Analysis of Closure Program Initiated by Marks and Spencer | Report

Analysis of Closure Program Initiated by Marks and
Spencer
Name- Sayma Asif Ali
Student ID-1862737
Course code- F8LE 35
1

Contents
Executive Summary...................................................................................................................2
Introduction................................................................................................................................4
Literature review........................................................................................................................5
Gantt chart..................................................................................................................................9
Research methodology.............................................................................................................10
Findings and analysis...............................................................................................................11
Conclusion................................................................................................................................21
Recommendation and action plan............................................................................................22
References................................................................................................................................25
2

Introduction
This report is concerned with the closure program initiated by Marks and Spencer. In this
project management of the organization is seeking to close a significant amount of their retail
stores over the next 2 years. It is estimated by the management of the organization that
around a hundred stores will be closed by the organization by the year 2022. One of the
primary reasons behind this step taken by the organization is that management of the
organization has identified that a particular branch is closed then customers stand to go for
the alternative branch rather than not shopping from Marks and Spencer (Myers, 2019).
According to this market survey conducted by the organization, it was identified by them that
the overall market profitability of the company will not be affected by this closure program
initiated by the organization. In addition to that, it is estimated that the management of the
organization will be able to save a significant amount of money as indirect and direct costs
associated with a retail store is significantly higher.
Project Aim- Aim of the project is to identify secondary and primary information that will
help in understanding the closure program initiated by the organization. In addition to the
financial impact of the disclosure, the program will also be evaluated in this report.
Project objective- Project objective can be defined as the objective with which a particular
project is undertaken by the organization. It can be said that these are the ultimate learning
outcomes that are expected to be achieved by the organization from a particular research
project (Andrew, Pedersen and McEvoy, 2019). Following are the research objectives
associated with this project-
1. Investigating the reason behind Marks and Spencer's initiation of closure program.
2. Identifying the basic opportunities of advantages that can be achieved by the company
through closure program.
3. Investigating whether this closure program will be able to meet the demands of
customers.
4. Examination of the impact that this closure program would have on current strategies of
management adopted by Marks and Spencer.
5. Analysis of the internal and external business environment after executing the closure
program (Morgeson, Brannick and Levine, 2019).
3

Acknowledgement
Main objective of this section in the report is to identify and acknowledge people that have
contributed towards completion of this project. It will in communicating to the tutor that this
report has not been completed by me on my own. I have taken contribution from others for
gaining information about the subject matter under consideration and principles of research
management. Two people that has helped me in development of this project and grading are
Pamela Bennett and Shanice Galli.
4

Literature review
A literature review can be defined as a medium that is used by the organization for
conducting secondary data analysis. This is the data that has already been collected by a
particular research or business organization and such information can be used by the
researcher again for the new project objectives. Factors that are discussed in this report are as
follows-
 Possible factor behind closure program i.e. decreasing profit of the company in the
year 2019 as compared to 2018.
 Possible factor behind closure program i.e. saving cost so that online shopping
channels can be developed.
 Possible remodelling of the company for better performance.
 SWOT analysis of Marks and Spencer’s current strategy.
 External environmental analysis through pestle analysis.
 Marketing analysis through 4Ps of marketing.
First of all collection of information will be undertaken for identifying the reason behind the
initiation of a closure program of Marks and Spencer. This will help in identifying the basic
objective of the program under consideration and it will help in the development of primary
data that is required to be collected from the customers (Wiseman and Poole, 2020). One of
the primary objectives of Marks and Spencer to close the significant number of stores owned
by Marks and Spencer is that its profits are decreasing significantly over the period.
Management will not be able to generate overall profitability to cover all the direct and
indirect expenses associated with a large number of the store owned by the company. This
closure program will help management to ensure that the cost of operation is decreased
significantly so that profitability margins can be increased over the period and re-
establishment process of the organization can be initiated. Total profit recorded by the
organization was 523.2 million (2019) and the profit recorded for 2018 was 580.9 million.
Profitability of business has decreased by approximately by 9.8% over the prior 12 months
(Smith, Evans and Spencer, 2019).
Another reason behind close a program initiated by the organization is that management is
seeking an area relocation strategy. The location of any store will affect its revenue and profit
of an organization as management has to consider the target market is searching for the
5

location. For example, if Mark and Spencer open can you store in an area where the majority
of the families that are living earns income lower than average national income then revenue
generation capability of such retail store will be significantly lower as compared to a retail
store that is located in high income generating community (Jones and Comfort, 2019).
Therefore it can be said that management is undertaking 4 Ps of the marketing strategy for
identifying the location.
4 P's of marketing important techniques that can be analysed in the given scenario to identify
the primary reasons behind the initiation of the closure program by Marks and Spencer.
Following are the important elements of 4 Ps of marketing that will help in developing this
marketing mix strategy for the company-
Place- This is one of the most important aspects of this marketing mix strategy in this case
because Marks and Spencer is focusing on changing the place as well as reducing the number
of locations for retails shops of the company.
Product- Product of the organization will not be changed significantly as the reputation of
products manufactured by Marks and Spencer has not been affected due to the closure
program.
Price- Price of the product and services can be re-evaluated by the organization as revenue of
the organization have been decreased in 2019 as compared to 2018 and it is a clear indicator
towards increasing competition in the market (Shengnan and Nedelea, 2019).
Promotion- Promotional strategies of the organization will also require changes after a
closure program is entirely completed. This is because management will be required to
communicate the existing locations of Mark and Spencer's retail stores to the customers.
Now it is important to identify whether a closure program initiated by the organization will
have any positive impact on the current business strategy of Marks and Spencer. For this
purpose, it is important for conducting a SWOT analysis for management of Marks and
Spencer (Davari Farid et.al, 2019). SWOT analysis will help in identifying whether closure
programs will help in mitigating the weaknesses and threats currently associated with the
current strategies of the company.
Strength
Operating in the market for a long period.
6

Possession of sufficient financial and human resources to operate successfully in the market
(Ahmed, 2016).
Weaknesses
Decreased profits of the company in 2019 as compared to 2018.
Profitability from online channels has been increasing.
Opportunity
The use of social media and online shopping by customers is increasing.
Management can develop an effective online platform through money released from the
closure program.
Threats
The level of competition in the industry is also increasing.
Based on this SWOT analysis it can be said that the majority of the weaknesses and threats
associated with the given scenario can be solved with the help of reducing the cost of
operation and developing online channels for sales. The current closure program initiated by
the organization will complement the current business strategy of the company. With the help
of closing around a hundred stores by the year 2020, significant amount of cost can be saved
and directed towards the development of effective and efficient channels of online selling for
the customers (Toms and Zhang, 2016). In addition to that revenue can also be increased
significantly by identifying the retail stores that are not performing poorly from the financial
perspective and directing resources towards the financially profitable retail store.
In addition to that, the internal environment of the organization can also be analysed based on
the above SWOT analysis as the internal strengths and weaknesses of the organization are the
reflection of the internal business environment. It can be said that internal management of the
organization has certain problems but closure program can help in such management. Pestle
analysis will help in identifying the factors associated with external environment analysis.
Pestle analysis helps in identifying political, economic, social, technological environmental
and legal factors associated with a particular organization and all of these factors are related
to the external business environment.
7

Political environment- Marks and Spencer is a British National retailer but it has been
operating in numerous countries and the political environment of each country will affect the
business environment of Marks and Spencer. The organization needs to understand the
political environment of different business organizations differently. This political
environment is not expected to have any negative impact after completion of closure
programmers' overall operations of the organization have become familiar with such
environment over the period (Annabel and Scrymgeour, 2019).
Economic environment- In the current business environment economic factors will affect the
business operations of Marks and Spencer in a significant manner. This is because the overall
global economy is at its minimum during the current business environment due to the
pandemic of coronavirus. It can be said that a closure program of the organization can be
beneficial in the current business environment as management will not have to incur the cost
associated with non-profitable retail stores.
Social environment- Social status of the population is directly related to the economic factors,
therefore it can be said that in the current business environment social status will also harm
the overall revenue generation capabilities of the business (Bei, Gielens and Dekimpe, 2018).
Technological, environmental and legal environment- All these external business
environments will not have any negative impact on business operations as management has
been conducting business for a long time. Management of the organization has become
familiar with these factors and current Global condition is not expected to have any negative
impact on these three factors.
8

Gantt chart
Task Start Date End Date Duration
(Days)
Research aim and objective 01-04-2020 05-04-2020 5
Literature review 06-04-2020 10-04-2020 5
Research methodology 11-04-2020 17-04-2020 7
Developing questionnaire 18-04-2020 26-04-2020 9
Collection of primary data 27-04-2020 02-05-2020 6
Finding and analysis 03-05-2020 10-05-2020 8
Developing conclusion 11-05-2020 15-05-2020 5
Recommendations 16-05-2020 22-05-2020 7
Action plan 23-05-2020 28-05-2020 6
Total duration - - 58
9

Research methodology
It can be defined as general procedures associated with rules and regulations undertaken by a
particular researcher in the collection of information so that research objectives can be
achieved. It has already been described in the introductory paragraph that this report will be
using a combination of primary and secondary data to main conclusions concerning the
subject matter under consideration. There are two distinct types of research methodologies
that can be adopted by a business organization concerning different kind of data that is
required to be collected. This to research methodology for quantitative methodology and
qualitative methodology (Bromwich and Scapens, 2016).
Qualitative methodology- quantitative methodology is dependent on the accuracy and
relevancy of numerical data that has been collected and qualitative methodologies dependent
on the quality of data that is collected. Generally, qualitative methodology is used when there
is no requirement of numerical data in making decisions concerning the collection of
information. In the given scenario qualitative methodology will be used for both primary data
and secondary data as a collection of accurate and relevant information is more important as
compared to the collection of numerical data.
Sampling- Making decisions concerning the sampling method and sampling size is one of the
most important aspects of research methodology. The sampling method that will be used in
the given unit will be random sampling. It means that the management of the organization
will collect information from current customers of the organization from the database that has
been collected by the organization over the period (Kumar, 2019). It is expected that the data
will be collected from at least 500 customers of the organization which will help in analysing
the impact that loser program initiated by the company can have on the perception of
customers.
10

Findings and analysis
This is type is concerned with the collection of primary data for which research methodology
has been developed in the previous section. As it is already decided that the data will be
collected from around 500 current customers of the company that you will be selected on a
random basis out of the customer database developed by the company over the period. The
technique of the questionnaire will be used by the organization for the collection of
information from customers (Ledford and Gast, 2018). 10 questions have been developed and
the overall analysis of responses provided by each of the customers is represented with the
help of the following chart, table, and analysis.
In this research questionnaire techniques has been used in order to collect primary data.
Survey monkey has been used in order to collect the information collected by the researcher.
Questionnaire in this research has been attached in the appendix. Questionnaire will be used
for the purpose of collecting primary data as it is one of the easiest method for collecting
information. Other advantages of this method are as follows-
 This method is cost efficient.
 Data can be collected from large range of customers without spending large amount
of money.
 Time consumed in the data collection will also be less.
 Pressure on respondents is less as compared to other methods such as interview.
 Wide range of information can be collection with better structuring of questions.
Question 1- have you ever purchased any product of Marks and Spencer -
Frequenc
y Percent
Valid
percent
Cumulative
percent
Yes 410.00 82.00 82.00 82.00
No 90.00 18.00 18.00 100.00
500.00 100.00
11

According to the response provided to this question, it can be said that the majority of you are
aware of the product and services that are Wings by Marks and Spencer. This is due to the
placement has selected the majority of the people in the sample from the current database of
the organization.
Question 2- Have you purchased the product and services of Marks and Spencer in the last
one year?
Frequenc
y Percent
Valid
percent
Cumulative
percent
Yes 350.00 70.00 70.00 70.00
No 150.00 30.00 30.00 100.00
500.00 100.00
12

70% of the selected population have purchased product and services of Marks and Spencer in
the last one year. Indicate the popularity of the product has not been any problem for the
organization and it also shows that the collection of relevant information will be easy in the
given scenario as the sample population can be considered as regular customers (Rosskam,
2018).
Question 3- Are you satisfied with the current quality of products provided by the company?
Frequenc
y Percent
Valid
percent
Cumulative
percent
Yes 300.00 60.00 60.00 60.00
No 200.00 40.00 40.00 100.00
500.00 100.00
13

Around 60% of the respondents are also satisfied with the quality of the products
manufactured by the organization on the other hand only 40 are not satisfied with the quality.
40% of the population is also a high number of dissatisfied customers and management is
required to analyse the quality and changes that can be made to improve the quality
(Litosseliti, 2018).
Question 4- Do you wish to continue shopping from the organization?
Frequenc
y Percent
Valid
percent
Cumulative
percent
Yes 340.00 68.00 68.00 68.00
No 160.00 32.00 32.00 100.00
500.00 100.00
14

The majority of the customers are also willing to continue shopping with the organization
irrespective of the current closure programs initiated by the company and the primary factor
behind such continuance will be the online platform of shopping. It can be said that is the
closure program will not have any significant negative impact on the revenue generation
capabilities of the company.
Question 5- What is the primary mode of shopping that you prefer in the current business
environment?
Frequenc
y Percent
Valid
percent
Cumulative
percent
Retail stores 180.00 36.00 36.00 36.00
Online shopping 320.00 64.00 64.00 100.00
500.00 100.00
15

Around 64% of the sample population are generally shops through online platforms which
indicates that the preference of customers is changing from retail stores to online stores
(Arantes do Amaral, dos Santos and Rodrigues, 2018). It can be said that a closure program
initiated by the organization will be beneficial for the profitability of the company as online
channels can be improved with the cost saved on closing the retail stores.
Question 6- Are you aware of the closure programs initiated by Marks and Spencer?
Frequenc
y Percent
Valid
percent
Cumulative
percent
Yes 150.00 30.00 30.00 30.00
No 350.00 70.00 70.00 100.00
500.00 100.00
16

Based on this response it can be said that only 30% of the sample population is aware of the
general closure program initiated by the organization and it indicates a lack of
communication on part of management (Mohajan, 2018).
Question 7- Are you aware of the objective with which management is initiating such a
program?
Frequenc
y Percent
Valid
percent
Cumulative
percent
Yes 120.00 24.00 24.00 24.00
No 380.00 76.00 76.00 100.00
500.00 100.00
17

Only 24% of the sample population is aware of the objective with which management has
initiated the closure program which is also an indicator of poor communication channels of
the company (Basias and Pollalis, 2018).
Question 8- Does the disclosure program is affecting your perception of the company in any
negative manner?
Frequenc
y Percent
Valid
percent
Cumulative
percent
Yes 150.00 30.00 30.00 30.00
No 350.00 70.00 70.00 100.00
500.00 100.00
18

Due to the lack of communication on part of management, the majority of the sample
populations think that close a program is an indicator of a poor financial position of the
company. In addition to that, it will also indicate that over the period Marks and Spencer will
be closed as the majority of its retail stores are being closed. There is a requirement of
making certain changes in communication channels so that overall strategies can be
communicated (Flick, 2018).
Question 9- Do you think that the management of the organization currently has a significant
number of retail stores that can be closed?
Frequenc
y Percent
Valid
percent
Cumulative
percent
Yes 300.00 60.00 60.00 60.00
No 200.00 40.00 40.00 100.00
500.00 100.00
19

Around 60% of the customers think that the number of retail stores owned by Marks and
Spencer is in abundance and closure of certain stores will not have any significant impact on
overall operations of the organization and perception of customers.
Question 10- Do you think that there is a requirement of better communication by the
organization concerning this close a program?
Frequenc
y Percent
Valid
percent
Cumulative
percent
Yes 420.00 84.00 84.00 84.00
No 80.00 16.00 16.00 100.00
500.00 100.00
20

It can be said from the above response that 84% of the sample population thinks that a
manager is required to strengthen its communication channels to communicate the internal
Strategies and their objectives to the customers (Rutberg and Bouikidis, 2018).
21

Conclusion
The main objective of this report was to identify and collect primary and secondary
information that will help the organization to understand the perception of customers towards
the closure program initiated by the company. This research report has conducted a detailed
analysis of available literature to identify the secondary source of information. Based on the
secondary source of information, it can be said that several stores owned by the organization
are significantly higher and overall profitability can be improved with the closure of non-
profitable stores. In addition to that closure, a program can be very beneficial for the
organization if it is executed effectively as identified by internal and external analysis of the
business environment.
Primary data has also been collected in this report from 500 current customers of the
organization that are selected from the current database of the company. Based on this
information, it can be said that the perception of customers has not been very positive
towards the closure program of the organization as they are not aware of the objectives and
strategy with which the management is executing this program. It can be said that there is a
lack of communication on part of management and this can be improved by executing
marketing strategies to promote this remodelling of the company. Based on primary data it
can also be concluded that the buying behaviour of customers is changing over the period and
their preference online channels of shopping as compared to shopping through retail stores.
22

Recommendation and action plan
This section of the report will provide recommendations that will enable in executing the
closure program more efficiently without changing the perception of customers towards the
positive quality of products manufactured by the company-
 First of all Marks and Spencer is required to initiate a social media marketing campaign
that will help in communicating the information about closure programs.
 Management is required to communicate the primary objective behind close a program of
the company (Glesne, 2016).
 Management is required to conduct overall profitability analysis from each of the retail
stores from which revenue generated is minimum.
 Closure of retail stores should be conducted based on profitability analysis, stores with
the least profit generation capability should be closed.
 Management will be able to recover a significant amount of money for the sale of retail
stores. These saving should be used by the organization for the development of interactive
online channels of selling.
 Social media marketing campaigns should be directed towards target customers and the
program should help to identify the name and location of new retail stores for retail stores
that are not closed after completion of the closure program.
 Market research should be conducted within a period every 3 months as it will help in
identifying the effectiveness of social media marketing campaigns (Fletcher, 2017).
Objective Action to be done Starting date Finish date
Initiation of the
social media
marketing campaign
The marketing
campaigns should be
directed towards the
communication of
closure program
objectives to the
01/04/2020 30/06/2020
23

customer.
Conducting market
research
Market research
required to be
conducted at regular
intervals of time to
identify the
perception of
customers identifies
the efficiency of
social media
marketing
campaigns.
01/04/2020 25/08/2020
Financial analysis of
retail stores.
Financial analysis of
digital students will
be conducted to
identify the retail
stores that are has
incurred losses in the
past financial year
(Silverman, 2016).
01/04/2020 20/07/2020
Closure of 50 retail
stores
Closure of 50 retail
stores should be
based upon the
above mentioned
financial analysis
and the least
profitable stores
should be closed
down.
01/04/2020 05/12/2020
24

25

References
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Market Entry in China (pp. 61-72). Springer, Cham.
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management. Human Kinetics.
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The Australian Journal of Pharmacy, 100(1180), p.58.
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Learning and Community-Based Research in a Research Methodology Course: The Lessons
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Economics Research, 7, pp.91-105.
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Research on Retailing. Edward Elgar Publishing.
Bromwich, M. and Scapens, R.W., 2016. Management accounting research: 25 years on.
Management Accounting Research, 31, pp.1-9.
Davari Farid, R., Azizi, J., Allahyari, M.S., Damalas, C.A. and Sadeghpour, H., 2019.
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Flick, U., 2018. An introduction to qualitative research. Sage Publications Limited.
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Street, Upper Saddle River, New Jersey 07458.
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Rosskam, E., 2018. Using participatory action research methodology to improve worker
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28

Executive Summary
Any business organization needs to undertake market research before initiating any kind of
project in the business. For market research management of the organization can conduct a
research report that will help in identifying the perspective of customers concerning the
project under consideration. The main objective of this research program was to identify
whether the closure program will have any negative impact on the overall operations of the
organization. In addition to that identify the perception of customers concerning this closure
program was also one of the objectives. This research report has used qualitative research
methodology for the collection of primary data as well as secondary data. It means that the
primary focus of the researcher was on the collection of relevant and important information
based on which conclusions and action plans can be developed.
Secondary data has been used to collect information concerning the overall objective with
which the organization has been using this closure program. In addition to that impact of this
program on the internal and external environment of the organization has also been discussed.
Based on secondary data, it can be said that this will be a successful program executed
effectively by management. Primary data has been used to identify the perception of
customers concerning this program. Based on this collected information action plan,
recommendations have been provided along with the development of an action plan which
will help the organization to execute this program more effectively.
29

Appendix
Appendix 1- Questionnaire
Question 1- Have you ever purchased any product of Marks and Spencer?
 Yes
 No
Question 2- Have you purchased the product and services of Marks and Spencer in the last
one year?
 Yes
 No
Question 3- Are you satisfied with the current quality of products provided by the company?
 Yes
 No
Question 4- Do you wish to continue shopping from the organization?
 Yes
 No
Question 5- What is the primary mode of shopping that you prefer in the current business
environment?
 Retail stores
 Online
Question 6- Are you aware of the closure programs initiated by Marks and Spencer?
 Yes
 No
Question 7- Are you aware of the objective with which management is initiating such a
program?
 Yes
 No
30

Question 8- Does the disclosure program is affecting your perception of the company in any
negative manner?
 Yes
 No
Question 9- Do you think that the management of the organization currently has a significant
number of retail stores that can be closed?
 Yes
 No
Question 10- Do you think that there is a requirement of better communication by the
organization concerning this close a program?
 Yes
 No
31