PWC. The companys international expansion via franchise agreements gives it a strong competitive advantage compared with other UK businesses that trading only on the UK market (Rogers, 2012). Marks and Spencer has strongly criticised the government for intervening in its plans to knock down its flagship Marble Arch store in London, saying the firm is "bewildered and disappointed". Two trends the retailer should take into consideration are the different generations customer preferences for fashionable items and/or the growing perception that British produce is no longer considered to be of high quality (Experian, 2015). M&S Bank, which was started in 1985, recently (2014) launched a current account facility with no monthly fee and a 100 M&S gift card. The difference amongst the gross profit alone is a colossal 700%, with the . Harrison, J. Over the last one quarters, M&S's revenue has decreased by 0%. Standardization Management greatest advantage is that we can save a lot of management costs, while consumers can enhance the overall impression of the Marks and Spencer, giving them a home away from home shopping experience. (2016). Competitive differentiation is the basic strategy, to pursue I have what people dont have, my superior that what people have customer value that is different from other competitors. To find the main sources of competitive advantage that Tesco has over its competitors an analysis of the structure of the industry should be under-taken . It is essential to study the internal and external environment in order to achieve a competitive advantage. Free store collection Free delivery when you spend 60 Free returns for online orders. With the launch of the companys Plan A in 2007 and having won the GBS supply chain award for implementing a truly disruptive supply chain (Purt, 2012) the company is ahead of its competition as regards the social and environmental impact of its business. A SWOT analysis assesses the external environment and internal capabilities of a company (Harrison, 2015). Having only decided on implementing a digital transformation strategy in 2010, the company has been a latecomer into the digital user-centred retail space. The most successful retailer using cost leadership strategy the worlds largest retailer, Wal-Mars. For this case study, Marks and Spencer is selected. Retrieved July 2016, from The Economist: http://www.economist.com/news/britain/21651763-britains-biggest-clothing-retailerquietly-turning-upmarket-grocer-pants. M&S decided to change strategy, developed a new program in overseas sourcing and manufacturing goods. Marks and Spencer Case Study 3. A significant portion of the workforce is highly trained, and this leads to more productive output for the organisation. As the retail business operated products, the technical content of most is not high, more likely to imitate, so facing a greater alternative threats. Most notably one is a billboard in his stall: Do not ask the price, a penny can be. This simple and eye-catching slogan quickly spread among the people in the middle and lower classes. This article has been researched & authored by the Content & Research Team. Yet, these attempts have so far not resulted in a desirable outcome (BBC, 2013). (2015). In simple words, Marks and Spencer was far away from eCommerce checkout best practices. Almost no food online M&S will begin selling its main food ranges online on 1 September, after missing out on the market for years. 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. Customer firstly thinks a lot of commodities with high-quality and low price, which is Marks & Spencer sought-after standard. Marks & Spencer Place & Distribution Strategy: Following is the distribution strategy in the Marks & Spencer marketing mix: Marks & Spencer is an international brand which has got more than 1000 stores operating in more than 50 countries. Oxford: Oxford University Press. Marks & Spencer remains the UKs biggest seller of clothes, by value, but it has lost ground to rivals. In addition, the in the implementation process of objectives accumulation strategic, the cost leadership strategy and differentiation strategy can also be used at the same time. Its own M&S.com was only launched in 2014 after three years of development (The Telegraph, 2014). 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). 5) Existing competitors. Marks and Spencer Group PLC does not currently have any hardcopy reports on AnnualReports.com. 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). Cost leadership strategy is to low operating costs or fees. Differentiation strategy is that the business through the characteristics production makes their product or service unique, and thus consumers are willing to pay a higher price. Competitors were obtaining products from sources outside of the UK at much cheaper prices while M&S continued to maintain rigid loyalty towards expensive local suppliers. If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. In addition, in 2009 the company set annual recycling targets (Waste Management Word, 2010) and in 2012 achieved zero waste to landfill (Russell, 2012). Other retail stores are a threat due to their discounted prices 2. Retrieved July 2016, from Fortune: http://fortune.com/2016/07/11/brexit-referendum-uk-economy/, Rogers, T. (2012, October 4). The company, eponymous with its environmental and ethical Plan A green strategy, has also been critical of the lack of clarity in the governments flagship energy efficiency scheme, the green deal, as well as in its shifting green measures legislation. Finally, it uses Porters global generic strategy to analysis M&S, to face the future social development, to further advantage, discussing how M&S attract different customers by using different strategy in the global environment. Large-scale commercial retail enterprises shall include at least the brand connotation of the brand of goods, services, brands, and on the basis of the previous two derived from the three-tier corporate brand meaning. Marks and Spencer Group (M & S) is an iconic and leading retailer of food, home ware and clothing items in the UK and worldwide. Sector and Competitors. U.K. sales growth (up 9.7%) was driven by both food sales, which were up 10.2% (outperformed the market both on volume and value in the four . As regards its clothing business, the threat of substitutes is high copying or imitating existing designs is becoming ever easier. Retrieved July 2016, from Reuters: http://uk.reuters.com/article/us-m-s-outlook-idUKKCN0ZN0EH. Retail business goals taking cost-leadership strategy is to become the industrys low-cost firms, which tend to have economies of scale, proprietary technology, preferential supply of commodities prices, lower transaction costs and management fees and other advantages. According to Joseph L. Bower, Christine Harris of the case study following are the critical resources that are valuable to the firm - financial resources, human resources, marketing expertise, and operations . It is expected to source sixty-five per cent of its inventory from direct vendors (OReilly, 2010). However, in todays fiercely competitive market environment, M&S should also adopt optimal strategy to obtain a stronger competitive by reducing human and material costs by exploring overseas cheap labors and improving their quality of service and giving full play to their creativity. MBA Skool is a Knowledge Resource for Management Students, Aspirants & Professionals. First it outsourced to Amazon, missing the opportunity to develop skills and gather information on its shoppers in the early days. If you need assistance with writing your essay, our professional essay writing service is here to help! However, from 1998 to 2001, M&S operating profit had been on the decline. The company has its main presence in UK where it operates over 700 stores. The opportunities for any brand can include areas of improvement to increase its business. For customers to eat well and well dressed has always been motto of M&S, which is also main historical reason for 100 years of food and clothing at the same time. In 2007 Marks & Spencer (M&S) was the UK's largest clothing retailer with a market share of 11.1%. Annual Report and Financial Statements. SWOT analysis of Marks & Spencer analyses the brand by its strengths, weaknesses, opportunities & threats. M&S has to ensure that it does not obstruct any laws or regulations both in its home market, in international markets during expansion as well as in the countries alongside its value chain. The decline of M&S post the 1990s was largely due to competitive retailers operating with foreign imports. (2010). 3. - provides you an in-depth strategic SWOT analysis of the company's businesses and operations. . Two external factors that affect the retailer include changing values in the population and a generation shift with the Baby Boomer generation retiring, the company has to redirect its attention to Generation X and the Millennials. M&Ss products are perceives as value for money due to quality, convenience and wide range of products. Seeking Alpha - Go to Homepage. Facing fierce competition, M & S retail businesses have successfully used a variety of competitive strategies to improve their competitiveness. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. The company is employing approximately 80000 people in 2020. Threats in the SWOT analysis of Marks & Spencer. There are 1,059 Marks & Spencer retail stores in the United Kingdom as of January 10, 2023. In 2016 the company has also become completely transparent about its supply chain by publishing a map of where the company sources its products (Marks & Spencer, 2015). In addition, Porters Five Forces Analysis discusses the industrys competitiveness and the firms competitive positioning in the marketplace. Think Innovation: How were encouraging innovation across M&S. The value chain is analysed to explain M & S's competitive advantages. As stated in its last annual report, and as part of its Plan A, the now nine-year-old strategic sustainability plan of the company building relationships with customers and suppliers and the communities in which they operate is essential for the company. Add to Library Added to Library Add to Library Remove. Access in-depth analysis, premium industry data, predictive signals, . We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. 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). Commercial retail enterprises implement differentiation strategy with mainly the work to be undertaken: first, accurate positioning for the enterprise. 3. Outdated systems have forced stores to accept deliveries of clothing in sizes they didnt want, and were slow to update details of the amount of stock on the shop floor. 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 Successful examples adopting differentiation strategy are such as the United States Norton department stores, its different, nuanced human service has won praise from consumers, so that no rival can match. Now they sell stylish, high quality; great value clothing and home products and outstanding quality food. Marks & Spencer is one of the UKs leading retailers with over 21 million people visiting their stores each week. Competition: Very high: the levels of competition in the apparel, food, . Green consumerism and customers ethical concerns about the socio-environmental costs of brands they use is one of the factors contributing to the development of companies sustainability reporting and related activities. The availability of these stores and accessibility are also . 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. Second, analyze how M&S can running there business in the competitive environment, trying to explain more different market segment in M&S and how the different market segment works together, analyzing their competitive advantage in this cloth industry. The strengths of Marks & Spencer looks at the key aspects of its business which gives it competitive advantage in the market. The weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. Oxford Street is a well-known British commercial street on the number of stores, the London crowd to get on the top spot. By 1894, the British Spencer Tom with 300 pounds, and Marcos had co-founded Marks & Spencer. In Marks & Spencer SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors. Govt policies for retail stores. 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). Comment: Retailers must heed Marks & Spencers international strength. No plagiarism, guaranteed! Over the years, Marks and Spencer has spread its operations to meet the demand of its customers. This initiative has been largely praised and with its operating performance strong in 2015 (Marks & Spencer, 2016), is considered a threat to High Street banks (Jones, 2014). And it has also characteristic of its own brand, types of goods is not exhaustive, but rather selective to provide customers with the best-selling inexpensive goods. Fabled U.K. retailer Marks and Spencer is trading near thirty-year lows. Until 20 the eighties and nineties, M&S gained unprecedented praise in terms of quality, service, diversification. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. However, despite its successful specialist positioning. 10% most volatile stocks in GB Market. M&S is a listed company under the London Stock Exchange. Marks & Spencer. Also read Marks & Spencer SWOT Analysis, STP & Competitors. Retrieved July 2016, from Marks & Spencer: http://corporate.marksandspencer.com/blog/stories/thinkinnovation-how-we%E2%80%99re-encouraging-innovation-across-mands%E2%80%99. (2015). Retrieved July 2016, from BBC: http://www.bbc.com/news/business-22104228, Brignall, M. (2016, January 5). In 1992, the company has 280 chain stores in the United Kingdom with sales of 75 billion dollars. Whilst this strategy led to a short-term decrease in sales, it resulted in a long-term increase in consumer confidence due to British customers preference and desire to seek both value and quality. Its 180 supply chainrelated targets backed by financial incentives for its buying teams include ethical trade, energy efficiency and sustainable sourcing and are helping make M&S the worlds most sustainable retailer (Purt, 2012). It could supply goods whatever customer needs timely whether it is the variety of food products or clothing style. From the view of Sales category, M&S accounts for 15% of the UK clothing sales, food sales 4.6%. 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. There are several brands in the market which are competing for the same set of customers. Both Marks and Spencer and John Lewis cater to a young audience with a good E-Marketing strategy to drive their business. Only 18.5% of its clothing and home sales were online. 5) Industrial clusters: regional competitiveness has a great impact on competitiveness of enterprises. With sustainability becoming an increasingly necessary and lucrative strategy, the company is ahead of its competitors in this area. The ensuing analysis aims to look at the strengths, weaknesses, opportunities and threats faced by M&S. Marks & Spencer Competitors Marks & Spencer competitors include Volvo IT, Tesco Corporation, PACCAR, MS Global Inc and Phoenix Technology Services. The main competitors of Marks and Spencer Group include Beacon Roofing Supply (BECN), Global-e Online (GLBE), Sprouts Farmers Market (SFM), Foot Locker (FL), Marui Group (MAURY), Signet Jewelers (SIG), Insight Enterprises (NSIT), Samsonite International (SMSEY), Kohl's (KSS), and Hagerty (HGTY). The companys food business is being rivalled by supermarkets such as Tesco, Sainsburys and Asda, and it is competing with clothing and homewear retailers such as Topshop, Zara and John Lewis (Retail Week, 2016). Short Term: Mid-Term: Long Term: Trends: Bullish: Bullish: Neutral: . The company was founded by Michael Marks and Thomas Spencer on September 28, 1884 and is headquartered in London, the United Kingdom. Almost 100% of sales of own-brand are a biggest difference for M&S with the general retailers. Through the above analysis, M&S has made a great progress, getting over lots of difficulties. In addition, the recent Brexit vote is likely to have a substantial impact on the retailer in both its home stores and abroad. The group's international business accounted for 7.1% of turnover and had grown to 219 franchise stores in BBC. Retrieved July 2016, from The Telegraph: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10403348/Should-MandS-giveup-on-clothes-and-focus-on-food.html, Ruddick, G. (2016, July 7). Since it was founded in 1884, the. M&S has invested in a multitude of sub-brands, in-store bakeries and an improved in-store customer experience, thus meeting the changing needs of its consumers (Marks & Spencer, 2016). Retrieved July 2016, from The Guardian: http://www.theguardian.com/business/2015/may/20/marks-spencer-profits-jump-mark-bolland, Cunningham, T. (2016, May). Marks and Spencer (M&S) is one of Britain's oldest and best known retailers of clothing, foods, home ware. Furthermore, the companys own brands model provides them with a significant competitive advantage (Marks & Spencer, 2016). The annual revenue of the company in 2020 was 10181.9 million pounds. 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. It has moved from a platform hosted by Amazon to its own web platform which was launched at the end of 2014 to provide more delivery options and streamlined multichannel services. 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. Like many other retailers, Marks & Spencer has been hit hard by the pandemic but it is also dealing with years of missteps. Analyse PESTEL for Monitoring your Business or Organization. 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. It made a massive investment in an automated home delivery warehouse which has struggled to cope with demand. Industrial cluster is defined as a specific area, with competitive and cooperative relations, and geographically concentrated, with interactive relevance enterprise, specialized suppliers, service providers, financial institutions, related industries such as manufacturers and other relevant bodies composed of groups. Weakened consumer confidence and a decrease in the buying power of the pound have already had an impact on sales growth, whilst the decision is expected to affect the retailer in various other ways in future years.