Business Strategy: Macro Environment Impact & Strategic Planning

This report provides a comprehensive analysis of business strategy, focusing on the impact of the macro and micro environments on organizations like Marks and Spencer. It utilizes tools such as PESTLE analysis to assess the external environment, considering political, economic, social, technological, legal, and environmental factors. The report also evaluates the internal environment and capabilities of an organization using SWOT analysis, identifying strengths, weaknesses, opportunities, and threats. Furthermore, Porter's Five Forces model is applied to evaluate the competitive forces within a market sector. Finally, the report interprets and devises strategic planning for a given organization, applying a range of relevant theories, concepts, and models to formulate effective strategies.

Business Strategy

Table of Contents
Introduction......................................................................................................................................3
Task1................................................................................................................................................4
P2. Analyze the impact and influence which the macro environment has on an organization.......4
Task2................................................................................................................................................9
P2. Assess an organization’s internal environment and capabilities...............................................9
Task 3.............................................................................................................................................11
P3. Applying Porter’s Five Forces Model evaluate the competitive forces of a given market
sector for an organisation...............................................................................................................11
Task 4.............................................................................................................................................14
P4. Applying a range of theories, concepts and models, interpreted and devise strategic planning
for a given organisation.................................................................................................................14
Conclusion.....................................................................................................................................17
Reference list.................................................................................................................................18

Introduction
The term macro environment is not limited to a particular region or any sector but is a condition
that has its existence in the overall economy. The macro environment has a direct link with the
overall business cycle rather than considering the performance of a single business sector. The
environment can include few factors like the gross domestic product (GDP), employment,
expenditure fiscal as well as monetary policies.
Major firms are unable to sustain and prosper without an analysis of the general environment and
taking actions as per the trend. Marks and Spencer is the multinational British retailer, which is
headquartered in London. It is worthy to mention that an organization like Marks and Spencer
has to consider the impact of the general environment on the overall business that helps them to
not only get an idea of the upcoming trend but also assist them in formulating proper business
strategy.

Task1
P2. Analyze the impact and influence which the macro environment has on an
organization.
Marks and Spencer is the retailer giant that has been working since ages across the globe in not
less than 40 countries. It specializes in clothing as well luxury food products. It is significant to
illustrate the fact that the organization has extended its wings in Manchester and other parts of
London and has become the first retailer of Britain making more than 1 billion pre-tax profits. In
order to do an analysis of the impact of the environment over the business it is important to know
that an environment of any origination comprises of the:
The internal environment that comprises of the office technology, the employees,, salaries and
the finance. The microenvironment comprises of the suppliers, distributors, agents and the
external customers. The macro environment comprises of the economic, political, social,
technological and legal environment (Bocken, 2017). This together forms the Pestle
Environment. The Pestle analysis can be described as an infrastructure of the factors that
comprises of the macro-environment (Newton, P., 2014). This is a section of the external
analysis that provides an over viewing of various macro factors an organization has to consider
in order to attain their desired goals. A detailed analysis of the Pestle environment can be
structured in the form of a table.
Political:
 Marks and Spencer has been abiding by
the Government rules and policies and
the various safety policies were also
followed ( Bryman and Bell ,2015).
 In recent years however, Marks and
Spencer was accused of not abiding by
the safety rules but was finally not
being pled guilty.
 Marks and Spencer understand the
Economic
 The economic recession affected the
business of the origination a lot but
currently, the economy of the country
has stabilized which in turn has helped
the business and the operation of Marks
and Spencer.
 IN recent years, UK has become the e-
commerce hub, which helps Marks and
Spencer to extend the customer base

importance of keeping a healthy
relation with the government
 The EU referendum is creating a crisis
for the investors that has a deep impact
on the business of Marks and
Spencer(Hamilton and Webster, 2015)
 Taxes on the big supermarkets that
were being proposed by local council
but were somehow refused by the
government of UK to avoid hike in
price (Falkner,2017). However, similar
issues if arises can negatively affect the
business of Marks and Spencer.
 The import duties have affected the
business of Marks and Spencer because
the origination sends its products
outside UK also.
 The increment of the VAT due to
Brexit will also affect the business
because this will increase the price of
goods importation from the
EU(Dhingra et al., 2016).
providing a scope for diverse retail.
 The exchange rate always remains in a
volatile state that affects the
organization’s negotiation with the
suppliers. Recently UK has left EU for
which the uncertainty regarding this has
prevailed which in turn has affected the
business of Mars and Spencer.
 In UK, it is expensive to run a
manufacturing site for which a
consideration of shifting this elsewhere
was in the process but UK after leaving
EU this consideration has been delayed
for an indefinite period( Dhingra et
al .,2016). Marks and Spencer also had
plans to shift the manufacturing sites
but the process now is on hold
 The constant changes in the demand of
the customers have put a heavy impact
on the business of Marks and Spencer.
The organization launched a campaign
that can engage the customers.
 Recently an analysis has shown that the
food as well as cloth sales of the
company have fallen according to the
entire year’s result (Badhe and
Bambawale, 2017). Capturing Retail
Demand and using linear regression to
influence competitive offers from
retailers. Neural Networks & Machine
Learning, 1(1), pp.1-1.

Social
 Marks and Spencer in the recent years
have done a modification of the entire
clothes range and the food products.
 The continuous change in the trend has
compelled the company to develop and
create products according to the
growing demands.
 Customers want their delivery very fast
and with a good return policy. The
customers are in need of a one-stop
place to get all their things under one
roof. The company formulates its
business strategy according to the
customer’s wants and needs.
 Obesity has been a serious issue in the
society and an organization like Marks
and Spencer has been trying to fight
this crisis by producing products that
are healthy and a trigger to the taste
buds ( Guillén and Ontiveros, 2016).
The clothing range of the organization
has been developing a lot especially for
the plus size people. The obese people
within the society find an absolute
comfort in the varied apparel ranges
provided by the company. The business
strategy is to pull all types of customers
irrespective of their age, sex and
physical appearance.
 UK shoppers are generally the loyal
Technological
 The technological advancement has
enhanced the business level of Marks
and Spencer.
 Retrial technology has impacted the
business of the company because this
technology has helped the organization
to get an ultimate customer satisfaction
 With the introduction of the RFID
technology MARKS and Spencer has
enhanced the customer’s experience in
store (Ahson and Ilyas, 2017). The
technological factors have helped the
organization to formulate their business
strategy in a way so that. The company
gets a huge benefit from this type of
technologic growth.
 With the RFID, the stocks can be
automatically counted with this
technology and is removed after the
sales. Another aspect that affects the
business strategy is how the suppliers
get information about the
replenishment of the stock and hence
do the needful.

shoppers. Hence, Marks and Spencer
must develop a close tie with their cu
Legal
 Marks and Spencer conducts all its
operation on the basis of the Food
Retailing Commission and hence all the
food products produced has to follow
this rules(Lang and Schoen,
2016 ).The business strategy of the
company is formulated on the basis of
this law
 The increase in the wage rates also
affect the business of the origination as
with the wage increment the origination
has to formulate strategies so that the
employees can remain happy with the
allotted wages.
 The business strategies have been
created in such a way that the human
rights of all the employees are
respected thoroughly. The organization
has even published inaugural reports
on human rights so that both the
customers and the supply base remains
on the right track
 The gender pay and the gap in the
payment of the employees are also
strictly followed by Mars and Spencer.
Environment
 Originations like Marks and Spencer
formulates their business strategies by
keeping in mind the environmental
issues.
 The company wants their customers to
shop from Mark and Specner.com .The
Marks and Spencer van drivers make
use of the routes that are fuel saving
and also collects the plastic bags and
get them recycled. Marks and Spencer
takes on the strategy to make use of
environmental friendly products so
that the customers can buy these items
without any fear (Morgan et al., 2017).
The happy customers bring successful
business for the origination.
 Marks and Spencer commits to make
use of the renewable resources, which
will be helpful in developing the
financial condition of the company. The
business strategy is to keep in mind the
use of these sources to make immense
profit with a moderate budget.
 The minimization of the carbon
footprint also assures a positive

Their strategic move to equally pay
both the men and the women has
enhanced the workforce and the
performance level of the company. This
has a positive impact on the company
as a whole
 General Data Protection Regulation
(GDPR) is a part of the EU and even
though UK has left the EU, the law gets
implemented so that the employees can
maintain their data and remain secured
(Tredinnick and Laybats, 2017).
 Marks and Spencer has always allowed
their employees to maintain the
confidentiality of the data so that the
employees can work freely and increase
the productivity of the company. The
strategy is to keep the employees
satisfied and get a positive impact out
of it.
feedback for the origination and people
buy products from such organizations
that have a positive feedback. Marks
and Spencer excels in this arena.

Task2
P2. Assess an organization’s internal environment and capabilities
In order to make any strategy to get success, a realistic assessment of the various internal
resources and capabilities of the origination has to be done. The internal analysis of any
origination cam is done based on SWOT Analysis.
SWOT Analysis can show the business internally with the analysis of the strength and
weaknesses of the company. SWOT Analysis can help the origination to identify their strength,
weaknesses and the threats lurking in the competitive market (Quix and van der Kind, 2016)
Strengths: An organization like Marks and Spencer incorporate number of strengths like brand
values and the varied range of the products. Moreover, the numerous outlets that act as the retail
chains help the company to grow their business and the various ranges they deliver to the
consumers (Etgar, 2015). Marks and Spencer is the business giant known for the best quality
product. The high street stores of the company have best quality products befitting the customers
who have a preference of the brand values and want to save time by finishing their shopping
under a single roof. Marks and Spencer has been widely known for the extensive range of the
products in all their stores. For an example Marks and Spencer sell the varied range of vegetables
and fruits like the avocados, English apples etc. The origination has an appropriate framework of
testing all these vegetables and the fruits and ensures that the products are directly coming from
the farmer’s crop so that the customers get a real taste of the items.
Marks and Spencer has 900 stores in all the corners of the world, these show that the huge count
of their stores make their business grow wider, and with the broad range of the products the
choices are more for the customers. The origination has set up appropriate framework for
establishing outlets in different parts of the world. A detailed survey of the demographic and the
geographical structure is done as homework.
Weakness: The company has, been alleged to outdate and non-trendy products. The customers
have a notion that the products sold are meant for the aged people and for this the business of
Marks and Spencer is getting low and it has been noticed that the Marks and Spencer has gain

the confidence of the customers from past years . The company must formulate strategies to
overcome this kind of bad publicity and attract the people from all the ages (Porter and Kramer,
2019). Marks and Spencer has been also under bad light because of the use of old techniques to
produce their goods. this has a negative impact on both time and money. Organization should
develop an appropriate framework to make use of both the automated and mechanized tools to
get more production in less time and expenditure.
Opportunities
Internalization has always increased an originations global presence. The company has been
establishing the franchise in countries with low income per capita and has a deal with a company
called Planet Sport. The brand name of Marks and Spencer will help the business grow
extensively and the collaboration with the organizations will flourish along with the brand name.
The organization can grow in all parts of the world by setting up an appropriate framework to get
integration with other companies. Marks and Spencer has huge buying capabilities, which can
utilize in establishing their branches in all corners of the globe. Marks and Spencer should also
initiate in segmentation of their customers and get a powerful grip on the global market
( Drucker, 2017). The organization is having the opportunity by developing small shops and
hence reduces the cost and increase the gain percentage of the company. A proper framework
must be set to establish these small shops instead of the mega stores.
Threat
The organization is standing in an arena where the competition is high and tough. The retail
sector is highly competitive and the competitors like Tesco, Asda are developing local stores
whereas Marks and Spencer still relies on the mega stores( Drucker, 2017). The continuation of
such condition will make Marks and Spencer get a negative reputation and hence it is
recommended to grow more local shops and increase the profit level. The organization must take
people according to their skills and be a part of the small stores. The organization has to
formulate a framework that will also ensure a risk management in the stores.

Task 3
P3. Applying Porter’s Five Forces Model evaluate the competitive forces of a given market
sector for an organisation
The industry where an organization operates its business, determines the type of growth and
development it would be able to achieve. The industry scenario determines the profitability of an
organisation. Industry analysis is also required for analyzing the attractiveness of the industry.
Marks and Spenser operates in a highly competitive environment. The retail industry in UK is
one of the most competitive as well as prolific industries. Several small size organisations are
joining the retail industry due to its high prolific and profitable nature. Marks and Spenser is
facing the challenge of high competition despite its long term existence in this market and high
market share (Barney, 2014). It is essential to conduct industry analysis of retail industry for
having a better understanding of the retail industry.
Several tools are used for analyzing the industry scenario of the retail industry of UK. One of the
most effective tools that are used for analyzing the market scenario is Porter’s Five Forces. It
helps in analyzing the major five forces that influences the market scenario of the organisation
(Dobbs, 2014). The five forces are Competition in the industry, Potential of new entrants into the
industry, Power of suppliers; power of customers ad threat of new substitutes. The factors and
the way it influences the retail industry in UK are described in the following way:
Competition in the Industry: The real industry is highly competitive as a huge number of large
size organisations are operating in this industry and they are making the market highly
competitive. Marks and Spenser are facing hard challenges from other retail organizations in this
industry (Indiatsy et al., 2014.). Some of the most potential competitors of this industry are
Tesco, Sainsbury, Asda and some others. It is observed that Tesco and Sainsbury are the two
most potential competitor for the organisation Marks and Spenser. The two organisations have
the highest market share in 2017. Together they held nearly 43.7 percent of the entire market. In
March of 2017, Lidl held 4.9 percent of the market of retail industry in UK. Morrison had a
market share of 10.4 percent, while the market share of another retail market Asda was 15.7
percent.

This shows that the most potential market competitors for the organization Marks and Spenser
are Asda, Morrison, Sainsbury and Tesco. The organisation holds a stable position in this market,
and has a high market share. However, in order to be line with the growing competition and hold
sustainable position in the market of UK Marks and Spenser has to analyze the aspects and
strategies used by the competitive firms (Riley, 2012).
Potentiality of the new entities: The retail supermarket industry is one among the most potential
sectors in UK. It promises the entities a better future, fast growth and higher profitability that
most of the other industries (Dälken, 2014). The requirements of retail products are considerably
high among the customers and this makes the never fading prosperity of the retail industry. Due
to this high prolific nature of the retail industry in UK, several organisations are joining this
market and are trying to cease the opportunity this market provides.
Such new entities are making the market more and more competitive. These organizations are
also coming up with new innovative ideas that are making them more attractive than other
organisations. For example, GreenBay, is a new London based supermarket that sells only vegan
products. They mostly emphasizes on online retain selling and this is one of the most innovating
organization in the retail supermarket industry (Moreno-Izquierdo, 2016). Thus most of the new
organizations are enhancing the competitive market of the organization.
Power of suppliers: The power of suppliers considerably influences the market strategies of the
organisations operating in this industry. The power of suppliers are, however, how due to the
high number of suppliers present in this industry. The factors associated with the industry that
are influencing the market environment of the retail organisations in this industry are the
presence of various distribution channel, availability of impute alternatives and some others
(Mathooko and Ogutu, 2015). The other actors that determine the influence of the suppliers in
the retail industry are the competition among suppliers, the ration between supplier concentration
and firm concentration, the influences of imputes on differentiation and cost and some others.
Such factors are positive in most of the cases and therefore the powers of suppliers are
considerably high in the case of retail industry.