Marks & Spencer plc which is also known as M & S is fashion retail organization of the British origin which has its operations all over the world. The organization is listed in the London Stock Exchange. Marks & Spencer mainly specialises in the sales of products based on clothing, food based products and home products as well. The company was established in the year 1884 by Thomas Spencer and Michael Marks. It began the sales of branded products in the year 2008.
Marks & Spencer currently has more than 900 stores all over the United Kingdom. The company went on to become the first retailer of British origin to register a pre-tax profit of more than 1 billion dollars (Marksandspencer.com. 2018). The organization had seen sudden loss after the year 1998 which was quite surprising for the shareholders and the customers of the organization as well.
The clothing-based sales of the organization has decreased in the recent years due to the economic issues in UK. The sales of the company based on the food products has however increased in the recent times. The report will be mainly based on the analysis of the environment in which Marks & Spencer has its operations. The external environment will be analysed with the help of PESTEL framework. The industry will be analysed in an effective manner with the implementation of the Porter’s Five Forces Model.
The analysis of external environment will thereby be helpful for the discussion of the ways by which the organization can develop strategies which be helpful for its operations in the future. The recommendation based on successful operations in the future will also be provided in the report. The sustainable operation of Marks & Spencer is thereby dependent on the ways by which the company is able to operate with the proper usage of its resources for different purposes (Marksandspencer.com. 2018).
Goals and Objectives
The goals as well as objectives of an organization form the base of it and thereby makes it crucial that the company is headed towards a certain achievement level. The goals and objectives of Marks and Spencer’s can be stated to be as follows:
The mission of the Marks and Spencer Company is to provide the different customers with the different new quality products in areas of food, financial services along with cloths. Furthermore, the other aspect is to deliver high quality foods which will be beneficial for the gaining competitive advantage in the entire market. The products are being sold to the customers at an affordable rate and which are being received by the different customers and they will be good value for the money as well. The mission of the organization is being achieved by the organization through providing inspirational quality to the customers as this will be beneficial for the overall success of the organization in an efficient manner (David and David 2017).
On the other hand, the vision statement of Marks and Spencer is to become the standard against which the other competitors are being measured. Furthermore, as per the vision statement of the respective organization, this can be analysed that organizational goals can be achieved by the companies which will increase the sales along with market share in the retailing business effectively. Additionally, the vision of the company is mainly into continuing differentiation strategy which will help them in delivering proper services and become the largest sustainable quality of goods and services to the customers effectively.
The generic strategies can be rightfully described as those strategies which are generally followed by the organization in order to ensure that the firm is successfully able to achieve its objectives at large. The different generic strategies which are available to the Marks and Spencer’s are as follows:
Out of these strategies, the company, Marks and Spencer’s uses the focus generic strategy whereby the company aims to concentrate on a particular target market base which can be defined as the executive crowd and thereby provides high end products which are fresh in stock (Islam 2016). Moreover, the firm also offers attempts to make use of the differentiation strategy which tends to differentiate it from Tesco, ASDA and top shop.
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Strengths · The brand image is clear in nature as they have tried in positioning themselves in the premium brand products which are being sold by the company in the entire market · Multichannel Presence is the other strength wherein they have different options for franchising and this has helped the company in managing their activities effectively |
Weaknesses · There is low level of satisfaction among the different customers in the market which can be negative for the entire organization. There are no such return policies which are being not provided to the customers · There is huge inability to penetrate successfully ion the overall foreign countries and this can create negative impact on the different kinds on the purchases of customers |
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Opportunities · There is inclusion of different new segments which will be beneficial for the overall success of the firm in comparison to the other competitors in the market
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Threats · There are different major competitors in the market which can create negative impact on M&S such as Zara and UCB which can be competitive in nature |
From the SWOT analysis, this can be analysed that there are different kinds of strengths of the company such as the premium brand image which can be competitive in nature for them to become more user friendly in the entire market. The company has tried to position themselves as the most premium brands in comparison to the other competitors in the entire market. As per the present scenario, this can be analysed that more than 80% of the operating goods and this will be beneficial for the overall success of the firm in the competitive market. Additionally, in the present scenario, this has been noticed that M&S has been trying to utilize the organic clothes and this has helped them in increasing and improving the effectiveness of the energy
Political factors – The political factors are mainly based on regulations that are formed by the government in order to conduct the business operations in a successful manner. The running position of the retail organizations are thereby affected by political activities. The trends that are applicable in the shopping and retailing based activities can play an important part in the ways by which organizations operate. The retail industry thereby has to face some major challenges that can affect their profitability in an adverse manner (Barros, Hernangómez and Martin-Cruz 2016).
Economic factors – The strength of the economic situation within a country is an important factor that is able to affect the operations of retail business. The economic situation thereby has a direct impact on the successful operations of retail organizations. The change which takes place in the economic situation of country is an important factor that is able to affect the operating processes of the organizations. The foreign exchange rate in the country is also able to affect different operations of the organization in a positive or a negative manner (Daspit et al. 2017).
Social factors – The current lifestyle and social change that takes place in the external environment is an important factor that is able to influence the sales of retail organizations. The wants and attitudes of the clients are also important factors which play a major role in the ways by which organizations are able to operate in the environment. The customers have become much more aware of the products and their demands are changing with a rapid pace. The organizations thereby need to provide products that can match the desires of customers (Demir, Wennberg and McKelvie 2017).
Technological factors – The current business environment has gone through many technological changes and advancements. This has led to the changes in the latest technologies that have been implemented by these organizations in the industry. The new technologies have been able to create a special position in the market and in all the spheres of life as well. The online shopping platforms thereby play a major part in the ways by which the organizations are able to reach the customers with the help of their products. The new products and services can be introduced to the customers with the help of online platforms and this is also able to increase the reach of company as well (Durand, Grant and Madsen 2017).
Legal factors – The legal factors are able affect the retail industry of UK in such a manner which can lead to the formulation of different policies. The legal implications that have been implemented by the UK government is thereby important for decreasing the illegal trafficking based processes. Consumer protection based laws need to be followed by the organization so that they are able to provide the best levels of services (Dyer et al. 2015).
Environmental factors – Different forms of energy which are used by the retailers in UK can cause many environmental concerns. The products that are offered in retail shops are mainly prepared or grown in the environment and it is affected by the changes that have occurred in the trends. The government has also imposed ban on different kinds of the gases or sprays so that the effect of operations of these retail stores on the environment can be reduced (Engert, Rauter and Baumgartner 2016).
Threats of the new entrants – The new entrants in UK fashion retail industry are able to introduce new and innovative products and services. This has put immense pressure on the low pricing based strategy that has been formulated by Marks & Spencer. The challenges that are faced by the organization due to the entry of new organizations thereby need to be faced by Marks & Spencer in an efficient manner. Increasing the levels of innovation and introducing new services and products can play an important role in facing the new entries in the industry. The company thereby needs to build effective levels of barriers which can help in creating a competitive position in the retail industry (Dobbs 2014).
Bargaining power of the suppliers – Raw materials that are required by the fashion retail organization of UK are acquired by Marks & Spencer from huge number of suppliers. The suppliers are however in a dominant position in the industry and they are able to decrease the margins based in different products that are offered by the organization. The power of suppliers can be reduced by the organization with the creation of an efficient supply chain which consists of multiple number of suppliers. The company can also experiment with the designs of products in order to increase its margins. The formation of an efficient supply chain and huge number of suppliers will be an effective step in decreasing the effect of suppliers and their power to affect the prices of raw materials (Ethiraj, Gambardella and Helfat 2018).
Bargaining power of the buyers – The buyers in the fashion retail industry are highly demanding in nature and they tend to get the best offers at lowest prices. This has increased the pressure on Marks & Spencer based on the ways by which the company is able to operate in the external environment. The rapid innovation of new products is also an important part of the ways by which the company can aim at developing the customer base. High number of buyers of the organization will be helpful in decreasing their power of bargaining in an effective way. The development of a huge customer base can be an effective part of the successful operations of the organization in the competitive retail industry of UK (Dobbs 2014).
Threats from the substitute products – The retail industry consists of many organizations of similar types which are able to provide highest levels of products and services to the customers. The substitutes of the products that are offered by the organizations are easily available in retail market. This threat can be reduced by the company by making the operations service oriented in nature rather than operating only in a product oriented manner. This will help Marks & Spencer to create a profitable position in the market within a short period of time. Marks & Spencer can effectively create a competitive advantage in the market with the help of innovative services that can be provided to the customers (Frynas and Mellahi 2015).
Rivalry among the existing players – The retail industry of UK is highly competitive in nature and this has increased the levels of rivalry among the organizations which operate in the environment. The rivalry levels are thereby able to decrease the prices of products and profitability levels as well. The organization can mitigate this threat with the help of a sustainable differentiation which can be developed for the purpose of competing in an effective manner. The levels of collaboration that is created with the other organizations in the industry can also play an important role in the reduction of rivalry levels among different organizations. The levels of rivalry among the organizations which operate in the retail industry of UK can be reduced with the help of different and unique products or services that can be offered to the customers (Hill, Jones and Schilling 2014).
The development of proper and authentic strategies is based on the ways by which the company is able to analyse the external environment in an effective manner. Proper business strategy thereby plays an important role in the formation of an effective structure of the organization. The major strategy that has been implemented by Marks & Spencer in its operations can be termed as the value price strategy. The organization is mainly known in the market for serving the middle class customers. The supplier base of the company is mainly in Britain where Marks & Spencer has been able to create an efficient supply for providing effective service to the customers within the stipulated time (Hitt and Duane Ireland 2017).
From the resource-based perspective, this can be identified that this is one of the most strategic choices which has helped the company in becoming more appropriate in their approach. Firstly, this is essential in nature for M&S that building of the different capabilities is not possible in vacuum and this is inclusive of the external and internal environmental analysis which is essential in managing the different operations effectively. Marks & Spencer has been highly profitable in the different kinds of aspects and this has helped the organization in becoming more effective in the different kinds of operations in the competitive business environment and this will become one of the major opportunities for Marks and Spencer organization which is operating in the overall competitive environment (Hill, Jones and Schilling 2017).
Albers et al. (2017), have commented that there are unique kinds of resources and capabilities which are being maintained by M&S in which the brand reputation plays a major role in managing the various activities efficiently. The loyalty of the employees is being taken into consideration which is essential and efficient in nature in managing the effective kind of management structure in the organization which is combined with the effective system of the management. With the help of the SWOT analysis, this can be analysed that there are various types of the higher quality and low-cost products which are being sold to the customers in the market (Yorio, Willmer and Moore 2017).
Marks & Spencer has been able to form a group of manufacturers who are able to adhere to the quality-based levels that have been set by the management. The company has also been able to maintain effective relationships with the suppliers in order to provide the lower prices to customers. The inspirational standards that are promoted by the organization are based on service, products, price and quality. The main part of the strategy that has been developed by the company is related to the lower prices of products that are affordable for all types customers. The organizational culture of Marks & Spencer has been developed with the help of its effective business strategy which is mainly a reflection of the taken for granted style that has been developed by the employees (Hubbard, Rice and Galvin 2014).
The core competencies that have been created by an organization play a major role in the existence of Marks & Spencer. The major core competencies of Marks & Spencer mainly include, reliability, quality, high value and the trust of customers. These core competencies have been able to provide a profitable position in the retail industry. The changes that have been made by Marks & Spencer in the prices of products has played a major role in creating its competitive advantage in the retail market. The efficient marketing and sales strategy that has been implemented by Marks & Spencer is important for the company to operate in the industry (Karadag 2015). Along with this the core competency as possessed by the firm will be made use of by using the Hudson Competency Framework model which has been given as follows:
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Competency |
Relevance to Marks and Spencer’s |
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Information Management |
The competencies relate to that of processing of information and data which are as follows: Capability to process information Able to make use of the data available Formulation of strategies |
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Task Management |
These competencies refer to the competency of managing the task flow. Organized Role oriented |
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People management |
These refer to the management of people in the firm and in this case the organization needs to be consistent, considerate, trust worthy and accurate (Murray 2014). |
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Interpersonal management |
The relationship between the different employees need to be strong enough and thus the organization must successfully be able to manage the relationship between the different departments |
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Personal management |
Lastly, this can be described as the competency to manage oneself which analyses the ability of the firm to manage itself on the whole. |
As commented by Karadag (2015), this can be analysed and identified that the strategic group analysis is being performed by the different organizations as this will assist them in understanding their position in the entire competitive market. The different analysis of the underlying factors is required to be analysed and identified in order to determine the profitability of the organizations along with analysis of the competitive dynamics of the industry in an appropriate manner as well. Additionally, the strategic groups can be created which are based on various kinds of direction which are as follows:
From the above, this can be analysed that there are different kinds of factors which are essential and responsible for the growth of the M&S and this will be helpful in maintaining competitive position in the entire competitive market. The vertical integration can play a major role in M&S which will be helpful in gaining control over the suppliers which will be suitable for increase the power of the firm in marketplace and reduce the distribution channel costs effectively as well.
Additionally, the product quality along with service plays a major role in managing and increasing the overall satisfaction of the different customers who are the target and major customer base in the M&S (Karadag 2015). This respective strategy is essential in nature which will be beneficial for the company in becoming more cost effective in nature in comparison to the different competitors in the overall competitive marketing environment as well.
The goals and strategic direction that have been set by Marks & Spencer has been mainly an effect of the understanding of the company based on the value that is provided by the customers. The opportunities and challenges that have been offered by the organization has created an important support system in community. The strategy which has been implemented by the organization in different departments has provided effective support to increase the profitability and revenues of the company (Kasemsap 2014). The company thereby aims to increase its revenues in the market with the implementation of better strategies in its operations. The franchise partners of Marks & Spencer are able to provide an effective position in the retail industry. The business operations of the fashion retail organization can be increased effectively with the help of proper levels of support that is provided by the franchise owners (Meyer, Neck and Meeks 2017). The major support based services that are provided to franchise owners to the management include,
The strategic direction of Marks & Spencer is thereby defined by three major values which are, value, quality and services. The company has been coming up with new and innovative strategies in order to improve its position in the retail industry.
The strategic goals of an organization can be set in an effective manner with the help of analysis of the external environment and industry in which it operates. The analysis of Marks & Spencer based on the external environment, that is, the retail industry has proved that the organization needs to develop some goals and objectives which can help in increasing the profitability and revenues (Morschett, Schramm-Klein and Zentes 2015). The strategic aim that can be set by Marks & Spencer is based on the improvement of the customer satisfaction levels and sales of products. Technological advancement that has taken place in the environment has been an important part of the ways by which the company can gain leadership in food and clothing based industry in the United Kingdom. Introduction of new and innovative products in the industry and improvement of quality is also a part of the objective that has been set by M&S for improvement (Sakas, Vlachos and Nasiopoulos 2014). The development of strategic plan thereby plays an important role in the successful achievement of the goals.
The needs of stakeholders need to be balanced in an effective manner so that a large organization like M&S to operate in the competitive retail industry. The stakeholders can play an important role in the ways by which Marks & Spencer can achieve the goals in the next six years. The different stakeholders in the organization are managed in different which further depends on the position and status of Marks & Spencer in the retail industry (Trigeorgis and Reuer 2017).
The success history of Marks & Spencer is mainly dependent on the ways by which the organization has creates its position in the fashion retail industry of United Kingdom. The company has been a pioneer in the textile and food technology based applications in the operations. In the year 1934, Marks & Spencer had set up the research laboratory which has helped the company to improve its operations in fashion retail sector. The innovations which were made by the organization have thereby been an important part of the transformation of high street and the customers were provided with new types of textures (Wheelen et al. 2017).
The clothing based operations of Marks & Spencer had suffered a lot since the year 2008. The CEO of the company has decreased the reliance of sales on the high levels of discounts that can be provided to the customers. The fall that has been experienced in sales of clothing items is around 8.9%. The clothing prices of M&S has been increased by the CEO due to which the customers have been lost. Greater than 40% of the total clothing items of the organization had been sold with the help of promotion and discounts (Simon, Fischbach and Schoder 2014). The CEO thereby aimed at breaking the cycle of the sales by decreasing the levels of discount. This new strategy which had been implemented by the CEO of the organization has reduced the levels of profitability and revenues of the clothing department of M&S. The shares of the organization have also reduced in the recent environment due to the lack of sales of clothing items. The collapse which has been experienced in the retail industry of UK after implementation of Brexit has proved to be an important part of the operations of M&S (Morschett, Schramm-Klein and Zentes 2015).
The strategic Evaluation objective plan of the company can be stated to be as follows. It will help in the analysis of the performance of the company and ensure that all its objectives are achieved successfully (Purce 2014).
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1 |
2 |
3 |
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Objectives |
To decrease the employee turnover rate by 20% by the year 2020. |
To increase its market share by 20% by the year 2021. |
To increase its sales percentage per square foot by 10% in the next one year. |
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Area Goals |
To increase employee satisfaction To ensure that the employees contribute towards the objectives of the firm at large. To ensure that the employees are well trained and are able to successfully able to manage the different customers. |
As the second objective comprises of ensuring that the firm will be successfully able to improve its market share, it needs to ensure that the following Area Goals stand at large: To improve the brand image of the firm To improve the strategic positioning of the organization To ensure that there exists considerable offers of the firm. To ensure that the pricing policy of the firm is consistent to the market standards |
To ensure that the company is successfully able to improve its store appearance. To ensure that the offerings as made by the firm are adequate in nature such that the attractiveness of the firm increases. To ensure that the staff is capable enough to make the sales. |
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Key actions required to Complete |
Training of the employees Motivating them Rewards and Recognition |
Keeping standard prices Improving brand image Stocking sufficiently |
Ensuring better stocks Ensuring good discounts are being provided. Ensuring successful appearance of the stores. |
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Key Performance Indicators |
Employee satisfaction index Turnover rate |
Market share and size Sales incurred Popularity of the firm. |
Sales per square foot Net revenue Profits being made |
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Responsibility |
Senior managers HR Manager |
Marketing Manager Senior manager |
Marketing manager Store managers |
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Timeline |
2 years |
3 years |
1 year |
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Budget |
$10000 |
$15000 |
$5000 |
Marks & Spencer needs to be provided with recommendations that the company can use for the purpose of increasing its profitability in the clothing items. The recommendations are as follows,
Conclusion
The report can be concluded by stating that Marks & Spencer has been successful in its operations since its inception. The major strength of the company has been based on the ways by which the customers are attracted with the help of lowest prices of products and services. The products and services of the company were provided to the organization in such a manner which have increased the customer base. The appointment of new CEO of Marks & Spencer had caused changes in the profitability levels of the company. The clothing business of the organization had been affected in an adverse manner due to the reduction of discount based pricing. This had been a major cause of failure for the organization in the fashion retail industry. The strategic plan that has been devised in the report can be helpful in achievement of profitability and goals of the organization in the fashion retail industry.
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