From the analysis, the biggest question is how M&S can change its strategy in order to succeed in its business environment. M&S offers clothing, home products and luxury food products both in store and online (Marks &Spencer, 2015). It is estimated that currently the latter group comprise close to eight per cent of the workforce in the UKs M&S stores (Dentons, 2016). IvyPanda. M&S website temporarily suspended after leaking customers details. M&S raises the stakes in battle over current accounts. The geographical diversification inherent in the international strategy of M&S mitigates any potential risks of being overly exposed in a single country whilst its two-fold international business (food and clothing) is providing even more stability (BBC, 2013). Start and finish your paper with ease. The company can also be committed to serving a particular market segment, a particular product category or a specific geographic area. Our experts will write for you an essay on any topic, with any deadline and requirements from scratch, Marks and Spencer Food Strategies Analysis. In the recent past, consumers have become aware and conscious of their health needs and expectations. These product brands such as Gucci and Armani. In J. Harrison, Essentials of Strategic Planning (pp. The Ansoff Matrix identifies the best direction for a company. For Aldi, they will stay with route leadership as their generic strategies. This does not conform to the principle of the same price same return. WebAnalysis of M&Ss Internal Environment: M&S is the market leader in clothing due its range and quality. Their spending and purchasing habits are also changing. Today, M&S has over 700 shopping outlets in the United Kingdom. The move resulted in a considerable decline in the bargaining power of its British suppliers (BBC, 2013) and, hence, the bargaining power of its supplier is currently low. Focused strategy refers to strategy in which a companys business activities are concentrated on a particular group of buyers, a certain part of a product line, or a regional market. As well, different food chains and restaurants such as Wal-Mart, Tesco, and Sainsbury are providing affordable and quality food products to their consumers. Yet, these attempts have so far not resulted in a desirable outcome (BBC, 2013). Watch out! Thanks to this strategy, Aldi turn to become successful as the cost of the product is the lower compared to the others and they can sell their product to the customers will a lower cost. It is the way for companies to move toward paradigm. Marks and Spencer (M&S) is a leading British Multinational Company with its headquarters in London. M&S markets high quality and competitive products. In the UK market, M&S is a market leader in womenswear, menswear and lingerie. The matrix helps the business managers make the best decisions based on the companys products, market share, and consumer expectations. The following two frameworks are used to analyse the strategic position of the M&S food unit. The approach will make it easier to market the best products to the consumers. They love new things and are willing to try new products. In 2015, M&S experienced stalled growth in its international business due to global uncertainties, substandard infrastructure and decreased profitability in new markets which lead to the closing of twelve stores in 2016. Health and safety regulations, consumer rights, environmental, antitrust and other legal factors affect the company. & Walker, 2018). M&S has undertaken a food-focused transformation as the new growth point in the retail industry is food. In 2015, this strategy helped the company maintain its market share in most of its markets and achieve strong sales in key owned markets such as Hong Kong or India (Marks & Spencer, 2015). The company is currently expanding its business to different countries and cities. They consist of the following: Inbound logistics concern the transport, storage and delivery of goods coming into a business. The core strategy of M&S is quality, value, 1884 thus celebrating its heritage (Swift, 2014). These values include quality, affordability, and efficient service (Sekhar, 2009). In order to promote sales growth, companies need to work harder in terms of youthfulness, personalization, and service. 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). We will write a custom Report on Strategic Analysis of a Company and its Competitive Environment specifically for you for only $11.00 $9.35/page. M&S offers clothing, home products and luxury food products both in store and online (Marks &Spencer, 2015). You are free to use it for research and reference purposes in order to write your own paper; however, you Would you like to get a custom essay? The premise for companies to adopt this business strategy is that no competitors provide similar products and services in the market. Compared to low-cost strategies, such as Wal-Mart, products that are low-priced and low-intuitive are inferior goods with no names on the shelves. Following the appointment of Mark Bolland in 2010, the British retailer has accelerated a programme of making its supply chain more efficient by targeting $280 million in savings by 2020. Certain food chains such as Sainsbury and Tesco are marketing frozen food products and fast foods thus making it hard for Marks and Spencer to emerge successful in its business. As more companies continue to use the internet for marketing, Marks and Spencer continues to lose it customers. (2021, Aug 31). WebMarks and Spencer (M&S) p.l.c. Porter has summarized three main directions on this topic: Cost Leadership, Product Differentiation, and centralized strategy. The 133-year-old Marks & Spencer has been busy closing stores around the world and plans to close 53 wholly-owned stores in 10 markets, including 10 in mainland China and 7 in France, as well as Hungary, Lithuania, Poland and Slovakia. The level of competition makes it hard for the company to realize its goals. However, despite considerable barriers to entry, the company is facing incoming competition in both its clothing and food sectors. The ensuing analysis aims to look at the strengths, weaknesses, opportunities and threats faced by M&S. The company has the best business practices and financial strengths. "),c=g;a[0]in c||!c.execScript||c.execScript("var "+a[0]);for(var e;a.length&&(e=a.shift());)a.length||void 0===d?c[e]?c=c[e]:c=c[e]={}:c[e]=d};var l=function(b){var d=b.length;if(0 WebDeveloping strategies that can capitalize on Spencer Marks strengths and help mitigate weaknesses and impact of threats of macro-environment. The decline in sales lead to the head of the clothing branch of the company, John Dixon, leaving the company in July 2015 (Macalister, 2015). Abroad, it sells goods and services in more than 320 stores in over 40 countries. Such products are usually cheaper and address the needs of the customers. In 2015, food surpluses were allocated by working with redistribution partners through a Community Shop programme, whilst in 2016 a Spark Something Good campaign engaged 1000 employees in community work and charity action days (Marks & Spencer, 2016). By continuing well assume youre on board with our, https://samploon.com/marks-and-spencer-food-strategies-analysis/, Select a writer from a large pool of experts. (2016, July 11). Online fashion retailer, ASOS, has been one of the companys main competitors in recent years (Davey, 2016). This part presents the companys external environment. Marks and Spencer food sales offset clothing weakness. Marks & Spencer ranks 1st in Customer Service Score on Comparably vs its competitors. Having only decided on implementing a digital transformation strategy in 2010, the company has been a latecomer into the digital user-centred retail space. Spencer, J. In the case of M&S, the company has placed considerable emphasis on its social agenda. "Strategic Analysis of a Company and its Competitive Environment." Furthermore, the companys own brands model provides them with a significant competitive advantage (Marks & Spencer, 2016). Your privacy is extremely important to us. Marks & Spencer plc is known through its 1,382 stores worldwide. The company is losing key employees to its main competitors, including product developers, food technologists and General Merchandise design team members. The firms promotional strategy is also supported using the best CSR practices. However, post the 1990s M&S experienced a rapid decline in sales and was forced to outsource globally and work with overseas suppliers who offered much more competitive pricing. Analyse PESTEL for Monitoring your Business or Organization. The level of competition in the business is very high. Losing access to the common market will affect supply chains, the free movement of people, IP rights, international contracts and more. Marks & Spencer profits jump for first time in four years. This report on Strategic Analysis of a Company and its Competitive Environment was written and submitted by your fellow M&S offers customers a perceived added value at the same and slightly higher price than the competition, with the aim of gaining more market share by offering better products and services or increasing revenues at slightly higher prices. A shift from a strong focus on products to a more consumer-focussed strategy has benefited the company. To achieve differentiated marketing, the marketing strategy is mainly based on the following four aspects: first, to understand the composition of the customer base; second, to understand the needs of the customer base; third, to promote effective sales; fourth, to provide customers with unique shopping service. Web1. 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Next, to identify the strategic position of Marks and Spencer in the competitive environment, focusing on the food rather than evaluating the whole company and analysing their competitive advantage they have in food industry. Due to selling frozen food only, it helps to lengthen the selling period for their product as their product will be harder to get damaged As go result. The company has traditionally invested in TV and magazine advertising as well as in-store visual merchandising. More importantly, the constant innovation of technology has made consumers more and more demanding about the food experience. This affects the pricing and promotional decisions of the business, as M&S must be competitive in order to remain successful. WebMcDonalds is the largest fast food restaurant chain in the United States and represent the largest restaurant company in the world, both in terms of customer served and revenue generated. In the case of M&S, the five forces that influence the industry are as follows: 1. Retrieved July 2016, from The Telegraph: http://www.telegraph.co.uk/news/uknews/terrorism-in-the-uk/11428309/Al-Shabaab-calls-for-attackson-Oxford-Street-and-Westfield-centres-in-new-terror-threat.html, Copyright Sofia, Bulgaria, 2023. is one of the largest retailers in the United Kingdom with a selling space of 12.5 million square feet, was established in 1884 as Penny bazaar. M&S offers clothing, home products and luxury food products both in store and online (Marks &Spencer, 2015). The core strategy of M&S is quality, value, M&S has been affected by the recession and has seen a big slump in sales in 2009, a fouryear decline in its clothing sales and most recently, a ten-year low in its clothing sales in the second quarter of 2016 (Davey, 2016). With the combination of the existing strengths, M&S will be able to turn its threats and weaknesses into opportunities. One example is the lack of a charge on plastic carrier bags and how this is affecting the companys efforts to implement sustainability measures (Vaughan, 2012). Geopolitical unrest also affected the companys overseas operations (Marks & Spencer, 2016). WebINTRODUCTION. Retrieved from https://samploon.com/marks-and-spencer-food-strategies-analysis/, Product Strategy and Companys Marketing Target, Challenges and Strategies of Malaysian Automotive Industry Analytical Essay, Marks and Spencer Food Strategies Analysis. As well, the company is facing high completion from Sainsbury and Tesco Companies in the food sector. 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). WebM&S operates as a family of businesses, selling high-quality, great-value, own-brand products and services, alongside a carefully selected range of third-party brands. Having begun as a market stall, today it is considered to be one of the UKs leading multinational retailers with over 1,382 stores worldwide, including 468 stores in Eurasia and the Middle East. Marks and Spencer (M&S) has a tough and competitive external environment. They mainly using Cost Focus as their generic Strategies. Further developments in this regards can present opportunities for the company (Brignall, 2016). Beginning in the 1990s and more recently as a result of the recession in 2009, the company has faced both a decrease in sales as well as increasing competition from online retailers, discounters, fast fashion brands and others in both its clothing and food businesses. A PESTEL analysis provides a framework to investigate a companys non-controllable external factors that have the potential to affect its operations. The needs of consumers are changing. Despite a slight rise in April 2015, the companys clothing sales have being falling for four years in a row with the company facing its worst quarter since 2005 in the second quarter of 2016 (Davey, 2016). The core strategy of M&S is quality, value, The company operates in the UK. 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. Thomas Spencer and Michael Marks established the company in 1884. 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). Since M&S operates in many business segments, it has to deal with many competitors. Retrieved July 2016, from Monica Krish: https://monicakrish.wordpress.com/category/porter-five-forces-analysis-fortelecom-industry/, Macalister, T. (2015, July 16). From the above issues facing the industry, it is agreeable that (M&S) is currently doing business in a very competitive environment. M&S offers clothing, home products and luxury food products both in store and online (Marks &Spencer, 2015). The increasing cost of living is making it harder to the consumer to purchase most of the companys products. Marks & Spencer is one of the UKs leading retailers with over 21 million people visiting their stores each week. Retrieved July 2016, from The Economist: http://www.economist.com/news/britain/21651763-britains-biggest-clothing-retailerquietly-turning-upmarket-grocer-pants. 22 April. professional specifically for you? As they operate in many segments like food cloths and home and beauty products they have to deal with a Consequentially, the slight decline of sales and share prices in 2008 were followed by steady improvements in both these indicators a year later, thus escaping the hard to reverse grip of discounted prices felt by many other competitive retailers (The Marketing Society, 2010). Today, M&S has over 700 shopping outlets in the United Kingdom. This affects the pricing and promotional decisions of the business, as M&S must be competitive in order to remain successful. With the company operating in many countries today, there is need to address such factors and consumer expectations (Burns, 2008). That being the case, the expectations and demands of the customers has been changing thus making it impossible for Marks and Spencer to remain competitive in its business environment. A value chain analysis is a strategic tool use to identify the activities in and close to an organisation which lead to the creation of a product or a service. At the same time, the company has failed to change its business strategy in order to remain competitive in the industry. The firms promotional strategy is also supported using the best CSR practices. Choosing the vision, mission and the reason of existence for Spencer Marks. The second is to pursue a cost-leading strategy and actively change the cost structure while maintaining perceived value and market share, such as Wal-Mart. They are often small and medium-sized enterprises, relying on convenient location or customer loyalty to survive. Retrieved July 2016, from TaylorWessing: http://www.taylorwessing.com/download/article_fashiontech_trends.html, The Economist. In its food sector, the company has introduced staff zoning across food halls and is increasing the number of staff in the store on an ongoing basis. 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). With proper management, the company can succeed in this economy. The company does not market to the young generation. With the same brand, you can achieve the same price. Further investments are being made in GM IT systems and a logistics network with the aim of delivering better supply chain flexibility and customer availability. K, 2018) There are three generic competitive strategies: Cost- leading strategy, differentiated strategy, centralized strategy. Marks and Spencer (M&S) has a tough and competitive external environment. Marks & Spencers head of clothing quits retailer after sales slip. IvyPanda. M&S redesigns its products and marketing processes in order to achieve the best outcomes. Seth, A & Randall, G 2011, The Grocers: The Rise and Rise of the Supermarkets Chains, Longman, London. Applying this strategy in M&S, they are not like traditional retailers, Marks & Spencer stores sell their products, whether they are clothing or food, all with their own brands, and use only one unified brand St. Michaels, that is, M&S does not provide consumers the opportunities with brand choices, consumers either afford to buy St. Michaels products or go to other stores to buy other brands. Managing Organizational Change by Graetz, F., Rimmer, M., Lawrence, A. and Smith, A. Apple Inc Market Entry Audit: The Entry of Apple Inc Into a New Market With an Existing Product or Service. You can use them for inspiration, an insight into a particular topic, a handy source of reference, or even just as a template of a certain type of paper. Retrieved July 2016, from Pestleanalysis: http://pestleanalysis.com/category/pest-analysis/. The products at this time are biased towards designer products. The closing of the store is actually part of the group restructuring plan, hosted by CEO Steve Rowe. Marks & Spencer plc is an iconic brand which has been trading since 1884 and is still considered one of the UKs top ten brands today (Vizard, 2015). 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. As well, the consumers are becoming aware and sensitive about quality and service delivery. The companys 914 UK stores 222 owned and 349 franchises of Simply Food stores as well as the 302 full-line clothing and home stores and an e-commerce platform with over seven million registered users serve 33 million customers in two divisions (food and general merchandise) with a revenue of 5.2 billion and 4.0 billion respectively. All Rights Reserved, Essay on the Impact of Artificial Intelligence on Innovation. The company has its main presence in UK where it operates over 700 stores. Bowman proposes a strategic clock model that summarizes the market strategy under the fierce competition. A SWOT analysis assesses the external environment and internal capabilities of a company (Harrison, 2015). Specifically, the centralized strategy can be divided into product lines, customers, regions, and low-occupancy centralized strategies. Analyze the Spencer Marks external competitive environment to identify opportunities and threats. WebAnalysis of M&Ss Internal Environment: M&S is the market leader in clothing due its range and quality. Thus, more customers will be attracted due to the low price and Aldi can remain to earn a certain level of profit. Marks & Spencer launches new website to replace Amazon platform. When using different brands, even though quality and function of the products are similar, the prices may be different. According to analysts, a steeper fall is expected in the coming years (Macalister, 2015). WebThe major success key of Marks & Spencer is that it offers superior quality and innovative products and services to its users with prime emphasis on innovation and design. This explains why more customers are buying products from its competitors. The decline of M&S post the 1990s was largely due to competitive retailers operating with foreign imports. One thing about Marks and Spencer is that it relies mostly on local suppliers in the United Kingdom. Bowman believes that these directions are too general, so the above framework is subdivided into eight strategies to create greater practical value. Marks & Spencer is one of the largest retail chains in the world and its presence across the globe continuously strives for excellence and innovation through providing quality products and services in accordance with the demands and expectations of valued customers. In this section, the discussion would be on the following key points: Financial Resources Human Resources Company Image Learning and development Location WebMarks & Spencer is one of the UKs leading retailers with over 21 million people visiting their stores each week. Indeed, Asda became Britains secondbiggest clothing retailer by volume in the summer of 2014 (Butler, 2015). Leadership in clothing converted M&S into market leader in department stores. In this section, the discussion would be on the following key points: Financial Resources Human Resources Company Image Learning and development Location For instance, some apparel companies such as Top Shop, Guess Company, and Hugo Boss continue to dominate the European Union (EU) market. We use cookies to give you the best experience possible. It is agreeable that more customers are aware of their clothes and fashion needs. Dentons. In each part of the business M&S has a lot of competitors like BHS, NEXT, Burton and Gap. This explains why M&S should work hard in order to cope with these changing trends in the market. 5. The buyers are demanding for quality and proper service. Marks and Spencer has established the best supply chain processes and strategies with its suppliers (Williamson & Jenkins, 2013). K, 2018) The core of this strategy is to achieve something unique that is valuable to customers. WebM&S operates as a family of businesses, selling high-quality, great-value, own-brand products and services, alongside a carefully selected range of third-party brands. Tesco is the last chosen competitor and It chooses to use cost leadership as their generic strategy. 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). The food industry naturally has different changes from the past, which is mainly reflected in the dining place. This paper examines Marks & Spencer Plc an iconic brand and one of the UKs leading retailers. Technology trends in fashion. It also has its presence in over 40 nations globally. Should M&S give up on clothes and focus on food? 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. Retrieved July 2016, from The Telegraph: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10647939/Marks-and-Spencerlaunches-new-website-to-replace-Amazon-platform.html, Vizard, S. (2015, July 15). Outbound logistics concerns the transport, storage and delivery of goods going out of a business. Marks and Spencer can use e-business in order to compete against the other leading companies (Seth & Randall, 2011). The company has been moving away from its leading values. Differentiated strategy refers to a strategy adopted to make a difference between an enterprise product and a competitor product and to form a distinctive feature. At this juncture, companies may, by Vitis considerable profits, may move toward a position-diversity of differentiated companies that can use brand strategy to consolidate differentiated images and keep prices high, such as Nike. PESTEL Analysis makes it easier to measure the organization potential according to the major environmental factors (Verdin & Heck, 2009). The company stands a better chance to benefit from this new development (Tallman, 2010). Marks and Spencer Group (M & S) is an iconic and leading retailer of food, home ware and clothing items in the UK and worldwide. (2013, April 11). Many companies in the industry are using modern technologies than ever before. Bevan, J 2008, The Rise and Fall of Marks and Spencer: And How It Rose Again, Oxford University Press, Oxford. (2015). However, in 20142015 the company experienced difficulties in marrying its online operations and distribution from its Castle Donington centre. Marks and Spencer Group (M & S) is an iconic and leading retailer of food, home ware and clothing items in the UK and worldwide. Execution of the strategy and building a feedback loop, using which managers at Spencer Marks can fine tune processes and strategies going forward. G, 2018) Eight strategies are distributed on the X and Y axis, and x is the price, y is Perceived Value. The company can embrace the best short and long-term goals because the economic situation in the United Kingdom is favorable for business practices (Verdin & Heck, 2009). Marks and Spencer Group (M & S) is an iconic and leading retailer of food, home ware and clothing items in the UK and worldwide. The latter has most recently resulted in a 10 year low in the sales of its clothing business (Ruddick, 2016). If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda. To market the best supply chain processes and strategies going forward and safety regulations, consumer rights environmental... Plc is known through its 1,382 stores worldwide post the 1990s was largely due to retailers. High completion from Sainsbury and Tesco companies in the UK prices may different... 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Will make it easier to measure the organization potential according to analysts, a steeper fall is expected in recent. Key employees to its main competitors, including product developers, food technologists General. Specifically, the Grocers: the Rise and Rise of the business M & S is way! Published on IvyPanda Sainsbury and Tesco companies in the food experience consumer rights, environmental, antitrust other. Easier to market the best CSR marks and spencer competitive environment present opportunities for the company has its main presence UK. The company is facing incoming competition in the sales of its clothing business ( Ruddick 2016! Using different brands, even though quality and competitive products July 16.! Modern technologies than ever before internet for marketing, Marks and Spencer ( M & S operates in countries. The 1990s was largely due to the consumer to purchase most of the business as. Traditionally invested in TV and magazine advertising as well as in-store visual merchandising be different the. Too General, so the above framework is subdivided into eight strategies to create practical. Companies to adopt this business strategy is also supported using the best business practices and financial strengths a geographic... Using Cost focus as their generic strategies is known through its 1,382 stores worldwide post the 1990s was due. More companies continue to affect its operations ( Swift, 2014 ) &! 40 nations globally of its clothing business ( Ruddick, 2016 ) same return use Cost leadership product... S must be competitive in order to remain competitive in order to compete the... Make the best decisions based on the Impact of Artificial Intelligence on innovation cookies give... And consumer expectations ( Burns, 2008 ) they mainly using Cost focus as their strategies.