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Marks and Spencer SWOT & PESTLE Analysis

ID : 52267953| Feb 2018| 15 pages

COMPANY PROFILE -Marks and Spencer

Business Sector :Retail

Operating Geography :United Kingdom, Europe, Global

About Marks and Spencer :

Marks and Spencer Plc. is a major British multinational retailer which is headquartered in London, U.K. It was established in 1884, when Michael Marks, a Polish refugee opened a market stall in Leeds, with the slogan ‘don’t ask the price, it’s a penny’. He later entered into a partnership with Thomas Spencer in 1894 and in 1904; Marks and Spencer opened their first shop in Leeds. Marks and Spencer enjoys a customer base of 32 million and has 1433 stored around the world, with 979 stores in U.K. It has 84,939 employees as of 2017.

Marks and Spencer Revenue :

£10.6bn (2017)

Competitive Analysis of Marks and Spencer

SWOT
PESTLE

The SWOT analysis comprising of factors influencing the internal analysis and external analysis of Marks & Spencer are presented below in a matrix. The SWOT analysis report for Marks & Spencer essays the detailed business case covering strengths, weaknesses, opportunities and threats of this retailer which puts customers at the heart of all business and holds 17% of UK's market share in clothing space. The Company relies on the UK market for a large slice of its revenue which is dwindling due to the Brexit effect and Sterling depreciation. M&S needs to explore newer markets and improve its online presence to consolidate its market position. The report presents an interesting business case and competitive analysis for M&S which illustrates that only an educated business strategy for implementing market segmentation, bolstering online presence and reducing reliance on UK market will help M&S overcome its present challenges and tread on a trajectory of growth and success.

Strengths
Weaknesses
1. Strong offerings in line with latest industry trends
2. Strong e-commerce infrastructure
3. Highly effective corporate social responsibility
4. Strong focus on enhancing customer experience
1. Poor financial performance
2. Too much reliance on UK markets make it vulnerable to market conditions in the local country.
3. Future of M&S in China gone for a toss
4. Frequent product recalls leads to loss in customer confidence
Opportunities
Threats
1. Plans to invest in Indian markets
2. Online presence to bolster its market position
3. Reshaping their Clothing segment
4. Simplifying their operating model
1. Depreciation of Sterling post-Brexit
2. Stiff competition in the UK food sector
3. Changing trends in the clothing space
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Detailed SWOT Analysis of Marks and Spencer

 

Strength

1. Strong offerings in line with latest industry trends: The WOW range was launched to promote the concept of healthy foods among the customers. The TV and print campaign of M&S, Adventures in Wonderfood, showcased products from the new ranges in a vibrant and exciting way, and this was supported by a coordinated campaign in their stores and editorial features on M&S.com. A new range of Nourish Bowls was launched, which featured fresh ingredients. They also developed the first ever vegan sandwiches and a range of vegetable wraps. In the Clothing segment, their products are now designed by category, rather than by brand. The £99 M&S Collection wool-mix pea coat was the major focus of M&S’ Autumn/Winter marketing campaign. M&S has the advantage of large local (UK) and global presence with approx. 1433 international stores that promotes popular home grown brands like Autograph, Big&tall, Blue harbour, Collezione, North coast ( men's segment ) and Classic, Indigo collection, Limited collection, Per Una, Portfolio etc. ( women's segment) thus empowering them to develop and market them as per customer's needs.

2. Strong e-commerce infrastructure: M&S is leveraging on its expertise developed in the UK’s fast growing e-commerce market to spread its wings abroad. It is investing heavily on IT, systems and logistics. It is also a strategy to become a multi-channel retailer, reaching customers through mobile devices, stores and the web. 52% of their online orders are placed through tablet and mobile. The British retailer is primarily focused on going about it via partnership model and online business. Sales are expected to be primarily driven by price, service and availability.

3. Highly effective corporate social responsibility: Ten years, after its inception in 2007, Plan A still continues to be the leading sustainability agenda. Plan A is aimed at building a sustainable future by being a business that enables its customers to have a positive impact on well-being, communities and the planet through all that it does. Strong partnerships communities, councils, charities, NGOs and businesses (including our competitors) have been forged over the years. M&S has further updated its goals, scaling up the global socio-economic and environmental development and improving the lives of its employees.

4. Strong focus on enhancing customer experience: M&S have endeavored hard to put customers at the heart of their business. The Company encourages employees to make real time decisions purely driven by customer needs and eliminated non-customer facing activities, so they can spend more time with customers and understand their choices and demands. M&S boasts of a strong force of 33 million customers. Shopping was made simpler for customers by contracting new line releases from 14 to 9 times a year. M&S have reworked their business strategy from being a 'fast fashion' brand which prioritized frequency over quality and borrowing styles from catwalk fashions to a brand that is totally focused on delivering contemporary wearable apparels and wardrobe essentials. They also dipped prices on 2,400 Clothing & Home lines to offer better value in pocket friendly ways which have contributed immensely to boosting their profits and full price market share. Stores were also redesigned by merchandising apparel by product category than by brand. Food business of M&S is also on a trajectory to sustainable growth by making it special and different. Customers love their investments in innovation as they renew approximately 25% of their offerings every year. Second-rate ingredients are not accepted and key focus is on health and freshness. Made Without, Balanced for You and Eat Well ranges have been expanded. Campaigns like "Spend It Well" and "Doing the right thing" our some of the channels by which they build long lasting customer relationships.

Weakness

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Opportunity

1. Plans to invest in Indian markets: Despite economic overhaul worldwide, M&S has established its commitment to bolster its joint venture business Reliance retail in India which has shown double digit growth ever since its inception since 2012 proving the joint venture extremely successful. It also plans to grow its online presence via fashion platforms like AJIO and Myntra. M&S also plans to hire 300 people in the next fiscal in India. India is one of the major markets for M&S, given the wide range of customers that it can cater to. The Company has the highest number of stores in India, after UK with a presence in 27 cities with 56 stores. They have standalone beauty and lingerie stores exclusively in India as there is lot of opportunity to grow in this segment.

2. Online presence to bolster its market position: Through their Smarter Working program, they plan to further increase the digital savviness across their business. Also, leveraging on their online presence can help them venture into new markets.

3. Reshaping their Clothing segment: From re-positioning their Clothing and Home business by ending the previous system of promotions and discounts to refocusing their ranges to stylish, wearable, great-quality wardrobe essentials to implementing a competitive pricing strategy, M&S have reshaped their Clothing segment. Although, sales have reduced due to the structural change, however, they are expected to revive in the long run. Focus remains on style, quality and authority.

4. Simplifying their operating model: Restructuring of the existing operating model to give rise to two demarcated, clearly defined profit and loss accountability, Clothing & Home business unit and Food business unit. Both the business are responsible for their own end-to-end profit and loss. Plans to reduce the number of launches of new lines from 14 to 9 times a year, cutting the number of garment options by 10%, thus giving the customers a clearer view of their products and prices. Cost control remains a top priority. As part of the Crunch Costs initiative, employees are asked to tackle unnecessary costs. Better buying initiatives, such as direct design and food packaging optimization are expected to mitigate the currency headwinds.

Threat

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Marks and Spencer SWOT and PESTLE analysis has been conducted by Payal Mazumdar and reviewed by senior analysts from Barakaat Consulting.

Copyright of Marks and Spencer SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

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