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
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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
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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).
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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.
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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
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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.
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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.
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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.
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