Friday, May 17, 2019
Marks & Spencer SWOT and PEST Essay
tag and Spencer is the British multinational retail comp each that specializes on producing wearing and high-quality nutriment. Being the dominant force on the UK market attach and Spencer owns 600 stores in the home country and everyplace 225 stores worldwide. Bird (1986) claims Marks and Spencer to be the closely powerful image of Great Britain the companion currently macrocosm the most profit commensurate UK organization also is one of the most innovative in the world. Two briny features of the Marks and Spencer ar centralization and simplicity. The firm tends to use centralized organizational structure and tries to keep everything unproblematic avoiding the complexity in any aspect of systematic applications (Howells, 1981).StrengthsMarks and Spencer has been known for its highest standards of fair-trading, which include acquiring weapons-grade contacts with current suppliers, producing and proposing high-quality food, being friendly to the staff and having a flexible e xchange policy for existing customers (Grayson, 2011). Having a stable and positive reputation is inevitable for the long worldwide brands. The company being initially save focused on producing garments lately diversified its market to the other sectors, such(prenominal) as food, electronics and furniture (Hamil, Crosbie, 1990). variegation guaranteed bigger derive of customers for the company and expanded its growth. The company tends to locate its stores in the high streets which leads to obtaining large amount of customers every day and therefore larger profit. (Bird, Witherwick, 1986). Furthermore, Marks and Spencer does not rent the premises, it owns stores eliminating the possible rental cost. Marks and Spencer is an international retailer which owns more than thousand shops approximately in forty countries, c everyplaceing market of such a big size is beneficial for the companys income (Salmon, Tordjman, 1989). According to Doyle (1982), Marks and Spencer is the Britains s trongest and most successful brand that makes company well known around the world and differentiates it from competitors making it unique.WeaknessesMarks and Spencer payable to diversification and operating in more than one market (garments, food, furniture) is not concentrated on any specific segment, unlike its main competitors such as Tesco and Sainsburys whichretail only food (Lewis, Thomas, 1990). The deficiency of the focus and concentration may lead to the reduced innovations and scarcity of the expertise in one particular market area. When Marks and Spencer tried to expand their market adding the clothing line for younger people, it experienced outlet and failure, as it wasnt able to follow latest fashion trends to satisfy younger audience and unbroken a reputation of the retailing brand mainly for elder women (Fletcher, 2007). According to Alon (2000), Marks and Spencer experienced want of inventory control which led to the underperforming other major British companie s by 25% in 1998. The come price comparison made by Telegraph in 2008 has shown that the prices on the Marks and Spencers food exceed those in Asda by 3.6%. The company is considered high-priced and looses large amount of customers from middle and lower class, who choose daily shopping in other big retail chains like Asda, Sainsburys and Tesco, where prices are much cheaper and more reasonable (Avery, 2011).Political factorsEach company which desires to increase its profit should develop inwardly the governmental policies. Marks and Spencer is not an exception, as the company believes that engagement with the government is beneficial for the organizations income. According to Marks and Spencers official website, company tends to communicate with the political audiences either directly or through the trade memberships. afterward the green governmental policy in 2008, Marks and Spencer introduced the 5p charge for the bendable bags across its stores (Vaughan, 2011). Marks and Spe ncer is located in the UK, which has stable political background and tax policies (McGrattan, 2005). However, in 2005 the company experienced losings in the EU area and appealed to the court for the opportunity to deduct international losses from its UK tax bill (European Commission Legal Services, 2005). After European Court of Justice announced that Marks and Spencer and other UK companies induct the right to counterpoise British tax bill, Marks and Spencer has won this case receiving 30 million tax relief (BBC, 2005).Economic factorsThe majority of international companies are considering the USA a consummate area of franchising due to the big population and large size of the market. Marks and Spencer was among the original British retailers who consideredexpanding its strain to the North America (Alexander, 1995). However, the September 11 attacks have caused scotch crisis and change in the purchasing way of Ameri rat citizens which led to the extreme losses experienced by Marks and Spencer throughout the following family imposing the company to close the non-core branch in North America (BBC, 2002). Due to the financial crisis victorious place in 2007-2008 (Barrel, 2008) and later severe crisis in Eurozone, the sales of Marks and Spencer has significantly decreased, as the salaries of the lower-middle-class didnt math the high-priced food and garments offered by the retailer (Rayner, 2008).Social factorsAccording to Marks and Spencers official website, company is focused on applying ethical trading, producing nontoxic food and employing responsible use of an energy, as the company believes that adapting CSR is vital for the development of business. Company is especially focused on the animal welfare, being the first UK retailer to sell only free-range eggs in its stores (Jones, 2005) and a want with several other British retailers promotes food without additives (Jones, 2007). However, several years ago Marks and Spencer was accused in using the c hild lug in Morocco which might have damaged the companys reputation (Frankental, 2001). According to Moore (1995) and Campbell (2010) Marks and Spencer over the past years has increased the amount of advertisement using different types of commercials. Nevertheless, the company was not been able to satisfy customers needs, while producing their clothing line for young people which led to the losses of profit (Jobber, 1999). scientific factorsAccording to Butler (2013), Marks and Spencer is the only big British food retailer that does not have an online shopping service, while other companies like Sainsburys and Morrison are making millions of pounds through the web. The company for the long time is using RFID (Radio Frequency Identification) technology that helped to achieve more efficient supply chain system. After the success with Marks and Spencer other British supermarkets implemented this technology in nightclub to reduce costs and improve customer service (Jones, 2005). In 2 012 Marks and Spencer announcedthe new marketing plan that include the wi-fi connection throughout its stores, planning that the customers would be able to see the full stock of products on their devises which would simplify searching for the preferable item (Raddick, 2012).ConclusionMarks and Spencer is the powerful international retailer that can maximize its future profit taking into consideration further opportunities and threats of substitutes. Marks and Spencer should consider adding online shopping for its food products, as the other British food retailers like Tesco and Sainsburys already have this feature that gives a big percentage of companies income. Another way for developing company may be expanding to the Asian market which can guarantee huge profit due to the big size of population. One of the main threats caused by economic crisis both in USA and European Union is the loss of bargaining power of customers. People palpate it hard to afford the high prices offered by Marks and Spencer and therefore try to search for a cheaper alternative. retail merchant in future should adapt to the social changes when producing their clothing line for younger people in order to satisfy this audience.