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 learners 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 Williams 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, to meet the needs of markets and to fulfill stakeholder
expectations".
Strategy is about:
Business vision in the long-term

Targeting, positioning and segmenting market.

Business competitive advantage
Resources are required to compete in such market

Business environment
Stakeholders analysis.

Strategy at Different Levels of a Business

2.2 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.
Employees of M&S
Have a welfare department established in 1930.
Financial interest safeguarded - bonuses
Job performance appraise 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 built reliance on suppliers
Life long 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 rangeApril 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

2.3 Organizational and environmental audit

Macro factors influencing Marketing decision
PESTEL The External Environment
Political EU and Free Trade Agreement the

Technology E-commerce. M& S

market has opened up for British companies

promoting people to buy on line with

opening in Europe.
Economy Retail sector very sensitive to

incentives likes discount. Flexibility 24hr

Environmental M&S commitment to the

changes in the interest rates.

environment - top ten "green brands" in the

Social Changes in consumer taste and

UK recently - * Global Warming

Legal National Health and Safety

lifestyle give rise to new market and

National Minimum Wage

consumers but also threats in terms of social

Taxation Policy

acceptance to alcohol

Use of renewable resources.

SWOT ANALYSIS M&S

STRENGHTS

WEAKNESSES

Reputation/Brand/Goodwill

Lack of newness

Market position

Clothing- segmentation

Quality products Detail in

Lagging to provide up to date

supplier control

fashionable clothes

Internet Shopping

Simon Marks understanding of

believing higher quality but low

customers preferences and trends

cost

Using most British suppliers

Competitors using overseas

suppliers to cut cost

OPPORTUNITIES

THREATS

Define target age group

Store a new upbeat look

Respond to customer taste and

Loss of market share of intense

competition

Strong competition with Next

purchasing power

same price product but more

Improve CRM systems to retain

fashionable

existing customers and target

Discount stores like Matalan

potential new customers.

Threat from Giant Tesco and

To go global and expand the

Sainsbury who penetrate in the

business

market to supply added value.

Use technology to improve their

functioning and thus gain
competitive advantage

Porters Five Forces M&S

The threats within the immediate industry and M&S

New Entrants
Low Price Low cost
BHS/ASDA

Suppliers

Substitute

Low in this Industry

Dual Sourcing
Strategies

Branded Food
Sainsbury
John Lewis

Premium

Porters
Five
Forces
Rivalry

Low Competitive
In this
Industry

Bargaining

Power - Buyers
Aggressive
Pricing
Strategy

Stakeholders expectations developed according to changes in the market. M&S

brand loyalty concept is less likely to survive where there are several substitutes of same
standard in the market. As such M&S has to be creative and innovative and constantly
reacting to the change in the buying behavior of the consumers.

2.4 Strategic positioning techniques

Strategic Positioning is thinking in reverse: instead of starting with yourself, you
start with the mind of your prospect.
Three main generic strategies
Cost leadership,
Differentiation,
Focus.
The case of M&Ss core products (food and clothing), it implements a focus generic
strategy as it concentrates on a narrow segment (a particular buyer group (executives),
market segment (high-end), product feature (freshness) and within that chosen segment
M&S attempts to achieve differentiation from Tescos Asda, BHS, Top Shop etc. The
premise is that the needs of the group can be better serviced by focusing entirely on it.
Scope Competitive advantage : Lower cost Differentiation
Broad target (industry wide) Cost leadership Differentiation
Narrow target (market segment) Cost focus Differentiation focus

Force Field Analysis - Kurt Lewin 1951

When decisions are made by managers they have to weigh up the reasons for and against
that particular decision. 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. If there are more things going against you,
say for a launch of a product then you would need to deal with those factors. Each forces
for and against are allocated a number based on the severity. 0 is usually neutral and 4 are
strong.

To sustain competitive advantage the product must be:

Valuable Exploits opportunities and / or neutralizes threats in a firms
environment.
Rare Among firm current and potential competition

 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.

Source: Business essential Business Strategy formulation page 82

To have a competitor analysis to try and assess what like Tesco, 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. They should include
printed press in their advertising channel just like their competitors Tesco ,Asda and so
on. Printed press catch the audience attention mainly if M&S want to deliver a specific
advertising message. M&S should be more present in creating fashion trends, sponsoring
fashion events which will boost sales and reduced unsold .
Mark & Spencer markets its products based on superior quality and reliability

3 Strategic Planning
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. Strategic Thinking will create a structured and progressive path
forward to your vision.

3.2 Strategic plan

Marks and Spencer, or M&S, the high street retailer has launched an ambitious waste
management transformation project to greatly improve its environmental performance, as
part of its Plan A commitments, required innovative systems, company-wide behavioral
change and an extensive education programmed.

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
-62,500 tones of food, cardboard, plastics, metal, wood, 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
- A direct contribution being the positive attitude of the staff, encouraged by the
extensive company
-wide internal communications programmed.
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

4 Strategic evaluation and selection

4.1 Alternative strategies Substantive growth, limited growth
or retrenchment
Product market mix
Ansoffs 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

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 nor 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 independenlty.
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 operations or pulling out of certain product market
areas. Reason for :
Companys business buy and sell businesses
Resource limitations
Insolvency
Market entry strategies
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 business
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 sells their product to a third party who then sells it on
within the foreign market.
Licensing - less risky market entry method. 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 oversea
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 company; of course profits will have to be shared.

4.2 Future strategies

Marks & Spencer PLC future growth strategy under the banner "2020 doing the Right
Thing"
Improving its operations to save costs,
Expanding the options for customers to buy products - especially online
online sales are expected to almost triple to GBP57 billion in 2020 from GBP21
billion this year according to research by Verdict, Forrester and Javelin Group
Driving its business outside of the U.K.
It would improve its supply chain.
Implement new IT systems which would save it GBP250 million by 2015/2016
through capital expenditure over the same period of GBP1 billion.
Consolidating distribution sites which would mean further warehouse closures on
top of the 21 already closed,
Sending products directly to the country of sale rather than routing everything
through a central U.K. hub, and refreshing stock systems and data collection.
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.

5 Strategic Implementation
Strategy implementation skills are not easily mastered, unfortunately. In fact, 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, presented below, provide
a valuable insight into the nature of strategic planning within large organizations, and the
role of the Chairman and Chief Executive in this process.
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

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 centre
Plan: 3 - 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 - 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 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 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.
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 retiling 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

5.2 Resource requirement to implement new strategy

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.
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.
Leaders provide vision; Managers provide execution. Both together achieve more

Capital allocation should be efficient and effective

Should be wisely invested and monitored.

5.3 Targets and timescales for achievement 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
subordinates level
o Managers major objective
o Managers general performance for achieving that objective
o Critical assumptions underlying the objectives and the performance.
Prepare activity schedules- for managers at divisional, departmental and
subordinates 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 sub units, rather than
imposing detailed planning specifications on them.

It implies organization hierarchy:

It empowers managers.
Assumes 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.

Internal communication
communication of corporate vision, strategies, plans, corporate culture, shared
values
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.

6 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 have 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 retiling concept into a virus.

7 References
http://www.examstutor.com/business/resources/companyprofiles/marksandspencer/strate
gyinsight.php - Extracts from the Speech
www.guardian.co.uk/business
http://plana.marksandspencer.com/media/pdf/planA-2010.pdf
http://bizcovering.com/major-companies/a-case-study-on-marks-and-spencer/2/
www.thetimes100.co.uk
www.tescoplc.com/plc/ir/corpgorv/boardprocess
http://www.edie.net/news/news_story.asp?id=18931
www.bized.co.uk
www.1000venture.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