This strategic report analyzes the strategies for Marks and Spencer in light of their profit losses in recent years. Then, this strategic report describes the external business environment of Marks and Spencer. As a result, this report uses PESTLE analysis and Porter’s Five Forces model. After that, this strategic report also describes the internal business environment of Marks and Spencer. In this case, this report uses value chain analysis. In addition, this report analyzes the strengths, weaknesses, opportunities, and threats of M&S. On the other hand, a competitive strategy for this company is also described. Finally, this report provides recommendations to M&S about how to develop their business operations.
Table of Contents
2.0 External Business Environment: Marks and Spencer.
2.1 PESTLE Analysis.
2.1.2 Economic situation.
2.2 Porter’s Five Forces model Application.
3.0 Internal Environment Analysis.
3.1 Value Chain Analysis.
4.0 Analysis of SWOT position.
5.0 Main issues faced by M&S.
6.0 Analysis of M&S’s Strategic Business Unit: Bowman’s Strategy Clock.
Marks and Spencer (M&S) is the famous retail sector in the UK. M&S sells several products including clothing items for men, women, and kids, food products, different home products, and gift items (M&S, 2018). This report analyzes the strategies for Marks and Spencer in light of their profit losses in recent years. Then, this strategic report describes the external business environment of Marks and Spencer. As a result, this report uses PESTLE analysis and Porter’s Five Forces model. After that, this strategic report also describes the internal business environment of Marks and Spencer. In this case, this report uses value chain analysis. In addition, this report analyzes the strengths, weaknesses, opportunities, and threats of M&S. Then, based on finding the strategic options are analyzed for M&S. Finally, this report provides recommendations to M&S about how to they develop their business operations.
2.0 External Business Environment: Marks and Spencer
2.1 PESTLE Analysis
A study by Perera (2017) said that PESTLE analysis is a strategic tool that is used in the business to understand the external environmental factors on business. PESTLE analysis tool analyzes the political, economic, social, technological, environmental, and legal factors of a business. M&S stands by several environmental and government rules to safeguard natural resources and protect the environment by using accurate waste management procedures.
Retails business activities are affected by the political structure in several ways. The retail sectors are always reliant on many national initiatives or debates. M&S is a well-known retailer in the UK that goes down in its food and clothing sector because of fair trade policy. According to Ivory Research (2018), the fair trade policy is used by M&S has led to a substantial reduction in its sourcing costs. Then, Brexit uncertainty is the other political factor for M&S. Brexit has produced uncertainty for the businesses which are operating in the UK including M&S. This Brexit issue affects the political landscape of the UK. As a result, M&S’s business operation is also affected by this Brexit issue. On the other hand, changes in both government and tax policy in the UK affect the business operation of M&S. As a result, the retail sector including M&S faces huge losses in their business. Furthermore, business initiatives of M&S are affected negatively because of the lack of clarity of the UK government on the energy efficiency method.
The economic structure of a country has a direct impact on the retail sectors. Economic factors include interest rate, inflation rate, economic growth pattern, foreign exchange rate, etc. Discounted pricing of the competitors affects M&S. Conflict with the competitors over the product price increase because of the Brexit issue. In addition, M&S needs to consider different issues such as interest rate, inflation rate, employment level, GDP, etc. to ensure sustainability in the competitive marketplace (Ivory Research, 2018). UK’s present economic situation is satisfactory with the low-interest rate that is the signal of a healthy economy. A healthy economy is a sign of growing disposable income that is good for the business.
Social factors affect the strategies of a business. It is significant for business organizations to consider the age, culture, race, etc. of the customers. Trends in the social factors effectively affect the demand of the customers for a product of the company. In the UK, people spend their income in the fashion sector. A study by Ivory Research (2018) disclosed that M&S focuses on the customers’ tastes and demands about the fashion sector. M&S has changed its product type by focusing on the wants or demands of the customers.
Technology issues also affect businesses in the UK. Compliance, risk, and security are the areas that increase concern for the retailers. M&S has gone to a partnership with SureCloud that helps M&S to manage its external security and compliance process. This also helps to reduce the dependency on manual working which is related to the security and compliance process (Ivory Research, 2018). Technology is the most significant part of the world. Thus, M&S tries to go with advanced technology. As a result, it invested 100m in new technologies. On the other hand, all the M&S stores in the UK equipped with free Wi-Fi…………