M Analysis

Introduction tag & Spencer is a British retailer with oer 800 stores in to a gr depleteer extent than 30 countries around the creative activity. It is the largest clothing retailer in the UK, as well as organism a pabulum retailer. roughly of its domestic stores sell almost(prenominal) clothing & food, and since the year2000 tag & Spencer flip started to expand into an some other(prenominal) ranges such(prenominal) as home w bes, furniture & engineering science. attach & Spencer became the first British retailer to work up a pre- euphony profit of oer ? jillion BBC parvenues program on delineate 1998 Though a few days subsequentlyward Marks & Spencer were hitby the credit crunch which has had a prominent effect on the familiarity as they struggle in the flowing scotchal climate. M&S is a successful guild. In macro-environment, M&S obeys the government and protects the inseparable environment. Moreover, M&S is captured by the factors of scotch, genial, and expert to make its transaction strategies. On the other hand, in micro-environment, the M&S has gaind a good and long-run relationship with the suppliers and clients.From the SWOT analysis, the most chief(prenominal) factor for M&S is to satisfy customer needs. On the other hand, the main disadvant geezerhood is the lack of clothing market surgical incisionation that causes M&S to lose its brand awargonness among the existing customers. The significant strategies of M&S argon creating potential customers and maintaining the existing customers. To sum up, the analysis of M&S has found that its overlap line structures follow the trend of society, s draw the gear up in the market, and subjoin its potential market sh be. MissionThe mission of the M&S is to make as racy up shade accessible to all. Marks & Spencer is a leading British retailer of clothing, food and household goods. They elect to shoot the breeze themselves Marks & Spencer, using an ampersand instead of the word and. Their logo is a direction form of the characters M&S. They bemuse a design A for tackling environmental issues because there is no plan B. M&S outlines its core credit line as clothing and Food. Its financial objectives is to deliver shareholder value in stipulations of increase returns, besides similarly in terms of increase sales and market share in retailing.It beliefs and values are outline as Our customers continue to see Marks & Spencer as the place to snoop for special food, produced to exacting standards. M&S in any case sees its workforce as an important part of its plan and withal considers modern its stores as a key corporate objective. Vision The vision of the M&S is to be the standard against which all others are measured. They sells clothes, food and home wares at more than 650 stores in Britain and about 300 scabs abroad, said it expected to achieve yearbook benefits of around 250 gazillion pounds by 2015-2016 from upgrading its supply cooking stove and information technology systems.They leave supply chain and IT improvements. The improvements willing include shrinking the firms net of 100 warehouses, which are run by third parties, to just four. And also to revamp its website and said it would expand its business abroad, including at least 50 stores in India over five years. They charter established a long-term vision for where we want to take the business which they believe will create long-term sustainable offset. At the heart of this vision is moving the business from being increase focuse, store centric and UK dominated to being customer focused, multi-channel and international.M would conduct a review of its UK store network in the argus-eyed of fast-growing online retail sales, with future tonic store likely to be offset at least in part by closures. They plan to excommunicationting prices, stepping up promotions and introducing new wares, add 800 new lines to sustain the new-fangled improveme nt, including extending a trial to sell a small number of brands. They remember the strong growth potential in children swear and footwear as well as home wares. PESTLE Political FactorsThe government sets regulations for companies to provide by such as Health & Safety British Standards such as, planning for hazard identification, risk assessment and risk tick. If companies do not patronage by these regulations they will be fined or heretofore in some cases be forced to close down. Marks & Spencer did not abide by the British Standards as they were charged for neglecting health & safety regulations later on a doorfell on an employee. George Blair was allegedly injured after a warehouse door in their store near Glasgow was remaining hanging on loose fixtures.Marks are alleged to urinate disregard repair requests, allowing the door to fall in to disrepair. Marks & Spencer pled not vicious to this there is still no outcome of this trial. Also according to BBC News 30th Januar y 2006 Marks & Spencer would be the first major retailer to go down the good-trade route on both clothing and food. The fair-trade policy, which they have launched will include, cut salt and fat in M foods, recycled packaging and savage welfare protection. Marks & Spencer Chief Stuart Rose stated, Customers want good value, still they care more than ever how food and clothing products are make.Economical Factors authoritatively the economic outlook is very uncertain and this is more than likely to affect retail sales, as great deal do not have the spare cash to cash in mavins chips on luxury items such as clothing and food luxuries. Marks & Spencer have been hit by this and have recently closed a number of stores and have had to make profession cuts of 2% of their 70,000 staff. And also to show what affect the recession has had, they took the decision to have two days of 20% discounts in the run-up to Christmas.They have also recently introduced a 20% of all Wine and Champag ne to sustain up with their competitors. Marks & Spencer have had to change the way they market themselves so that they can try and stay ahead of the recession. Sociological factors In the hold water(a) few years society has changed. In 2006 as stated by the Guardian, ChiefExecutive of Marks & Spencer Stuart Rose wanted to stretch the lodge brand, forexample he considered selling food online as part of a plan to pay off a multi-channel retailer, this was obviously to keep up with the agonistic market such as Asda.Asda and Marks & Spencer appeal to antithetical markets in terms of social class and other demographics this has a major influence on the way they respond to level issues. In response to the current cheap clothing industry supermarkets have increasingly over the last few years caught up with fashion trends, helping them to rival the utmost street clothing stores with their little expensive versions. Marks & Spencer is no excommunication to this and they have bou ght their clothing ranges up to date to keep up with the modish trends and to keep their customers interested.Consumer purchases are influenced by cultural, social, personal and psychological characteristics. For the mostpart, marketers cannot control such factors, but they must take them into account. Technological Factors applied science is springy in the retail market. Companies must manage their brand scare. First the brands short letter must be continuously communicated to consumers. Major brand marketers often spend huge amounts on advertising to create brand awareness and to contour preference and loyalty.For Marks & Spencer to continuously communicate to consumers they need to be hard into advertising, which they are. They have Celebrity icon Class as the Face of Marks & Spencer who appears on the adverts on the TV and she is also on their website model the M clothing, so their adverts appeal to women not only in their 20s but also to the more mature lady so they are c overing all areas with their advertising campaign. Also theirwebsite is very appealing with glimmery and very easy to use, it is also constantly updated with the new M brands. sound Factors Legislations are always changing.Marks and Spencer carry out re-training & update every year, they keep up to date with new laws or legislations, and with issues regarding Health & Safety they also ensure that their legal protection is updated. Forre-training Marks & Spencer invite business changes to the business, tax changes to the business & products changes amongst many an(prenominal) other things. Marks & Spencer invite objectives/methods that need to be changed and new training, and also on going maturation. An example of legislation is the Fair Packaging and Labeling Act (1996) Provided for the regulation of packaging and labeling of consumer goods.Requires that manufacturers state what the package contains, who make it, and how much it contains. Here is an example from Marks & Spencer s website to show that they are adhere to this legislation, Packaging helps to protect the product between being produced and used by the customer. It pr tear downts product wastage, carries important instructions and information on ingredients and helps the product look its best in the store. Environmental Factors With the current environmental climate as it stands, issues are being promoted free-and-easy on the television, in magazines and newspapers and on the radio.All companies, industries and organizations are being pressured to change their ways when it comes to the materials they use and how they manufacture. Marks & Spencer have established their own Green Policy which they call contrive A The chief executive ofMarks & Spencer states that it is called this because there is no Plan B. Marks has today announced a 100-point five-year plan to re-engineer itself to become a carbon neutral, zero-waste-to-landfill, ethical-trading, sustainable-sourcing, health-promoting busines s SWOT 3. 1 Strengths 3. 1. 1 graduate(prenominal) QualityHigh quality is the major strength that makes M successful. Customers always find high quality goods such as fresh fruits, vegetables, and other superior goods in M food hall (Ciao, 2002). With many heap turning to eat vegetarian meals. M grasps the consumers need. M has high quality of products that are the food and other products, such as baby products and women under wears. 3. 1. 2 Customer function M has high reputation for management on customer service. (Christie, 2002). This is one of the most important methods to make a good relationship between customers and M.For example, when women want to buy under wears for themselves, the shop assistants will help them to measure sizes and give them good suggestions. 3. 1. 3 Shopping Environment M tries to make customers feel more convenient and comfortable. It makes stores brighter, and uses modern designs (Rung 2001). All goods in the shop can be seen immediately. Furtherm ore, customers do not worry about being drowned in many shelves and avoiding multitudinous people. 3. 1. 4 Manager Training ace of M strengths is its strict and excellent handler training system (Retail Technology,1999).Every manager of M must be familiar with duty of every post. In fact, managers of M are arranged practice of every post. It helps them to improve both work experiences and management skills. 3. 2 Weakness 3. 2. 1 Clothing lose Segmentation The clothing market of M has many segments. In fact, in particular ladies outer wear, is outmoded design and cut. In addition, affluent younger consumers prefer purchasing brand-labels, such as Gap, Next and Top shop (Jobber, 2001 149). 3. 2. 2 Stock Control The non-performance of the home talking to/shopping service even sometimes involves wedding lists.Customers were told that items were out of stock (Jobber, 2001). Customers complain the defect of e-shopping and delivery services. To some extent, M suffers from the unbalanc e between the stock and Information Technology System. 3. 2. 3 Waste Store Spaces Another problem is that M has many store spaces. In fact, it has added 75 percent of square foot age since the early Eighties, but its market share in clothing has not increased (Stewart, 2000). M needs to find some new products to wring its extra spaces. 3. 3 Opportunities 3. 3. 1 Internet TechnologyInternet technology has developed fast, it purports an luck to increase the demand for the online products (Zakon, 1999). In terms of this circumstance, buying products online became a new trend. Customers are getting used to accept the model and adapt it to their daily lives, and the demand for this kind of products would be increased in the future. 3. 3. 2 well-p reliefd Eating Healthy eating offers an opportunity that the demand of specific food will be increased (Leyshon, 2002). People pay attention to the bread and butter quality, they request companies to offer varied products to satisfy their ne eds.For example, in the food market, M does good segmentation in providing the vegetarian, low fat or constitutional food. This is the advantage that the competitors have not aware of it. 3. 3. 3 Marketing Extending The smart set owned stores in the Republic of Ireland and Hong Kong and has 131 franchise stores in28 countries operating through a network of successful partnerships (Marks & Spencer, 2002d). In the future, the company will expand its business beyond the existing area. 3. 4 Threats Although M has its own strengths, opportunities and weaknesses, it still occurs some affrights from itself and other competitors. . 4. 1 Strong Competitors Strong competitors are the most curse to M. For example, in the food market, there are four main supermarkets, such as Tesco, Asda, Safeway and Sainsbury (Oct, 2002). They provide not only high quality but also value-added products to build customers loyalty. In the clothing market, Gap, Next, Topshop and other fashionable brands may compete with M (M shuts, 2001). 3. 4. 2 The Change of Social Environment nevertheless other competitors, M will be influenced by social environment.Since the social environment changes at any time, the customer tastes are also changed. For example, people move to other countries, and their culture will affect the local people lifestyles, such as eating, and dressing. M can adjust its products to satisfy opposite needs. 3. 4. 3 Chemical Pollution Environment pollution is a threat for M. An environmental systems manager of M claimed. Every one of the 30,000 product line that M sells is dependent on chemicals (Friend of the Earth,2002). Governments are taking measures to protect natural environment and reduce pollution.This potential risk will affect its development of M in the future. Invest strategy Focusing on up its operations to save costs, expanding the options for customers to buy products peculiarly online and driving its business outdoors of the U. K. The U. K. s biggest department store operator told attendees at an investor day that was webcast on its website that it would improve its supply chain and implement new IT systems which would save it GBP250 million by 2015/2016 through capital expenditure over the same period of GBP1 billion.Some of those changes would include consolidating distribution sites which would mean further warehouse closures on top of the 21 already closed, sending products directly to the country of sale earlier than routing everything through a central U. K. hub, and refreshing stock systems and data collection. The sustain stage of the companys strategy calls its 2020 program. It is to offer more choice of when and how to buy M products, with online sales a particularly large growth area especially as more people turn to shopping on the Internet.Store sales are expected to shrink slightly by 2020 to GBP206 billion from GBP212 billion this year, while online sales are expected to almost triple to GBP57 billion in 2020 f rom GBP21 billion this year according to research by Verdict, Forrester and Javelin assemblage provided by M at its investor day. Marks & Spencer aims to target some of its 8 million customers who shop online elsewhere but not at M. there is also an untapped 21. 5 million M customers who dont shop online at all.The final plank in ITVs strategy is to grow its international business which shortly accounts for 15% of M profits through 296 international stores and its online presence. The growth is expected to come from increasing the groups central and eastern European operations as well as building on its business in chinaware and India. The company expects to open 50 stores in five years in India, and identify key regional growth areas in China where the company will focus on property, products and local sourcing.Marks & Spencer unveiled its new strategy program under the banner 2020 Doing The Right Thing in May, which received a lukewarm reception from investors. At the time, the retailer depict its targets but gave few details on how exactly it would implement the plans. A bellwether for British consumer sentiment, Marks & Spencer has been hit hard over the past 18 months by the economic downturn as shoppers either cut screen spending on nonessential items or sought less expensive food and clothing elsewhere. As a result, the company has revamped its food offer and availability and introduced a budget range of grocery products.It has also cut capital spending, laid off 1,230 staff and closed some stores. At the start of the month, Marks & Spencer reported better-than-expected fiscal second-quarter sales, buoyed by the introduction of less expensive food and revamped clothing and house ware ranges. Still, it cautioned that business will remain difficult well into next year due to the economic downturn. Second-quarter group sales rose 2. 7%, due to a 9. 6% rise in international sales and a 30% sally out in online sales. The company also raised its outlook on annual profit margin thanks to better stock control, sourcing and supply chain management.Targeting strategy Targeting approach used by Marks & Spencer (M&S) is more multi segment targeting than a concentrated targeting approach. When we look at the segmentation statistics, middle patriarchal women are the prime revenue generator for the company but even the 80% of customers who bring the 20% of sales according to the 80/20 Paretos rule can be developed to increase the sales. Therefore M has been more focused on targeting multi segments of people with good educational socio economic class and who some high income urban populations as well.M has been previously focusing on women gender only but now environmental variables are changing and M has entered into the men market with high quality products as well that has increased the brand image in the clothing and accessories industry. M cannot follow undifferentiated or differentiated approach as the product pricing techniques are such that it is targeted to limited segment of higher socio economic class, who have high demands and can afford luxury and pleasure easily. stance strategy M, as now has become an international brand, wherefore the company needed to slur its brand in variable manner.The promotion in South East Asia region needed to be very different from what it was positioned in Britain. The company has focused a few important parameters that swot the brand in clothing industry. M has positioned its clothing and accessories with relaxation and high quality, moreover when it comes to international market specially in India where people are more in lower socio economic class and the consumer purchasing causation is not equal to other international markets where M has been making profits, therefore in such regions the company has also focused on fictile pricing strategies in order to retain and add new customers.The competitors of M in the international market are large in metrical composition and in order to be differentiated from the others the positioning strategy currently adopted by M is well suited to the situation. The comfort and quality has been a prime concern for the clothing industry and positioning the product with such parameters requires M to provide constant results on long term basis so that the company is able to build the brand truth and customer loyalty.Positioning is promises that a company makes to its consumers and fulfilling this promise is not only the toughest assign but it also need great sacrifices and unpopular decisions at times. however it is fact that if the positioning of the brand is well justified by the company with sincerity the increase in customer level is significant. In the world of similar products and services retaining customers is not easy and therefore M as a brand has to strive harder to get to the top clothing positioning.Financial position Notes As at As at 3 April 3 April 2011 2010 ? m ? Assets Non-cu rrent assets Investments in Group undertakings C5 9,179. 8 9,168. 6 Total assets 9,179. 8 9,168. Liabilities Current liabilities Amounts owed to Group undertakings 2,591. 8 2,603. 5 Total liabilities 2,591. 8 2,603. Net assets 6,588. 0 6,565. 1 Equity Ordinary share capital 396. 2 395. 5 Share premium account 255. 2 247. Capital redemption reserve 2,202. 6 2,202. 6 Merger reserve 1,397. 3 1,397. 3 contain earnings 2,336. 7 2,322. 2 Total equity 6,588. 0 6,565. 1