Corporate strategy means policies which contains company 's long term vision ,seeking to create customers or corporate value and motivate the employees so that they can do work effectively and efficiently which will help in increasing customer satisfaction. In other terms it is a continuous process that requires a constant efforts for motivating the investors so that they can invest their money in the company (Calandro Jr, 2011). This project report is based on Marks and Spencer which deals in clothing sectors and is the biggest multinational retailer in UK. It's vision is to be recognized as the best delivery company in UK. In this project report it explains the strategic issues that is faced by an organization , resources and capability of an organization that help the company in getting competitive advantages over the competitors and competitive strategy of the company and strategic issues and how company can improve it.
3 key strategic issues of the organization
Strategic issues are those problems that affects the company 's vision ,mission ,values ,costs of products and services etc. It affects the organization culture. For getting the success, Marks and Spencer company should have good strategy plan because today time there is more competition in the market. So it is necessary,company should make the strategy according to the market condition. There are an no. of strategic issues some of them are as follows-
Strategic issues in marketing and customer loyalty: In marketing and customer loyalty ,Company should make the strategic planning for the achievement of objective and competitive advantages over the competitors. If company will not make strategic planning then it will be failed in surviving (Dowling and Moran, 2012) .It is a strategic because for capturing the larger market ,company have to make policies taking all internal and external factors. Internal factors like cash budget ,capability of employees etc and external factors like PESTLE analysis ,5 Force model etc. If company will not make policy related to the market then it cant achieve the competitive advantages over the competitors. So it a strategic issues.
Strategic issues in strategic alliance ,merger and joint ventures: When company does merger or joint venture then it arises some issues related to the policies ,cash etc. So while doing the mergers with another company, both company have to make the planning .If company does not do so then merger will not become successful. It is also affected by the internal and external factors so while doing the merger ,company have to take all factors in consideration (Gazzola and Colombo, 2014). It is strategic because while doing the merger ,company have to planning in advance like what they want to do after merger etc.
Strategic issues in product development: It is also a strategic issues while developing the new products ,company have to plan and analyze the market. It is strategic because if company fails to meet the requirement then it may be lost the market and not be able to survive in the market . While developing the new products,company have to take all internal and external factors because it affects the development of the products.
Increased competition: It is also an strategic issues because it affects the company 'vision ,sales ,profit ,or market etc. If there are more competition in the market then company have to make the strategic planning for achieving the competitive advantages over the competitors (Grant, 2016). If company does not do so then company will not be able to meet the competition and failed.
All above points are affected by the internal and external factors like PESTLE analysis ,porter 5 force model ,capability of employees etc.
PESTLE Analysis: It is done for analyzing the external factors. It is helpful in analyzing the political factors , economical factors ,social factors ,technological factors ,legal factors or environmental factors.
Political factors: In this it analyze the rules and regulation ,laws etc related to the employment and evaluates that what are the impact of this on the business process.
Economical factors: In this it analyze the economy of the country like inflation rate ,deflation rate etc.
Social factors: In this it analyze what are the benefits or losses that have o suffer by the society because of the company process (Hao and Han-po, 2011).
Technology factors: in this company analyze that what are new up gradation in the technology.
Legal factorsL: In this company evaluates that company are following the laws or rules that are compulsory to follow.
Environmental factors: In this company analyze that what are factors that are affecting the environment of the society.
Porter 5 force model: It is also helpful in analyzing the external factors .It is helpful in knowing about the business position ,customers ,competitors etc. In this it analyzes the following factors which are as follows (Hillier, Grinblatt and Titman, 2011) -
- Threats of new entrants
- Bargaining power of buyer
- Bargaining power of supplier
- Threat of substitutes
- Industry rivalry
Internal environment: In this company analyze the internal factors like availability of raw material ,employees ,budgets etc.
Key resources and capability and factors that gives the competitive advantages to Marks and Spencer
While formulating the business strategy ,Marks and Spencer company considers it's resources and capability or critical success factors that are required for achieving the profit in the market .
Critical success factors are those elements that are required for the organization that will help the company in achieving the mission of the company. It is elements that help the company in getting success. Another way to look critical success factors is to examine the strategic capabilities of the company. Strategic capability means the ability of the company for performing well that will help the company in getting success in the market (Johnson, 2017).
For achieving the competitive advantages over the competitors ,Marks and Spencer should have resources and capabilities. Marks and Spencer have following types of resources which are follows-
Physical resources: These resources are those that can be seen or touch like machines ,building ,employees ,raw material etc.
Non- physical resources: Like goodwill ,brand name ,patents ,copy rights etc.
Human resource: Like skilled man power that will help the company in getting competitive advantages over the competitors.
Financial resources: Such as capital ,cash ,debtors and creditors etc.
Marks and Spencer 's capabilities: Capability means the ability of the company to perform the task with full utilization of resources that will help the company in achieving the vision or mission statements. It's marketing capabilities is based on the expert of the marketing and how they are interacting with the people , Information technology ,financial resources etc.
If company is developing their capabilities then it doesn't mean that it have sufficient resources and vice -versa (Johnson, 2011). Marks and Spencer have the following resources and capability that can be used for achieving the organization goals and objectives which are as follows-
It's network: Marks and Spencer is the universal parcel service provider that have the capability to visit anywhere in UK for delivering the letters and parcels. It has the largest retail network that helps in delivering the parcels. It uses the footprints to increase collection or delivery system for the customers. It provides the parcel worldwide through express delivery business etc. So it have largest network across the countries.
People: It has the 156000 employees under this and it is a great responsible employer. It have the skilled and efficient employees who help in achieving the vision or mission statement (Keyes, 2016). They plays an important role in getting success in the market.
Customers and brand name: It have the large no. of customers who help in getting the success. It is able to deliver to customers who are more than 29 million and 220000 customers in 41 European countries and nation states.
It's brand is helpful in defining the culture. With the help of brand name ,customers are able to identify the company .It is the most trusted company in UK and got the award of National Brand of the year.
Investment in business: It invest the big amount in their company for improving the efficiency and IT capability.
Factors that gives the competitive advantages
Competitive advantage are the condition that allows the company to produce the goods and services according to customer 's requirement and needs (Kim and et. al., 2011) . If company will make the goods and services according to the customer's requirement than it will helpful in achieving the competitive advantages and generating the sales and profits. There are many factors that gives the competitive advantages to the company and following are the factors that gives the competitive advantages to Marks and Spencer -
Uniqueness in products or services: Company can get the competitive advantages if they are introducing the new products or services that have some uniqueness and there have no substitute of those products.
Resources: Resources are the most important part that gives the competitive advantages .like employees ,quality of raw material etc. If employees are more skilled and intelligent then they will helpful in achieving the competitive advantages and as well if the quality of raw material is superior then it will help in producing good quality of products that will helpful in achieving the competitive advantages (Kim, 2011).
Cost effectiveness: If company are providing goods and services at lower cost or reasonable price then it will also help in achieving the competitive advantages.
Strategic capabilities: For achieving the competitive advantages ,company should have capabilities and competencies that can help in achievement of goals.
Uniqueness in offers: Marks and Spencer provides the uniqueness in offers that will help in achieving the competitive advantages like it provides the return offer etc to the customers so that they can attract towards the company 's offers.
Brand name: It is also helpful in achieving the competitive advantages .If brand name is good in the market or company has goodwill then customers will want to take products or services from that company. Like Marks and Spencer has good goodwill and brand name that's why it s able to get the competitive advantages because through this customers attracts towards the company. It is the only reason Marks and Spencer is the largest clothing manufacturer in UK or in other countries.
Distribution network: If company has good distribution network then it can attract the customers towards the company like Marks and Spencer has good distribution network in most of the countries so that customers trust on this company and take the services from this and it provides fastest services to the customers (McWilliams and Siegel, 2011).
Intellectual property: Intellectual property likes patents ,copyrights ,trademark etc are also helpful in achieving the competitive advantages because it creates a images and defines the culture of the company. It attracts the customers towards the company.
Customer support: If customers supports the company then company can easily achieve the competitive advantages over the competitors .Customer support means customers loyalty. In other terms when customers don't switch to any other competitor's products then it helps in achieving competitive advantages (Rothaermel, 2015).
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Following are the other factors that are also gives the competitive advantages to the company that is Porter Generic strategies which are as follows-
Cost leadership strategies: In this company reduces the prices of the products or services for achieving the market share.
The differentiation strategies: In this company makes the products or services which are different from the competitors' products or services.
The focus strategy: In this company focus on the cost and differentiation both.
All above strategies are helpful in achieving the competitive advanatges over the competitors.
Competitive strategies that addresses the strategic issues and what can do improvement in this Competitive strategies are those strategies that are made for long time of period and that are helpful in achieving the competitive advantage over the competitors. It's main objective is to defend itself and generate sales and profit (Sethi, 2012). There are three types of competitive strategies that are followed by Marks and Spencer which are as follows -
Cost leadership strategies: It is helpful in achieving the competitive advantages over the competitors . There are two ways by which company can achieve it – increasing profits by reducing cost of products and services or increasing market share by reducing products or services cost. For achieving this company have to face the strategic issues like -
- No availability of low cost labor ,materials , facilities etc. If all these are costly then company can not set the lower prices.
- No proper availability of capital (Steyn, 2012).
- Not availability of proper logistics that will help in achieving the large market.
- All above are the strategic issues that interrupt the success of the organization and in achieving the competitive advantages.
The differentiation strategy: According to this theory , Company makes or designs the products or services different from it's competitors 's products or services. How company does so ,it totally depends on the nature of the industry ,of the products or the of the services (Lyon and Maxwell, 2011). If company is adopting this competitive strategies then company have to face the following strategic issues which are as follows
- No proper research of the market so that company is not able to produce the unique or different products or services.
- No effective tools and techniques for doing marketing or sales because of this customers can not understand the benefits of the products and services.
- Sometimes company don't have skilled and knowledgeable employees that can work effectively and efficiently that's why company is not able to deliver high quality of products and services to the customers.
Focus strategy: If company uses the focus strategy then it mainly focus on the niche market ,uniqueness of the products or services ,low cost etc for the market. Company serve better in the market because it wants to create brand or customer loyalty in the market so that it can achieve competitive advantages and generate market share or profits. While adopting this strategies ,company have to face strategic issue like company can't focus on the cost as well as it's uniqueness .In this company can focus only on one part either to focus on cost or focus on differentiation (Komonen, Kortelainen and Räikkönen, 2012).
For selecting the best competitive strategies ,company have to follow some steps that are as follows -
- Firstly company should do SWOT analysis of the competitive strategies like analyze the strength ,weakness ,opportunities and threats of different different strategies.
- Then use the five force model that will help in understanding the nature of the industry.
Then compare between SWOT analysis and five force model and evaluates that how it can be used to-
- Reduce or manage the supplier or customer power
- How it can be helpful in reducing the threats of new entrants or substitutes etc.
After analyzing all above things then select that competitive strategies that are giving more benefits to the company. Company can improve the strategic issues by using the following ways which are as follows-
- Company should conduct the market survey before adopting any competitive strategies. In market survey ,company analyze the taste and preferences of customers ,needs and wants of the customers, customer attitude and buying behavior etc (McWilliams and Siegel, 2011).
- Company should hire the skilled and intelligent employees so that they can work efficiently and effectively and be able to deliver the good quality of products or services to the customers.
- Company should adopt the best tools and techniques for marketing so that it can attract the customers and potential customers.
- Company should hire or acquired the employees or materials which have low cost.
- It should invest the amount in the new technology so that it can deliver the best quality of products or services at lower cost to the customers so that they can become loyal customers (Dowling and Moran, 2012).
- It should adopt efficient logistics so that it can deliver the fastest services to customers so that they can be delighted after getting services.
- It should have good distribution network so that it can deliver the good services to the customers. Distribution network like whole sellers ,retailers ,agents etc.
- Company should focus on the the small segments so that it can serve in efficient and effective manner.
- It should make the effective competitive strategies so that it can achieve the competitive advantages over the competitors and can generate sales ,profits and market shares of the company (Calandro Jr, 2011).
- For removing the strategic issues there should be easily and properly availability of the resources so that there should no interruption between process of working of the company.
- For removing the strategic issues ,company should implement the proper strategies and that should be communicated properly to all members of the organization.
- For conducting the market survey ,company should hire the expert that can do analysis of the market properly and be able to give proper and adequate suggestion to the company so that company can improve its products or services (Grant, 2016).
Strategies are very important for the organization because it helps in achieving the success and guides the company for taking right decision and takes it on the right pathway. Strategies means the policies related to future and contains that what company want to achieve in future .Above study is based on Marks and Spencer that explains key issues that is faced by an organization like strategic issue in marketing ,product development etc. In sought out these problems, PESTLE ,Porter five force model etc are very helpful because by analyzing these factors ,company can make perfect strategies. And it also concluded that by adopting the Porter generic strategies like cost leadership ,differentiation strategies etc ,company can achieve the competitive advantages and get success and factors that can solve the strategic issues in the company.
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