Marks & Spencer

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Outline
INTRODUCTION
History
Aim
External Environmental Factor
Competitors
Impact External Environment
Major Challenges
Porters Five forces
Theory of retail development
SWOT analysis
Strategic options
Resources and Capabilities
References

Company introduction

Marks and Spencer plc is a major British

multinational retailer.
M& S operate in across more than 40
countries
M&S are specialists in the selling of clothing
food and luxury products

History
Marks & Spencer was founded in 1884 as a

market stall by Marks.

It became Marks & Spencer in 1894 as a
partnership with Spencer.
The business was built up within a close-knit
family environment offering generous pay
packages to its sales staff and family.

Mark & Spencer Aim

Our aim is to make M&S a truly international,

multi-channel retailer accessible to even

more customers around the world. We have
created considerable momentum through a
wide range of activities and are making good
progress.
<http://corporate.marksandspencer.com/about
us/our_plan
> 28/10/13

External environmental Factors

Political
Economical
Social
Technological
Legal
Environmental

Political Factors
As business taxes such as co operation tax has remained

the same for the last 5 years this will not affect M&S.
The introduction of new business restrictions policy's.
Environmental regulations such as air pollution from
farming could affect M&S supply chain.

Economical Factors
Credit is very hard to obtain for consumers however M&S

have not introduced credit cards in their organization.

Due to the recession people have less disposable income
and have less money to spend on luxury goods.
However inflation has declined over the last two years so
products may be more affordable for consumers.

Social Factors
Changes in UK population shows that there
are more retired people than children.
There is an increase in the demand for
organic food.
The UK is becoming very multi-culture.
Consumer attitude towards food is changing
as they have become more health conscious .

Technological Factor
Technology is rapidly changing and very

expansive to keep up with.

Technology is changing the buying behavior of
customers.
Loyalty cards programs are also developed to
discourage customers from switching over to
their competitors and understand their buying
behaviour.

Legal Factors
Competition laws
Consumer laws
Employment Laws
Advertising Standards laws
Health and Safety laws

Environmental Factors
Global warming is increasing.
The potential impacts of climate change is affecting

how businesses operate.

Due to affects from climate change raw materials are
hard to obtain.

Key competitors of M&S

Asda
Tesco
BHS
Next
Sainsburys

Sales figures for M&s

2013

http://
news.sky.com/story/1164063/m-and-s-upbeat-despite-clothing
-sales-falling-again

Impact of external
environment
Change in operation
Change in customer trends
Changing Buying power
Opportunities for competitors
New user Technology

(Grundy, 2006)
For example information technology completely
changed the way of work, customer behavior and life
style as well.

Future challenges
M&S needs to start outsourcing suppliers in

order to keep up with competitors.

M&S is losing its trend towards youngsters,
so they need to make some their products
more appealing to young people.
M&S needs to provide more diverse products
as the UK is becoming very multi-culture.

Porters Five forces

Competitive rivalry within a industry
Bargaining power of suppliers
Bargaining power of customers
Threat of new entrants
Threat of substitute products

Competitive rivalry
M&S have different competitors as they have

variety of product such as food , clothing and

home ware products.
There closest competitors are Debhanams
and house of Fraser as they sell similar
products and offer similar services and all
offer high quality products.

Bargaining power of
suppliers
M&S have a lot of power over supplier as a lot

of their products are of their own brand.

M&S buys large amounts of materials and
resources therefore they can get good prices
on what they buy.
M&S have a strategic advantage over
competitors as they are not more reliant as
others.

Bargaining power of
customers
Luxury products which M&S sell such as

expensive clothing, the customers will buy

them because of quality which means
bargaining power is low.
Some M&S products are sold by their
competitors so bargaining power of customers
is high.

Threat of new entrants

For M&S threats of new entrants are low due to

high barriers of entry.

M&S brand name and capital investment, high
sales revenue and market share helps them against
competition.
However for M&S cheaper selection of products
barrier may be low and competition could enter
such as Primark as they offer low priced clothing
which is value for money.
Competition for M&S is high as over the years they
have lost market share which means the threat for
new entrants is high.

Threat of substitute
products
For M&S threats of substitutes are high.
Other stores such as Next , house of Fraser

and Selfridges offer top quality clothing with

competitive price.
Supermarkets such as ASDA have cheaper
alternatives with their food prices and range
which is a threat.

SWOT Analysis
STRENGTHS
.Good quality products
.Diverse ranges of
Products
Largest retailer in UK
Increase turnover and
trading profits

OPPORTUNITIES
Introduce new products
Provide more organic
goods.
Build up more alliances
Develop overseas
supply chain

WEAKNESSES
Losing young customers
.Perception of High Prices
Customer disinterest
Environmental issues
Substitute products or
technologies

THREATS
Instability in the prices of
raw products
New legislations
Economic recession
Low cost retailers
Extreme competition

Strategic options
Consider the benefits and impacts those can

have on company financial position and

customer.
Brand repositioning
Getting Cost efficiencies by introducing some

new point-of-sale
Building a strong multichannel capability
Major technology-driven change projects

Strategic resources and

competencies
1. Value Chain: developing and adding value at each level

of supply chain
2. Primary Activities: the primary activities take in hand

several specific functions of the company: inbound

logistics, operations, outbound logistics, sales and
marketing
3. Support Activities: the company needs to have hold of its

human resource and technology

Thank for your time

Do you have any question

References
Grundy A. N. 2006. Competitive strategy and

strategic agendas. Strategic Change 10(5):

247260.
Porter, M. E. (1985). Competitive advantage:
creating and sustaining superior performance,
New York: The Free Press.
Marks & Spencer (2013), Available at:
http://www.marksandspencer.com/ [Accessed
10th October, 2013].
Hart, S. and Murphy, J. (1998). Brands The
New Wealth Creators. England: Palgrave, p7