TOWS Matrix

A TOWS matrix is very similar to a SWOT analysis but goes a step further by matching
externalopportunities and threats with internal strengths and weaknesses (Johnson

et al.

2011, p. 108). The matrixpresented in Table 3.2.1.3 reveals a series of future strategies and the
extent to which M&S is capable ofsupporting these strategies.

"Strategic Planning and Strategy Formulation of Marks & Spence"

I. Strategic Planning A. Define the following terms: Mission Statement; Vision;
Core Competencies. Use your chosen organisation to illustrate examples of each
of the above elements of the strategic planning process. A companys mission
statement is usually the companys purpose for existence. It is said that the mission
defines everything about the business—its activities, the need of the market, its
consumers, its relation to its suppliers, employees, shareholders, and societies
where it operates in (Spanos & Lioukas 2001). Thus, a mission is the cornerstone
of a business. Marks & Spencer is a company that has existed for more than 125
years. The companys secret to staying well, alive and surviving the times include
sticking to its mission—to provide high quality products at great value (Marks &
Spencer Plc 2009). This has been the companys mission statement for more than a
century. The companys vision is derived from its mission. With the companys
purpose for existence and scope of operations, a companys vision represents what
a company aims to accomplish over the horizon of a certain period (Spanos &
Lioukas 2001). With the companys mission in place, the vision is where the
company wants to be after a certain period—what it plans to achieve in line with
fulfiling its mission (Spanos & Lioukas 2001). In the case of Marks & Spencer, in
support with its mission of providing high quality products at great value—it aims
to be a socially responsible multi-channel retailer that will provide the customers
great value by granting them easier access to its high quality products (Marks &
Spencer Plc 2009). In these changing times where reaching consumers has
become easier due to advancements in information and communication
technology, Marks & Spencer aims to fulfil its mission according to the present
norms. Core competencies to an organisation are some of its capabilities that
enable it to create competitive advantages to the company (Pralahad & Hamel
1990). A companys core competencies can range from the technology that it uses,
its people, its brand and relationship with its customers and suppliers, etc.
(Pralahad & Hamel 1990). In the case of Marks & Spencer, the companys major
core competency is its M&S brand which is long synonymous to quality and value
(Marks & Spencer Plc 2009). Aside from it, the companys green business model
in its response to calls for a more environmentally-friendly way of doing business
as well as cutting down on costs, which it calls its Plan A (Marks & Spencer Plc
2009). B. Identify the approach to strategy adopted by your chosen organisation
and compare/ contrast your organisations approach with one other approach,
including the benefits and limitations of each approach. There are two major
approaches to strategy: the competitive strategy framework by Michael Porter,
and the resource-based perspective. The major difference between the two
approaches is their focus. For the resource-based perspective, the assumption is,
there is a heterogeneity when it comes to the companys resources where it can
capitalise on—something that cannot be imitated by competitors (Spanos &
Lioukas 2001). On the other hand, Porters competitive strategy framework
emphasises on the need to focus on the market and the industry when crafting a
strategy(Spanos & Lioukas 2001). That is, in crafting a strategy, the forces of
competitors as well as the market are needed to be incorporated in order to
effectively carry out its operational plans. This is more commonly called the
outside-in perspective because of its orientation. Between the two approaches to
strategy, it is apparent that Marks & Spencer uses a resource-based view approach
to strategy. In the companys annual report, Sir Stuart Rose has outlined the
companys strategy as a five-point plan with targets and time-scales (Marks &
Spencer Plc 2009). These five points include: growing M&S core UK business;
building M&S Direct business; expanding the companys international business;
strengthening the companys property portfolio in the UK; and integrating Plan A
across the business (Marks & Spencer Plc 2009). In crafting its strategy, the
company takes an inside-out perspective by looking at its internal capabilities first
—the companys M&S Direct on-line business model platform; the companys
supply chain management in line with implementing Plan A, the companys strong
brand and its current business in the UK; the companys strong presence in the
international market due to strong brand recognition—these are all the companys
capabilities (Marks & Spencer Plc 2009). And crafting plans and strategies by
looking at the available resources first and capabilities, is a resource-based view
approach to strategy. The benefit of using a resource-based approach to strategy is
that, by creating a competitive advantage, the company is being able to get ahead
of the competition mainly because of a capability that is unique in its business.
However, the resource-based perspective also has some limitations; one of which
is its tendency to lose sight of the market, and the industry or the competition
(Spanos & Lioukas 2001). In a companys pursuit of a distinct competitive
 advantage, there is a possibility that it alienates the consumers in the process. That
is why this approach is most known as the inside-out perspective. In environments
where changes occur very fast, the company can better craft plans in order to
adapt to the changes (Spanos & Lioukas 2001), Porters competitive strategy is a
more appropriate approach. A limitation of the model however, is that the
companys perception of its competitive advantage is from the outside, which is
dependent on its position in the industry—either as a cost leader, or through a very
differentiated offer (Spanos & Lioukas 2001). This is subject to industrys forces in
the process.

II. Strategy Formulation A. For an organisation with which you are familiar, carry out an
environmental and internal audit. A firm is subject to forces that are beyond its control;
most of these forces are part of the larger environment where it operates in. One way to
analyse these forces and their effects on the firm is by employing an environmental audit.
In order to analyse the macro environment, PESTLE framework is usually utilised. In
order to analyse the task environment of the company, forces that can immediately affect
the companys operations such as the industry competition, suppliers and customers are
also determined. One political factor that is significant to Marks & Spencers operations is
the UKs efforts to forge stronger ties with the emerging economies (Datamonitor 2008).
For the countrys economic landscape, the global financial downturn has affected the
industries where the company operates. The global crisis has resulted in low consumer
confidence among British as the economic prospects of the country look dimmer.
Therefore, a decrease in private consumption threatens the companys operations
(Vitorovich 2009). Sociological factors that may impact Marks & Spencers operations
include the increasing income disparity (Datamonitor 2008), as well as the countrys
ageing population which can dim the countrys prospects for growth over the longer term
(Datamonitor 2008). With the advancement of information and communication
technology, consumers over the years have resorted to a more convenient way of
acquiring goods, which has boosted the companys retail sales through its e-commerce
website, the M&S direct which is re-launched in 2007 (Felsted 2009). As for the
companys legal landscape, provisions for higher wages in the UK can severely impact the
companys earnings (FT.com 2009). Global warming and other environmental phenomena
can impact the companys operations across the globe, therefore its efforts through its Plan
A are just appropriate as a social responsibility act in line with the environmental
landscape (Marks & Spencer Plc 2009). The task environment of Marks & Spencer has
elements include consumers, network of suppliers, and competition in the industry. As
British consumers prefer more convenient and overall, the most economical way in order
to acquire goods, spending for the companys on-line retail industry has been increasing
due to this shift in customer preferences (Felsted 2009). As the company expands its
operations overseas, the companys network of suppliers and customers increase (Food
Manufacture 2009). This increasing network has enabled the company to secure contracts
with more suppliers, which provides some room for expansion of its merchandising
content. With more merchandise to offer, the company can better capture more needs of
its consumers. However, the company also faces intense competition especially in its food
retailing business. This intensifying competition in the food market has resulted from
firms vying for fewer profits due to the effect of the global downturn on the decrease
consumer demand (MarketWatch 2009). The companys internal audit is conducted by
looking at the companys capabilities as well as competitive disadvantages. Marks &
Spencer has been a market leader in general merchandise over the years. This is due to its
strong brand equity which it has built upon its core values that include quality, value,
service, innovation, and trust (Marketing Week 2009), and this is a capability or a
competitive advantage to the company. With the Marks & Spencer brand which is
recognisable internationally its strong market presence is part of the companys ability to
deliver what it promises to consumers, which is another competitive advantage
(Marketing Week 2009). As for its competitive disadvantages, the companys customer
base has not expanded over the years and its revenues have been declining (Jones 2009).
This is mainly due to the companys reluctance to enter younger markets, as it prefers to
stick to its current market which are older in terms of demographic profiles (Murray
2009). Another disadvantage to the company is its weak cash position, relative to the
industry (Benady 2009), which can affect the companys future liquidity positions. This
potential problem that can arise from issues on liquidity can hamper the companys
prospects for growth and expansion in the future. B. Using Porters generic strategies,
identify the strategy adopted by your chosen organisation giving reasons for your
selection. Marks & Spencer has used differentiation strategy in its business as it tries to
differentiate its offer from its competitors with its brand. Among the three generic
strategies of Porter, this is the most fit in accordance with the companys activities, i.e. its
marketing communications campaign (Marketing Week 2009; Marketing 2009). The
company does not pursue overall cost-leadership; although it provides high-quality
products at affordable prices (Marks & Spencer Plc 2009), its prices are not the lowest,
overall, in the industry. The company does not use focus strategies as well. As apparent in
its wide range of merchandise—from the most casual shirts amounting to 4 pounds up to
luxury suits with prices of around 400 pounds, the company does not focus on a certain
market segment (Marks & Spencer Plc 2009). It tries to differentiate its offer by the level
of quality of the goods that it provide as well as how it does business, as apparent in its
marketing communications activities. III. Strategy Evaluation and Selection A. Discuss
the organisation growth strategies being adopted by your chosen organisation – in
particular comment on how vertical and horizontal integration could be adopted by, and
why it may (or may not) be suitable for, your chosen organisation. Marks & Spencers
growth strategies include growing its core business in the UK, growing its M&S Direct
business, as well as growing its international business operations. In order to grow its core
business in the UK, the company plans to offer more products to its existing customer
base (Sandler 2009). The companys focus not only include apparel, but it focuses more on
expanding its food business as well as focusing on its home ware business, which has
been the major contributor to its growth during the past year (Cabinet Maker 2009).
Because prospects for on-line retail has been rosy over the years, the company plans to
ensure it is well-positioned in the on-line retail market through its M&S Direct, the
companys e-commerce website (Felsted 2009). By offering more options in terms of
merchandise that are offered as well as the quality of service to on-line consumers, this is
one of the companys prospects for growth (Stacey 2009). For the companys international
operations, Marks & Spencer aims to cater to open up new stores in emerging markets
especially in Asia. Its success in other Asian countries that it has entered has resulted in
stronger international presence which it aims to capitalise on by entering the hosts
countries neighbours (Sandler 2009). With these prospects, it is tempting to engage in
some integration in order to grow the business. A possible horizontal integration includes
buying some smaller competitors such as in the food business. Because of the intensity of
the rivalry in this industry which results in price wars, the company can opt to buy some
of these smaller retailers in order to free up some market share for it to capture, and to
increase its foothold in the market. For vertical integration, it is tempting to think of
making the companys manufacture of some goods in focus areas such as food and home
ware in-house in order to increase its efficiency and reduce quality control costs.
However, this proves to be counter-productive because of the existence of its expanding
network of cheaper suppliers around the world where it can outsource production.
Therefore, this kind of vertical integration is not good for the company. B. Identify your
chosen organisations stakeholders, and outline why is it important for organisations to
gain stakeholder buy-in to a selected strategy. Marks & Spencers stakeholders include its
shareholders, other investors such as its creditors, the companys consumers, employees,
suppliers, the communities and the environment (Marks & Spencer Plc 2009). Because
the companys actions will affect these stakeholders in one way or another, the will be
contentions and resistance for a given strategy. A strategy, unless implemented will
remain as good in theory. Therefore, the support of these stakeholders, when a strategy is
being pursued is crucial. For example, Marks & Spencer has to balance its obligations to
these various stakeholders when it has decided to incorporate Plan A in its strategy.
According to its Plan A, the company aims to become carbon neutral, to send no
operational waste to landfill by recycling, and improving energy efficiency (Marks &
Spencer Plc 2009). In order for this to be carried out, certain resistance and concerns have
to be addressed first. The shareholders may, from their shorter-term perspective, may not
like the idea of it because it will entail restructuring and other additional costs to the
business, which will lower the companys profitability as well as the returns to their
investments. Employees may oppose the change if some chaos due to internal changes
will result from employing this strategy. In order for this strategy to be implemented
smoothly, Marks & Spencer has to address the concerns of these stakeholders. By looking
at their needs, and seeing that these interests will not be harmed in the process of
following the strategy, the company can communicate to these stakeholders that it is for
the better. Thus, gaining their buy-in is crucial, or else the strategy will render ineffective.
IV. Strategy implementation A. Explain what resources might be required to implement a
new strategy in the chosen organisation. In order to implement a horizontal integration for
Marks & Spencer as another strategy for growth, the company needs a handful of
resources. These include financial resources in order to buy out those smaller retailers that
will otherwise be its competitors. Aside from this, the company needs to have the right
people which will effect the transition of the acquisitions smoother, with less hostility
between the parties, as these smaller companies become absorbed of the larger culture of
Marks & Spencer. Its human resources is definitely required in implementing the new
strategy, for change management purposes and integration to the organisational structure.
Aside from this, the company needs to have the technology to incorporate the operation
of these smaller retailers in its operations. Unless its information technology platform is
upgraded in order to handle the additional operations of these retailers, the company will
become inefficient and will not reap the benefits of the acquisition. Therefore, investment
in technology in such a way that the systems of these smaller acquisitions, from supply
chain, procurements, marketing, to accounting, as well as in the companys e-commerce
operations, is necessary in order to implement this new strategy for growth. B. Describe
in detail how targets and time-scales are, or could be, used to measure the effectiveness of
strategy in your chosen organisation? Marks & Spencer, since Sir Stuart Rose has taken
the reins of the company, used targets and time-scales in order to ensure the effectiveness
of the new strategies. In the companys annual report, five points are included in the
companys strategy, all have a time-scale duration of up to the year 2010 in completion
(Marks & Spencer Plc 2009). These five points include: growing M&S core UK business;
building M&S Direct business; expanding the companys international business;
strengthening the companys property portfolio in the UK; and integrating Plan A across
the business (Marks & Spencer Plc 2009). The time-scale according to Sir Stuart Rose is
up to 2010, however, due to the effects of the global financial downturn, the time-scale is
extended up to 2010/2011 and 2012 (Marks & Spencer Plc 2009). The company has come
up with various targets for these five points: the 500 million pound target by 2010/2011
for the M&S Direct, as well as the 15-20% contribution of the companys international
business to Marks & Spencers revenues, reducing its carbon emissions in tonnes, as well
as its 51 kilowatt hour per store square feet of consumption to improve its energy
efficiency (Marks & Spencer Plc 2009). In its annual report, what has happened over the
years have been measured according to the plan and presented to the investors. This is a
good way to measure if the company is nearing its target within the time-scale, to see the
effectiveness of the strategy, or if the time-scale needs to be expanded if the company
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