Overview of XXXX Industry
Strategic management refers to the consistent planning, supervision and evaluation of all the required things of the organisation to fulfil the objectives. It is the changing fast-growing innovation of the organisation and expectation of the clients that force the companies to take decisions for making strategic improvements. In this context, it is important for the company to apply the essentials of strategic management as it helps the leaders of the company to evaluate the existing situation of the workplace the potential risk present within the company and thereby sort out strategies to solve the issues. Therefore, the study deals with the strategic management process of Marks and Spencer that involves the evaluation of cross operations decisions of business before applying them. In this context, the study highlights the competitive edge of the company thereby portraying the companies’ existing internal and external situation in the market. Based on this factors the study discusses on the existing business model of M&S through porter’s analysis followed by environmental evaluation through PESTLE.
Porter’s model of five forces will help in analysing the growing competition within a specific industry. It is equipment that helps to demonstrate the position of the existing organisation in accordance with the rival enterprises (Lasserre 2017). Therefore, the model of five forces in this study will offer the information about the organisation’s present condition and the ways that are necessary for the future success within the organisation. Apart from these, the model will help in recognising the attractiveness of the sectors thereby implying the progressive profitability of the industry. Generally, it provides the idea of the average prediction earned by the company.
The retail market has a high barrier of entry due to the presence of high capital investment within the market to accomplish cost-effectiveness and scaled economic retailer of M&S are very poor for which it is difficult to obtain a new player. Apart from this, it is evident the market on which Marks and Spencer is investing is an growing market that would attract the new entrant to offer customers with new business strategy that may become hard to conduct dress retailing (Secundo et al. 2015) All the major potential industries have string development names of trade that becomes relatively important for the import within the homogenous market. Their attempt accumulates within the local market may pose the problem for the company due to the growth of new entrants in the market (Karadag 2015). More specifically, the lack of experience and recognition for operating in this market there would be problems for any new entrants within the location.
PEST Analysis
Looking at the international and overall condition of the market, there are no major replacements that can overgrow the company. However, there is a marked possibility that M&S nutrient products and clothing can be easily replaced by the other merchandise retailers. Seemingly, most of the direct challenges in case nutrient products are probably, Waitrose, John Lewis and Peter Jones that delivers standards quality clothing’s within the international market as well as other markets in different currencies (Bolden 2016). In China the company considerably failed due to the presence of merchandise that offers chides touch in their products.
In China, with such a demographic profile Mark and Spencer cannot sustain their business amongst the customers for a long period of time. Therefore, it is evident, that in China the power of the buyers are stronger since the customers present there have many retailers to select from ranging from a variety of markets such as Tesco, Carrefour and other merchandise such as Zara for clothing (Christopher 2016). Buyers in this context can make a demand to get products on a cheaper process that may reduce down the profitability of the company.
Figure 1: Porters Five forces
(Source: Christopher, 2016, p.144)
On the other hand, the power of the suppliers of the company is low in China and India, since customers have various choices including the local brands. Suppliers have lowered the power from the quality, cost and system of delivery (Nolan, Ciara and Thomas 2016). It is through the use of internet customers can easily; compare the cost of the items from various suppliers that may easily limit the power of the suppliers.
External competition for the company is high on all the aspects of business coming from the high process, high activities of promotion in the different market and falling down as well as growing of sales (Fernie, John and Leigh 2014). There is a stiff competition for the company that is coming from international brands such as Zara that has almost operations processed in their in-house location. The uncompetitive pricing strategy of the M&S in the market of China and India declined the sales of the company while increasing competition.
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Porter’s value chain analysis helps to review the primary and secondary activities of the company while recognising the areas of the organisation’s achievements of the important value. Thereafter, they focus on the areas of the value that will help them to achieve competitive benefits in the market. The primary purpose of the value chain is to demonstrate the state of production and the process of delivery of the company (Teller et al. 2016). The secondary activities are those that are not directly related to value chain rather it helps to enhance the effective delivery of initial activities.
Porter’s 5 Forces Analysis of XXXX Industry
Figure 2: Value Chain analysis of M&S
(Source: Karadag, 2015, p.42)
In M&S the areas of most important value are its supply chain which is represented as outbound logistics while delivering customers with high-end products related to infrastructure. In this aspect, the company has almost 798 stores that are highly available in street UK. The company’s infrastructure is also assisted by technology that is expanding itself with the growing set of e-commerce in business. In this context, the suppliers of M&S and their value chain are known as the part of M&S internal sources that are necessary for the entire system of value for the industry (Witherow 2018).
At the stage of internal logistic M&S maintains absolute transparency about starting of the input employees as well as retailed products. In this context, the organisation begins to develop its supply chain by taking reliable suppliers that will help them to provide quality production during the stock list control. Moreover, in the case of operation M&S has the smart system of packaging experts that help them to continue offering quality and safe distribution of products (Teller et al. 2016). A smart system of packaging operations provides the customer with reputed trade awareness and convenience.
Again, in the case of outsources logistics the company tends to use multiple user systems of the warehouse that is the most essential system of mainframe base that helps in finding the direction for M&S. This process allows the company to handle and bringing the trials to be communicated to the different parts of shops thereby increasing the value of products.
After opening in China the company started sourcing its products from cheap markets that hampered the quality of the products thereby exploiting the USP of the company. However, Marks and Spencer do not have a sufficient number of outsourcing agents for maintaining supply chain and internet for maintaining the worldwide stores. The company has only 110 warehouses in the UK. Currently, M&S is following Zara, a model of the value chain for developing the source of distribution. They have, therefore, started a renewed website for the potential customer’s involvement. This version of the business supply chain model aims to provide service to various markets through websites but the company has the faulty chain of supply that may be problematic.
In the case of business corporate strategy, M&S accumulated the business strategy used by Zara. Therefore, the company has planned to expand their distribution market with the emergence of 250 new international stores. In the present scenario, the company has 450 international stores. Currently, they are focusing on delivering food, beauty and lingerie products. It has been estimated that through the plan of expansion the company is about to bring almost 40% expansion in the production (Witherow 2018).
Opportunities and Threats
Through the strategy of diversification of corporate and business strategy, they are developing new products for the merging markets as a challenging option. However, the growing economies of Russia, India and another western economy can offer them opportunities for building innovative products to the market. In this context, M&S focus on the achievements of the market expansion with the close philosophy with different product lines.
Conclusion
As a sustainable business in the UK, Marks and Spencer’s maintains a strategy of differentiation that emphasises the quality as well as the value at the current state at an affordable price. However, from the above study, it is evident that the company ignored the major aspects of value and innovation. Therefore, for getting back is popularity the company needs to focus on conducting innovative and customer-oriented service thereby focus on developing innovative products with the existing features of the products. They are required to bring new ways to enhance the uncompetitive prices to bring value to their products in markets like China and India.
Since the market is the current situation for fashionable and quality clothes, M&S has to make efforts for the meeting the demands of the customers through a development of joint venture and strategic collaboration to obtain a competitive edge in the diverse market. Moreover, the company has the ability to provide appropriate product therefore, they are required to invest more in the building promotion to support innovation a supply value in fashion.
References
Bolden, Richard. “Leadership, management and organisational development.” In Gower handbook of leadership and management development, pp. 143-158. Routledge, 2016.
Chimhundu, Ranga, Eric Kong, and Raj Gururajan. “Category captain arrangements in grocery retail marketing.” Asia Pacific Journal of Marketing and Logistics 27, no. 3 (2015): 368-384.
Christopher, Martin. Logistics & supply chain management. Pearson UK, 2016.
Fernie, John, and Leigh Sparks. Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan page publishers, 2014.
Hingley, Martin, Adam Lindgreen, and David B. Grant. “Intermediaries in power-laden retail supply chains: An opportunity to improve buyer–supplier relationships and collaboration.” Industrial Marketing Management 50 (2015): 78-84.
Karadag, Hande. “Financial management challenges in small and medium-sized enterprises: A strategic management approach.” EMAJ: Emerging Markets Journal 5, no. 1 (2015): 26-40.
Karadag, Hande. “Financial management challenges in small and medium-sized enterprises: A strategic management approach.” EMAJ: Emerging Markets Journal 5, no. 1 (2015): 26-40.
Lasserre, Philippe. Global strategic management. Macmillan International Higher Education, 2017.
Nolan, Ciara T., and Thomas N. Garavan. “Human resource development in SMEs: a systematic review of the literature.” International Journal of Management Reviews 18, no. 1 (2016): 85-107.
Secundo, Giustina, Susana Elena-Perez, Žilvinas Martinaitis, and Karl-Heinz Leitner. “An intellectual capital maturity model (ICMM) to improve strategic management in European universities: A dynamic approach.” Journal of Intellectual Capital 16, no. 2 (2015): 419-442.
Teller, Christoph, Andrew Alexander, and Arne Floh. “The impact of competition and cooperation on the performance of a retail agglomeration and its stores.” Industrial Marketing Management 52 (2016): 6-17.
Witherow, T. (2018). Marks & Spencer boss warns high street chain has ‘no God-given right to exist’. Mail Online. [online] Available at: https://www.dailymail.co.uk/news/article-5940479/We-no-God-given-right-exist-Marks-Spencer-boss-warns-chain-burning-platform.html [Accessed 29 Jul. 2018].
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