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 market has opened up for British companies opening in Europe. Economy Retail sector very sensitive to changes in the interest rates. 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. M& S promoting people to buy on line with incentives likes discount. Flexibility 24hr Environmental M&S commitment to the environment - top ten "green brands" in the UK recently - * Global Warming Legal National Health and Safety National Minimum Wage Taxation Policy Use of renewable resources.

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

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. 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.

Porters Five Forces M&S The threats within the immediate industry and M&S

New Entrants Low Price Low cost BHS/ASDA

Suppliers

Substitute
Premium

Low in this Industry Dual Sourcing Strategies

Porters Five Forces

Rivalry Bargaining

Branded Food Sainsbury John Lewis

Low Competitive In this Industry

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 changing needs of the customers Tesco can introduce new product lines Require more attention to R&D, leading to additional spending.

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. 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