Marks and Spencer Internal and External Factors

Keywords: pestle evaluation marks and spencer

Analysts did not expect there to be always a "double-dip" recession first, but changes in consumer spending styles elevated concerns for keeping an enthusiastic eyeball on consumer confidence by carrying out in-depth customer studies every month. This is to be and stay reasonable. Market leaders of large organizations are very careful regarding UK economical environment.

UK is known as to come through the deepest ravages of the monetary turmoil just lately and in such a situation still M&S managed to post income of Ј632. 5m for the last financial year. With the worst ramifications of the recession behind, the strong foundations set up, and its primary ideals helped M&S set for expansion under hard circumstances. At Ј632. 5m, M&S's fine-tuned pre-tax profits for the twelve months to 27 March were 4. 6% higher than a year ago but well below the Ј1bn profits achieved in 2008. These stats along with the new budget announcement, effect on consumer spending remains a cautious issue and can have effect on outlook for the entire year ahead.

Business Environment Analysis

PESTLE

The external environment of Marks & Spencer is comprised of all the elements that know what the it needs to be competitive in its particular industry. Following is highlighted some factors of M&A's external environment and exactly how they effect Grades & Spencer in performing its strategies

(P)OLITICAL

European Integration and Free Trade Contracts have exposed markets for Uk & other Companies to purchase Europe. Thus, triggering M&A to fight hard to keep its market share with hostile strategies. Generally any trade is allowed in UK so long as it does not oppose public policy, general population order, or any existing laws in the land. But for Marks and Spencer, the most problematic political elements that they have to contend to deals with the issue of labour laws and regulations and industrial romantic relationship.

In the long record of M&A, its development initiatives have been manipulated by many infringements in labour laws and regulations in local functions and also in international initiatives.

(E)CONOMIC

UK Retail sector is quite recession prawn and also very sensitive to changes in interest levels. With the event of Sept 11, the globe economies have suffered heavily, After the customers and overall economy was on growth track after September 11 post effects, the financial meltdown of 2009-09 has again place the economies have difficulties for survival. UK current economic climate after struggling hard has now regained its system and consumers are again optimistic and the retail industry is once more booming. THE UK being truly a hub of business in Europe, has consumers not limited by only locals but flocks of travellers also, thus creating much variants in base tendencies and retail business.

(S)OCIAL

Changes in consumer flavour and lifestyle stand for both opportunities and threats for the industry. UK consumer have a dedicated tendency specifically towards brand. Quality of the product, but these factors can be easily get over by quite competitive costing strategy from a rivalling brand. Moreover, consumers choice towards trendy styles alternatively than classics are also obvious in UK consumer market. This is specially in case of Markings and Spencer, as it offers struggled hard to gain a larger market talk about of its customers. This makes visible that UK consumer places quality value on the money.

(T)ECHNICAL

Changes in retailing methods such as Internet used as online shopping store is a common practice in retailing, widening the opportunity of ecommerce. Furthermore, Paperless operation and use from it systems has provided overall flexibility in the performing operations of the business enterprise. Online marketing activities over the net is also becoming one of the competitive advantages kept by the main retail companies in UK.

(E)NVIRONMENTAL

The alternative and environmentally friendly sources of resources found in creation are opted by most of the firms across globe now which has posed greater have difficulties for companies to keep up its market share. For Markings & Spencer, careful use of textile and recycleables is a greater concern now.

(L)EGAL

National legislation for health and basic safety both in terms of consumer rights and also in conditions of development of own natural alternative resources to make clothes is meticulously monitoring practices of companies so as to evaluate them on complying with legal restrictions.

Analysis of the External Environment of Marks and Spencer

The retail environment in UK appears to be extremely attractive. Companies, although have federal support still there is in the market some degree of difficulty in penetrating the retail market, especially for new entrants, due to the strong your hands on monoliths This is also true companies like Grades and Spencer, having strong historical track record that their environment is actually welcoming and neglecting the actual fact of cutthroat nature of your competition there are chances of immense demise for companies.

PORTER'S 5 FORCES

Porter clarifies that five pushes exist in market, which determine the intensity of competition and success of M&S.

The first is the danger posed by new entrants, the high capital costs and customers changing prospects put significant barriers to admittance, making market also sensitive to reputation. But, with emergence of low cost manufactures a significant danger is posed for M&S market. There can be an opportunity in the low price/ low overall economy (fast) sector and BHS and Top Shop or ASDA may also consider introducing low priced home products. The second reason is the threats from substitutes, as there are many vendors in both clothing and food sector, M&S has serious concerns regarding this. The 3rd force is the threats from the bargaining vitality of potential buyers, this is strong for both M&S and the entire food retailing industry with a big number of different suppliers, hence, the ambitious pricing strategy which in turn causes strong competitive rivalry in the industry and gets intensified because of little if any differentiation in the basic product offered. Previous is the threats from the suppliers bargaining ability which is substantially low for food industry, due to a range of alternative sources of supply available for products.

SWOT

SWOT Analysis will help us in understanding Marks & Spencer's current situation in conditions of strengths and where advancements are essential within the business enterprise and what external environmental threats it faces along with what new opportunities are available in the short and medium term.

(S)TRENGTHS

  • Diverse runs of Products - Food, Clothing, Financial loans, furniture, wine and Home
  • Largest retailer in the United Kingdom by sales.
  • Strong CASHFLOW Position
  • Increase turnover and trading profits
  • Leading TOP QUALITY Food Retailer
  • Brand Awareness

(O)PPORTUNITIES

  • New Products
  • Innovation & Alliances
  • Customers demand change to more affordability products
  • Develop overseas resource chain

(W)EAKNESSES

  • Perception of High Prices
  • Customer disinterest
  • Environmental issues: Pollutions
  • Substitute products or technologies

(T)HREATS

  • New & existing competition
  • Volatility in Price of organic products
  • New legislations
  • Economic recession
  • Low cost retailers
  • Extremely high competition

Analysis of the Macro environment & Microenvironment

M&S is rated a successful multinational company. It has generated its large number of loyal customer basic by giving them with its high quality, good service, comfortable shopping environment and convenient access to retailers and products. But, because of the enormous competition in market and also M&S's own huge product ranged offered it has to revise its marketing segmentation strategy, especially in reference to clothing market. Consumers have changing fashionable design and color requirements and M&S as is facing different focus on markets need to change its designs, cuts and color strategies to meet their requirements. These need to specific and individual for females and young consumers who are its main focus on.

M&S also needs to improve stock management. Combing its it system with stock management ca help M&S find problems immediately and solve them effectively to provide products timely.

M&S must also consider the global economical environment, where in fact the monetary recession has brought on deciling sales for M&S, it should target more towards mid-age and mid-class as its focus on group as now their incomes can afford the high price of M&S.

Trend Impact Analysis

Proposed Strategic Plan for M&S

After doing evaluation of the surroundings of the M&S, the proposed tactical plan will be turning over both the interior as well as external environment. Primarily its value chain should be centered on
  • Value Chain

The value string of the organisation is coined mostly by Porter as a tool to discover the inherent functions of the company to realise its competitive benefits. The following will describe the principal activities and support activities of the business.

  • Primary Activities

The principal activities ingest hand several specific functions of the business: inbound logistics, businesses, outbound logistics, sales and marketing, and service. Grades and Spencer gets its inventories from its suppliers, in the beginning the strategy was to stay limited to British suppliers but eventually this developments is now shifting and today suppliers include international suppliers also. Grades and Spencer is involved in the direct offering of apparel, foodstuff, and even home furnishings. The sales and marketing of the company should be the most prioritised elements for the company, due to the intense competition present in the industry, vying for consumer favour also to add value to the brand, it requires a step that beats all others of these primary activities.

  • Support Activities

For these support activities, the business will need hold of its f real human reference and technology, where with help of proper training of common staff, the business can ccreate knowledge of its products and their understanding during the functions of selling to customers. Use of technology in similar manner can significantly infused in the businesses of Marks and Spencer. This consists of providing online deals and loyalty credit cards on which they must be doing continuous improvements and development.

Strategic Options Available

To create sensible strategic options for the M&S, they must consider the benefits and effects those can have on company financial position and customer bottom part also. Following are talked about some options which following a ongoing recession and UK competitive market structure can be of good advantage for the company

Brand repositioning: this technique if used to make fresh sense in the brains of customers for the brand after frequent intervals. Furthermore brand repositioning requires a lot of work on new targets, sections and options, the changing consumer developments and needs can be well completed by M&S using such strategies

The speedy competition demand fast and rational decisions that are adaptable and designed in such a ways that immediate implementation is possible as customers don't have time now and immediately turn to other brands. Thus the structure of decision making should be redesigned to make it more involved and versatile.

Of the countless strategic options available for Markings & Spencer it would appear that Markings and Spencer could focus on to refurbishing its operations. For instance, the business should consider a relationship with the greater current and competitive players in the retail industry. This assists broaden the overall outlook of Grades and Spencer regarding their standing in the market.

Marks & Spencer needs to move ahead with major technology-driven change tasks, despite cautiousness over the overall economy. Improvement in systems can also take place to improve supply chain processes which include enhancing stock management systems to provide more exact real-time stock level information.

Getting Cost efficiencies by adding some new point-of-sale system and better customer support to all or any stores

Building a strong multichannel capability can also be useful that may bring about more website development and intro attractive and more efficient facilities and stock availableness information for customers

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