1 INTRODUCTION.......................................................................................................................................2 1.1 TERMS OF REFERENCE. .................................................................................

..............................................2 1.2 AIMS AND OBJECTIVES................................................................................................................................2 1.3 RESEARCH METHODS.................................................................................................................................2 2 STRATEGIC FORMULATION................................................................................................................3 2.1 CONTEXTS OF BUSINESS STRATEGY................................................................................................................3 2.2 SIGNIFICANCE OF STAKEHOLDER ANALYSIS......................................................................................................4 2.3 ORGANIZATIONAL AND ENVIRONMENTAL AUDIT...............................................................................................6 2.4 STRATEGIC POSITIONING TECHNIQUES.............................................................................................................8 STRATEGIC POSITIONING IS THINKING IN REVERSE: INSTEAD OF STARTING WITH YOURSELF, YOU START WITH THE MIND OF YOUR PROSPECT. .............................................8 3 STRATEGIC PLANNING.......................................................................................................................12 3.1 STRATEGIC THINKING...............................................................................................................................12 TO RAISE THE BAR OF PERFORMANCE IN YOUR BUSINESS FROM WHERE YOU ARE NOW TO WHERE YOU WANT TO BE IT WILL REQUIRE A LEVEL OF STRATEGIC THINKING THAT IS IN PERFECT HARMONY WITH YOUR VISION FOR THE BUSINESS. STRATEGIC THINKING WILL CREATE A STRUCTURED AND PROGRESSIVE PATH FORWARD TO YOUR VISION.......................12 3.2 STRATEGIC PLAN......................................................................................................................................12 -62,500 TONES OF FOOD, CARDBOARD, PLASTICS, METAL, WOOD, PAPER AND GENERAL MIXED DRY RECYCLED DIVERTED FROM LANDFILL IN THE LAST 12 MONTHS ..........................................................................................................13 -WASTE MANAGEMENT COSTS FOR M&S REDUCED BY 20% ....................................................................................................................................................................13 -CURRENTLY 16 MONTHS AHEAD OF PLAN A TARGETS AT STORE LEVEL................................................................13 - A DIRECT CONTRIBUTION BEING THE POSITIVE ATTITUDE OF THE STAFF, ENCOURAGED BY THE EXTENSIVE COMPANY...13 -WIDE INTERNAL COMMUNICATIONS PROGRAMMED. .............................................................................................13 AS PART OF ITS PLAN A COMMITMENTS, M&S SET SPECIFIC SUSTAINABILITY OBJECTIVES TO DIVERT ALL OPERATIONAL AND FOOD WASTE FROM LANDFILL BY JANUARY 1, 2012......................................................................................13 4 STRATEGIC EVALUATION AND SELECTION................................................................................13 4.1 ALTERNATIVE STRATEGIES – SUBSTANTIVE GROWTH, LIMITED GROWTH OR RETRENCHMENT.................................13 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.............................................14 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....................................................................................14 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.....................................................................................14 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 NOR MARKET EXPERIENCE. FOR EXAMPLE A SOUP MANUFACTURER INVESTS IN THE RAIL BUSINESS. ..........................................................................................14 DIVERSIFICATION AND SYNERGY......................................................................................................................14 DIVESTMENT STRATEGY..................................................................................................................................15 4.2 FUTURE STRATEGIES..................................................................................................................................16 5 STRATEGIC IMPLEMENTATION.......................................................................................................17 5.1 ROLE AND RESPONSIBILITIES FOR STRATEGY IMPLEMENTATION IN TWO ORGANIZATION.........................................17 5.2 RESOURCE REQUIREMENT TO IMPLEMENT NEW STRATEGY................................................................................19 5.3 TARGETS AND TIMESCALES FOR ACHIEVEMENT TO MONITOR A GIVEN STRATEGY..................................................21

IT IMPLIES ORGANIZATION HIERARCHY:..............................................................................................................22 6 CONCLUSION..........................................................................................................................................24 7 REFERENCES..........................................................................................................................................25

1 Introduction
1.1 Terms of Reference.
The purpose of this assignment is purely for academic reasons; this assignment has been made primarily to complete the module of “Business Strategy” under the course HNC Business (Management) which I am studying

1.2 Aims and Objectives.
The assignment is to develop learner’s ability to evaluate and select strategies appropriate to business organisation. This will involve an analysis of the impact of the external operating environment and the need to plan organisational strategies to ensure effective business performance.

1.3 Research Methods.
Research Methods. Mark & Spencer Ltd web sites articles, news, case studies. Theoretical studies from different books and Handouts from our tutor. Scenarios given in the assignments and support of William’s college health and safety officer. Personal academic knowledge about business organisation.

2 Strategic formulation 2.1 Contexts of business strategy "Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment. Strategy is about:  Business vision in the long-term  Targeting. positioning and segmenting market. Strategy at Different Levels of a Business .  Business competitive advantage  Resources are required to compete in such market  Business environment  Stakeholder’s analysis. to meet the needs of markets and to fulfill stakeholder expectations".

Employees of M&S  Have a welfare department established in 1930.  Financial interest safeguarded .bonuses  Job performance appraise and financial incentive  Benefit package . ensuring consistent quality  Relationship to built reliance on suppliers  Life long relationship. bonus or right issue Suppliers  Always used UK based suppliers.interest free loans granted. .2.  Mutual dependability respects the specification and standard. Buy as you earn shares.2 Significance of stakeholder analysis 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.

AL Gore said “a sustainable business can be profitable one” . Environment friendly  Removed artificial color and flavoring from its entire food and soft drinks rangeApril 2008  Launched school wears made from recycled plastic bottle Despite tough economic conditions Mark and Spencer stick to Plan A.  Community development efforts  Government social projects. as it gives them brand and differentiation.Social commitment  Strong tradition of CSR  Sponsorship of Charities.

top ten "green brands" in the UK recently . SWOT ANALYSIS – M&S STRENGHTS • • • • • Reputation/Brand/Goodwill Market position Quality products – Detail in supplier control Internet Shopping Simon Marks – understanding of customers preferences and trends • • WEAKNESSES • • • Lack of newness Clothing.segmentation Lagging to provide up to date fashionable clothes Using most British suppliers believing higher quality but low cost Competitors using overseas suppliers to cut cost .3 Organizational and environmental audit Macro factors influencing Marketing decision PESTEL – The External Environment Political –EU and Free Trade Agreement the market has opened up for British companies opening in Europe.2. Social – Changes in consumer taste and lifestyle give rise to new market and consumers but also threats in terms of social acceptance to alcohol Technology – E-commerce. Economy – Retail sector very sensitive to changes in the interest rates.* Global Warming Legal – National Health and Safety National Minimum Wage Taxation Policy Use of renewable resources. Flexibility 24hr Environmental – M&S commitment to the environment . M& S promoting people to buy on line with incentives likes discount.

• • To go global and expand the business Use technology to improve their functioning and thus gain competitive advantage THREATS • • Loss of market share of intense competition Strong competition with Next same price product but more fashionable • • Discount stores like Matalan Threat from Giant Tesco and Sainsbury who penetrate in the market to supply added value.OPPORTUNITIES • • • • Define target age group Store a new upbeat look Respond to customer taste and purchasing power Improve CRM systems to retain existing customers and target potential new customers. Porter’s Five Forces – M&S The threats within the immediate industry and M&S .

market segment (high-end).4 Strategic positioning techniques Strategic Positioning is thinking in reverse: instead of starting with yourself. BHS. Scope Competitive advantage : Lower cost Differentiation  Broad target (industry wide) Cost leadership Differentiation  Narrow target (market segment) Cost focus Differentiation focus . The premise is that the needs of the group can be better serviced by focusing entirely on it. it implements a focus generic strategy as it concentrates on a narrow segment (a particular buyer group (executives). M&S brand loyalty concept is less likely to survive where there are several substitutes of same standard in the market. Three main generic strategies  Cost leadership. Top Shop etc. As such M&S has to be creative and innovative and constantly reacting to the change in the buying behavior of the consumers. you start with the mind of your prospect.New Entrants Low Price Low cost BHS/ASDA Suppliers Substitute Premium Low in this Industry Dual Sourcing Strategies Porter’s Five Forces Rivalry Bargaining Branded Food Sainsbury John Lewis Low Competitive In this Industry Power .  Differentiation. 2.Buyers Aggressive Pricing Strategy Stakeholder’s expectations developed according to changes in the market. product feature (freshness) and within that chosen segment M&S attempts to achieve differentiation from Tesco’s Asda. The case of M&S’s core products (food and clothing).  Focus.

0 is usually neutral and 4 are strong. If there are more ‘against’ then a decision has to be made whether they should go ahead with that particular route. The manager also needs to assess whether these reasons against can either be turned into ‘for’ or whether they can be dealt with or the severity of the ‘against’ reduced. To sustain competitive advantage the product must be:  Valuable – Exploits opportunities and / or neutralizes threats in a firm’s environment. Each forces for and against are allocated a number based on the severity.Kurt Lewin 1951 When decisions are made by managers they have to weigh up the reasons for and against that particular decision.Force Field Analysis . If there are more things going against you.  Rare – Among firm current and potential competition . say for a launch of a product then you would need to deal with those factors.

. Uniqueness – must be imperfectly imitable  No substitute Mark and Spencer will use the BCG matrix to decide about their position in the market.. Value chain analysis highlighting Mark and Spencer core competence..

sponsoring fashion events which will boost sales and reduced unsold .Asda and so on. Mark & Spencer markets its products based on superior quality and reliability .Source: Business essential Business Strategy formulation page 82 To have a competitor analysis to try and assess what like Tesco. Printed press catch the audience attention mainly if M&S want to deliver a specific advertising message. Asda does and thus enable them to have a competitive advantage. A detail Gap analysis to see where they stand with the sum of projections and already planned projects. M&S should be more present in creating fashion trends. They should include printed press in their advertising channel just like their competitors Tesco .

the high street retailer has launched an ambitious waste management transformation project to greatly improve its environmental performance. 3.1 Strategic Thinking To raise the bar of performance in your business from where you are now to where you want to be it will require a level of strategic thinking that is in perfect harmony with your vision for the business. or M&S. as part of its Plan A commitments. . Strategic Thinking will create a structured and progressive path forward to your vision.3 Strategic Planning 3.2 Strategic plan Marks and Spencer. required innovative systems. company-wide behavioral change and an extensive education programmed.

500 tones of food. M&S set specific sustainability objectives to divert all operational and food waste from landfill by January 1.A direct contribution being the positive attitude of the staff. encouraged by the extensive company -wide internal communications programmed. 2012 4 Strategic evaluation and selection 4.1 Alternative strategies – Substantive growth. cardboard. As part of its Plan A commitments. paper and general mixed dry recycled diverted from landfill in the last 12 months -Waste management costs for M&S reduced by 20% -Currently 16 months ahead of Plan A targets at store level . limited growth or retrenchment Product market mix Ansoff’s 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 . metal. plastics. wood.M&S Key highlights: -Recycling stood at 41% in 2009 and reached 88% in March 2010 -New waste management processes introduced across 420 stores in 10 months -62.

This means that the product remains the same. Such products are then marketed to our existing customers. For example a soup manufacturer invests in the rail business. promoting the product. Unrelated diversification is where we have no previous industry nor market experience. but it is marketed to a new audience.better use of operational facilities.  Marketing synergy – Use of common marketing facilities –Distribution channel  Operating synergy. Here we develop and innovate new product offerings to replace existing ones. are examples of market development.e.  Investment synergy – Wider use of common investment in fixed assets. bulk purchasing. There are two types of diversification Related diversification means that we remain in a market or industry with which we are familiar. This means increasing our revenue by. for example. Product Development -This is a new product to be marketed to our existing customers. working capital and research. Exporting the product. or marketing it in a new region. Diversification and Synergy Synergy occurs when the combined results produce a better return than would be achieve by the same resources used independenlty. the food industry). Market Development -Here we market our existing product range in a new market. personnel. Diversification -This is where we market completely new products to new customers.  Management synergy-Management skills gained for current operations are easily transferred to new operations. the product is not altered and we do not seek any new customers. However. repositioning the brand. This often happens with the auto markets where existing models are updated or replaced and then marketed to existing customers. and so on. For example. a soup manufacturer diversifies into cake manufacture (i. .Market Penetration -Here we market our existing products to our existing customers.

Divestment strategy It is the selling off part of a firm’s operations or pulling out of certain product market areas.less risky market entry method.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 oversea investors. Reason for :  Company’s business buy and sell businesses  Resource limitations  Insolvency Market entry strategies Methods of growth (Domestic market). Licensing . The Franchise holder may help out by providing training and marketing the services or product. use the brand name etc in return that they will receive a royalty payment. Franchising. Methods of growth (International market). .  Building up new businesses – from scratch and developing them  Acquisition – existing business from their current owners  Merger. Direct export-The organization produces their product in their home market and then sells them to customers overseas.of two or more separate business  Joint ventures. McDonalds is a popular example of a Franchising option for expanding in international markets.Spreading the costs and risks and with other forms of cooperation. Indirect export-The organizations sells their product to a third party who then sells it on within the foreign market. Licensor will grant an organization in the foreign market a license to produce the product.

The manufacturer of the product will contract out the production of the product to another organization to produce the product on their behalf.K.  Sending products directly to the country of sale rather than routing everything through a central U.  Implement new IT systems which would save it GBP250 million by 2015/2016 through capital expenditure over the same period of GBP1 billion. and refreshing stock systems and data collection. Clearly contracting out saves the organization exporting to the foreign market. 4. hub. Forrester and Javelin Group  Driving its business outside of the U.to establish a manufacturing plant in the host country.  Store sales are expected to shrink slightly by 2020 to GBP206 billion from GBP212 billion this year  The final plank in ITV's strategy is to grow its international.2 Future strategies Marks & Spencer PLC future growth strategy under the banner "2020 doing the Right Thing"  Improving its operations to save costs.Contracting.  It would improve its supply chain. of course profits will have to be shared.  Expanding the options for customers to buy products . There may be tax incentive as the host government wish to attract inward investment to help create employment for their economy. Manufacturing abroad.K.  Consolidating distribution sites which would mean further warehouse closures on top of the 21 already closed. .especially online  online sales are expected to almost triple to GBP57 billion in 2020 from GBP21 billion this year according to research by Verdict. 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 company.

Plan: 1. 2) The Strategic Review and Selling the Plan. presented below.Focus the entire organization on our UK business  100% Own Brand – sell only M&S brand  Improved Segmentation of Clothing.satisfy aspirations and traditional demands  Build on Success in Foods. service and innovation.fast-growing sectors as ready meals and prepared foods  Accelerate Store Renewal Programmed. unfortunately.quality. Recovery Plan – Mark & Spencer 1) Putting together the right team – the values that the founder instilled into this Company. In fact.5 Strategic Implementation Strategy implementation skills are not easily mastered. drawing on strengths which still exist to inspire trust in our customers. value.under a plan to refurbish more stores faster and at lower cost . virtually all managers find implementation the most difficult aspect of their jobs 5.1 Role and responsibilities for strategy implementation in two organization The speech and extracts from Marks & Spencer Press Releases. and the role of the Chairman and Chief Executive in this process. provide a valuable insight into the nature of strategic planning within large organizations.

 Extensive local knowledge and operating expertise of the partner.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 .direct relationships with our suppliers  Financial Services –Developing M&S store card Plan: 2 . .to close its loss-making catalogue business. to gain larger economy of scale and larger market presence.  Able to generate high profit margins.increase in consumer spending and trend towards retailing. More Intensive Use of Space  Improve the Supply Chain .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 .Change the Capital Structure  To reduce the dilution from the relatively low returns from property investment Tesco's Strategy Strategy of cost leadership lowest costs .exploit current resources and competence  Entering into joint ventures or partnerships.products and services to a broad market at the lowest prices  Ability to control their operating costs and price their products competitively.  New markets demographically high opportunity markets  International alliances with the local retailers in Asian markets. a dedicated call centre and fulfillment centre Plan: 3 .  Method of development .

 The nature and the extent of diversification    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. political controversy. It had fostered powerful identities by making their retiling concept into a virus and spending it out into the culture via a variety of channels: cultural sponsorship. . expanding and diversifying Tesco's product mix  To implement internal development when new products are developed. Sustainability . Tesco have 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. Tesco's strategy at a corporate level defines the businesses in which Tesco will compete.  Feasibility .  Acceptability.Building on our knowledge and understanding to provide exactly what our customers want. leading to additional spending. in a way that focuses resources to convert distinctive competence into competitive advantage 5.expected return from the strategy.strategy addresses the circumstances in which the company is operating.2 Resource requirement to implement new strategy Product . the changing needs of the customers Tesco can introduce new product lines Require more attention to R&D. the level of risk and the likely reaction of stakeholders.whether Tesco has the resources and competence to deliver the strategy. Product Development –Diversification. 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. and consumer experience and brand extensions.

 Consolidate and developed sectors as ready meals and prepared foods.  More Intensive Use of Space  Develop the distribution channel  Nurture our brand names People.recruit top talent to strengthen the team. Both together reach more.  The values that the founder instilled into this Company.  Quality. so most of our customers will notice the difference. Both together achieve more Capital – allocation should be efficient and effective  Should be wisely invested and monitored. .  Leaders provide vision. service and innovation. Managers focus on the means. Stores-the changes will extend to around two-thirds of our space. Satisfy aspirations and traditional demands. value. drawing on strengths which still exist to inspire trust in our customers Leaders – Leadership and management synergy  Leaders focus on the ends. Managers provide execution.

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.  Prepare activity schedules. departmental and subordinates level o Manager’s major objective o Manager’s general performance for achieving that objective o Critical assumptions underlying the objectives and the performance.  Documents the responsibilities – of divisions.3 Targets and timescales for achievement to monitor a given strategy. .for managers at divisional.those contributed to success of the organization. Recognizing .Control process to ensure work is done and deadlines achieved. departments and individual managers  Prepare responsibility charts –for managers at divisional.5. 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 . departmental and subordinates level Controlling .

 Assumes objectives are not in conflict but can be reconciled easily Assumes that senior management and junior managers to cooperate if they are equal. rather than imposing detailed planning specifications on them. . It implies organization hierarchy:  It empowers managers.is setting objectives for managers and sub units.Management by objectives .

selling. or an organization – with the objective of creating value for your business.Business Communication Defined Business communication is any communication used to build partnerships. shared values  Guiding principles. service. and cross-pollination of ideas. to promote an idea. plans. marketing. public relations. business negotiations The main objective is to create business awareness. corporate culture. strategies. customer relations. Internal communication  communication of corporate vision. External communication  branding. a product. media relations. advertising. intellectual resources. employee motivation. . identifying core competence and adding value to the business.

Tesco already have an integrated HRM approach and a very strong brand which will support to formulate strategy and implement them instantaneously. implement and execute their goals and objectives. To sustain its leading market position in an already established retailing market Tesco need to continuously identify.6 Conclusion In a rapidly changing business environment with a high competitors' pressure Tesco have to adopt new expansion strategies. . select. Tesco image and brand has fostered powerful identities by making their retiling concept into a virus.

co.com/media/pdf/planA-2010.asp?id=18931 www.php .net/news/news_story.1000venture.Extracts from the Speech www.co.bized.examstutor.uk www.uk www.co.com/business/resources/companyprofiles/marksandspencer/strate gyinsight.7 References http://www.thetimes100.guardian.uk/business http://plana.com/major-companies/a-case-study-on-marks-and-spencer/2/ www.com Books – Johnson and Scholes (Exploring Corporate Strategy) Buisness essentials business strategy – BPP publications ACCA Business Strategy – BPP publications MR Saud handouts Pevious knowledge and materials from marketing and business environment unit of the same course Personal experience from working for Tesco .com/plc/ir/corpgorv/boardprocess http://www.marksandspencer.pdf http://bizcovering.tescoplc.edie.

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