BMP6002 Strategic Management: Strategy Evaluation Report for M&S

This report provides a comprehensive strategic analysis of Marks & Spencer (M&S), a multinational retail organization. It begins by defining strategic management and then delves into M&S's purpose, vision, mission, and objectives, emphasizing its commitment to quality and customer service. The report assesses M&S's competitive advantage using the VRIO framework, evaluating its resources based on value, rarity, imitability, and organization. Furthermore, it employs the PESTEL framework to analyze the external environment, considering political, economic, social, technological, legal, and environmental factors impacting the business. Finally, the report applies Porter's Five Forces model to assess the competitive landscape of the retail industry. The analysis covers key aspects of M&S's strategic positioning, highlighting its strengths, weaknesses, and opportunities within a dynamic market.

BSc (Hons) Business Management Top up
BMP6002
Strategic Management
Strategy Evaluation
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Introduction
Strategic management can be defined as and process and practice that includes
developing goals and objectives and this is followed by continuous planning evaluation and
analysis of different requirement through which goals and objectives can be achieved. Its
involves implementation and formulation of major initiatives and goals taken by the company
taken by key managerial personnel (Strategic management.2019). It is being based upon the
resources and environment that is internal and external in which company operates. M&S is
amultinational retail organisation of UK and its headquarter is based at London, where
company specialises in selling home products, clothing and food products, which are mostly
under its own label (Leite, 2020). Present report will brief about the clear purpose, vision,
mission and objectives of the company. The report will brief on the competitive advantage by
using the VRIO framework. It will cover the PESTEL analysis of the company. The report
will address to the application of Porter five Force Model. It will lastly cover analysis of
organisation strategy
A critical evaluation of the value of clear purpose, vision,
mission and objectives in setting the strategic direction of
organizations using examples from selected organisation
The mission statement of the company is to make the quality which is being
aspirational and accessible to everyone, by the depth and range of its services and products
being offered. Mission of marks and Spencer is to bring in the best quality of products
present in the market with the help of using the best material available for the manufacturing,
in the long run and which is accessible to all.
Vision of marks and Spencer is to make the brand much more popular among the
customers, and create the brand image in such a way that it becomes a standard to measure in
the market.
The purpose of company is To add quality value to the customer and product. Service
plays an important role in creating a brands' mission, marks and Spencers is among the
premium customer service provider which helps to boost company's brand image. The
company also focuses on the innovation which is mostly related to the customer needs and
wants, as per the needs and wants of the customers the company change its product and make
changes accordingly (Marks & Spencer's Mission And Values.2020). Marks and Spencer
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focuses on building trust to its customer to retain the customer for longer time period. The
company provides different vouchers and discount coupons to its customer. For the better
customer engagement and building trust towards the brand.
Objectives of Marks and Spencer are to become leader in Retail Industry whereby
company aims to capture the larger market share in terms of having huge customer base. The
board's objectives is to build with sustainable organisation by consistent and profitable
growth. The objectives is to make sure that company act responsible in meeting the
accountability to its shareholders and wider stakeholders of the company. The main objective
of the company is to implement new inclusive standards of design to ensure company
products and services are accessible to and usable by as many customer as possible. The
objective is to inspire, engage millions of individuals who visit the outlet all across the world
and enhance lives.
Assess the competitive advantage of the selected
company, using the VRIO framework
Competitive advantage refers to the factor that allows organisation to produce product and
services better and more cheaply than its rivalries firm in industry. It allows with the
productive entity to generate more of sales revenues and superior profitability margins as
compared to its market competitors.
This could be understood by means of doing VRIO Analysis which is business
analysis framework which forms the part of company larger strategic scheme. It includes
Valuable- It states that resources of company adds value by enabling defend against the
threat and exploit various opportunities. If its so than the resources is considered valuable.
Resources of M&S are valuable if it increase the perceived value for its customers. This can
be done by the company by increasing differentiation of its offering and decreasing the prices
of same. The resources which are not able to meet up with this condition, lead to have
competitive disadvantage. It is being important on the end of company to constantly review
the resources which are valuable because constantly changing business environment can
result in making resources which are less valuable and useless of all (Ariyani, and Daryanto,
2018).
Rarity- It examines that resources of the company must be rare. Resources which can be
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acquired by only few companies are considered to be rare in nature. If a resource is being
possessed by large amount of players in the retail industry, each player has ability and
capabilities to exploit the resources, which leads to not getting the competitive advantage for
the company. Such a condition is being considered as competitive equality and rivalry parity.
This can be due to if company uses identical and similar resources to implement same plan of
action where it can not achieve superior level of performance (HoLEE, 2020). If M&S have
resources which are valuable as well as rare, it is likely to have the competitive advantage.
Costly to imitate – The resources of the company are costly to imitate if other company do
not have it cant imitate, substitute and buy at a price which is being reasonable. The resource
imitation can occur in two ways such as duplication which relates with direct imitation of the
resources and by substituting, which is giving comparable services and products. It is being
identified that there are three resources of the company are hard to copy or imitate. This are
conditions which are being historical. It states resources of M&S are developed because of
historical events and over the long period which are costly to imitate. It can be because of
casual ambiguity where the competitors find it hard to identify the particular resources as
competitive advantage. It can be also because of social complexities where resources of M&S
are based on culture and interpersonal relationship.
Organised- It states that resources of M &S do not confer with any of competitive advantage
for the company, if its is not organised in manner to capture value out of it. It is being
required that M&S must organise its management processes, systems, organisation structure,
policies and its culture to be able to fully realise and utilise the potential of its resources
which are costly to imitate, rare and valuable in nature (Miethlich,and Oldenburg,2019). Only
by this company can be able to achieve the competitive advantage and survive in highly
challenging business environment and support business dynamics. Thus the focus of the
company needs with the capability to coordinate and assemble resources effectively and
efficiently.
Valuable
International presences
Skilled manpower
Products and service
quality.
Rare
Vendor and supplier
relationship
Packaging
Imitable-
Variety of products
and service offering in
food, clothing and
home products
Technology
advancement
Organised -
Workplace culture
Leadership style
Innovation
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Using PESTLE framework analysing the external
environment of the selected business
This relates with the external environment of M&S that affect the business operation
of company. It includes-
Political factors- These factor plays vital role as it has impact on the running of the business
of company. It is being required to closely monitor the same, which if being failed will leads
to different ball game. It is being stated that Brexit has huge impact which has affected with
sales revenue and profitability margins of company. Free trade policies have allows the
company to import foreign goods for sale in their outlet at a cheaper prices as otherwise,
which in turn led with maintaining and having healthy profit margins,which led to success of
company.
Economic factors- It relates with operation of company that has helped with the growth of
economy by contributing towards the GDP of UK. It also states that conflicts with small
retailers rise over the prices due to currency impact of Brexit. It is being affected. Current
market trend is shifting towards smaller retail stores. These stores provide with less markup
price there by allowing the company to retain with its status that is being premium. It states
with discount competitors of company where competitors are stealing market by offering
goods to customers at a price lower (Perera,2017).
Social factors – These relates with meeting the needs and wants of customer and satisfying
the same to build positive brand image. The company is known for its household name, but
because of its long lasting existence it is not known as the brand of Youth. The brand take
initiatives to cater the customer requirement of all age which leads with getting the
competitive advantage in marketplace. As trendy and new retail chain pops up every year,
company goodwill and reputation may become less trendy brand for customers especially for
younger audience as they relate with past.
Technological factors- This states with initiatives of the company in technological
advancement over the past. It leads with getting valuable insights about the requirements of
its target audiences and fulfilling in manner that boost up with the sale revenue and
profitability of company. It leads with smooth flow & ease of business operation (Düerkop
and Huth, 2017). The company has established with e commerce presence where it offers all
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its goods ranging from home, clothing and food. The company leads with self checkout
which offers the customer and employees with innovative experience with the company.
Legal factors – This relates with rules and regulation where the business have its operation,
non compliance to such will leads with discontinuation, restriction and imposing of penalties
on company. With many of legal disputes, it has made hard for the company to hold its
image at a constant pace by its decades long existence. The recent dispute with Frascati
Landlord was one issue which has affected business functioning and operation of M&S. The
change In trade laws of Britain after Brexit is being also considered as another legal factor
that has affected the brand hugely.
Environmental factors- This relates with efforts of company towards safety of environment.
The company has taken several steps to reduce carbon footprints and effective disposable of
waste material. The company has promoted with concept of sustainable retail industry on
various occasion and vows to be careful with its process of production. The company takes
with initiative to spread awareness about the protection of environment (Fozer,2017).
Company also sell fair trade goods, which allows small retail business to incur less cost on
production and thus leads with production methods that are highly environment friendly.
Application of the Porter’s Five Forces Model for the
selected organisation
It is the framework which helps in analysing the environment of company which is
being competitive. It is being used to identify the industry structure to determine the strategy
of the company . It includes
Competition in Industry – Competition in industry is one of the most important forces in the
model and this refers to number of competitors of Marks and Spencer and their ability to
compete operations of M&S. It states high number of competitors offering same products and
services reducers and limits power of Marks and Spencer in its industry and vice versa.
Suppliers and buyers in case they are capable of providing low prices and comparatively
better offers. As per this force when competitive rivalry is less and Organisation have more
power that enables organisation to charge high prices and set strong and difficult terms for
deal which are better and charge prices which are higher thus leads to increase sales revenue.
Potential of new entrant into the industry- The power of Marks and Spencer is being also
affected by force of new entry in the marketplace. The less money and time it costs for a
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rivalry to enter the market of company and be an effective competitor, more the position of
the company will be significantly weakened. The retail industry with string barriers to entry
will be ideal for M&S as it will be able to charge prices higher and negotiate on terms which
are efficient and effective. If not then it may result in loss of market share of company
(Mehjabeen, 2018).
Power of suppliers – This is another force in model of five forces and this is concerned with
ability of suppliers to increase cost of inputs for Marks and Spencer. This gets affected by
number of key suppliers for key inputs there that are required for Marks and Spencer and also
gets affected by uniqueness of input and cost of switching that Marks and Spencer can have.
(Mugo, 2020). In this suppliers in Retail industry of UK are less in number and this is why
company significantly depends on its suppliers. Because of this suppliers have strong power
and can increase advantage in trade and cost of input for the company. In this power when
there are several suppliers company can charge high prices.
Power of customer- Power of customer is concerned with ability of customers through which
they can reduce prices of Marks and Spencer. This gets affected by number of customers as
well as number of sellers in Retail industry and importance of each of the customer for
organization and cost of the company for finding new customers and market for its goods and
services. Customer base that is small and strong enables them to have strong power in
negotiation for prices as well as offer off Marks and Spencer. It states that if the company has
more of client base it will be more easier for company to charge higher prices and earn
revenues (Isabelle,2020).
Threat of substitutes –The last of the five force which affect the competitiveness of company
is threat of substitutes. It states the products and services which can be used in place of Marks
and Spencer goods and services posses threat to the company. When company have and
produces products and services with no other close substitutes will be in more power to lock
in positive terms and increase prices accordingly. When substitute to company goods are
being available customers are at option to forgo the buying of products and services of
company and its power can be significantly being weakened and loss of share.
A review of the selected organisation’s strategy
Ansoff Growth Matrix – The matrix is also known as a grid for market expansion and
product. It includes M&S
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Market Penetration- This strategy emphasize on increasing sales of existing products
in a Marketplace where M&S already operates. It can be executed in number of ways which
can be company decreasing the prices to encourage new customers from existing market.
Improving and enhancing distribution and promotional activities and acquisition of
competitors operating in retail industry. The company can use product in market where
Marks and Spencer has its operations and increases market share by market penetration
strategy.
Product development- This strategy has its emphasis on introduction of new product
for market and customers Marks and Spencer already operates. In other words company
develops new product to cater existing market. The company involves in more R&D and
expanding its existing range of products. Application of this strategy is effective when
organisation has effective understanding of market where it’s operating. In addition to this
this is also effective when organisation has an ability to provide innovative solutions for
requirements and needs of customers within existing market.
(Loredana, 2017).
Market development- This strategy emphasize on entering into new market and using
products that are being used by Marks and Spencer in its existing market. In other words
market development is concerned with expansion of business in new market in form of
geographical market as well as new customer segments. Effectiveness of this strategy mainly
depends on technology that company can use in new markets. Customers in new market place
are highly profitable and later consumer behaviour in new market not significantly different
from consumers of existing market.
Diversification- This strategy Emphasize on entering New Market with new products
and services (Dawes, 2018). This is the riskiest among all the four strategy. This strategy
includes diversification where there is potential that new market and existing market and
products can be synthesized with each other. However this can be and unrelated
diversification also when new market and existing market does not have any kind of
synergies that can be realised between existing and new market.
This could also be understood by BCG matrix that states four elements
Dogs – This position have low market share compared to other competitors that are operating
in market with slow growth. In other words this position is not worth investing and expanding
because they are likely to generate negative and low returns in terms of profit and cash.
Sometimes this position can be profitable for Organisation in long run because they are likely
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to provide synergies and can also be a defence to counter the moves of the competitors and
can be successful.
Cash cows- This is most profitable position for a brand and should be effectively used in
order to gain as much return as possible. And case that is edited from this position can also be
invested into business that is on Star position to support continuous growth and success of
business (Madsen,2017). These are capable of moving in innovating new processes or
product, which may helps in becoming the stars. If there would be no cash cows support, they
would not be of such innovations.
Stars – Products that are having high market share with a high growing rate. These are both
cash user and cash generators. They are prime areas of focus in an organisation that requires
more money to be invested because they are expected to become cash cows by generating
favourable Returns. This is a rapidly changing industry in which new innovation in products
and services can be used to stay a highly competitive and advancing in technology
(Mohajan,2017).
Question Marks- This position is one in which growth of company is favourable but their
market share is less. These are the brand which requires with closer consideration.
Companies have low market share in highly growing market ad consumes large amount of
cash and in return incurs loss (Fadrian and Arifin, 2018). This position is likely to bring both
kinds of results and can be successful at the same time can struggle to gain market share and
come at dog position.
Conclusion
From the above report it is being concluded that there are various things which needs
to be considered by company for strategic management and planning. It requires huge
planning by key managerial personnel to make effective decision making process. It is being
understood that it helps in supporting challenging business environment of company and
leads to growth and success of company. It has briefed with clear understanding of purpose,
objectives, Mission and Vision of M &S. It has led to understanding of competitive
advantage by the means of VRIO framework which implies resources are valuable, rare,
imitable and organised. It has led with brief understanding of external environment which
affect the business functioning by doing PESTEL analysis. It is being concluded with the
five forces of porter model that helps in assessing the competitiveness of Marks and Spencer.
It Is being lastly concluded with review of organisational strategy of company.
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References
Books and Journals
Ariyani, W. and Daryanto, A., 2018. Operationalization of Internal Analysis Using the VRIO
Framework: Development of Scale for Resource and Capabilities Organization
(Case Study: XYZ Company Animal Feed Business Unit). Asian Business Research
Journal.3.pp.9-14.
Dawes, J., 2018. The Ansoff Matrix: A Legendary Tool, But with Two Logical
Problems. But with Two Logical Problems (February 27, 2018).
Düerkop, S. and Huth, M., 2017. Transportation under Threat–A PESTLE Analysis for
Critical Logistical Infrastructures. ICTA2017, p.14.
Fozer, D., and et.al., 2017. Life cycle, PESTLE and multi-criteria decision analysis of CCS
process alternatives. Journal of cleaner production. 147. pp.75-85.
HoLEE, J., 2020. Smart Study’s Strategy in the Kids Content Industry: VRIO
Framework. Journal of Economics, Marketing and Management. 8. pp.1-8.
Isabelle, D., and et.al., 2020. Is Porter's Five Forces Framework Still Relevant? A study of
the capital/labour intensity continuum via mining and IT industries. Technology
Innovation Management Review.10(6).
Loredana, E.M., 2017. The use of Ansoff matrix in the field of business. Annals-Economy
Series. 2. pp.141-149.
Mehjabeen, L., 2018. Assessing Attractiveness of Banking Industry of Bangladesh by
Applying Porter’s 5 Forces Model. International Journal of Business and
Management Future, 2(1), pp.55-62.
Miethlich, B. and Oldenburg, A.G., 2019. The Employment of Persons with Disabilities as a
Strategic Asset: A Resource-Based-View using the Value-Rarity-Imitability-
Organization (VRIO) Framework.
Mugo, P., 2020. PORTER’S FIVE FORCES INFLUENCE ON COMPETITIVE
ADVANTAGE IN TELECOMMUNICATION INDUSTRY IN KENYA. European
Journal of Business and Strategic Management. 5(2). pp.30-49.
Leite, B.T.D.S., 2020. Marks & spencer out of fashion the case of an outdated brick and
mortar (Doctoral dissertation).
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Mohajan, H., 2017. An analysis on BCG Growth sharing matrix.
Madsen, D.O., 2017. Not dead yet: the rise, fall and persistence of the BCG Matrix. Problems
and Perspectives in Management.15(1). pp.19-34.
Fadrian, A. and Arifin, A.S., 2018, September. Study on 2G Termination in Indonesia using
BCG Matrix. In 2018 5th International Conference on Information Technology,
Computer, and Electrical Engineering (ICITACEE) (pp. 1-5). IEEE.
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