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The Hierarchy Of Strategic Intent Marketing Essay

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Strategic analysis, strategic choice and strategy application are the three parts of the Strategic
Management. Strategic choice is anxious with decisions about the companys future and the way it
needs to reply to the impacts and influences identified in strategic analysis. The choice becomes an
indolent exercise if the strategy is not correctly implemented. These three divisions, so, form a closed
loop in which the tail and the head are often vague.

TASK1
Understanding the process of strategic planning:
Explain strategic contexts and terminology missions, visions,
objectives, goals, and core competencies:
STRATEGIC INTENT:
Strategic analysis, strategic choice and strategy application are the three parts of the Strategic
Management. Strategic optimal is concerned with decisions about the organizations prospect and the
way it needs to respond to the effects and impacts identified in strategic analysis. Choice becomes an
indolent exercise if the strategy is not properly applied. These three divisions, consequently, form a
closed loop in which the tail and the head are often indistinguishable.

THE HIERARCHY OF STRATEGIC INTENT:


I will discuss these parameters as a ladder of strategic intent. The ladder of strategic intent includes
the following elements.
A broad vision of what the organization should be.
The organization's mission
The strategic objectives and specific goals to be pursued relentlessly
The plans that are developed to accomplish the intentions of management in a concrete way.
The fundamentals of the hierarchy specify the devout intentions, lofty ideals and clear-cut ideas that
serve to unify the energy and forces scattered throughout an business. They are beginning points for
any formal planning process, but they also provide the sense of direction necessary to assure that
incremental behavior culminates in overall progress. Strategic intent is said to have expressed
effectively when individuals believe fervently in their products and industry and when they are absorbed
totally on their firm's ability to outdo its competitors.

VISION:
Vision is what keeps the business moving forward. Vision is the motivator in an business. It needs to be
meaningful with a long term viewpoint so that it can motivate individuals even when the business is
facing discouraging odds.
Vision has been defined in numerous dissimilar ways.

Kotter defines it as a "description of somethings (an organization, corporate culture, a business, a


technology, an activity) in the future".
El-Namaki reflects it as a "mental perception of the kind of environment an separate, or an
organization, aims to create within a broad time prospect and the underlying conditions for the
actualization of this insight".
Miller and Dess view it simply as the "category of intentions that are broad, all inclusive, and forward
thinking".
The communal strand of thought evident in these definitions and several others available in strategic
management literature narrates to vision' being future ambitions that lead to an inspiration to be the
best in one's field of action.

CHARACTERISTICS OF VISION:
Vision is industrialized through sharing across an organization:
Famous stories of successful vision include visions that have been extensively shared across entire
organizations. Of course, an individual leader, often a founder has a powerful influence on the others.

Techniques of convincing the others about vision:


The leaders by working hard along with others persuade the others in the organizations rather than
merely delivering speeches.
Change Agents: Leaders must recognize the complexity of changing an outmoded vision to reflect new
realities. Organizations must redefine themselves through efficient visions of the future through new
purposes and strategies.

THE ADVANTAGES OF HAVING A VISION:


Parikh and Neubauer point out that numerous advantages accumulating to a business having a vision.
Here is what they say:
Good visions are inspiring and exhilarating.
Visions represent a discontinuity, a step function and a jump ahead so that the company knows what it
is to be.
Good visions help in the creation of a common identity and a shared sense of purpose.
Good visions are competitive, original and unique. They make sagacity in the marketplace as they are
practical.
Good visions foster risk-taking and experimentation.
Good visions foster long-term thinking.
Good visions represent integrity; they are truly genuine and can be used for the benefit of people.

VISION STATEMENT:
When you initiate the process of strategic planning, visioning comes first. Martin Luther King, Jr. said, "I
have a dream," and what followed was a vision that altered a nation. That famous speech is a dramatic
example of the power that can be produced by a convincing vision of the future. A vision is a guide to
applying strategy. Visions remain about feelings, beliefs, feelings and pictures.

A vision statement responses the query, "What will success look like?" pursuiting of this advent of
success is what inspires individuals to work collectively. It is an significant obligation for building a
strong foundation. When all the staffs are committed to the company's visions and goals, best choices
on business decisions are more likely.

CREATING A SHARED VISION:


Most managers, now-a-days, talk about a communal vision, meaning that individuals from across the
business have a common mental image and a equally supported set of ambitions that serve to unite
their efforts.

MISSION:
A mission was earlier careful as the scope of the industry activities a secure pursues. The definition of
mission has slowly expanded to represent a concept that exemplifies the purpose behind the existence
of an organization. Business mission can be defined as the important, unique purpose that sets a
business apart from other companies of its type and identifies the scope of its operations in product
and market term.

CHARACTERISTICS OF A MISSION:
A mission statement includes the basic business purpose and the reason for its being by rendering
some valuable functions for the society. An effective mission statement should possess the following
physiognomies.
Feasible: The mission should be accurate and achievable. For example, Tesco professed its mission
as "to encourage saving among customers by selling their product cheep".
Precise: A mission statement should not be fine or too comprehensive.
Clear: A mission statement should lead to action. O2 mission of connecting people' leads it to a variety
of service with varied tariff structure so as to cater to the preferences of mobile phone users.
Motivating: The mission should be motivating for the employees to be inspired for action. For example
Royal mail mission is to expectations of the customer' with dedication, devotion and enthusiasm. So
customer service has develop a value and it is inspirational and motivating the postal employees.
Distinctive: A mission statement will indicate the major components of the strategy to be adopted. The
mission should be unique. When Microsoft defines its mission as to be a world class competitor' it
creates a unique place in the minds of individuals personal computer users.
Indicates major components of strategy: "The mission statement of Shell Bp emphasizes petroleum
refining, marketing and transportation with international standards and modern technology. It indicates
that Shell Bp is going to adopt diversification strategy in future.
The mission delivers way to insiders and strangers on what the company stands for. It is the
supervisory star for any copany.

MISSION STATEMENTS:
Vision is the critical focal point and beginning to high presentation. But clearly a vision alone won't
make it happen. Even the most exciting vision will remain only a dream unless it is followed up with the
striving, building, and improving.

RESEARCH OF VISION AND MISSION STATEMENTS:

In a competitive economy ambitious by the cruel logic of markets, a business with a determined
management can transform a business much more quickly and much more efficiently than in the past.
Clearly enunciating your strategic intent is the key. Vision and Mission hold an business together.

OBJECTIVES:
An objective designates the result that the business expects to achieve in the long run. It is an end
result, the end point, somewhat that you aim for and try to reach. It is a desired result towards which
behavior is directed in a business.

CHARACTERISTICS OF OBJECTIVES:
Objectives have the following structures:
Objects Form a Hierarchy: In many organizations objects are structured in a hierarchy of importance.
There are objectives within the objectives.
Objectives Form a Network: Objectives interlock in a network fashion. They interrelated and
interdependent. The concept of network of objectives implies that once objectives are established for
every department and every individual in a business, these subsidiary objectives should contribute to
meet the objectives of the total business.
Multiplicity of Objectives: Organizations pursue multifarious objectives. At every level in the hierarchy,
goals are likely to be manifold.
Long and Short-range Purposes: organizational objects are usually related to time. Long-range objects
extending over five or more years are the ultimate or dream objectives for the business

GOALS:
They are stated in precise terms as quantitatively as possible. The emphasis on goals is on
measurement of progress toward the attainment of objectives. Goals have the following structures they:
1. Are resulting from objects, 2. Offer a normal for measuring presentation, 3. Are articulated in
concrete terms, 4. Are time-bound and work-oriented.

Advantages and Disadvantages:


It helps organizations do to satisfy a particular need of the society or to fulfill a particular deficiency in
the society. There is always a deadline which sometimes is never meant by organizations.

Review the issues involved in strategic planning:


Businesses that succeed do so by creating and keeping customers. They do this by providing better
value for the customer than the competition.
Marketing management constantly has to assess which customers they are trying to reach and how
they can design products and services that provide better value (competitive advantage).
The main problem with this process is that the environment in which businesses operate is constantly
changing. So a business must adapt to reflect changes in the environment and make decisions about
how to change the marketing mix in order to succeed. This process of adapting and decision-making is
known as marketing planning.
Where does marketing planning fit in with the overall strategic planning of a business?
Strategic planning is concerned about the overall direction of the business. It is concerned with

marketing, of course. But it also involves decision-making about production and operations, finance,
human resource management and other business issues.

The objective of a strategic plan is to set the direction of a business and


create its shape so that the products and services it provides meet the
overall business objectives.
Marketing has a key role to play in strategic planning, because it is the job of marketing management to
understand and manage the links between the business and the environment.
Sometimes this is quite a straightforward task. For example, in many small businesses there is only
one geographical market and a limited number of products (perhaps only one product!).
However, consider the challenge faced by marketing management in a multinational business, with
hundreds of business units located around the globe, producing a wide range of products. How can
such management keep control of marketing decision-making in such a complex situation? This calls
for well-organized marketing planning.
What are the key issues that should be addressed in strategic and marketing planning?
The following questions lie at the heart of any marketing and strategic planning process:
Where are we now?
How did we get there?
Where are we heading?
Where would we like to be?
How do we get there?
Are we on course?
Why is marketing planning essential?
Businesses operate in hostile and increasingly complex environment. The ability of a business to
achieve profitable sales is impacted by dozens of environmental factors, many of which are
interconnected. It makes sense to try to bring some order to this chaos by understanding the
commercial environment and bringing some strategic sense to the process of marketing products and
services.
A marketing plan is useful to many people in a business. It can help to:
Identify sources of competitive advantage
Gain commitment to a strategy
Get resources needed to invest in and build the business
Inform stakeholders in the business
Set objectives and strategies
Measure performance

Advantages and Disadvantages:

Market planning delivers a means for actively involving personnel from all areas of the business in the
management of the company and this participation improves the quality of the plans, with the
participation of the staffs it enhances their overall understanding of the companys objectives and goal.
One of the disadvantages is costly to implement.

Explain different planning techniques:


Planning is a critical business responsibility that is often overlooked, particularly by smaller companies
with limited time and personnel resources. However, the reason for this oversight is often the result of
management's lack of planning techniques. Learning useful planning methods and factors eliminates
this knowledge gap. Business planning is just as critical as having a map when traveling to an
unfamiliar location. Without it you may never reach your destination.

Primary Planning Types


Business planning types come in various flavors depending on the company size and industry.
However, there are three basic plans that apply to all businesses, large or small. Business, strategic
and marketing plans are important to every for-profit and nonprofit organization. Understanding the
goals and components of each offers businesses the tools to create effective plans using the most
basic or sophisticated techniques.

Business Plans
Typically used for starting up or financing a company, business plans are the cornerstone of the
planning function. Components of a business plan include an executive summary, market analysis,
product/service descriptions and financial/operations projections for a minimum of three to five years.
In start-up situations that need initial financing, creators should paint a vivid, yet conservative, picture
of the founders and the rationale for believing the business will succeed. When seeking growthfinancing, management should highlight past company performance and carefully project the impact of
the new funding on improving net income. Always include debt service, which is the amount needed to
repay the new loan, in income and expense projections.

Strategic Plan
Strategic plans should be created by business owners and/or senior management only. Unlike
business plans, which are based on historical data and future projections, strategic plans are more
conceptual. These plans should include defining your organizational goals, identifying your available
options to achieve your objectives and considering new short-term opportunities you believe will exist
to improve your business's results. You may want to incorporate specific industry trends into your
planned strategy. Strategic plans are not long-term creations, but should address taking advantage of
available opportunities in the next 12 to 24 months.

Marketing Plans
All the fabulous business and strategic plans ever devised will fail if you don't market and sell your
product or service. A solid marketing plan will help you achieve gross income and sales goals. A SWOT
(strengths, weaknesses, opportunities, and threats) analysis is an effective technique for creating a
winning marketing plan. SWOT is also useful in strategic plan creation as a foundation technique. You
can also combine a SWOT analysis with the four P's product, price, publicity, and place of effective
marketing. Even if you have invented the "better mousetrap", you need a superior marketing plan to get
results. These techniques will give you the ammunition you need.

SWOT analysis and marketing

A vital part of the planning process is looking at the existing position of an industry and trying to decide
how factors external to the business may affect the business.
An organization can perform a SWOT analysis as a way of deciding which marketing plan to use. The
organization performs an audit on the internal and external nature of the company looking at the current
and future situation. An audit is a review of all the company s activities.

Internal
Explanation
Strategy Implications
Strengths
Reviews the business current strengths such as a good brand or strong sales performance
Can develop the strengths, perhaps in the way they promote the product, or wish to develop new
products (Tesco have used their strong brand name to launch several products)

Weaknesses
Reviews the business current weaknesses such poor response times to requests for information or late
deliveries
Can implement strategies to eradicate these weaknesses e.g. more resources put into a better
warehousing system for the dispatch of goods.

External

Opportunities
Reviews the business future opportunities e.g. new technology making it easier to manufacturer
certain goods or new markets abroad
Can use strategies to take advantage of the potential opportunities e.g. developing new products to
meet the potential increased demand

Threats
Reviews the business future threats, mostly from increased competition from other firms or from
changes in the economic situation.
Can employ strategies to ward off these problems, e.g. setting lower prices or increasing promotion
Rational about the use of a SWOT analysis in measuring the influence of marketing to a business
strategy;

Possible strengths in marketing might be:


Specialist marketing expertise
An innovative product or service
The location of the business convenient for customers
The reputation of the brand perhaps it is trusted or recognized as the highest quality

Likely weaknesses in marketing could include:


Lack of a clear product differentiation compared with competing products
Weak distribution compared with competitors
Inadequate online presence

Potential marketing opportunities could include:


The use of technology to develop new products
Growing demand from overseas markets (e.g. China & India)
The use of social media like Facebook and Twitter to reach new customers

A list of likely marketing threats might include:


Competitors introducing better products at lower prices
Changes in the economic environment which encourage customers to be less loyal to established
brands
Changes in customer tastes and fashions

Universal Techniques
To make business planning come alive and succeed there are three simple practices that must be
always be employed. First, set realistic, measurable goals. Second, understand and communicate with
your customer base. Third, attract and retain the best employees your company can afford. Without
these three components, your business planning, however sophisticated, risks failure on a massive
scale. Using these three simple techniques, your business plans should deliver the results you want.

SPACE, PIMS.
PIMS data can be described as a guide to help management describe the business a business
situation and opportunity relative to the offerings of its competitors in two-dimensional space.

TASK 2
BE ABLE TO FORMULATE A NEW STRATEGY
Produce an organizational audit for a given organization
Tesco Marketing Audit:

The marketing audit is a fundamental part of the marketing planning process. It is conducted not only at
the beginning of the process but also during and after the process completion. Marketing audit not only
consider its own plan but also considers internal and external factor that affects marketing planning.
Some important tools used by marketing audit are SWOT for internal and external environment where
as PESTLE and Five Forces Analysis which focus only on the external environment.
It can be viewed as an umbrella that covers efforts to assess customer needs and wants and to
understand community patterns. The external environment is reviewed at micro and macro level.
Definition:
The marketing Audit has been defined by Phillip Kotler strategic market auditing (1977) as a
comprehensive, systematic, independent and periodic examination activities and resources in order to
determine problem areas and opportunities and to recommend a plan of action.
As per the definition:
Marketing Audit is Comprehensive, systematic, independent and periodic features. In simple word
marketing audit is the complete review of the environment that includes both internal and external
environments of any organization. The marketing audit follows the following areas as components of
marketing audit:
Environmental Audit which includes Macro Environmental Audit and Micro Environmental Audit.
Marketing Strategy Audit
Marketing Organization Audit
Marketing System Audit
Marketing Productivity Audit
Marketing Function Audit
Processes and techniques used for auditing the marketing auditing environment follows simple three
steps are:
a) Agreement on objectives, scope and approach: Marketing auditor must prepare for the marketing
audit by holding discussion with the CEO and the executive staff and briefly reviewing some financial
and marketing data. Often objectives are discussed in the meeting such as determine how the market
views the company and its competitors, recommending a pricing policy, determining sale activity. The
audit would cover the marketing operations of the company as a whole.
b) Data collection: More time is spent on the gathering data. More auditors are involved when the
project is large. Auditor has to spent time in deciding what question to be asked, who will be
interviewed and so on so forth. Daily reports of the interviews are to be written up and reviewed.
c) Report preparation and presentation: When the data gathering is over, auditor prepares notes for a
visual and verbal presentation to the company officer.
Techniques used for auditing the marketing environments are as follows.
1) SWOT Analysis: It is one of the most important tools of marketing audit. It helps a lot of help to the
marketers and is used at the beginning of the marketing audit process. It has advantages as well as
drawbacks. Some of the drawbacks are subjective and cannot be relied too much. Therefore it should
be used as a guide in the marketing planning and not as a prescription to the process.
2) PESTLE Analysis: Various factors of the marketing is analyzed by PEST analysis that effects upon

the marketing process. An organization that is carrying the analysis needs to study the environmental
factors that are internal and external.
3) Five Force Analyses: This is an analysis that helps the marketers to have a clear picture of
competitor's for the market. This analysis has some similarities with PEST analysis. In this analysis the
marketer goes through five areas of concerns.
Analyze and evaluate the external environment of the organization by using PEST framework, Porter's
Five Forces model and Product life cycle.
Company's profile:
Tesco runs more than 2300 supermarkets and convenience stores in the UK, Ireland, Central Europe
and Asia. It is operating in almost areas such as gasoline retail (Tesco Express) small urban stores
(Tesco Metro) hypermarkets (Tesco Extra) and Financial service (Tesco Personal Finance). It covers
up to 35% stake in US grocery. It is the leading online grocery store and is now expanding its business
with a TV channel and a retail based education institution.
A) A PEST Analysis of the industry was then undertaken to examine the local, national and global
influence of political, economic, social and technological factors to understand opportunities and
threats well.
An assumption was made that most of these ( political, economic, social, legal and environmental )
factors would, to some extent apply to the retail industry in Sweden:
Political: Following the European Integration and Free Trade Agreements, the market has opened
British Companies to invest in Eastern European. It has 60 stores in Hungary. Lidl is fighting hard to
maintain its market share with an aggressive pricing strategy against Tesco.
Economic: Retail industry is fairly recession proof and also very sensitive to interest rate. Because of
September 11 events, the world economy have suffered heavily, stocks were plummeting and prices
are low all time. However the world economy is up after the September 11th attack. Consumers are
optimistic and retail industry is once again boosting.
Social: There are changes in consumer taste and lifestyle present both opportunities and threats for the
retail industry. There are alternative Sweden national retailers which poses additional threats to the
Tesco while entering in the Sweden market industry.
Technical: Introduction of online shopping via internet is now a common place in retailing. IT system
undertakes a paperless operation, the management and administration of the company which are
monitored by the secured severs, it provides a flexible base for running the business. Sweden is at the
forefront of technologically developed with national companies like Ericsson, hence Tesco gets an
advantage of developed logistics and distribution channels already in place.
One other tool that will be used in these areas is Porter Five Forces. This model can be used to good
analytic effect alongside other models such as the SWOT and PEST analysis tools.
Five Forces analyses five important in the determination of competitive power and these are:
Buyer's power:
Suppliers' power:
Rivalry among competitors:
Threat of new entrants:
Threat of substitute product

Problems faced by Tesco can be explained by Porter's five forces including of the threat of substitutes
from other supermarkets, buyer power, supplier power and the power of customer.
Buyer power also decides the prices in the market. If products are expensive in Tesco then they will
purchase from Sainsbury. This mean market is disciplined which make the pricing is disciplined as
well. This in turn stops them to destroy the market in a profit war.
Supplier power is an important part of this model. Supplier power is wielded by suppliers demanding
that retailers should pay them certain price for their goods supplied.
There is always a threat of substitution, although Tesco tries to ensure brand image and quality by
having the best value for the products.
Tesco acknowledges the fact that there have always been threats from the competitors and new
entrants into the markets and therefore always plan to improve upon developments in its stores.
Carry out an environmental audit for a given organization:
PESTLE (Political, Economic, Social, Technological, Ecological, Legal and Environment)
Among the above PESTLE analysis Political, Economic, social and Technological factors are
implemented as a technique for the auditing of the marketing environment.

Political/ legal:An environment of marketing at any nation is affected due to the political reasons. There should be the
management of change once there is a change in the political condition and situation. The system of
nation keeps on changing if there is a lack of stability in politics and the organization should change the
marketing strategies as per the changing environment so that the organization can exist in the
changing environment.

Economic:Economics plays a vital role in the marketing environment audit. A country with weak economy cannot
compete in the international market. To be successful in the marketing there should be a sound
financial transaction of an organization. Some of the components of economic factors for environmental
audit are: Interest rates, Business cycles, Investment policies. There should be good investment
policies for the investment by the nation so that the interest of the investor in investment increases
which helps to raise financial stability in the nation.

Social and cultural:Social and cultural refer to the tradition and costumes or belief of people living in a particular
geographical region. Social value and norms sometimes becomes the barrier to the marketing
environment. There is vast different in the culture and tradition of eastern and western societies as a
result of it the culture of eastern may not be suitable for western and vice versa. The marketing
depends upon the culture and tradition of any geographical area. S

Technological:In this competitive age technological changes plays a vital role in the marketing. All the developed
countries have been successful due to the drastic changes in the technology and their capacity to cope
with changing technology. Different technologies can be used for the auditing of the marketing
environment.

SWOT analysis:-

SWOT analysis includes strength, weaknesses, opportunity and threats for an organization. Strength
and opportunities are the positive aspect of an organization whereas weaknesses and threats are
negative. Similarly strengths and weaknesses are internal environment whereas opportunity and
threats are external.
Low cost of production and sales, good information about the market and sound finance of the
organization are the strengths and lack of communication and low quality of goods are the
weaknesses. Similarly lack of competition and expansion of the market is the opportunities whereas
control from pressure groups, lack of political and system stability are the threats for any organization.

PORTER'S five forces model:It consists of five main points that are listed below: -

Bargaining power of the customers: It is found in the open or the competitive market where the customer has the advantage over the
suppliers or the sellers. A consumer has the choice of quality and the rate and if the supplier fails to fulfil
the satisfaction of the consumer there is the chance of the customer to walk away from the suppliers. In
this case the buyer has every right to complain and the seller need to hear it and recover so that the
buyer did not leave the consumption of the commodity..

Bargaining power of the supplier: We normally find it in the monopoly market where there is the presence of only one market. Here the
supplier has the advantages over the customers. A seller can fix the price of his own and sell low quality
products as a result of it buyer couldn't get enough facilities. As only one marker is available the
customers are forced to buy goods from the same shop and have no choice. For an illustration, if one
city has only one market the people living there have to purchase the commodities from the same
market no matter what the price and quality is because they don't have a second option. In this case
the supplier has their own choice of marking prices. Such type of business brings profit motive rather
than service motive.

Threat of new entrants: When there is the presence of new product or the new supplier the old products and the old supplier
gets affected. A customer of particular supermarket gets diverted to next one, if the new supplier gives
him new schemes ad facilities. Threat from the substitute product: It provides the facilities to the consumers as the consumers have enough choices for the commodities
to use. The customers won't feel bored of using same product again and again.

Rivalry among the competitors: Rivalry begins where there is the presence of competitive market or when two similar types of goods
are present in the market. It gives advantages to the customers. When there is rivalry among
competitors' consumers receives the benefits.

Apply organizational and environmental auditing techniques in a given


situation.
As for the project work I have chosen Tesco which deals with retail sales of food and household
products. They use PESTEL analysis for the purpose of marketing environment audit.

Political:Under political it uses the monopoly system, taxation policies, rules of employing the staffs and
government stability as a method of evaluating political environment.

Economic:Under the economic sector the interest rates, inflation and business cycles are evaluated for the
purpose of environmental marketing audit.

Social cultural:There are different cultures of the particular area. The marketing of Tesco has been influenced due to
the social cultural factors as well. The different elements under socio cultural which can affect the
marketing audit of the organization are demography, distribution of income of the people and their
lifestyle.

Technology:Technology plays a vital role during upgrade any organization. In this competitive age no organization
can ever think of improvement in the absence of technology. The factors influencing technology in an
organization can be the development of new technologies, rate of technology transfer and investment
on the research of technology.

Positioning of Ansoff matrix:


For any decision to be taken at the business level, you need the right strategic tools. Ansoff matrix is
one of them. Ansoff matrix helps a company decide their market growth as well as product growth
strategies. The 2 questions which the Ansoff Matrix can answer is How can we grow in the existing
markets and What amends can be made in the product portfolio to have better growth.
From the above two questions, it is clear that the Ansoff matrix deals with the business external market
scenario as well as the product portfolio which the company has. The matrix is divided into two
quadrants. The product quadrant and the market quadrant. The Product quadrant on the X axis is
further divided into Existing products and New products. The market scenario on the Y axis is divided
into existing markets and new markets. Thus the Ansoff matrix divides a firm on the basis of the
products it has existing products or new products, as well as the markets it is in existing markets or
new markets.

Explain the significance of stakeholder analysis:


What is Stakeholder Analysis?
Stakeholder Analysis (SA) is a methodology used to facilitate institutional and policy reform processes
by accounting for and often incorporating the needs of those who have a stake or an interest in the
reforms under consideration. With information on stakeholders, their interests, and their capacity to
oppose reform, reform advocates can choose how to best accommodate them, thus assuring policies
adopted are politically realistic and sustainable.
Although Stakeholder Analysis originated from the business sciences, it has evolved into a field that
now incorporates economics, political science, game and decision theory, and environmental sciences.
Current models of SA apply a variety of tools on both qualitative and quantitative data to understand
stakeholders, their positions, influence with other groups, and their interest in a particular reform. In
addition, it provides an idea of the impact of reform on political and social forces, illuminates the

divergent viewpoints towards proposed reforms and the potential power struggles among groups and
individuals, and helps identify potential strategies for negotiating with opposing stakeholders.

Who Are Stakeholders


A stakeholder is any entity with a declared or conceivable interest or stake in a policy concern. The
range of stakeholders relevant to consider for analysis varies according to the complexity of the reform
area targeted and the type of reform proposed and, where the stakeholders are not organized, the
incentive to include them. Stakeholders can be of any form, size and capacity. They can be individuals,
organizations, or unorganized groups. In most cases, stakeholders fall into one or more of the following
categories: international actors (e.g. donors), national or political actors (e.g. legislators, governors),
public sector agencies (e.g. MDAs), interest groups (e.g. unions, medical associations),
commercial/private for-profit, non-profit organizations (NGOs, foundations), civil society members, and
users/consumers.
To achieve Stakeholders objective an organization should be able to separate their interest from each
other and as such act according to the power they exert in the organization.
Employees of M&S
Have a welfare department established in 1930.
Financial interest safeguarded - bonuses
Job performance appraises and financial incentive
Benefit package - interest free loans granted, Buy as you earn shares, bonus or right issue

Suppliers:
Always used UK based suppliers, ensuring consistent quality
Relationship to build reliance on suppliers
Lifelong relationship.
Mutual dependability respects the specification and standard.

Social commitment:
Strong tradition of CSR
Sponsorship of Charities.
Community development efforts
Government social projects.

Environment friendly:
Removed artificial color and flavoring from its entire food and soft drinks range-April 2008
Launched school wears made from recycled plastic bottle
Despite tough economic conditions Mark and Spencer stick to Plan A, as it gives them brand and
differentiation.
AL Gore said a sustainable business can be profitable one

Business Continuity
Reviewed the tools and processes established to ensure we have the capability to protect our people,
the brand, property and profit at all times;
Received plans for all locations both nationally and internationally;
Discussed plans for the Olympics and the Queen's Diamond Jubilee;
Full medical and security package introduced for all business travelers;
Travel tracker system introduced both nationally and internationally;
A group training awareness program launched; and
Evacuation pack and welfare response.

Plan A
The External International Advisory Board established, comprising academics and advisors, extending
our reach to reflect the countries we operate in and source from;
Discussed progress in reducing carbon emissions, improvements in fuel and energy efficiency,
reduction in waste and packaging, improvements in recycling and the M&S/Oxfam clothes exchange;
An update on work with suppliers to set up 12 Ethical Model factories in Bangladesh and three in India;
Review of commitments against plan;
Overview of discussions with UNICEF outside the UK on social development programs linked to the
garment industry; and
Overview of what we believe will be benchmarked as industry leading positions across a number of key
areas.

General Merchandise ethical sourcing


Reviewed how we manage the ethical risks across our supply chain outlining our ethical trading
approach across 1.7 million workers, spread over 1,448 sites in over 77 countries with 55 different
languages;
Considered the key ethical issues including: excessive working hours, poor health and safety, terms
and conditions of employment, migrant labour, and low wages;
Discussed the team and the independent ethical trading division based in our regional offices in China,
India, Vietnam, Sri Lanka, Bangladesh, Turkey and the UK.
M&S was the first UK retailer to create a clear set of labour values in 1998 known as our Global
Sourcing Principles. Each trader must agree to and sign our terms and conditions, which include these
Values. M&S has been a founding member of the Moral Trading Inventiveness since 1998 and we have
recognized moral policies on key issues. They have a clear factory approval process which is selfgoverning from our purchasing departments.

International business development


Focused on the risks to our international growth each risk was highlighted and discussed, alongside
the relevant mitigating action which was either recently taken or in progress;

Discussed the team and its integration the presentation also covered the performance of our partlyowned businesses, franchise operations, ethical reputation and the importance of having an aligned
approach across the business.

Data security
Apprises relating to our investment in IT security, structure of the new retail website platform and the
move from the current platform reinforced by Amazon. International activities, user access and the
controls around the protection of individual data. Strategies were reviewed as was the staffing of
resource and the skill sets these individuals bring to M&S.
Stockholder influences on the organization: Sources: www.qualitydigest.com.

TASK 3
Analyze possible alternative strategies relating to substantive growth,
limited growth or retrenchment:
Product market mix:
Hands-off product/market growth matrix suggests that a business attempts to grow depend on whether
it markets new or existing products in new or existing markets

Sources: www.oup.com/uk/orc/bin/9780198782292/ch14.pdf
Market Penetration:
Here we market our existing products to our existing customers.
This means increasing our revenue by, for example, promoting the product, repositioning the brand,
and so on. However, the product is not altered and we do not seek any new customers.

Market Development:
Here we market our existing product range in a new market. This means that the product remains the
same, but it is marketed to a new audience. Exporting the product, or marketing it in a new region, are
examples of market development.

Product Development:
This is a new product to be marketed to our existing customers. Here we develop and innovate new
product offerings to replace existing ones. Such products are then marketed to our existing customers.
This often happens with the auto markets where existing models are updated or replaced and then
marketed to existing customers.

Diversification:
This is where we market completely new products to new customers. There are two types of
diversification Related diversification means that we remain in a market or industry with which we are
familiar. For example, a soup manufacturer diversifies into cake manufacture (i.e. the food industry).
Unrelated diversification is where we have no previous industry or market experience. For example a
soup manufacturer invests in the rail business.

Diversification and Synergy:

Synergy occurs when the combined results produce a better return than would be achieve by the same
resources used independently.
Marketing synergy Use of common marketing facilities Distribution channel
Operating synergy- better use of operational facilities, personnel, bulk purchasing.
Investment synergy Wider use of common investment in fixed assets, working capital and research.
Management synergy-Management skills gained for current operations are easily transferred to new
operations.

Divestment strategy:
It is the selling off part of a firms operation or pulling out of certain product market areas. Reason for:
Companys business buy and sell businesses
Resource limitations
Insolvency
Merging with another company provides the opportunity to increase market share and expand into new
geographies and sectors. Suveen Sahib, Group COO and CEO, Americas of EBS Worldwide, a
marketing and technology company, merged his company that had a premerger value of $7 million to
create a company valued at $15 million. Sahib says, EBS Worldwide started in India and now has a
footprint in the U.S., allowing for its global clients to benefit from our strong position in these regions
and our large suite of services.

Methods of growth (Domestic market).


Building up new businesses from scratch and developing them
Acquisition existing business from their current owners
Merger- of two or more separate businesses
Joint ventures- Spreading the costs and risks and with other forms of cooperation.

Methods of growth (International market).


Direct export
The organization produces their product in their home market and then sells them to customers
overseas.

Indirect export
The organizations sell their product to a third party who then sells it on within the foreign market.

Licensing
Less risky market entry methods. Licensor will grant an organization in the foreign market a license to
produce the product, use the brand name etc in return that they will receive a royalty payment.

Franchising

The organization puts together a package of the successful ingredients that made them a success in
their home market and then franchise this package to overseas investors. The Franchise holder may
help out by providing training and marketing the services or product. McDonalds is a popular example
of a Franchising option for expanding in international markets.

Contracting:
The manufacturer of the product will contract out the production of the product to another organization
to produce the product on their behalf. Clearly contracting out saves the organization exporting to the
foreign market.

Manufacturing abroad:
To establish a manufacturing plant in the host country. There may be tax incentive as the host
government wish to attract inward investment to help create employment for their economy.

Joint Venture
Two organizations may come together to form a company to operate in the host country. The two
companies may share knowledge and expertise to assist them in the development of the company; of
course profits will have to be shared.

Select an appropriate future strategy for a given organization:


Following a wide-ranging and detailed strategic review of its business, the Board of M&S announced in
March 29 of 2001 significant changes to the Group strategy and structure. The highlights of this new
plan are:

a) Total focus on UK retail


The Company will return to selling only own brand products and brands exclusive to M&S so it can
guarantee customers the quality, value and service they have come to expect. Central to the recovery
plan is the delivery of significant improvements in product appeal, availability and value thereby
rebuilding the relationships with core M&S customers.

Recovery plan for Clothing


The Company has plans to regain the confidence of its customers in the quality
and fit of its clothing. It will sharpen pricing by rebalancing the price architecture, extending the range of
entry-price merchandise and communicating this clearly to customers.

Expansion in growing product areas such as Food, Home and Beauty


M&S Foods continues to perform well and has earned customers' trust for providing quality, innovation
and convenience. The business is a key platform for future growth and the Company is considering
opportunities to expand its reach through new locations and selling channels.
The Home business is growing strongly, with home furnishings and gifts the fastest growing product
areas. Beauty, albeit relatively small, is also growing rapidly. Both of these areas offer promising
opportunities for development and will be expanded.

Acceleration of store renewal program


Accelerate Store Renewal Program: M&S will accelerate the rollout of the successful elements of its

new concept format under a plan to refurbish more stores faster and at lower cost. Two-thirds of its
retail space (120 stores) will be completed by the end of the coming financial year, benefiting the
majority of M&S's customers.

More intensive use of space


Selling space will be reallocated to higher growth product areas to maximise returns per square foot. In
total, 600,000 sq ft will be reallocated within the year to areas such as the new Clothing range supplied
by George Davies, Home, 50 new Beauty Shops, and 30 new Coffee Shops.

Being closer to the customer


In order to be more customer oriented, some stores in big cities will be open 24 hours per day. By other
hand, 125 stores in the UK will be modernized in order to create a more attractive, easy-to-shop
environment for our customers. These stores represent two thirds of total UK stores. Modernization
investments will amount 100 million.
With all changes, the company expects to raise the operating profit in the UK by 10% approximately
(40 million) per year.

b) Value realization, cost cutting measures and closure of loss-making


businesses
In order to focus all its efforts on the recovery of the UK business, Marks & Spencer intends to divest or
close non-core businesses and assets, subject to consultation with its employees.

Intention to close Continental European subsidiaries except the Irish ones


The Company intends to close its loss-making business in Continental Europe (France, Germany,
Belgium, The Netherlands, Luxembourg and Spain), affecting some 3,350 jobs. That business was not
a success. In the last three years it has lost nearly 100 million, with a loss of 34 in the last 12
months. The stores were too big and the company hadnt properly understood the markets before
investing in them.
The Company's business in the Republic of Ireland is growing fast and profitably (22,6 million in
profits in 2001), therefore Marks & Spencer remain firmly committed to this business.
The budget of the sales price of these sales is 450 million, without considering the exceptional
charges of the restructuring, which have been included in the P&L of 2001. By other hand, during the
year 2002 there will be some additional exceptional charges (26,4 million) in connection with the
discontinued operations.

Sale of profitable Brooks Brothers and Kings Super Markets in the US


The company also intends to dispose of its two profitable United States businesses, Brooks Brothers
and Kings Super Markets. These operations do not provide an appropriate platform for future
international expansion by Marks & Spencer.
The budgeted price of these sales are 550 million and 275 million respectively.

Franchising of business in Hong Kong


The Company's 10 stores in Hong Kong will be sold to become a franchise. The budget of the sale
amounts to 110 million. The franchise business, spanning 30 countries and operating with appropriate
formats and strong local partners, continues to be successful.

Intention to close Direct catalogue business in the UK


Marks & Spencer intends to close its loss-making catalogue business including a dedicated call center
and fulfillment center, with about 690 jobs affected in total. Although the joint Clothing and Home
catalogue will be discontinued, Marks & Spencer is committed to maintaining its e-commerce web site:
www.marksandspencer.com, as well as a Home brochure and a range of services including flower
delivery. Last year losses of the direct catalogue unit have amounted 38,6 million. The budgeted cost
of closing this unit is 35,5 million and has been included in the P&L of 2001.

Release value of almost half the property portfolio


To reduce the dilution from the relatively low returns from property investment, M&S intends to release
value from almost half of its extensive property portfolio (78 stores). That means that the company will
rent instead of owning the property in which it operates. They are going to use the sale and lease back
type of financing. Ownership of stores in prime locations will be retained to maintain maximum
operational flexibility as well as capturing future increases in capital value. The budgeted price of these
sales is 348 million.

Cost cutting
To reduce the costs of goods sold using less suppliers and using foreign suppliers, mainly from Asia. At
present UK suppliers represent 70% of total purchases. This % will be reduced till 25%. This measure
will allow to reduce sales price and to increase profits.
To reduce general and administrative costs at the headquarters, where 350 jobs will be reduced.
With all this cost cutting measure, M&S plans to increase the operating profit by 100 per year.

c) Improved capital structure


Working capital reduction
Another set of measures will pursue to reduce the investment in inventories by 10%. That means a
reduction of 90 million.

Return 2 billion of cash to shareholders by the end of March 2002


To create a more efficient capital structure and improve the potential for a faster rate of earnings
growth Marks & Spencer intends to return 2 billion to shareholders by the end of March 2002. The
release of value from almost half the companys property portfolio and the sale of international
subsidiaries will finance this decision. Following the return of cash to shareholders, Marks & Spencer
will retain the financial strength and flexibility to fund future growth.

Financial Impact
The benefits to trading profit from the closure of the European subsidiaries and the changes to Direct
will be about 50m in a full year. These measures will give rise to exceptional charges in the current
year of 250 m to 300 m, in addition to the 42m already announced at the companys Interim results
for the cost of satellite closures in the UK. Some two thirds of the 250 to 300 m will be cash items
covering closure costs and future trading losses.

SECTION 4
Explain how you would implement a chosen strategy:

The original strategy employed by M&S was to build its brand. The companys resources included the
St Michael logo, the policy of using mainly British suppliers, and good customer relations. Quality
control was achieved by working closely with suppliers, and the M&S management system focused on
a top-down approach that became standard in all stores. Customer satisfaction and loyalty was
secured and there was steady growth in market share and profit until the 1990s, when competition at
the top and bottom end of the market rendered this strategy obsolete. The top-down management
approach caused M&S to become vulnerable to market changes so new resources were created,
including a department with a remit to seek out new business opportunities; more autonomy for store
managers; different procedures for buying. M&S began to look overseas for suppliers. The Simon
Marks management style was directly linked to this strategy.
Restructuring was designed to reposition M&S at the markets core and to restore and enhance some
of its key resources. The close working relationship between suppliers, employees, management and
loyal customers was enhanced. New customers were attracted by campaigns featuring Twiggy and
younger models so M&S could widen the appeal of its clothing range. The techniques of broadening its
appeal, responding to customer preferences and introducing new products in food and finance have
assisted M&S towards recovery.
The development of the quality food market has been a particularly successful new resource. Using
designers to create unique food areas M&S has continued to sustain consumer interest in its food
range.

Recovery Plan Mark & Spencer:


1) Putting together the right team the values that the founder instilled into this Company.
2) The Strategic Review and Selling the Plan- quality, value, service and innovation, drawing on
strengths which still exist to inspire trust in our customers. Plan: 1- Focus the entire organization on our
UK business
100% Own Brand sell only M&S brand
Improved Segmentation of Clothing- satisfy the aspirations and traditional demands
Build on Success in Foods- fast-growing sectors as ready meals and prepared foods
Accelerate Store Renewal Programmed- under a plan to refurbish more stores faster and at lower cost.

More Intensive Use of Space:


Improve the Supply Chain - direct relationships with our suppliers
Financial Services Developing M&S store card

Plan: 2 - Sell or Close loss-making businesses:


No longer afford to support non-core activities
Stop subsidizing loss-making businesses
To divest or close non-core businesses and assets
10 stores in Hong Kong will be sold to become a franchise
Direct - to close its loss-making catalogue business, a dedicated call centre and fulfillment center

Plan: 3 - Change the Capital Structure

To reduce the dilution from the relatively low returns from property investment Tesco's Strategy
Strategy of cost leadershipLowest cost - products and services to a broad market at the lowest prices
Ability to control their operating costs and price their products competitively.
Able to generate high profit margins- significant competitive advantage

Market Development Strategy:


Joint developments and Strategic alliance
Entering new markets like China and Japan
Key growth driver for revenues and expansion strategy
Asian markets - increase in consumer spending and trend towards retailing.
New markets demographically high opportunity markets
International alliances with the local retailers in Asian markets.
Method of development - exploit current resources and competence
Entering into joint ventures or partnerships, to gain larger economy of scale and larger market
presence.
Extensive local knowledge and operating expertise of the partner.
Sustainability - strategy addresses the circumstances in which the company is operating.
Acceptability- expected return from the strategy, the level of risk and the likely reaction of stakeholders.
Feasibility - whether Tesco has the resources and competence to deliver the strategy.

Product Development:
Diversification, expanding and diversifying the Tesco's product mix
To implement internal development when new products are developed.
The nature and the extent of diversification
The changing needs of the customers Tesco can introduce new product lines
Require more attention to R&D, leading to additional spending.
Also develop different store types in Eastern European and Far Eastern markets
Value added by the uniqueness will eventually lead Tesco to command a premium price
The management of technological innovation is increasingly involved in strategic decision-making.
Tesco has to exploit their internal strengths and minimize their internal weaknesses in order to achieve
sustained competitive advantage. From the above comparison it is very clear why Tesco is dominating
the retail market. The success of the Tesco shows how far the branding and effective service delivery
can come in moving beyond splashing one's logo on a billboard. It had fostered powerful identities by
making their retailing concept into a virus and spending it out into the culture via a variety of channels:

cultural sponsorship, political controversy, and consumer experience and brand extensions. Tesco's
strategy at a corporate level defines the businesses in which Tesco will compete, in a way that focuses
resources to convert distinctive competence into competitive advantage

Evaluate resource requirements to implement a new strategy for a given


organization
Product:
Building on our knowledge and understanding to provide exactly what our customers want.
Satisfy aspirations and traditional demands.
Consolidate and developed sectors as ready meals and prepared foods.

Stores:
The changes will extend to around two-thirds of our space, so most of our customers will notice the
difference.
More Intensive Use of Space
Develop the distribution channel
Nurture our brand names

People:
Recruit top talent to strengthen the team, by recruiting qualified individuals.
The values that the founder instilled into this Company.
Quality, value, service and innovation, drawing on strengths which still exist to inspire trust in our
customers

Leaders
Leadership and management synergy
Leaders focus on the ends; Managers focus on the means both together reach more.
The leader provides vision; Managers provide execution. Both together achieve more by working
together to achieve a single goal.

Capital:
The allocation should be efficient and effective by allocating more capital to the most needed
departments
Should be wisely invested and monitored to increase profit

Discuss targets and timescales for achievement in a given organization to


monitor a given strategy:
Focus the entire organization on our UK business -100% Own Brand sell only M&S brand:

Envisioning need to be communicated at different levels of the organization


Activating - Share the vision and ensure others support
Supporting Leaders need to support subordinates particularly in times of change
Installing Developed detailed plans to enact and control the strategy.
Documents the responsibilities of divisions, departments and individual managers
Prepare responsibility charts for managers at divisional, departmental and subordinate level
Managers major objective
Managers general performance for achieving that objective
Critical assumptions underlying the objectives and the performance.
Prepare activity schedules- for managers at divisional, departmental and subordinate level
Controlling - Control process to ensure work is done and deadlines achieved.
Recognizing - those contributed to success of the organization.
Management by objectives - is setting objectives for managers and subunits, rather than imposing
detailed planning specifications on them.
Sources: realisedesign.co.uk
It implies an organization hierarchy:
It empowers managers.
To assume objectives are not in conflict but can be reconciled easily
Assumes that senior management and junior managers to cooperate if they are equal.

Business Communication Defined:


Business communication is any communication used to build partnerships, intellectual resources, to
promote an idea, a product, service, or an organization with the objective of creating value for your
business.
Sources: realisedesign.co.uk

Internal communication:
Communication of corporate vision tragedy, plans, corporate culture shared value
Guiding principles, employee motivation, and cross-pollination of ideas.

External communication:
Branding, marketing, advertising, selling, customer relations, public relations, media relations, business
negotiations. The main objective is to create business awareness, identifying core competence and
adding value to the business.

CONCLUSION

In a rapidly changing business environment with a high competitors' pressure Tesco have to adopt new
expansion strategies. To sustain its leading market position in an already established retailing market
Tesco need to continuously identify, select, implement and execute their goals and objectives. Tesco
already has an integrated HRM approach and a very strong brand which will support to formulate
strategy and implement them instantaneously. Tesco image and brand has fostered powerful identities
by making their retailing concept into a virus.

REFLECTIVE STATEMENT:
This assignment has helped me in developing and implementing strategic planning, I have been able to
understand that strategic planning controls where a business is going over the next year or more, how
it's successful to get there and in what way it'll know if it got there or not. The emphasis of a strategic
plan is usually on the entire business, while the emphasis of a business plan is usually on a specific
product, service or program. There is a diversity of viewpoints, models and methods used in strategic
planning. The way that a strategic plan is developmentally depends on the nature of the
establishment's leadership, culture of the business, the difficulty of the group environment, the size of
the business and skills of the planners. These ideas would contribute to my ability to undertake any
strategic planning control in my carrier.