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Business strategy a Core Management Function

University: Harrods of London

  • Unit No: 16
  • Level: High school
  • Pages: 22 / Words 5464
  • Paper Type: Assignment
  • Course Code: N/A
  • Downloads: 316
Question :

This sample will let you know about:

  • What is SWOT Analysis?
  • Define PESTLE Analysis?
  • Discuss Business Management.
Answer :
Organization Selected : Mark & Spencer

Business strategy is defined as core management function that aids to undertake effective plan of action that guarantees the success to enterprise (Sari, Afifah and Sueb, 2019). Creation of strategy assist to undertake business activities effectively. In addition to this, business strategy is the working plan of the entity that aids to accomplish the business vision, aids to prioritise the objectives, competing successfully and this also make the effective contribution to make the performance of business appropriate.

The present study is based on the business activities of the Mark & Spencer, this is private limited enterprise engaged as grocery retailer within UK. It is headquartered in Westminster, London and mainly this firm engaged in to sell high quality clothing.

Furthermore, this report will undertake internal and external analyse with use of PESTLE and SWOT techniques.  Also, the study will outline analysis of competitive environment with use of Porter's five forces model. Additionally, strategic plan needs to be undertaken with use of environment analysis and findings. Moreover, evaluation will be undertaken on different strategic direction of the enterprise. Lastly, strategic management plan will be formulated with number of strategies, objectives and tactics that leads to improve business performance.

Define analysis on organisation capabilities with use of PESTLE and SWOT techniques.

PESTLE analysis is termed out as the framework and tool that helps to monitor the performance of the enterprise (Bocken, Smeke Morales and Lehner, 2020). This is strategic management tool that helps to identify, organize, analyse the external factors of the enterprise. It is the tool that leads to define the impact on the organisation now and in the future course of action. Thus, outlined as following context as-:

Political

This is defined as those components that has huge impact on the working of the enterprise. These are the components that shows the level of anticipation by the legal authorities within the different trades and businesses.  The one of the massive political advancement to the chosen enterprise is free trade policies (Panda, 2019). Due to the Brexit, there are number of the policies that cannot be applied to the firm.  Also, quoted entity is well known for the CSR initiatives but ineffective clarity of the United Kingdom legal authorities has negative impacts. Political factors involve in all decision-making process of the company as it involves government policies related to the corporate sector like taxation policies of company, foreign policy and all associated policies that influence over company's decision-making process and growth potential.Ask for assignment help from our experts!

Economic

There are number of the factors that directly affects the economy performance and also have long term effects. Enhancement in rate of inflation can have huge impact on the way firm price their products and services. This can have the huge impact over the purchasing power of the customers. Economic factors mainly inclusive with rate of inflation, interest rate, growth pattern of economic and foreign exchange rate etc. The economy condition of the UK has fourth ranked (Sulich and GrudziÅ„ski, 2019). So, this is crucial to put the major consideration over the state of economy in the short term and long term. Also, current economy situation within the UK is quite favourable due to low to moderate rate of interest and this can be termed out as the health sign of the economy. Therefore, it has also been found out that there are majority of the population within the UK that mainly prefers local retail store rather than premium commodities of the chosen enterprise. Thus, store that provide budgeted product and services to the customer’s is the wider threat to chosen entity. Thus, it can be stated that increased food and prices of fuel has an effect on disposable income of consumer that leads to weaker demand for non-food products. Also, chosen entity responding to it by cutting prices and thus have serious effect on sales. 

Social

This is termed out as fundamentals that cannot be directly impact the business and market strategies. Changes in preferences of customers has huge on working of enterprise. However, the trends in social components can impact the demand of commodities and services. Sulich and GrudziÅ„ski, 2019). In addition to this, purchase of the customer can be influenced by the cultural, social and number of psychological changes within the market. Henceforth, there is enhancement in trade of more than 10% after credit cards came into the market. Thus, this entity took the advantage of the opportunities and this allowed customers to pay through credit cards and this can lead to further increase the sale. Thus, one of major concern of buyer is also dependent on price, quality and style that attract the customer and also aids to ensure the sustainability of the enterprise. In current era, new and trendy retail chains pop up every year due to this competition within the firms tends to rise. Get Assignment Examples?Talk to our Experts!

Technology

Continue innovation in the technical advancement assist the firm to operate efficiently within competitive markets and modern IT system has also enhance the firm productivity and lowers the cost. In the present scenario, the customers put their major focus on to prefer the online retailing to in-store purchase (Man, 2016). Also, the enterprise is taking the various initiatives in terms to have the effective presence in digital medium to take the full advancement and to enhance the sale of the organization. In addition to this, enterprise needs to understand the role of technical advancement in undertaking the successful operation of entity. Also, it can be stated to enhance the sale the chosen firm needs to put their major focus on to delivering the agile, flexible and simpler customer focused commodities (CubasDíaz and Martinez Sedano, 2018).Thus, chosen enterprise has already established strong e Commerce presence that offer almost of the goods from clothing to foodstuffs to home products. This entity do not deliver food items, unlike some major food stores within UK.

Legal factor

The legislation plays the vital role in undertaking the business activities. In order to cope up with it, the entity is conducting training sessions to keep employee’s updates with current laws and legislation (Man, 2016). Additionally, entity needs to address the issues that can have wide impact on the image of entity. Over the years, chosen entity has been involved in multiple legal disputes. Thus, legal dispute have made it hard for brand to hold it existence within market.

Environmental conditions

This entity is considered as to luxury brand due to its highly concerned environmental effects. Therefore, this enterprise has promoted the term as sustainable retain industry by undertaking the careful production process. It is entity that has worked on many areas to remove trans fats, to reduce the use of energy and also promotes the fair value of the trade practices (Panda, 2019). This entity sell fair trade products. These allows smaller retail business to incur less cost of production and this enable environment friendly production techniques.

SWOT Analysis

It is tool that aids to undertake the internal and external analysis of chosen enterprise. These are outlined in below context as-:

Strength

  • This enterprise has strong offering in line with latest industry trends.
  • It follows high effective Corporate social responsibility to build high brand image.
  • Quoted enterprise has string focus on enhancing experience of customer (Sulich and GrudziÅ„ski, 2019).

Weakness

  • It is the enterprise that has poor financial performance.
  • This has wide reliance on the UK markets in terms to business activities more vulnerable to market conditions within local country.
  • The commodities frequent recalls leads to loss in the confidence of customers.

Opportunities

  • This entity follows online sales to boost its market position and this can aids to accomplish the future market share.
  • It is firm that is taking initiatives towards to reshaping their clothing segments.
  • This entity leads to simplifying their operating models.

Threats

  • This is the enterprise that is facing the wide range of the stiff competition within food sector of the UK.
  • Changing in the trends highly affecting the working of the industry in the huge aspect.

VRIO Analysis

It is defined as technique that aids to undertake better evaluation of firm resources that aids to gain competitive advancement.

Valuable

  • Mark and Spencer group plc reflects the financial resources of  chosen entity that are highly valuable as this assist in investing into external opportunities that increases. It assist to quoted entity in combating external threats.
  • The chosen enterprise distribution network is valuable resources as this assist in reaching out to more and more customers.It aids to run higher profitability to the enterprise. This is the things that ensures to undertake promotional activities that translates within the sakes as commodities are easily available.

Rare

  • This enterprise has found to rare as this strong financial resources are possesses by few firms in industry.
  • The employees of the Mark and Spenser are rate as they ate highly trained and skilled.With help of providing the better compensation and effective working environment the employees do not leave from enterprise.

Imitable

  • Distribution network of the Marks and Spenser also not costly to imitate by competition. This happens because this not legally allowed to imitate the patented commodity.Therefore, rivalries have to invest the significant amount as they are imitate the similar distribution system.

Organisation

  • Distribution network of the quoted enterprise is found to be organised as this provides the sustainable competitive advancement. This kind of the resources are proved to be the sources of sustained competitive advancement for chosen enterprise.

By application of VRIO analysis this has been identified that financial resources and distribution network offers the sustained competitive advancement. Lastly, this has been identified that the cost structure of the chosen firm is also a competitive advantage.

Competitive environment by using Porter's 5 forces model

Porter 5 Forces

Porter 5 Forces is an effective tool to analyse about the strength and weakness of corporate organisation (Akter and et al., 2016). Analysis of various factors such as competition in the industry, potential of new entrants in the industry, power of supplier, power of customer and threat of substitute products. Analysis of all the five factors involved in Porter 5 Forces will completely brief about the position of M&S as an organisation in retail market across the world and it will also guide in making suitable market strategies based on the company's strengths and weaknesses.

Competition in the Industry

M&S carry the consumer base world wide as the company carry its retail outlets across the globe. The latest statistics about the market share of M&S specified that the market share of retail sector is more than 32 trillion sterling Pound that clearly indicate the dominance of this sector at the global level in corporate world (CubasDíaz and Martinez Sedano, 2018). Huge dominance also resulted into association of big corporates like Puma, Sainsbury, Tesco and many others that causes to huge competition for the M&S across the globe. M&S carry the outlets across the globe so the company management not just face competition from the big retail corporates but the competition also addresses from the regional level corporates that carry the retail market in specific locations or countries. In-spite of such a competition for the M&S the retail outlets of the company in more than 400 locations apart from UK has enabled the management to give the tough competition to all the corporates in retail sector across the globe. The market dominance of M&S can also be justified with recent revenue states that specifies that the company could generate more than 10 bn GBP which sufficiently enabled the company management to deal with such a high level competition in retail market. This force is high due to high competition in the retail market for the company which also drives to new organisations in order to enter into the retail sector.

Potential of new entrants in industry

Retail sector is one of such sector that has witnessed the increasing trend in revenues. Increasing trend of revenue effectively attract to several new domestic and international companies that also improve the market competition at both global and regional level for the M&S (Febriyanti, Samopa and Ambarwati, 2019). Apart from the healthy revenue in retail sector the possibilities of new entrants coming into the market is not dominating as the retail sector seek high investment for establishing the whole retail set up. Potential of new entrants can be more dominating at regional level as the investment level is apparently low as compare to setting up business at global level. So the threat from the new entrants is mostly engage with M&S in the international market specifically with the regional entities. Besides the increasing competition from the new entrants this factor of new entrants not work aggressively as the M&S carry the huge brand name and goodwill that effectively attract the customer’s even at various regional levels because the people across the globe prefer to use branded cloths and other retail products that effectively cut the competition from such new entities.

Power of supplier

M&S deals in retail market and the company management need to deal with various suppliers of home products, food products and of clothing. Supply chain of M&S is also huge as the company carry the business across so the management deals with suppliers at both regional and international level (Fontana, Sastre-Merino and Baca, 2017). Supplier play the huge role in effective operations of company as supplier assures the sufficient availability of company's products at all the outlets across the globe. Apart from such a great involvement of suppliers in company's business the power of supplier is relatively low for the M&S. As the M&S is a big brand that enable company management to create dominance over various suppliers of company by providing effective profitability from operations. 

Power of customer

Customer’s play the huge role behind the success of company as customer’s are the ultimate source of profitability for the corporate organisations. M&S initiated business operations in the year 1884 in UK and today the company carry the world wide retail outlets because of the great support and acceptance of company's products by customer’s. Customers are the ultimate source of revenue for corporate organisations which play the great role behind the sustainability of company's operations (Huang, 2019). All the marketing and other business strategies of M&S is surrounded only around the target customers and that effectively justifies the importance of customer’s. Huge involvement of customer’s  in business sustainability and growth specify that the power of customer is high for the business.

Threat of substitute products

Threat of substitute products is always associated with corporate houses as it put a great impact over acceptance of company's products in the market by target customer’s and it also reduces the target customer base for corporate organisations (Lim,  Chalmers and Hanlon, 2018). M&S deals in food products, home products and clothing so the threat of substitute product is relatively high for the company as the company deals in three segments. Food and home products are more like a sustainable product segments that sustain the market demand for longer period of time but this factors effectively work in the clothing segment for M&S. Every day new fashion and trends are coming in the market based on the customer’s demand and expectations that also influence the company's market share not just at international level but at regional level as well. Substitute products also impact over sustainability of the business so the power of substitute products is high.

Porter 5 Forces is an effective tool to analyse about the strength and weaknesses of M&S. All such forces involved in Porter 5 Forces covers the major business aspects that also guide the company management to frame the suitable and effective market or business strategies to achieve better and more effective revenues.

Strategic Plan on the environmental analysis

Different types of strategic direction

To identify the strategic direction available for the M&S various aspects of Porter's generic strategies will be analysed.

Porter generic strategical tool is an effective analytical approach for taking competitive advantage in the market. This model focus over taking competitive advantage in the market by improving profitability of company in the market. This model guides two approaches to earn competitive advantage in the market that involve low cost of products and differentiation of products in the market.

Cost and Price leadership strategy

Cost and price leadership strategy is an effective tool to improve the profitability of the M&S. Porter generic model specifies two ways to achieve competitive advantage under cost and price leadership strategy (Varelas and Georgopoulos, 2017). The main aspect of this strategy is to reduce the selling price of the products to attract more customer base. For reducing the selling price, the company management can either put efforts to reduce the cost of goods sold so the profitability can be achieved eiter the set standard mark or even beyond such set standard. In case the cost of goods sold is not reduced then still company can take competitive advantage by reducing sales prices even the cost of goods sold is still the same. In such a case M&S can achieve higher sales at the reduced price as compare to other competitors and generate higher profitability. This strategies of reduced prices are largely based on reducing selling price and achieve higher profitability.

Differentiation strategy

Differentiation strategy is specified as creating a different image of company's products in the market. To create a different and unique image in retail market the management can focus over launching a new product. Management of M&S is launching a unique product that is stain less shirt and t- short line that will enable the management to generate specific attention in retail market from target customer’s. Research and development also conducted for analysing the market suitability for the new clothing line. Effective marketing tool such as social media marketing, internet, you tube and other brand promotions will be associated to project the new clothing line of M&S.

Focus strategy

Focus strategy is also an effective tool used in Porter Generic strategies. This strategy enables the management to focus over the target customer and based on the category and class of such target customer’s proper marketing str Porter generic strategical tool is an effective analytical approach for taking competitive advantage in the market. This model focus over taking competitive advantage in the market by improving profitability of company in the market. This model guides two approaches to earn competitive advantage in the ategies frame (Yuliansyah, Gurd and Mohamed, 2017). M&S is a luxury brand that also reflect the target customers of the company which belongs to upper class and upper middle class so all the marketing strategies and product line must be based on such target customer’s. This will enable the management to attract only the target customer’s.

Bowman's strategy clock

Bowman's strategy clock is an effective tool to analyse the company position in respect to the competition in the market. This tool focus over achieving the competitive advantage by effective market positioning of company's products. Based on the price and perceived value this model guided to position the products in the market. To take the competitive advantage this model specifies various positioning for the company's products in the market that involve hybrid, low price, differentiation and various other positioning in market. M&S is a big brand in retail sector and the hybrid strategy of market positioning will be an effective tool to achieve target customer’s for the company's products. Hybrid is an effective positioning strategy that involve element of both low and affordable price and also the market differentiation approach (Zhang, Leng and Zhou, 2020). Low cost indicates towards setting the affordable price range for products as compare to other competitors in the retail market. Differentiation involve branding of company's products with innovative advertisements, initiatives and other ways to create the different image of company in market. Both the factors sufficiently cope up with taking competitive advantage in the retail market for M&S.

Diversification

Diversification will also be a part of strategies for M&S. The marketing and positioning of new products line stain less shirt and t-shirt will be well diversified in all the company's locations. This will also include trading over websites and internet.

Vertical/ Horizontal Integration

Vertical and horizontal integration is also a part of strategical tool for the M&S. This strategy guided the management to control the supply chain management for the supply of company's products.

 

Strategic management plan

Balance Score Card

Balance score card involve vision of the organisation and also involve strategies related to the market.

Vision

  • Achieve the highest level of profitability
  • Provide quality products
  • Achieve the highest level of consumer satisfaction
  • Dominate retail sector with market share

Strategies

Management of M&S is aiming to plan the suitable market strategies by using Porter 5 Forces model, stakeholder analysis and the Ansoff matrix product / market strategy.

Ansoff Matrix Model

Ansoff Matrix is often call as Product / Market expansion grid. To achieve the higher growth the management of M&S has prepared the suitable strategies to apply the Ansoff Matrix Model (Arbogast, Deng and Maumbe, 2017). For effective use of Ansoff Matrix model management of M&S will be focused over market penetration, product development, market development and diversification. All such factors will cause to an effective strategy for the M&S to achieve higher growth in retail market. To entertain and achieve higher growth for the business the management is planning to launch a new products in stain less shier and t-shirt clothing line as a part of product development and new clothing line of the company will also be aggressively work in diversification strategy.

Vision

  • To achieve higher growth

Mission

  • Improve market share
  • Improve customer satisfaction
  • Improve growth potential

Objectives

  • Attract new customers in existing market
  • Expansion of business
  • Attract new customer by upgrading product quality
  • To enter in a new market to reach more sales for existing products.
  • To  expand the existing product line.
  • Sucesfull launch of new clothing line.

Strategies

 The management of M&S will use various strategies for implementing market penetration. To company management will attract new customers in existing market for company's products by giving attractive offers and other promotional strategies to attract the new customer base in existing market.

Management of M&S also use the strategy of market expansion by expanding the business area for company. For business expansion the company management has finalised various new geographical locations for the launch of new stores and outlets (Razak and et.al., 2016). Launching of new stores and outlets is not restricted to the UK and other countries where the outlets do exist but the management will also target new retail markets. For improving the market share in current dealing retail market management also making strategies to launch new clothing line like stain less shirt and t- shirts and also focusing over improving the food products to cater more customer base effectively. Management also focused to upgrade the existing product quality for improving customer experience. To upgrade the quality management is framed the strategies like taking market reviews about the quality assurance from customer’s in different outlets, asking questions about satisfactory development will also be a part of strategy for the product development. Market diversification will also be a crucial part of strategies for the management. To better cater the new geological locations and its associated customer base the management has framed the strategies of launching new clothing line stain less shirt and t- shirt to attract customers based on such new locations.

Tactics

Management of M&S will channelise different tactics for effective implementation of various strategies related to the growth of business.

Market Penetration:

  • Prices of existing product line will be reduced
  • Productive marketing tools will be channelised more aggressively
  • Using new marketing strategies like raising social campaign to ensure and strengthen the customer trust
  • Social media marketing will be used.
  • New dominated entrants will be acquired from the same market in other geological locations except from UK as the company is in very dominating position in UK already.
  • More distribution channels will be utilised in rural locations.

Product Development:

  • Improved research and development will be used over existing product quality to introduce satisfactory changes for upgrading the quality.
  • With the help of primary research expectations of customer will be analysed and based on that new clothing line will be launched currently stain less shirt and t- shirt is aimed by management (Safari, Farhang and Rajabzadehyazdi, 2016).
  • More strategic partnership will be conducted with firms to gain advantage of distribution channels and brands.
  • Quality improvement will also be implemented in existing product line based on the analytical review about the existing products of customer’s.

Market Development:

  • Inaugurating new outlets and stores in new target locations.
  • New locations in UK and other geographic locations will be touched with such outlets.
  • International expansion will be conducted will the tactics like merger and acquisition with other profitable brands and retail traders.
  • Strategic partnership will be conducted with trading retailers like amazon and others over internet.
  • Discounts, additional discounts and sales will be conducted over M&S website for attracting new customers over internet.

Diversification:

  • Management of M&S is planning to implement two tactics for diversification one is product diversification and second is market diversification.
  • The company management is launching new product line such as stain less shirt and t- shirt as a part of product diversification strategy.
  • Multiple colours will also be offered in stain less clothing line.
  • Various new and dynamic designs will be used to attract more customer’s.
  • The company will also use regional aspects while offering products to gain more attention in market.

Implementation / Control

The company management has framed a proper team to implement and control all the actions associated with the tactics and strategies for growth expansion. Professional tool such as social media marketing and branding, advertisements and other tools will be used to control the market expansion and penetration process. Strategical partnership has also developed with regional body's in new market to implement various operations of market penetration and expansion (Sia, Soh, and Weill, 2016).

Evaluation

Evaluation of impacts will be analysed on the basis of profitability standards. The company management has set the small targets based on the customer and market area in all the new locations to evaluate the company's performance or growth of the company. Profitability is a fair approach towards analysing the impacts of strategies and tactics used for growth in retail market.

Stakeholder Analysis

Supplier: M&S is a big organisation that effectively provide business and growth opportunities to all the associated suppliers to the company (Agbola and Otchere-Ankrah, 2018). Suppliers carry the high dependency over product supply related to the products of M&S. High dependency of suppliers also causes to low power in the business operations of M&S as the company carry the numerous options for products supply.

Investors: Investors are among the major stakeholders of M&S. Investors play the huge role in the sustainability and development of the business. High dependency of company's operations over investors enable investors to carry the huge power in the organization.Investors also involve company's shareholders that are also considered as the owner of company. Due to influence of stakeholder in sustaining and growth of the company the importance of stakeholders is relatively high as compare to other stakeholder group.

Employee's: Employees are among the crucial stakeholders for the M&S as employee's of the company ensure the effective company's operations. Power of employee is moderate in nature for big organizations like M&S. Employee's are among the crucial stakeholder of the company as they involves in operating every operational aspects of the company. Behind smooth operations of company employee's play a huge role.

Customer: Customer’s are among the major stakeholders of the M&S. Customer’s carry the huge involvement in business development and sustainability. Because of the high involvement of customer’s in sustainability and growth of the business enable the customer’s to carry the huge power in the company's business. Customers impact sustainability as well as company's growth potentials due to that the role of customers as a stakeholders is huge.

Government: Business organisation's needs to cope up with all the regulataions and rules attached with company's operations in process to run the business operations. Huge involvement of government in setting regulation and laws related to company's operations enable the government to carry the high power in company's business. Government influence every aspect of the company with its policies and strategies. Due to such as aspect the role of government is huge as a stakeholders. Order Business Essay Help Now!!

CONCLUSION

This report concludes about how and in what ways factors related to the macro environment effect the decision making of company related to the marketing strategies. Various aspects such as governmental policies, regulation and other aspects of macro environment take the crucial role in framing of strategies. Various aspects of PESTLE and Porter 5 Forces to analyse about the company's strength and weaknesses. Ansoff matrix is concluded for the positioning of company's products in market. Strength and weaknesses also concluded by analysing SWOT.

Also Read- Securing Systems: Evaluating Components and Ethical Implications

 

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