Strategic Management Report: Marks and Spencer Company Analysis

This report presents a strategic management analysis of Marks and Spencer, a major British multinational retailer. It begins with an introduction to strategic management and an overview of the company's mission, vision, and objectives. The core of the report comprises analyses using Porter's Five Forces model, PESTEL analysis, and SWOT analysis to evaluate the company's competitive environment, internal and external factors. The report examines the competitive rivalry within the UK retail industry, the threat of new entrants, substitute products, and the bargaining power of suppliers and customers. The PESTEL analysis considers political, economic, social, technological, and environmental factors influencing Marks and Spencer. The SWOT analysis identifies the company's strengths, weaknesses, opportunities, and threats. The report concludes with key findings and recommendations based on the strategic analysis.

Strategic Management

Table of Contents
1.0 INTRODUCTION.....................................................................................................................1
2.0 MAIN BODY.............................................................................................................................1
2.1 Overview of the company................................................................................................1
2.2 Porter’s Five forces model................................................................................................2
2.3 PESTEL Analysis.............................................................................................................4
2.4 SWOT analysis.................................................................................................................6
3.0 Main Findings............................................................................................................................8
4.0 CONCLUSION..........................................................................................................................9
5.0 RECOMMENDATION...........................................................................................................10
REFERENCES..............................................................................................................................10

1.0 INTRODUCTION
Strategic management is basically associated with management of all available resources
of an organization in order to achieve its desired goals and objectives. Thus, Strategic
management is a vital process that involves setting of objectives, analyzing the current situation
of competitive environment along with evaluation of internal organization, its strategies, and
ensuring a effective management of all available resources to accomplish the set objectives and
desired goals (Ansoff and et. al., 2018). The orgnisation selected for assignment is Marks and
Spencer which is a well known major British multinational retailer having its main headquarter
in London, England, UK. The current assignment is based on analysis of strategic management
strategies of Marks and Spencer ad consists of evaluation of its mission, vision and objectives.
Further, to evaluate the complexity of the relationships between the organisation and its
competitive environment use of Porter’s Five forces model is made. Further, a discussion about
the internal and external environment of marks and Spencer is also there with the help of
PESTEL and SWOT analysis.
2.0 MAIN BODY
2.1 Overview of the company
Marks and Spencer has taken out as one of the most popular brand and top British Retailer
the main headquarter of which is situated at London, England, UK. Marks and Spencer basically
deals in selling cloths, food products and other home products that consists of Blazers,
Cardigans, Jeans, shirt, boots, sandals, casual shoes, home accessories, furniture, etc. through
more than 959 stores across the various locations of UK and many other reasons of world like
Turkey, Spain, France, Ireland, Hungary, Finland etc (Moutinho and Vargas-Sanchez, 2018).
The main mission, vision and objectives of Marks and Spencer consists of the mission statement
of Marks and Spencer that is based on key purpose to make inspirational quality accessible to
others through the depth and range of its products that consist of best quality product that are
superior than other competitors.
Beside this, the vision of Marks and Spencer is to make higher money for its shareholders
through improving its profit margins wherever possible. The main objectives of Marks and
Spencer consists of designing more appealing and innovating products for its customers products
along with selling theses products at prices that their customers are prepared to pay (Newburry,
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Deephouse and Gardberg, 2019). Further, the main focus of Marks and Spencer is on
strengthening its internal competencies and skills to come up with more better and superior
products and services that cater the needs of customers and fulfils their expectations along with
leading better competitive strength and business position in the external environment. Thus, the
main values of Marks and Spencer are based on quality, services, innovation, trust and
commitment in customers to achieve its set targets and desired objectives.
Use of various strategic management theory and tools are made by an organisation to
achieve its set targets and desired gaols in order to have better analysis of complexities of its
business environment along with internal strength and competencies (Hitt and Duane Ireland,
2017). A discussion and comparison between the various strategic management theories and
approaches that are used by Marks and Spencer to set a balance between its internal resources
and current environmental situation in order to achieve desired objectives are provided below:
2.2 Porter’s Five forces model
Michael Porter’s competitive forces model or model of competition support is used by an
orgnisation for analyzing its competitive environment. Every business industry comprises of
many organisations and firms that are dealing in somehow similar products and are close
substitutes of each other thus, this gives rises to competitions and trade war between them as
they are mainly targeting a common range of customers (Meyer, Neck and Meeks, 2017). Thus,
use of Porter’s Five force model is made by Marks and Spencer as it yield help and set a
framework for identifying and analysing the five main competitive forces that exists in
environment of organisation and shape the operations and resources of an organisation through
determining the weakness and strengths of an industry. The main elements of Porter’s Five
forces model in context of Marks and Spencer are explained below:
2.2.1. Threat of Competitive Rivalry
The retail industry of UK is fiercely competitive where a cut throat competition exists
between big retail market consists of huge brands like Tesco, Debenhams, Macy's, John Lewis
Partnership, Aldi UK, Asda, etc. Thus, a high level of competitive rivalry is faced by Marks and
Spencer that is not good for its productivity and profit margin (Newburry, Deephouse and
Gardberg, 2019). The main reason for high competitive rivalry consists of the fact that many
other companies like Next plc and other orgnisation had enter into its market with similar quality
goods along with affordable price and up-to-date fashion that has lead huge issues for Marks and
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spacer. To cope up with this threat of High competitive rivalry, Marks and Spencer need to focus
more on quality of its products as well as there process along with coming up with new and more
innovative and superior products and services.
2.2.2. Threat of new entrant
The retail industry of UK is having high entry barriers because of high capital investment
thus, the risk of new entrant is low for Marks and Spencer (Ansoff and et. al., 2018). It is
difficult for any new business organisation to enter the retail industry as it needed much more
Monterey and human resources (Carayannis, 2018). Further, it is difficult for any new entrant to
achieve the level of cost efficiencies and economies of scale that existing retailers like M&S had
already gained and achieved thus, the threats and risk form new entrant is low and minimal for
Marks and Spencer.
2.2.3. Threat of Substitute Products
This factor consists of those goods or services that can be used by a consumer in place of a
company's products or services thus, lead to threat of substitute products. A larger number of
orgnisation are there which are dealing in similar product line as of Marks and Spencer that lead
reduction in customers demand for that particular product because it offer a better option for
customers to switch to the alternatives. Thus, the threat of substitutes is relatively high for Marks
and Spencer that could only be managed through regular innovation and focusing more on
quality of products in order to attract larger number of customers for innovative and superior
products and services (Ethiraj, Gambardella and Helfat, 2018).
2.2.4. Bargaining power of suppliers
This threat depends on the number of suppliers and accessibility to them (Hanson and et.
al., 2016). The maximum number of suppliers of Marks and Spencer are British and are reliant
on M&S to sell there all their stock that they manufacture. Thus, the threat of barraging power of
suppliers is low in context of Marks and Spencer because of its concentrated purchase from
reliable manufacture and suppliers.
2.2.5. Bargaining power of customers
This factor represents the ability that customers are having and lead to drive prices lower
that is mainly dependent on the number of customers that are targeted by a company
(Baumgartner and Rauter, 2017). In case of Marks and Spencer, the bargaining power of
customer is high as they are price sensitivity and thus have the ability to force the hand of the
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retailer. It has been evaluated that the customers of Marks and Spencer are having very low
switching costs and has many available alternatives to switch for. Thus, a high risk of Bargaining
power of customers is faced by Marks and Spencer that could only be managed through meeting
expectation of customers in a superior way and through yielding maximum satisfaction to its
consumers in order to retain them for a longer period.
2.3 PESTEL Analysis
Use of this strategic management tool is made by an orgnisation to develop better
understanding about the main factors and forces of its external environment. Marks and Spencer
also adopt PESTEL analysis to have better evaluation of complexities present in its external
business environment so that betters strategic approach could be adopted on the basis of this
management tool and strategic theory (Hitt, Ireland and Hoskisson, 2016). The main comments
and forces comprise in PESTEL analysis are discussed below in context of external environment
of Marks and Spencer:
2.3.1. Political
It represents the attitude and behaviour of government towards business operation and
consists factors like trade policies and other restriction and control on business operations. The
political environment of UK is somewhat stable and yield many opportunities for Marks and
Spencer on grounds of rich historic values and fair means of trade practices (Marks and Spencer
PESTLE Analysis, 2019). But the resent issues of Brexit has negatively impacted the business
operations and productivity of Marks and Spencer as it resulted in the loss of numerous free trade
policies with European suppliers and target customers that resulted in a higher product cost for
end consumers that is hampered its productivity and sales. Beside this, it has been also seen that
many changes are made in the tax reforms and structure especially after G20 tax reform that
includes much stricter polices to prevent profit shifting culture mainly by MNC’s. Thus, tough
international tax standards created by G20 tax reforms is creating a negative impact and
challenge for Marks and Spencer strict tax reforms are not favourable for profits of this
orgnisation and required to pay a higher amount of tax to government which is enhancing cost of
operation of Marks and Spencer (Peppard and Ward, 2016).
2.3.2. Economic
These factors mainly based on overall growth rate and GDP of a nation that consists of
inflation ad deflation rate, bank rates, employment level, etc. The UK is having one of the most
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developed economies of world that yield many growth and expansion opportunity for Marks and
Spencer (Michael, Storey and Thomas, 2017). But due to Brexit and inter trade barriers a slow
down and recession is seen in economy of UK that affected the ability of Marks and Spencer to
give discounts as the company scrapped off the initial discount off, thus hampers and negatively
impacted the strategy of Marks and Spencer to attract larger number of customers. Beside this,
the current global pandemic, COVID-19 is also leading to a high level of instability in economy
of UK as sudden lockdown and other factors has lead to slow-down of economy has also affected
the buying capacity and demand of customers thus, leading threats for business operations and
profit margin of Marks and Spencer.
2.3.3. Social
This consists of factors that represent the socio-culture and resent trend of the market. The
society of UK is getting more inclined towards ready meals and cheap clothing industry has been
also increasingly caught upon the markets of UK with the changing trends in the market
(Carayannis, 2018). Thus, this factor is availing huge opportunity for Marks and Spencer to
enhance its viability and productivity.
2.3.4. Technological
This factor basically reflects the level of technical advancement and rate of innovation in
business environment. The technical environment of UK is rapidly growing and new technology
are keeps on coming to create an agile, faster and commercial technology function that would
result in growth for the businesses (Hanson and et. al., 2016). The resent trends seen in the
external environment of Marks and Spencer consists of self checkout technique and increasing
craze of online shopping. The self checkout technology has already adopted by Marks and
Spencer that lead to save money that is spent on cashiers, while simultaneously offering a faster
customers a checkout experience (Hanson and et. al., 2016). Thus, it could be evaluated that
regular technical advancement and trend of online shopping is offering enhanced growth
opportunity for marks and Spencer.
2.3.5. Environmental
The customers and government of UK had become more conservative and protective
towards environment (Michael, Storey and Thomas, 2017). Thus, all possible steps are also taken
by Marks and Spencer to reduce the negative impact on environment through limiting carbon
emission and using and providing eco-friendly products that attract larger number of customer
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for this organisations. Beside this, Marks and Spencer is also working on variety of areas like
removing trans fats from the food, reducing the use of energy etc, to ensure better implication
with conservation of environment and health of customers (Ethiraj, Gambardella and Helfat,
2017).
2.3.6. Legal
This aspect is mainly associated with the legal acts and provisions that are made by
government for betterment of employees and protection of customers from use of hazardous
product. Marks & Spencer conduct regular training sessions to ensure better skills and
competencies in employees in order to deal in healthy products and also update its strategies and
policies every single year in order to keep a balance and updated with the current laws and
legislations to meet and overcome the complexities of legal environment.
With respect to above discussion, a comparison could be made that the use of PESTEL
analysis is mainly associated with analysis and evaluation of external factors of environment that
impacts business operations and functions of an organisation (Peppard and Ward, 2016). On the
other hand, use of Porter’s five force as an strategic management theory is viable for Marks and
Spencer as it lead to better support to understand and evaluate the level of competition within the
industry in order to enhance its long-term profitability and viability through adopting suitable
strategic management strategy to cope up and overcame the threat of competition prevailing in
the business environment. Thus, it has been compared that PESTEL analysis is associated with
external business environment where as Porter’s five force model is related with level of
competition that prevailed in an industry and lead to impact on strategic polices and management
of an organisation.
2.4 SWOT analysis
Use of this theory is made by Marks and Spencer to have better evaluation of its internal
strengths and weakness along with getting better glimpse about the prevailing opportunity and
treats in the environment (Anyika, Ehie and Oghojafor, 2019). Thus, SWOT analysis facilitates
better interaction between internal factors and situation prevailing in the environment. The
SWOT analysis of Marks and Spencer is provided below with the help of following tables:
Strengths Weakness
 The greatest strength of Marks and
Spencer consists of its high recognition
 Bad publicity as non trendy stores is the
biggest weakness of Marks and Spencer
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of the brand and Market experience as
one of leading readier of UK (Ansoff
and et. al., 2018).
 Wide range of products along with
agreement with Popular designer
brands makes it more viable for Marks
and Spenser to attract and cater larger
number of customers (Ansoff and et.
al., 2018).
 Large number of stores and outlets
along with Global presence that consist
of its effective reach and assess to
various countries of world including
Turkey, Spain, France, Ireland,
Hungary, Finland etc, is also a strength
of Marks and Spencer that ensures
more convince to its customers and
enhanced productivity and viability to
Marks and Spencer.
that hamper its sales and global
presence.
 High operating cost because of non-
manual operations is also a weakness of
Marks and Spencer (Moutinho and
Vargas-Sanchez, 2018).
Opportunity Threats
 Enhanced opportunity to expand at
global through leading better
innovation and creativity in its product
level that consists many big economies
like Brazil & Poland.
 Implication of online technology and
having better use of digital and social
media facilitates a better way to interact
and cater larger number of customers
both at local and international level
(Newburry, Deephouse and Gardberg,
 High level of competition in retail
industry of UK is the biggest threat for
Marks and Spencer.
 The recent issue of Brexit has lead to a
slowdown in economy of UK that is
hampering the business operations and
productivity of Marks and Spencer lead
to strict trade barriers.
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2019).
Thus, with respect to above discussion about SWOT analysis of Marks and Spencer a
comparison can be made that SWOT analysis is more associated with internal strengths and
weakness where as PESTEL analysis emphasis only on the factors that present in the external
environment (Hitt and Duane, 2017). SWOT analysis consists discussion about internal strengths
and weakness along with prevailing opportunity and threats while PESTEL consist main forces
of external environment that consists of Political, economical, social, technological,
environmental and legal factors.
3.0 Main Findings
The findings of current assignment is based on evaluation of main strategic management
practises and approach that consist of porter’s five force, PESTEL analysis and SWOT analysis.
It has been found out that high level competitive rivalry is faced by Marks and Spencer due to
presence of large number of big retailers that consist of Tesco, Debenhams, Macy's, John Lewis
Partnership, etc. For overcoming this threat of high level of competition, Marks and Spencer
should come up with new and more innovative products and services that are better and superior
to its competitors. Thus, having better understanding of customer needs and fulfilling them
through more exclusive products is a suitable solution that could be adopt by Marks and Spencer
to get upper hand on its present competitors. Beside this, it has been also observed that the risk of
new entrant is low for Marks and Spencer as it takes huge capital investment to enter retail
industry of UK that is not viable for all new firms (Meyer, Neck and Meeks, 2017). Further,
threat of substitutes is also relatively high for Marks and Spencer due to viability of close
substitutes product along with high Bargaining power of customers due to availability of many
options. To overcome this threat of high Bargaining power of customers and close substitute,
Marks and Spencer should focus on creating new and more innovative change in product
portfolio that must be superior and exclusive in order to attract and cater larger number of
customers and it also retain them for longer period through fulfilling their expectations.
On the basis of PESTEL analysis of Marks and Spencer it has been find out that the political
and economic environment of UK is quite unstable due to Brexit issues and COVID- 19 that lead
to a stricter trade barriers and economic recessions because of which many issues are faced by
Marks and Spencer that negatively impacts its business operations and productivity also
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diminishing its profit margin and international growth. Further, it has been also observed that an
inclined shift towards ready meals and food item is seen in markets of UK that offer higher
growth opportunity for Marks and Spencer along (Peppard and Ward, 2016). Further,
advancements in technology also lead to a more cost effective and faster way of performing
business operations in order to attract and cater larger number of customers (PESTLE Analysis
Of Marks And Spencer, 2019). Beside this, the environmental factors have led to check on
carbon emission along with use of eco-friendly products to have improved image in eyes of
customers. At last, it has been found out from PESTEL analysis that regular modification and
updates are made by Marks and Spencer to keep a balance with complex legal acts and
provisions (Newburry, Deephouse and Gardberg, 2019).
Beside this, on the basis of SWOT analysis it could be evaluated that Brand recognition and
wide range of products are the biggest strength of Marks and Spencer where as Bad publicity as
non trendy stores along with High operating cost are its main weakness (Carayannis, 2018).
Further, it has been found out that Better expansion opportunity and implication on online
technology and services are leading opportunity for Marks and spacer while high level of
competition and slowdown of economy of UK due to Brexit are the current threats for Marks and
Spencer.
4.0 CONCLUSION
With respect to above assignment it can be concluded that strategic management is
associated with setting objectives for an orgnisation along with use of various approaches and
theories to achieve these objectives in a better way through proper use of resources. Further, it
has been compared that use of Porter’s Five force model is made to evaluate the existing level of
competition in a particular industry. On the other hand, PESTEL analysis lead to better
evaluation and analysis of external factors that consist of political, economical, social,
technological, environmental and legal factors. At last, it could be summarised that use of SWOT
analysis is made to get better glimpse in the internal strengths and weakness of an orgnisation
along with current opportunity and threats.
5.0 RECOMMENDATION
To achieve the objective of catering the needs of customers and fulfils their expectations
along with leading better competitive strength and business position in the external environment
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it is recommended for Marks and Spencer to make use of more advance technology and online
channels to provide better quality products along with leading more convinces and ease in order
to attract larger target market. Further, more emphasis of developing eco-friendly and healthy
products through removing trans fats from the food and reducing the use of energy is also
recommended along with reduction in its prices to get superiority and better business position in
its competitive business environment.
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Ethiraj, S. K., Gambardella, A. and Helfat, C.E., 2018. Theory in strategic management.
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management research. The Blackwell handbook of entrepreneurship, pp.45-63.
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