Building Sustainable Competitive Advantage for Marks and Spencer
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This report discusses the international expansion strategies of Marks and Spencer, focusing on market trends, competitive advantage, and strategic marketing challenges. It provides recommendations on building sustainable competitive advantage in the future.
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Table of Contents INTRODUCTION...........................................................................................................................3 Section 1...........................................................................................................................................3 Trends in the environment and market for the sector.............................................................3 The market structure for the sector.........................................................................................3 Section 2...........................................................................................................................................5 Summary of product and market focus..................................................................................5 Basis of current competitive advantage..................................................................................6 Strategic marketing challenges the company is likely to face to improve its international competitive position...............................................................................................................7 Section 3...........................................................................................................................................7 Recommendations on how to build sustainable competitive advantage in the future............7 Implementation actions that will be critical in building competitive advantage....................8 CONCLUSION................................................................................................................................9 REFERENCES..............................................................................................................................10 2
INTRODUCTION Marks and Spencer is a well known retailer of British that is dealing with clothing, food and other home products. The company was founded in the year 1884 and there are more than hundred cold chain which is selling products by the household name of marks and Spencer within UK. This report has discussion regarding the different factors which are related with international expansion of marks and Spencer(Casella and Formenti, 2019). It talks about the global strategies used by the company in order to expand in different countries. There is discussion regarding competitive advantage as well as market analysis of this company in order to improve the international competition. In the end, There are recommendations as well as implementation action which are critical in order to develop competitive advantage. Section 1 Trends in the environment and market for the sector Present strategic situation within marks and Spencer The main reason behind success of this company is that owners of this company are always focusing upon preferences and trends among customers before innovating their products. Another aim of this company is to meet the customer requirements within Market by introducing or launching some solid core capabilities. Proper market analysis is conducted before launching any product as if there are any limitations or disadvantages of this product then company will not have to bear those losses. There are a large number of substitute products in market today which are making the competitive atmosphere a little bit problematic(Cateora and et. al., 2020). Hence, it is essential for the management of marks and Spencer to analyse the whole situation properly and conduct various strategic analysis in order to know what can be done in order to improve the competitive advantage. Marks and Spencer has to adopt an aggressive marketing strategy for reorganizing or recapturing the market share and enhancing its profits. The market structure for the sector PESTEL Analysis Marks and Spencer is known for brand value and reputation as it is providing high quality products and services to customer since 1884. It is essential for the company to manage the macro environment in orderto conduct effective programs for enhancing customer base. The pestle analysis for marks and Spencer is described below 3
Political factors -the different political factors that affect marks and Spencers are free trading and Brexit. There is a positive aspect for politics in which free trading is established in various countries for start-up. Basically marks and Spencer is a UK brand and when it has to manufacture products in foreign countries then it has to trade that product into another country. When there is presence of free trading then it allows this company to import various foreign products in order to increase the sales within stores. Economical factors –the economical factors consistof discount competitors of marks and Spencer. price is a really big element within the retail industry(Cherunilam, 2020). There are various decades which have been analysed and it is concluded that there arenumerous budget retailers within UK and hence it is very important for marks and Spencer to manage its competitive advantage. this company is having great competition from budget clothing stores and budget supermarkets. These are the new competitors which are affecting the market share of marks and Spencer. These competitors motivate and encourage clients and customers for enjoying same products at a lower rate than marks and Spencer. Social factors –Social factors consist of managing various factors like non trendy and ready meals sector. Marks and Spencer is having a well reputed name within UK and there are approximately e more than hundred retail chains of this with them UK. This company is mainly focusing upon youth, elder people, and kids for the products. This company has the opportunity to introduce new and 20 retail chains and enhance the customer base every year. It is seen since last ten years, this company is able to make more profits and sales after it has been dealing in different sectors of the retailing industry. There are various wide scale which have been increasing the consumption of the ready meals and foods(Chiu,2019). It is seen that ready meals are prepared for managing the work. Because of the massive opportunity within food store, Marks and Spencer is seen for managing and associating in the food industry. Technological Factors -The technological factors are associated with the managing of different factors that are associated with the technical way for managing the work. There is need of managing the biggest trends within the retail industry so that it is seen that in the industry wide trend, it is silent that there is managing of retailer saving money which will be analysing the implementing of various number of self service checkout system. In context of online shopping, It is seen that there is big trend within the retail industry due to online shopping. This is also important that there is need of managing the effectiveness of retail industry for achieving the 4
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organisational targets and goals. It is also essential to manage the functioning and business activities of the company. EnvironmentalFactors-Theenvironmentalfactorsconsistofmanagingthe maintaining the brand image for luxury branding. Marks and Spencer is a sustainable retailer riches consisting of various occasions. Prices of various environmental factors which are having acquisition of clothing, food home products(Coomber, Moyle and Mahoney, 2019). There is need of managing the sustainable retailer which is you make and UK retailers are having privilege for conducting the sustainable procedure. Share trading consists of managing the initiatives and order to have compensation and foreign products for impacting the environment. Legal Factors -The legal factors concept of laws and regulations which are given by political and government for running within retail sector. It is essential that this company nice to follow all the regulations in order to composition of organisational goals and objectives. Section 2 Summary of product and market focus Marks and Spencer is one of the leading retailers of high quality clothing, food and household products. It offers a wide range of products in these categories like the clothing products are offered for men, women and kids. The clothing products for women include blazers, shirts, tops, skirts etc. While for men, the products include shirts, trousers etc. Apart from this, the company also offers a wise range of footwear as well as accessories. The company operates and manages different brands under its name for both men as well as women(Filimonau and Naumova, 2020). These include a Autograph, Indigo Per Una, Classic etc. Instead of selling international brands, the company sells its products under its house brand. Offering a wide variety of products in different markets has helped Marks and Spencer in attracting a greater number of customers. This has resulted in an increase in the overall profitability as well as brand image of the company in the market. Marks and Spencer started off as a small company and went on to become an internationally recognised brand over the years. Marks and Spencer is a brand that has a strong hold in the market and the reason behind this is that it offers products that are of high quality at affordable rates. Also, the company has a large base of customers who are loyal to it and satisfied by the services that are offered. Apart 5
from operating within the clothing industry, Marks and Spencer is also known widely for its operations within the food industry. Also, the company has a deep understanding of the needs and expectations of its customers. Not only this, the products offered by the brand are available easily to the customers. The company primarily focuses on two markets, i.e., food as well as clothing. In order to expand its business operations, the company uses different market entry methods like franchising, direct export and so on (Marks and spencers as an international retailer,2020). These are some of the reasons that have contributed to the overall success of the company in domestic, regional as well as international markets. Basis of current competitive advantage Marks and Spencer is a brand that has not only been able to retain its loyal customers for a long period of time, but also attract new ones. Although the company is more than a hundred years old, it still has a competitive advantage within the markets that it operates. One of the reasons behind this is that the quality of products that it offers is high. The company also keeps revising its marketing strategies from time to time. And in order to formulate new and effective strategies, Marks and Spencer analyses the market, performance of its competitors as well as needs and expectations of the customers(Lin and et. al., 2019). This has helped them in satisfying the needs of the customers in an effective manner and thus, gain their trust and loyalty. The company is concerned about the local community and thus, practices corporate social responsibility wherein it reinvests a certain amount of its profits for the welfare of the society. The company has a large pool of qualified and experienced employees working for it. It has been able to retain them by offering them various learning opportunities wherein they can enhance their overall knowledge about the latest trends within the market. Various innovative and unique strategies are adopted by the company to promote its products as well as services in the market. Also, the company has been successful in aligning its strategies with the ever changing demands as well as needs of the customers. Since the company has developed a strong hold of the market over the years, it is very difficult for any new entrant to enter the market and acquire the position of Marks and Spencer(Macharzina and Staehle, 2019). The company offers a range of clothes that are trendy as well as fashionable. Like other companies, Marks and Spencer also offers its clothes through online website. The strong distribution system is also one of the reasons behind the company to gain a competitive advantage in the market. 6
Strategic marketing challenges the company is likely to face to improve its international competitive position Although Marks and Spencer is one of the leading retailers, not only in the United Kingdom, but all over the world. There can be globalchallenges that it is likely to face if it wants to improve its overall competitive position internationally(Meredith and Shafer, 2019). For this, the company will have to overcome these threats and utilize the different opportunities that come its way. This is important because they will help it in attracting a greater number of customers as well as increasing its overall profitability within the retail industry. Strategic marketing is considered as a procedure by which a firm can able to differentiate itself through concentrating upon their strengths to facilitates effective services as well as value to their clients. As the company Marks & Spencer intentto improve their international competitive position so they has to face various challenges such as enhancing competition, firm’s restructuring, lacked of skilled personnel and many more.Some of the strategic marketing challenges that respective company faces are discussed below: Enhancing competition: Competition is considered as a real fact of all business life. So, this is regarded as the biggest strategic marketing challenge. The competition is enhancing day by day as in retail industry there are various business who are offering similar kind of product or services(Merigó and et. al., 2019). As Marks & Spencer is developing continuously and intent to improve their international competitive position so, it may be biggest challenges that can face. Therefore, they has to make some strategic for overcoming from this. Changing technology: As the technology is becoming advanced rapidly. So, this becomes a challenge while firm such as Marks & Spencer intent to improve their international competitive advantage. As it has to adopt various updated technology into their business and operations, which incurs huge amount of cost and outcomes into reduction into their revenue. Therefore, all these challenges which respective organisation has to tackle while improving their international competitive position. Section 3 Recommendations on how to build sustainable competitive advantage in the future In order to build a sustainable competitive advantage in the future, Marks and Spencer should make sure that it has a clear understanding of the market that it wants to expand its 7
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business in as well as its different segments. Also, it is important to identify the needs as well as expectations of the customers in that market(Nakos,Dimitratos and Elbanna, 2019). Although the company operates globally and has an effective knowledge of how the market operates, it is still recommended that it develops a strategy that is primarily focused on the needs as well as expectations of the customers within that market. The company is recommended to utilize the resources available with it in an effective manner. The competition within the new market should also be taken into consideration during the planning as well as strategy development phase. This analysis should include an analysis of the capabilities of the firm etc. In order to enter a new market, there are various different ways that are available which can be adopted. These include franchising, licensing, joint venture, direct export etc. Marks and Spencer can either select direct exporting or forming a joint venture wherein it can partner up with a company and form a new organisation. This will not only bring down that risks associated with the expansion process, but will also act as a safe entry method to a new market. This will also ensure that the company builds a competitive position globally. For this,MarksandSpencerisrecommendedtodifferentiateitsproductsbyadoptingthe differentiation strategy(Oswald, Durham and Bates, 2019). This will involve the company making changes in its existing products or adding new features to them etc. These strategies will ensure that the company gains a competitive advantage against the competitors in the future as well as attract a greater number of customers. This will lead to an increase in the overall profitability of the firm and also, gain the trust of the customers. Lastly, the respective company is also recommended to hire candidates who are qualified and possess a considerable and relevant amount of experience in the industry. Implementation actions that will be critical in building competitive advantage In order to build a competitive advantage, there will be certain implementation actions which will be critical for Mark and Spencer. The company will need to make certain key decisions while developing the strategy. This includes decision regarding customers, the method for entering the new market, improvements in business operations etc. It is important for an organisation to have s strategy for improving overall operational processes. This is usually done in order to enhance the efficiency of the business and attract a greater number of customers. This can include focusing on improving the overall efficiency of the supply chain. 8
Marks and Spencer can also focus on developing a new product an offering the same in the market to the customers(Qin, 2019). This can be done by adopting various promotional channels like social media, offering discounts etc. The products and services that will be chosen within the portfolio will include the ones that have been previously successful in other markets andthecustomersconsiderthemtobevaluable.Ifthecompanyimplementsthe recommendations that are made to it, it will be able to gain a competitive advantage on a global level. As a result, there will be an increase in the overall profitability as well as productivity of the firm. The resourceallocationshould be done inan efficientway so thatany kindof unnecessary costs can be minimised or eliminated. In order to build a competitive advantage, the company will require to implement the latest technology within its system. This can include artificial intelligence and virtual reality. Lastly, hiring qualified people will help the company in understanding the new market effectively and as a result, address the needs of the customers in an enhanced manner(Reid and Sanders, 2019). The new hires must also be provided relevant training so that they develop new skills and acquire an understanding of the different business processes within the company. This will also allow the company to grow and build a strong position in the market. CONCLUSION M&S was fruitful in item range and quality previously; in this manner, they disregarded the adjustments in nature, for example, expanding rivalry, changes in client tastes, etc. Thus, they remain 'sit idle' system without putting resources into item development, natural observing or advertising, which prompted the diminishing in benefits in 1998. It is essential for managing the work effectively. 9
REFERENCES Books & Journals Casella, B. and Formenti, L., 2019. FDI in the digital economy: a shift to asset-light international footprints.Casella, B. and Formenti, L.(2018). FDI in the digital economy: a shift to asset-light international footprints. Transnational corporations.25(1). pp.101-130. Cateora, P. R. and et. al., 2020.International marketing. McGraw-Hill Education. Cherunilam, F., 2020.International business. PHI Learning Pvt. Ltd.. Chiu, S. W., 2019. Promoting international co-operation in the age of global space governance– A study on on-orbit servicing operations.Acta Astronautica.161.pp.375-381. Coomber, R., Moyle, L. and Mahoney, M. K., 2019. Symbolic policing: situating targeted police operations/‘crackdowns’ on street-level drug markets.Policing and society.29(1). pp.1- 17. Filimonau, V. and Naumova, E., 2020. The blockchain technology and the scope of its application in hospitality operations.International Journal of Hospitality Management. 87.p.102383. Lin, B. and et. al., 2019. Liquid air energy storage: Price arbitrage operations and sizing optimization in the GB real-time electricity market.Energy Economics.78.pp.647-655. Macharzina,K.andStaehle,W.H.Eds.,2019.Europeanapproachestointernational management. Walter de Gruyter GmbH & Co KG. Meredith, J. R. and Shafer, S. M., 2019.Operations and supply chain management for MBAs. John Wiley & Sons. Merigó, J. M. and et. al., 2019. Research in production and operations management: A university-basedbibliometricanalysis.GlobalJournalofFlexibleSystems Management.20(1). pp.1-29. Nakos, G., Dimitratos, P. and Elbanna, S., 2019. The mediating role of alliances in the internationalmarketorientation-performancerelationshipofsmes.International Business Review.28(3). pp.603-612. Oswald, B., Durham, H. and Bates, A., 2019.Documents on the law of UN peace operations. Oxford University Press, USA. Qin, Z., 2019. Disruption and strategic outsourcing to the competitor in the common market. International Journal of Operations Research and Information Systems (IJORIS).10(1). pp.1-20. Reid, R. D. and Sanders, N. R., 2019.Operations management: an integrated approach. John Wiley & Sons. Online Marksandspencersasaninternationalretailer.2020.[Online].Available through:<https://www.ukessays.com/essays/business/marks-and-spencers-as-an- international-retailer-business-essay.php>. 10