Strategic Report: Analyzing M&S's External Environment and Strategy

This report provides a strategic analysis of Marks & Spencer (M&S), a major international retail company. The report begins with an introduction to strategic management and an overview of M&S. Task 1 involves a PESTEL analysis to assess external factors impacting M&S, along with a Porter's Five Forces analysis to evaluate the competitive landscape. Task 2 examines M&S's mission and vision statements, strategic capabilities, and the VRIO model to determine competitive advantages, followed by an analysis of how the company creates, delivers, and captures value using the Value Chain Model. Task 3 discusses potential strategies M&S could employ to defend its core business. The report concludes with recommendations based on the analysis.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Regulate the external factors..................................................................................................3
TASK 2............................................................................................................................................7
Mission and vision statement of chosen organization............................................................7
Organization strategic capabilities & competences................................................................7
VRIO Model...........................................................................................................................7
How organisation develop, delivers as well as capture value................................................9
Value Chain Model................................................................................................................9
TASK 3..........................................................................................................................................11
Possible plans followed by company...................................................................................11
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
In present scenario of management, strategic management is described as a process in which
regular assessing, monitoring as well as controlling the need of individual for accomplishing
objective within given period of time. It is necessary for manager and leader to identify the
present situation of business organization. In addition to this, Strategic management provides
direction to the company for accomplishing objective in short span of time. This report is carried
upon Mark and Spencer company which is one of the international retail organization which deal
in superior quality products such as food, clothing and so on in order to satisfy their customer in
an effective manner. The founder of company is Michael Marks in the year of 1884 which is
situated in London. Along with this, PESTLE analysis is used for assessing the external factor
which affect the productivity of company. Also use Porter force model for assessing the
competitive strategy that is adopted by its rival firm. Beside from this, there are different strategy
and competence which is going to be mentioned below:
TASK 1
Regulate the external factors
PESTEL ANALYSIS
PESTEL Analysis is framework used by organization and marketers to identify track and
monitor the macro environmental factors which affect the productivity, growth, development of
company. With help of this framework, enterprise is able to carry out their business activities in
proper manner. In context to Marks & Spencer, firm use this analysis so that new opportunities
in the market can be examined and strategies as well as tactics are implemented to run the
business smoothly. Main benefit of PESTEL is that it provides clear picture of the organization
and helps to determine the progress and performance level in appropriate manner. Also,
decisions making can be done in proper manner when this tool is adopted.
Thus, a proper market research is to be done when going with PESTEL. It includes several
elements which are mentioned below-

Political Factor- These are those factors in which government is involved at wider level. These
factors comprise of tax policy, trade, tariff and non- tariff etc. Rules and regulations are to be
considered important in political factors. In relation with Marks & Spencer, they work with
ethics and follow every law and legislations which are govern by government. This helps in
maintaining the structure of management in the entities in proper manner (Smit, 2016).
Economic Factors- Further comes the economic factors in which exchange rate, employment
rate, inflation & deflation rates are involved. These are not controllable and affect the growth of
business at wider level. With help of these factors a brief knowledge about globalization is
known which can be used by firm for development at international level. In context to Marks &
Spencer, they maintain a positive relationship with government which assists them in running the
business activities smoothly and effectively. Preventive measures is to be taken when such
variable affect the operations of business (Alexandros, 2016).
Social Factors- Social factors are those which include religion, culture, income, gender, standard
of living etc. Such type of factors helps in targeting the market and customers easily. In relation
with Marks & Spencer, market team of the company properly examine these variables or say
factors and then decisions are taken. This assists in using optimum use of resources and
providing right product to right people. By using these, firm is able to identify need and
requirement of the people.
Technological Factors- These types of factors include advance use of AI, technology tools and
equipment’s etc. Every organization is expanding its business with help of technology and
earning profit. Using of technology has reduced the importance of manpower worldwide. Marks
& Spencer use these factors for their retailing machines and rest of the work is maintained and
managed by manpower only.
Environmental Factors- Time is changing and corporate world is expanding at rapid level.
Environmental factors include weather, climate, temperature, pollution etc. In context to Marks
& Spencer, they identify these factors carefully so that product of the company is used by end
user in appropriate manner. This also leads to sustainability and corporate social responsibility
when these variables are focused by the firm.

Legal Factors- Legal factors are also essential in business and with help of which globalization
can accessed easily. These include company law, commitment, antitrust law, etc. It is necessary
for entities to be aware about legislations and law which helps them in knowing the difference
between right and wrong. In relation with Marks &Spencer, legal department or team of the
organization remains active whenever the situations or events arises which are related to these
factors. With help of legal factors, organization protect its business from being getting fraud and
misused by third party. Credentials are essential and legal team maintain and manage that
information so that data does not get lost or in wrong hand (Lincoln, 2018).
After analyzing the above factor it is stated that to expand business and successfully run the
functions and operations it is important to adopt the PESTEL in appropriate manner. By
examining these elements hurdles and obstacles in the business can be solved effectively. This
framework is time consuming and require expertise in the process so that results are achieved
properly without any errors and conflicts (Smit, 2016).
PORTER ANALYSIS
It is important to analyze the current condition of the business organization for achieving
competitive benefit at marketplace. Porter five force model is a strategic framework used by
company to assess the present condition of company within market. In reference of Marks and
Spencer, the management of this business organization use the porter five force model which is
going to be mentioned below:
Threat of New Entrants: The threat of new entrants is very low in retail industry. It
helps the company in boosting future sales as well as profitability level. In reference of Marks &
spencer, it is not possible for new business entity to take entry in the retail industry which is
beneficial for the business organization. Beside form this, they are capable to conduct their
business operation and activities as a monopoly market that helps them in gaining more and
more profit at marketplace (Pan, 2019.
Bargaining power of Supplier: The bargaining power of supplier is quite low within
retail sector. It has been analyzed that every business organization purchase material form
supplier prevailing in the market. In reference of Marks and Spencer, there are large number of

supplier providing substitute products as well as services to its user according to the need and
requirement of its user (Rahman, 2019). Therefore, it is vital for company to offer products to its
buyer at affordable cost. Otherwise, the buyer switches their brand to other product. Thus, the
manager focuses on offering high quality of products as well as services to its buyer at
reasonable price.
Bargaining power of Buyer: The bargaining power of customer is very high in retail
sector. There are ample of business organization which provide similar type of products &
services to its user for satisfy them. In addition to this, the buyer need innovative products at
affordable price. Otherwise they switch their brand to the products of its rival firm. In context of
Marks and Spencer, the management team of the company focuses on offering best quality
products as well as services at reasonable price in order to gain competitive advantage at
marketplace (Padilla, , 2019) It helps in boosting future sales as well as growth of business
organization. The company want to achieve leading position in the market. In addition to this,
they provide discount, free sample and coupon in order to attract ample of buyer towards the
products and services of business organization.
Threat of Substitute: The threat of substitute in retail industry is very high. There are
ample of person provide the similar type of product & services to its buyer. In addition to this,
there is number of competitor available in the market that offer high quality products to its buyer
at affordable price. In reference of Marks and Spencer, the manager of company offers products
based on the need of buyer in order to satisfy them. Therefore, it helps in boosting future sales as
well as growth of company. On the other hand, if the company does not offer goods and services
based on the need of buyer then there is a possibility arise to switch the brand towards
competitive firm. Beside from this, it is tough for company to retain for a longer period of within
marketplace (Lincoln, 2018).
Competitive firm: The level of competition in retail industry is very high. There are
ample of competitors offer similar type of products as well as services in the market. Therefore,
the manager of Marks and Spencer focuses on offer superior quality of goods & services to its
user in order to achieve competitive benefits over rival firm at marketplace.

The manager of Mark and Spencer adopted the Porter five force model in order to assess the
strategy which is used by competitive firm. In addition to this, the company focuses on providing
high quality products and services in order to achieve competitive benefits over competitive
business firm in the market.
TASK 2
Mission and vision statement of chosen organization
Mission Statement: M&S have the mission to develop or create high quality of goods
and services which can easily be reachable by every individual person.
Vision Statement: Vision of the business organization is to set standard in front of
competitor companies on the basis of which they can measure their products and services.
According to the current needs of the competitive marketplace, it has been analyzed that
the management team of M&S give western clothing to their customers which are of high quality
as well as attractive (Ansoff and et. al., 2018). Hence, it can easily say that vision & mission
statement of Marks & Spencer effectively fulfills all the needs and requirements of marketplace.
Organization strategic capabilities & competences
VRIO Model
Resources Valuable Rarity Inimitable Organized What is the
result?
Positive
goodwill
Positive
goodwill
- - - Competitive
Disadvantage
Commodities Commodities Commodities - - Moderately
competitive
Software Software Software Software - Competitive
advantage on
temporary basis
Employees Employees Employees Employees Employees Competitive
advantage

VRIO is an effective strategic tool mainly adopted by business organisations for
examining and evaluating their current resources so that they can gain competitive advantages at
the market. VRIO is a framework where V stands for Value, R for Rareness, I for Inimitable and
O for Organised. These elements are going to be discussed in a detail manner in context for
M&S which are as follows;
Valuable: It refers to the first element which is quite essential as it enhances the value of
business entity and aid in achieving their goals in given time frame (Okumus and et. al., 2019. In
reference to Marks & Spencer, there are some key elements which comes under valuable
component of VRIO analysis:
 Positive Goodwill: It has been analysed that positive and strong goodwill of Marks &
Spencer help them in gaining competitive benefit at the marketplace. This will assist
them in raising their profitability and add value to the offerings and services offered by
them.
 Commodities: M&S is a well-known organisation, provide high quality products to the
consumers with their main aim of getting their trust, faith as well as loyalty with the help
of using upgraded and advanced tools and technologies.
 Software: Management team of M&S use an effective software for managing their
operations across the whole wide world in an appropriate manner which help in
increasing their efficiency at international marketplace.
 Employees: Staff members of M&S conduct all their work in an effective manner which
assist managers of the company in accomplishing their goals within specific time period
(Carayannis, 2018). In addition to this, managers of the company providing training
sessions to their employees on a day to day basis so they can attain their work effectively.
Rarity: It refers to the factor which assist the company in order to distinguish the
company from their rival business organisation. For every business organisation it is needed to
place some more hard work so they will be able to gain competitive benefit at the marketplace.
In the present context of M&S, some rare factors are going to be discussed as follows:
 Commodities: Goods and services of Marks & Spencer are quite unique as they use
highly upgraded technologies and equipment’s. Management team of the company

update their techniques and polices on a regular basis so they can beat the competition at
the marketplace.
 Software: Software which are adopted by the managers of Marks and Spencer to examine
their operations and functions are quite rare as well as design according to the needs and
wants of the business organisation (Konovalova, E.E., and et. al., 2018).
 Employees: Personal of Marks & Spencer are highly skilled and capable which will assist
in accomplishing organisational goals in an appropriate way. The skills of such
candidates are rare and cannot be easily imitative by other organisation or person.
Inimitable: Each business entity has various assets, resources as well as essentials which
might be difficult for other organisation to copy it. In reference to Marks and Spencer, main
resources which cannot be copied or imitable by other companies are software and their staff
members. Software: Management team of the company used software mainly designed and created
for fulfilling the requirements of the business organisation. This might not be copied by
any other organisation as every company face different types of issues and problems.
 Employees: With the assistance of training sessions managers can enhance the skills, and
capabilities of staff members. This will also aid them in gaining various opportunities in
near future. Along with this, by providing them training on a daily basis, employees can
easily face any kind of adverse situation arise at the workplace (Tonelli and Cristoni,
2018).
Organized: At last, organised is the last element which says every organisation need to
organise their work, employees and other essential elements for accomplishing goals in an
appropriate manner. organised element of M&S is going to be discussed as follows:
 Employees: Personal of an organisation are structured in an attractive way which will aid
them in dealing any kind of negative situation in an effective and appropriate way.
How organisation develop, delivers as well as capture value.
Value Chain Model
It refers to the combination of various types of operations and activities which needs to
be performed by the business entities so they can produce high quality products and services. It
consists of different types of functions which includes designing, marketing, manufacturing,

distribution & many more (Yuan and et. al., 2018). It is the model which includes primary as
well as supporting activities which are going to be discussed as follows:
Primary activities: It refers to those essential activities which are the first or main activity
need to be done by the managers of the company which are inbound as well as outbound
logistics, marketing, services & operations. These activities are going to be discussed as follows:
 Inbound logistics: It refers to the activity where marketing team of the business
organisation identify the needs, requirements, trends as well as preferences of consumers
& communicate it to the top managers of M&S.
 Operations: It refers to the stage which includes all the functions need to be carried out
by the staff members of M&S. In short, staff members perform their work and task to
develop raw material into finished products.
 Outbound logistics: This is the stage where managers of finalise or select their
distributors for delivering goods to the end users in an effective manner.
 Marketing & sales: According to this, top management team of M&S use attractive and
effective advertising policies, strategies and distribution channels so that they can create
awareness about the goods and services among the marketplace.
 Services: It define as the stage where business organisations give after sales services to
the end users if they have any sort of issues and problems associated with the goods and
services offered by them.
It can easily be identified that all the stated primary activities assist in influencing and
attracting customers towards the business organisation (Ansoff and et. al., 2019). Along with
this, after sales services help in retaining loyal customers for a longer period of time and
satisfy their needs and wants. Also, outbound logistics assist in developing and providing
products in an effective and appropriate manner within given duration of time.
Supporting activities: It define as the undertakings which assist all the primary activities
for completing in an effective and appropriate way. It consists of Human Resource management,
procurement, technological development, infrastructure. Some of the most elements are going to
be discussed as follows:
 Technology development: It will assist managers of M&S to develop high quality
products in an effective manner. in addition to this, once all the needs and wants of

customers will be identified, organisation will upgrade their technologies so that they can
increase their overall sales and profitability of the company (Balon and et. al., 2019).
 HR management: It refers to the strategy adopted by the higher authority of M&S, so
that they can hire capable and skilled staff members so they can achieve their goals
within given time frame and in appropriate manner.
It is concluded that supportive activities help all the primary activities so that high quality
goods and services will be accomplished. In addition to this, by using advanced technology,
company will be able to produce high quality goods and retain their capable staff members for a
longer period of time.
TASK 3
Possible plans followed by company
Porter's Generic Strategies Model:
Porter generic is a strategic model that allows organisations to take competitive
advantage from the factors that prevails in marketplace. In this by taking use of different
measures and entity can effectively able to undertake strategies through which they can ensure

their competitive edge in marketplace (Matzembacher and Meira, 2019). Porter generic analysis
in context with Mark and Spencer is being defined below:
Cost Leadership:
According to the strategy, organisation offer low-cost services and products to the
customers in an industrial segment. However, the cost sources are mainly depend upon size as
well as structure of entity. In accordance with cost leadership company decides to offer low cost
services and products to the customers with an aim to effectively satisfy needs and requirements
of customers. By undertaking use of this leadership Marks and Spencer can ensure more strategic
advantages. In this they require to identify that consumer need and launch new product which is
a “men’s wallet” in marketplace in order to grab attention of more customers. Company by
undertaking use of cost leadership strategy will offer low cost products to customers.
Differentiation Strategy:
Differentiation strategy states that in order to develop products and services in a best
effective manner manager within an organisation evaluate number of policies and strategies in
order to develop their own with an aim to take competitive edge and stay one step ahead from
their competitors. In this organisation can ensure providing products and services in a different
way in marketplace. Marks and Spencer by undertaking advantage of differentiation strategy can
undertake different unique attributes (Doz, 2017). In context with present scenario Marks and
Spencer take advantage of differentiation strategy and introduce their new “men’s wallet” with a
safety lock system in wallet in this customers are allowed to set the password as to open the
wallet. This is being done in order to ensure success of the product in marketplace.
Focus Strategy:
In accordance with this strategy organisation mainly focused upon niche market segment.
In addition to this it has been evaluated that organisation is mainly focus upon a particular group
in marketplace in order to formulate strategies and policies that aims to ensure high competitive
advantages. Focus strategy is mainly segregated into two different parts that are differentiation
focus and cost focus:
Cost Focus: In accordance with cost focus Marks and Spencer management team have
focused approach towards maximizing internal efficiency within organisational due to external
focus. For example managers by undertaking use of this strategy can offer their services and