S did
not follow the British Standards as entity were charged for neglect safety and health
regulations.
 Economic: Due to uncertain economic conditions, individuals does not have enough
financial resources to spend on luxury items such as food and luxury items. This largely
affect the sales of products offer by Marks & Spencer and due to this, firm closed number
of its stores.
 Social: This factor consists the attitudes, behaviour and tastes of individuals of society.
When a business entity analyse these factors and respond accordingly then it help in
create and maintain a positive image in market. One of the main feature of M&S is that is
that it appeal to various market in terms of demographics and social class and this largely
affect the way entity respond to the social changes. M&S is actively involve to fulfil the
needs of individuals and this attract large number of customers towards its product.
 Technological: Technology is known as one of the vital component of retail market. It is
very essential for firm to manage all their brands in effective manner (Kalyani and Sahoo,
2011). It is very important that position of brand should be communicated to customers
on continuous basis. Every enterprise spend large amount of financial resources on
promotional activities for their brand awareness and to build loyalty. It is very essential
for M&S to use updated technology for manufacture its products as this help in fulfil
requirements of customers.
 Environment: Safety of environment is known as one of the most essential element that
require to consider by firm before undertake production process. Environment friendly
process is adopt by M&S to maintain the safety of environment and this support firm in
attract large number of customers towards its product.
 Legal: Government of every nation introduce various rules and regulations and every
business firm remain responsible to adhere those rules and regulations (Köseoglu and et.
al., 2013). Firms who follow the rule get support from government.
All these are the main element of macro environment that require to be consider by M&S in
order to work in an effective manner and to maintain its market share at workplace. Further,
there is another tool called SWOT analysis that use by firm to identify its strengths, weakness,
opportunities and threats.
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Strengths: Various type of products and services are offer by M&S as per the specific
requirements of customers and this is known as one of the biggest strength of firm. Involvement
of firm in development activities of society increase goodwill of entity (Oestreicher-Singer and
Zalmanson, 2012). Company encourage collection of feedback and opinions from customers
which help manager in identify the areas of improvement.
Weakness: Financial position of business entity is not effective and this create problem in
expansion of business operations. Complex legal structure and policy increase complexity of
commercial activities.
Opportunities: Various emerging markets can be use by firm to increase this market share. Firm
can increase the sales of its product by use online marketing.
Threats: Large number of competitors exist in market is one of the biggest threat for entity. So
many fluctuation in exchange rate negatively affect the business activities of M&S and also
decrease its profit margins.
M1 Analysis of macro environment to inform strategic management decision
Concept of strategic management highlight mission, vision, objectives and goals of an
enterprise. One of the main benefit of this is that it provide direction to employees to perform
their roles and responsibilities in adequate manner. This help in deal with all major factors so
entity can achieve its desired outcome. For formulate better strategy, it is very essential for
manager of M&S to identify the factors exist in business environment. Effective strategy help
entity in deal with all elements in better manner.
D1 Application of environmental and competitive analysis
Identification and analysis of various factors exist in external and internal environment is very
essential for a business enterprise as this ensure long term survival of firm in market and at the
same time help in generate large amount of profits. In addition to this, this analyse make
manager inform about major strengths and weakness of firm which help in take better business
decision. For attract large number of customers, it is very essential for business organisation to
examine the price of products offer by its rivals and study of business environment help in
identify the same.
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TASK 2
P2 Analyse internal environment and capabilities of entity
Examine the elements exist in macro business environment is very essential for a business
enterprise as this help in formulate better strategies but undertake analysis of internal
environment is also very important for a business organisation as this is collect information about
strengths, weakness, opportunities and threats of entity. Strengths support manager in take better
business decision which help in attain set goals and objectives. Workers working in enterprise
play a big role in success and growth of company so proper direction should be offer to them so
they can work effectively (Scholes, 2015). VRIO analysis can be use by the manages of M&S to
examine inner ability and to take decision accordingly. Internal comparison of entity with its
rival provide various ways to attain competitive benefit. This analysis can be understood by the
following table:
Basis Meaning Sainsbury Marks and Spencer
Valuable This is known as one
of the most essential
components as this
help firm in exploit
the opportunities exist
in business
environment. If yes
then these resources
are known as
valuable.
Skilled employees is
know as one of the
valuable resources of
entity. This help in
manage all business
operations in an
effective manner.
Adequate knowledge
and skills of staff
members ensure
effective execution of
business activities.
Rare This is use to reflect
the resources that are
few and are known as
rare. These type of
resources can be
utilise by only some
specific enterprises.
These type of
resources are use by
Sainsbury due to
ineffective
promotional activities.
Effective workforce
support entity in
utilise rare resources
in effective manner.
Imitate This means copy Products and services Resources use by
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something which
contribute in success
of organisation.
offer by Sainsbury are
of same nature.
M&S are not easy to
intimate.
Organised All resources,
policies, system and
many more are
require to be organise
as this help in
manufacture featured
products and at the
same time provide
competitive benefit to
entity.
Market growth and
share of Sainsbury is
good but due to
unorganised resources
firm is fail to get
competitive benefit.
Appropriate
management and
working policy is use
by M&S which
provide competitive
benefit to
organisation.
M2 Examine the internal environment to assess strengths a nd weaknesses
Different type of products and services are offer by M&S which help in generate large amount of
and this also provide competitive benefit to entity. Firm use internet to promote its products and
to make large number of customers inform about its offerings. For enhance efficiency it is very
essential for entity to ensure optimum utilisation of all funds and resources. This provide an
opportunity to firm to offer quality products to its customers at affordable prices. Overall internal
analysis help in reveal strengths of firms which help in take better business decision.
TASK 3
P3 Porter's five forces model to evaluate competitive forces
Porter’s five force model is classified into five parts which are as follows:
 Competitive rivalry: In this aspect features and strengths of rivals of entity is examined.
Company identify the number of its competitors operate in market.
 Supplier power: This aspect highlight the power remain in the hand of suppliers of firm.
If firm buy raw material from limited suppliers then suppliers enjoy a power of charge
high prices for its products and vice versa.
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 Buyer power: This indicate the power that rely in hand of final customers of product. if
same type of product is offer by large number of firms that it give a power to buyer to
buy the product from any place. But if company offer specific product then it decrease
the buyer of buyers as they does not have the option to buy it form any other place.
 Threat of substitute: If the product in which a company deal have substitutes available in
the market then it serve as a threat for business entity and lack of substitute does not
serve as threat for business entity.
 Threat of new entry: When new players enter in the same industry in which firm deal
then it serve as big threat for business organisation as it decrease the changes of sale of its
product.
M3 Appropriate strategies to improve competitive edge
For get competitive benefit, it is very essential for entity to formulate and implement effective
strategy. Before formulate strategy, it is very essential for entity to determine its end goals and
objectives (Svee, Giannoulis and Zdravkovic, 2011). To achieve success, it is very significant
for entity to manufacture products as per the specific requirements of customers. For better
understand the market model called porter five force model can be use by M&S. All this boost
up the growth process of entity and provide various other long term benefits.
D1 Interpret information to determine valid strategic direction
To get competitive benefit, analysis of various elements exist in internal and external
environment is very important for a business enterprise. This make the enterprise able to deal
with the changes in an effective manner. This make the enterprise able about strengths and
weakness of company which support manager in take right business decision. In this way M&S
can maintain its position in market.
TASK 4
P4 Application of concepts, theories and models
In order to gain competition at marketplace, a company’s managers need to make
modifications in strategies and other part of organisational activities. For introducing changes in
this process, they should an effective plan first by taking under consideration various factors like
threats present at marketplace, opportunities and more. This would help in getting better outcome
of changes so that objectives of business can be achieved in a proper and desired manner. In
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addition to this, strategic plan build by managers support organisation and other people in
defining the set targets appropriately so that they can contribute their efforts accordingly.
Through this procedure, better and effective results can be estimated.
Strategic plan can be defined as a process through which employers can provide right and
proper direction to working staff. This plan is formulated by managers of association which
reflect the contribution of them in implementing modifications in positive a positive way. Along
with this, such type of plan is based on future demand and uncertainties which are required to be
estimated before occurrence so that impact of external factors can be determined as well as
reduced also. Therefore, it has concluded that without an effective plan of strategies, operational
activities of company cannot be performed in desired manner. This would sometime leads to
heavy loss in business also. There are various elements present at marketplace which needs to be
considered by management of association in order to get better and effective working of
employees.
In context with Marks & Spencer, this firm required to make modifications in products
and services in order to improve sale performance. For this process, management should make
effective strategic plan which provides a proper guidelines and direction to its staff for
contributing best efforts in generating more revenues (Aithal and Aithal, 2016). This would help
in earning more profit as well as expanding business in appropriate way. For this procedure,
managers are required to measure trends of marketplace and factors which impact on business
operation by using PESTLE and Value chain analysis.
Company Overview
The business of Marks and Spencer was established in 1894 in partnership. Its services
and highest range of products aid this company to expand its business in other locations as well.
At present it has 500 stores in UK and other countries where near about 60,000 number of
workers are working. The main reason behind success of this company is its unique strategies
which help in completing the demand of people on time. Along with this, its managers used to
make modifications in regular time of interval as per change in trends. All these process, aids this
firm in expanding business at international level as well. As per statistical point of view, M&S
has achieved the highest market share in previous year with 11% approx. In addition to this, sale
performance has also increased with a margin of 49%. Through this enhancement, market share
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of this association also increased by 4.3% with a turnover of 7.1%. Therefore, having good share
in market aid this firm to launch it new outlets having innovative services also.
Mission Statement
The main mission of M&S is to provide innovative products at marketplace having best
quality on affordable rates. This statement has defined that this firm concerns more on demand of
customers as well as quality of goods. For snatching competition from rivals at UK marketplace,
it delivers the high quality products as per need of customers. Along with this, it also concerns
more on health of people, therefore, provide organic food to them.
Vision Statement
Marks and Spencer wants to settle down a benchmark of their performance so that better
and appropriate quality products lead to deliver to target customers which facilitate effective and
suitable working.
Core Values
Every organisation has its own core values depend on business in which it deals on. These
ethical values facilitate the employees to work in positive and desired manner. Therefore,
business of Marks and Spencer has constituted various core values which show that this firm has
focused more on providing best qualitative products to customers as per their need. It includes
 Quality of products
 Delivering best service
 Creating innovation
 Building Trust
These processes stated that employers of this firm always focus on providing high customer
satisfaction. For this process, they used to formulate effective strategies of business operations.
Objectives
Marks and Spencer has various objectives in terms of gaining high achievement of
business. As per functions of departments, each division has set its objectives with common
purpose is to improve sales performance. Along with this, on the basis of changing trends,
managers of all sections are used to formulate new strategic plans in regular period of time.
Some main objectives of M&S are:-
 Employee orientation
 Want to snatch highest position in marketplace from competitors
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 Increase sales performance by 10% in clothing and food section
Action plan
The action plan of Marks and Spencer has signified that in order to get interest of customers
towards its product and services, this firm needs to make changes in working system in an
appropriate manner. For making this plan, managers are needed to use SMART technique
which can be described as: Specific: The specific task for managers of this firm is to make enhancement in sales of
clothing with at least 10%. Measurable: After understanding the objectives of future plan, managers are required to
measure the increment of sales. Since, at present specific task demands 10% increment
therefore, such process can be measurable. Attainable: This set target is easily achievable and attainable for employees of firm.
 Relevant: This target is based on enhancing the production of clothing section which
helps this company to give tough competition to rivals present at marketplace with same
products or services.
 Time bound: In order to generate better outcomes, the achievable target are needed to be
bounded in a proper limit of time.
CONCLUSION
From the above given information, it can be summarised that for attain set goals and
objectives and to ensure optimum utilisation of all business resources it is very essential for a
business entity to formulate a effective strategy. For all this undertake analysis of internal and
external environment is very essential for M&S. Study of business environment make the
manager aware about its strengths and weakness of firm which help in formulate a better
business plan. Value chain analysis make the entity able to utilise all its resources and this
provide competitive benefit to entity. Right tool should be use by firm to carry out study of
external environment. SWOT is there which can be use by manager of M&S to carry out internal
analysis. Porter’s five force can be use by firm to understand the market and its various forces. In
addition to this, large number of theories, models and concepts are there which can be use by
M&S for do strategic planning of entity.
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REFERENCES
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