The company is losing key employees to its main competitors, including product developers, food technologists and General Merchandise design team members. Strategic Business Analysis of Marks & Spencer. Porters 5 forces analysis Global Telecom Industry. It is essential to study the internal and external environment in order to achieve a competitive advantage. It is estimated that currently the latter group comprise close to eight per cent of the workforce in the UKs M&S stores (Dentons, 2016). As Britain's favourite retailer loses relevance to today's shoppers, Retail Week asks: can M&S be saved? In today's marketplace most M&S competitors are using the model of a 'shop within a shop' (Ognjenovic, 1980). (2016). Supermarkets have introduced 'high quality' food ranges, such as Sainsbury's 'Taste the Difference' and now supply many other goods - others have developed inexpensive ranges of clothes with 'designer labels' - for example, George at Asda. After companies establishing their own unique brand image, they should make long-term planning to maintain its own brand image (Harry J.P., 2000). Macroeconomic factors and a weakening euro are still considered to be a challenge, especially in the Middle East (Marks & Spencer, 2016). Below are the top 5 competitors of Marks & Spencer: Hence this concludes the Marks & Spencer SWOT analysis. During the years of the financial crisis, the company continued its strong brand momentum by maintaining premium pricing and backing it through investments in advertising. In 2015, food surpluses were allocated by working with redistribution partners through a Community Shop programme, whilst in 2016 a Spark Something Good campaign engaged 1000 employees in community work and charity action days (Marks & Spencer, 2016). The decline of M&S post the 1990s was largely due to competitive retailers operating with foreign imports. A value chain analysis is a strategic tool use to identify the activities in and close to an organisation which lead to the creation of a product or a service. Since it was founded in 1884, the. With stricter environmental rules and regulations both at European and international level and increasing consumer pressure concerning business practices, major international retailers and brands have to examine the life cycle of its products from cradle to grave from the suppliers to end usage and disposal to be completely transparent about their strategic and tactical environmental practices and be fully accountable. M&S is changing the business strategy timely when market environmental change, while the continuous improvement on strategy goes along with the change of customer demands. Also read Marks & Spencer SWOT Analysis, STP & Competitors. At present, the existing competitors in the competitive retail industry has become a variety of forms, a variety of tissue types, regions and business scope of the three-dimensional cross-competition. Despite a slight rise in April 2015, the companys clothing sales have being falling for four years in a row with the company facing its worst quarter since 2005 in the second quarter of 2016 (Davey, 2016). The M&S website currently has six million online customers and has yet to reach, engage and convert 14.5 million customers who engage with the company only at its High Street stores and shop online with its competitors (The Telegraph, 2014). SWOT Analysis Of Marks & Spencer is brand-based. 25, 2020 5:49 PM ET Marks and Spencer Group . Competition: Very high: the levels of competition in the apparel, food, . As a result of poor eCommerce experience, by 2018, the retail giant was considerably behind its competition. However, the run-up to and outcome of the British EU referendum on 23 June 2016 resulted in a dip in the companys sales in its last quarter (Davey, 2016). Introduction 4. Key Legal Brexit Issues for Retailers. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. However, in the fiercely competitive market environment, operational management strategies are quite important for retailers to obtain a competitive advantage and access to greater income (Chase, 2001). Strong competition from other retail brands means limited market share, 2. One example is the lack of a charge on plastic carrier bags and how this is affecting the companys efforts to implement sustainability measures (Vaughan, 2012). Discover information and data insights on Marks and Spencer Group plc's key competitors and market peers. Retrieved July 2016, from Pestleanalysis: http://pestleanalysis.com/category/pest-analysis/. In this study, strategic analysis is done on Marks and Spencer. Retrieved July 2016, from The Guardian: http://www.theguardian.com/business/2015/may/20/marks-spencer-profits-jump-mark-bolland, Cunningham, T. (2016, May). II. Fashion Retail 2016: The future of fashion retailing in a digital age. In addition, Porters Five Forces Analysis discusses the industrys competitiveness and the firms competitive positioning in the marketplace. To face the future social development, to further advantage, M & S should be good at using the Porters competitive theory, adopting strategy and measures suited to the situation on their own (Dinesh, 2008; S. Ambec, 2002). Marks & Spencer. Recently it has utilised its customer loyalty data to organise targeted marketing and promotional activities and focus on high-impact promotions, which result in better value for customers and increased sales (Spencer, 2015). To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! 4. Marketing Excellence 2 . In Marks & Spencer SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors. Indeed, Asda became Britains secondbiggest clothing retailer by volume in the summer of 2014 (Butler, 2015). In addition, in 2009 the company set annual recycling targets (Waste Management Word, 2010) and in 2012 achieved zero waste to landfill (Russell, 2012). Products of Marks & Spencer (M&S) Essay, 13 pages (3,512 words) Download PDF; DOCX; The business strategy of marks and spencer Subject: Others. The annual revenue of the company in 2020 was 10181.9 million pounds. Comment: Retailers must heed Marks & Spencers international strength. Molinero, CM, Bishop, H & Turner, M 2005, 'The distress of Marks & Spencer PLC in 2001: a multidimensional scaling analysis/Los problemas de Marks & Spencer PLC en el 2001: anlisis de escalamiento multidimensional', Cuadernos De Estudios Empresariales, . Free resources to assist you with your university studies! The availability of these stores and accessibility are also . 1,105 17. However, in August 2020, the company announced that it would cut down 7000 jobs due to the covid-19 pandemic. 3) Value Chain: Value Chain is an essential tool for analysis of source strengths. Analysis. Retrieved July 2016, from Reuters: http://uk.reuters.com/article/us-m-s-outlook-idUKKCN0ZN0EH. Its premium position is threatened by shifting customer preferences; they might prefer to shop for a label or look for similar quality products offered at a better price elsewhere (The Marketing Society, 2010). Carried out on the part of the membership-based customer and sales records of the Commissioner of the members on a wide range of information, including birthdays, clothing numbers, special preferences, and settlement accounts. In 2007 Marks & Spencer (M&S) was the UK's largest clothing retailer with a market share of 11.1%. 1st jan. Capi. Thus, Porter makes an extension of his research into the national competitiveness. Technology trends in fashion. This is an example of the high standards by which the company abides. At the other end, fashion brands such as Zara, H&M, Gap and Next are targeting younger, fashion-oriented clientele with their latest fashions and affordable prices. He thinks factors that may strengthen their national enterprises to create competitive advantages include factors of production, demand conditions, business strategy, structure and competitors, related industries and support for industry performance. Consequentially, the slight decline of sales and share prices in 2008 were followed by steady improvements in both these indicators a year later, thus escaping the hard to reverse grip of discounted prices felt by many other competitive retailers (The Marketing Society, 2010). At the end of 2015 the company had to temporarily shut down its website due to a security breach (Curtis, 2015) and in 2016, poorly integrated IT systems in the company are still being experienced. While sales in the clothing branch of the company are falling M&S, has a strong hold in the food business with a successful specialist strategy leading to an increase in sales. View PDF. Retail enterprises further reduce business costs through the use of POS (selling real-time systems), MIS (management information systems), EDI (electronic data interchange), EOS (Electronic Ordering System) and other modern management techniques (Shankar, 2004). During the financial crisis of 2008, while competitors such as Aldi, Asos or Tesco followed a strategy of discounted pricing, M&S emphasised higher quality products and better consumer satisfaction (The Marketing Society, 2010). In the retail sector in which Marks and Spencer operates, competition is strong and growing the company is facing intense rivalry from supermarkets chains, homewear stores and fashion retailers. 'Loyal' customers were departing to competitors like Next, Gap and Oasis for trendier clothing at lower prices. Marks & Spencer ranks 1st in Employee Net Promoter Score on Comparably vs its competitors. Govt policies for retail stores. Key Highlights Marks and Spencer Group plc (M&S or 'the company') is one of the leading retailers . Original reporting and incisive analysis, direct from the Guardian every morning. 5. M&S has multiple channel operations and allows customers flexibility in terms of order and delivery options, including online shopping. The company which is currently 132 years old has built its image on offering a quality value-formoney products strategy has recently started refocusing on a low cost strategy for its clothing business. Retrieved July 2016, from The Guardian: http://www.theguardian.com/money/2014/mar/07/marks-and-spencer-bankcurrent-account, Krish, M. (2012, January 19). Advantages and disadvantages can be attributed to internal factors while opportunities and threats can be attributed to external factors. In the case of M&S, the company has placed considerable emphasis on its social agenda. Marks & Spencer remains the UKs biggest seller of clothes, by value, but it has lost ground to rivals. Marks and Spencer Group plc - Strategy, SWOT and Corporate Finance Report, is a source of comprehensive company data and information. For example, Tesco, ASDA, Sainsbury's, Morrisons, Next, Gap, Sports Direct, Debenhams, John Lewis and Amazon are some of the biggest competitors of Marks and Spencer. In combination with the reduced buying power of the pound and with 1.1 billion in revenue coming from international markets, the company needs to put together a strategic plan on how the likely impact of Brexit can be minimised. (2016, July 7). Unstable political and economic conditions in several international franchise markets in which the company operates such as the Middle East, Russia and Ukraine pose a threat to both franchise receivables and on the companys development in these areas (Marks & Spencer, 2015). M&S has struggled to adapt. Abroad, it sells goods and services in more than 320 stores in over 40 countries. This will not only result in the company having to invest in the recruitment, hiring and training of new employees, but also in the company facing the risk of its show how, know-how and contacts (related to current or potential contracts and business) becoming readily available to competitors (Davey, 2016). The opportunities for any brand can include areas of improvement to increase its business. Stores built for bygone age Stores built in the 1920s or earlier are now often the wrong size, in the wrong place or need huge investment to modernise them. Oxford Street is a well-known British commercial street on the number of stores, the London crowd to get on the top spot. 3) The bargaining power of suppliers. Porter through the study of industrialized countries finds industrial cluster is a common phenomenon in the process of industrialization, in all developed economies, are it is clear that a variety of industrial clusters. The company has a long history in the UK market, with its first store dating back. How many Marks & Spencer retail stores are there in the United Kingdom? The 133-year-old Marks & Spencer has been busy closing stores around the world and plans to close 53 wholly-owned stores . 10.4%. 4 year average Net Profit Margin. The profile has been compiled by GlobalData to bring to you a clear and an unbiased view of the company's key strengths and weaknesses and the potential . 5) Industrial clusters: regional competitiveness has a great impact on competitiveness of enterprises. The top 10 competitors average 5.7B. Third, accounting for the characteristics of the target market, it is to develop practical sales strategy, including determining the number of sales outlets, choice of a commodity business scope, pricing strategies. Retrieved July 2016, from Monica Krish: https://monicakrish.wordpress.com/category/porter-five-forces-analysis-fortelecom-industry/, Macalister, T. (2015, July 16). The brand also offers products and services online along with its physical store. The company is facing serious macro- and microeconomic issues despite its strong brand, solid positioning in the food business, and ongoing innovation in the digital transformation of its operations as well as the implementation of Plan A, its social, environmental and ethical business strategy. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. Below are the Strengths in the SWOT Analysis of Marks & Spencer : 1. Porters model was designed and developed by Michael Porter in the 1980s to determine the competitive intensity and attractiveness of an industry (Spencer, 2015). Marks and Spencer is one of the leading department stores and grocery retailers based in the United Kingdom (UK). External Analysis of Company: Marks & Spencer is one of the recognized names in retail products and other aspects related to the organization have ensured a sound presence across the corners of the world. M&S then bungled setting up its own site, with an expensive high-tech warehouse that didnt work properly and a boring, clunky website. Technical analysis trends MARKS AND SPENCER GROUP PLC. Because Marks & Spencer has become a very powerful organization in the retail world, new competitors find it very difficult to keep up with the quality of products and services that Marks & Spencer provide. M&S is a leading British retailer, headquartered in London. Marks and Spencer like John Lewis is a multi-channel retailer and a close competition for John Lewis. (2015). Losing access to the common market will affect supply chains, the free movement of people, IP rights, international contracts and more. A case study analysis report of Marks and Spencer . They used their resources and subsequent capabilities to exploit their differences from the competitors and create competitive advantage by: *Empowering suppliers/manufacturers with design responsibility *Closely managing supplier relationships London: Marks & Spencer Plc. Marks And Spencer: A SWOT Analysis. There are future opportunities in expanding their brand into China & India. M&S has sold almost all own-brand goods. By examining these, a company is in a better position to consider likely implications and minimise any future organisation-related risks (Makos, 2014). Enter for a chance to WIN a signed copy of Holly Willoughby's new book, 'Reflections', or an exclusive personalised video message from England Rugby star, Maro Itoje! The coronavirus has had a big impact on the retailer, but that cannot hide other shortcomings. Only 18.5% of its clothing and home sales were online. Plan A, the environmental and ethical plan M&S has adopted to serve as a backbone to the way business is being conducted within and outside the company, has helped the company stay ahead of the curve by sourcing responsibly, reducing waste and helping stakeholder communities. M&S Quarterly and Annual Revenue Trailing 12-Months Trend (TTM) Annual Revenue $14.3B M&S's revenue is the ranked 3rd among it's top 10 competitors. The low-cost of commercial retail enterprises, lead to lower barriers to entry the retail industry, retail businesses are always faced with the threat of new entrants. (2014, September 1). Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. The management believes in collecting and assigning cost data that is being shifted away from control. The company has traditionally invested in TV and magazine advertising as well as in-store visual merchandising. It is one of the most powerful retail brand with a top of the mind recall. At the lower end of the market, under the umbrella of ASDA, brands such as George and Matalan are targeting previously loyal M&S customers with lower prices. From raw material procurement, manufacturing, to sales, they strictly control the quality, allowing consumers to taste delicious food while taking care of nutrition and health. The decision will require new VAT rules as opposed to the VAT zero rating for intra-EU purchases and import duties and tariffs will be imposed (Dentons, 2016). Whether the company is well enough prepared to preserve its spot as the leading food and clothing retailer in the UK market and abroad remains to be seen. Marks and Spencer faces some great competitors both in the UK and abroad. This involves a detailed analysis of their actions and how these would affect the future strategies of Marks and Spencer Enters China. Following the UKs decision to exit the EU, the company, as will other UK retailers, is likely to face legal issues. This saved a lot of costs, and profits began to improve. It has been reviewed & published by the MBA Skool Team. The paper concludes with a value chain analysis which examines inbound logistics, operations, outbound logistics, marketing, and sales and services. 1st jan. Capi. Even though the company still holds the first position in terms of sales by value, its 14 quarter slump preceding a one-off rise in sales in the first quarter in 2015 makes it likely that the company will be moving its focus from clothes to food (The Economist, 2015). At present, 80% of M&S operating goods have the brand of St. The international franchise businesses of M&S in the Middle East, Russia and Ukraine also suffered significant decline due to geopolitical instability, local currency fluctuations and decreased consumer demand (Marks & Spencer, 2015). 2) The general strategy theory: Porter believes that the struggle with the five forces of competition, each company should only have two basic types of competitive advantage, namely, low-cost and product differentiation, which both with a special scope of business combination can be drawn from three types of successful strategic thinking, these three ideas is the overall cost leadership strategy, differentiation strategy and centralized business strategy. Third, long-term to maintain brand image. Marks and Spencer plc was set up in 1884 in Leeds by Michael Marks and re-branded as Marks & Spencer (M&S) ten years later when a partnership with Thomas Spencer was formed. As regards its fashion business, the speed with which the latest trends are being communicated to designers has increased as has the speed of transportation. He displayed goods by category and price tag, getting rid of the bargaining traditional transactions. The content on MBA Skool has been created for educational & academic purpose only. A PESTEL analysis provides a framework to investigate a companys non-controllable external factors that have the potential to affect its operations. Specifically, in Q4 2018's revenue was $3.9B. To modernise, simplify and create a distinct brand across its various offerings, in 20142015 the company created a unified storytelling-based brand identity for its food and clothing markets via Only M&S while preserving Est. Short Term: Mid-Term: Long Term: Trends: Bullish: Bullish: Neutral: . Marks & Spencer. (2015). 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