Introduction

In section A of this report, we will analyse and assess Marks and Spencer’s (M&S) food sector business strategy. In previous consultancy task we examined UK supermarket sector and business environment. That will be crucial in understanding current M&S strategic position. Also, it will help us to identify sources of competitive advantage and at the same time opportunities for future strategic positioning. In addition, we have to be aware of company’s non-financial performances as well as quantitative corporate objectives and key performance indicators. Analysing them using balanced scorecard and benchmarking method will show us, is our strategy sustainable, does it have long run perspective and direction we are currently moving. This will be covered in part B of this report

Part A

Strategy can be defined as “the direction and scope of an organization over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations” (Johnson et al. 2005, pp.9). According to Porter (1996) company can do better than other companies only “if it can establish a difference it can preserve” (Porter 1996, pp.63). Delivering additional value to customers, providing them with comparable products at lower cost or both is a good way to make a difference according to the author.

Johnson et al. (2005) presented three Porter’s generic strategies which could be used by companies to achieve competitive advantage: cost leadership, differentiation and focus. It can be concluded that M&S using focused differentiation strategy. According to the Bowman’s strategy clock this strategy is seen as high price strategy which gives perceived high value to customers. They choose to differentiate themselves from other food retailers with: top quality own label food, ready prepared meals, fresh food and food for special occasions. They do not attract customers for full weekly groceries shopping but gives them additional value for their money with focus on freshness and quality. Their simply food stores contributed with high margins to overall sales in past few years. Also, they expanded abroad to 40 countries in order to attract new sales into the same niche. This is consistent with Johnson et al. (2005) who explained that growth may be achieved by targeting new sale at the same market niche abroad.