Business Intelligence: A Critical Analysis of Declining Profit in Marks and Spencer

This report provides a critical analysis of declining profit in Marks and Spencer and suggests the use of business intelligence to improve sales and profitability. The report includes a theoretical framework, a dashboard solution, and recommendations for the company.

BUSINESS INTELLIGENCE

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................5
Theoretical framework to link the problem.................................................................................5
Critical analysis and justification of dashboard solution.............................................................6
CONCLUSION AND RECOMMENDATION...............................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Business intelligence (BI) refers to the procedural and technical infrastructure that
collects, stores, and analyses the data produced by a company’s activities. Many companies use
this to make strategic business decisions and this can be more competitive when they know the
market and their performance within the market. The main tasks of business intelligence are to
provide data sourcing and situation awareness. However, the road to knowledge is complex,
difficult and lengthy and implication of business intelligence in traditional way to the firm’s
unique situation. Batubara and et.al., (2021) shared their views and stated that BI is helpful to
measure performance progress towards business goal and identify the customer insights. That is
why, in this modern era, using BI will assist company to gain competitive advantage so that
effective decisions can be made.
The study will be based upon Marks and Spencer (commonly abbreviated to M&S and
colloquially known as Marks's or Marks & Sparks) is a major British multinational retailer with
headquarters in London, England, that specialises in selling clothing, home products and food
products. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index,
having previously been in the FTSE 100 Index from its creation until 2019. The present report
will provide detailed information about problematic situation in Marks and Spencer. Also, the
chosen problem for the present study is decline in profit that causes negative impact over the
business performance. Though, using BI will not be easy to implement, but with the help of
experts the tool is highly used in this industry to provide the ways to improve the issue. Also, to
stay ahead in the competition, there is a need to use BI in its business so that range of ways can
be generated (Luo and et.al., 2021). However, there are many areas where managers and leaders
faces issue, but with the help of BI company can manage the business performance and derive
better outcomes as well. Thus, there is a need to improve the issue because M&S affected in
negative manner. With proper efficiency only, company is able to meet the defined aim and this
is possible when company uses effective ways to improve the declining problem. Further, it will
give theoretical frameworks that link to an opportunity of the chosen business and with the help
of visual image, the report analyses the data in an effective manner. For that excel as an
analytical tool used that help to provide visualization of a data. Moreover, report will critically
analyse and justify the dashboard presented in excel so that the problem can be identified. In

addition to this, using the generated dashboard, suggestions will be provided that helps to
implement the business intelligence.
MAIN BODY
Theoretical framework to link the problem
Through the above discussion, it has analysed that Marks and Spencer faces different
issues but there is a need to solve the problem pertaining to sales because decline sales affect the
customers base. Though, penny bazaars were a huge success, because they focused on a price-
sensitive segment of the market. Also, M&S staff were paid more than other retail workers and
the British suppliers could not always keep prices as low as suppliers from outside of the UK.
So, by evolving different methods, company’s manager should determine the cause of the
problem so that decisions can be taken. Also, it has been identified that top companies like
Marks and Spencer have their motive is to increase the profit so that performance cannot be
affected negatively. That is why, there is a need to focus upon on wealth maximization instead of
profit maximization (Natalia, Purnama and Tampubolon, 2021). However, the secondary sources
also reflected that company’s profit is not highly improving from last many years, though in last
year pandemic affected the overall performance, but still company should manage the
performance by using different strategies. On the other side, involving all the stakeholder and use
their views in the company will also help business to grew more so that competitive advantage
can be improved.
In addition to this, it has been identified that there is a need to improve the sales of
company and this is possible only when company focus upon customer buying behaviour. The
rationale related to this fact is such that if company do not focus upon customer requirement then
the chances of declining sale increases. So, it is essential for the company to incorporate with this
fact so that effective action can be taken. However, if the customers will not satisfy with the
product then it affects the sales of a company and this cause negative impact over Marks and
Spencer’s profitability. Along with this, chosen company should also focus upon another aspect
that help to improve the sales which include in-depth market research. It is so because this assist
entity to determine latest trend through which the company should incorporate with so that
customer will be attracted (Nariswari and Nugraha, 2020). Hence, a specific team should be
organized that help to identify the market need so that effective results can be generated that help

to enhance the sales of a company. This also help business to determine the competitor’s
strategies so that effective results can be generated and improve the sales of a business as well.
Marks and Spencer have a brand image at global level and that is why, it must working
upon to improve the brand image because it has a direct relationship with sales of a company.
However, currently the company faces issue with regard to declining in sales and that is why, it
should focus upon the quality and quantity of a products so that it does not cause any negative
impact and attract the customers towards it as well. This in turn assist the company to improve
working efficiency as well as improve sales along with profitability. On the other side, it can be
stated that without focusing upon the quality of products, company will not improve the sales
and this in turn affected the brand image in adverse manner (Guo and et.al., 2021). That is why,
it can be stated that to improve the sales of a business, company should consider different aspects
so its brand image can be improved effectively and range of customers can be attracted. As per
the identified problem, it is evaluated that without focusing upon the ways to improve sales,
company affected negatively and customer base might decline that have a direct impact upon the
key performance of a company.
Critical analysis and justification of dashboard solution
The revenue of the Marks and Spencer Company has declined from 10.38 in the year
2019 to 10.18 in year 2020 which could further go down to 9.16 in the year 2021. The trend is
clearly showing the decline in the sales of the company. The net profit of the company has
declined from 117100000 to 25700000 which could further be reduced to -198000000 with the
use of certain strategies that will empower the business to mitigate business objectives. The
decline in the sales of Marks and Spencer Company has been constant for the company in recent
years. The covid pandemic is possible the core reason behind the decline sales of the business.
the reduced sales of company has further created an impact over the gross profit margin from
4087800000 to 4047300000 in the year 2018 which could decline to 2911600000 in the year
2021. The company can follow the practice of discount approach that will support the business to
maximise the growth and development (Brockhaus and et.al., 2019). The coupon and discount
practice will allow the business venture to improve the potential and ability of the organisation to
maximise the sales of the company. The decline in the sales of company is probably due to the
decreased buying power and capacity of the customer in the market. The pandemic has declined
the purchase power of the customer which could further damage to the income of the people. The

major focus of the leadership of Marks and Spencer Company is on certain ways that can
contribute into the increased sales of company. This practice will wisely support the business to
boost the sales of company. The discount practice will allow the customer to manage the
increased demand of the product under respective target market. The pandemic could damage the
buying capacity of customer that could become one of the major reason behind the decline sales
of company. The pandemic could completely damage to the buying power of the customer. The
pandemic could result into the fact that many of the customers of the Marks and Spencer
Company loose the employment and other growth opportunities.
The retail market is among the most competitive sector of business environment. As the
sector is associate with the product line that is basic product require to the customer to deal with
the day to day requirement like food, clothing and other home products. Marks and Spencer
Company offer all these retail products that is require for the people to survive the life. Hence,
the organisation faces the massive amount of competition as the demand is huge which could
attract to large amount of investor and stakeholder to associate with the sector. The key reason
behind the decline sales of Marks and Spencer is probably the competition that face. This is
important that the organisation take competitive advantage by adopting strategies that can look
favourable for the business (Maclean and et.al., 2020). Company can work over its services and
the quality of product and the level of customer’s satisfaction. This is important that the Marks

and Spencer hold the millions of customer base which further require the fast service related to
solving the issues of customers. This is also important that the company achieve the higher level
of customer satisfaction that can allow the organisation to sustain its customer base. This is
important that the management of Marks and Spencer must give emphasis over improving the
customer satisfaction level; against allocating all its services. If the company will improve over
its customer satisfaction level than this will directly support to the organisation for attracting to
more number of customer towards the services allocated by the organisation.
The dashboard is also indicating the fact that the liquidity of the company could also
challenge in the previous few years. The liquidity situation could decline from .48 to .22. This
could also influence to the overall performance identify by the company (Lang, 2020). The
liquidity of company contain a direct impact over the performance of the business. If the
organisation manages the better liquidity situation than the organisation can allocate better
resources to all different functional areas of company. Improving the liquidity of the company is
an opportunity associated with the company. This will involve company can constantly
coordinate with its debtor to pay the value in time. Further the organisation can control the cash
cycle that will further improve the liquidity of the company. Ther EPS of the company could
further decline from .07 to .02 and further remain at .02.
Diversification in the product line is another great opportunity available with the Marks
and Spencer Company to improve the overall performance. The product line of the company has
been similar from past many years this could also influence to the performance of company in
the respective target market. In order to attract the buying decision of customer and to attract
new potential customer this is important that the company should hold the diversified approach
in developing and advancing the product line of company (Kabir, 2017). Lack of innovation and
diversification in the product like could not allow the Marks and Spencer Company to launch
any new product in recent time. This could also effect the sales and performance of the venture
in the respective target market. Investment in research and product development would be a
massive opportunity for growth to the Marks and Spencer Company. This will allow the
company to sustain the existing customers along with attracting new potential customers
associated with the retail sector.

CONCLUSION AND RECOMMENDATION
Marks and Spencer is associated with the retail sector. The industry is highly competitive
in nature that require the company to face the immense level of market competition. This is a key
fact that the organisation need to constantly focus over increasing the sales capacity and
improving the customer base. This will require the constant level of investment towards product
develop and such other areas (McGreavy and et.al., 2018). Marks and Spencer Company is
facing a decline in the market performance that could further damage to the growth and
development opportunities to the business. In the previous years the liquidity of the company is
also challenged that could also become the possible reason behind the decline in the sales of the
company. The product portfolio of company is also similar from many years only few products
could introduce by the management which also became the reason of decline in the overall
performance of the organisation. Competition in the industry also challenge the organisation to
achieve its profitability target and growth possibilities.
Recommendations:
 This is recommended that the company must give emphasis over advancing the product
line with the use of extensive research over product improvement and development. This
would allow the company to attract new customer along with supporting to the existing
customer base of the company.
 Marks and Spencer should give an emphasis over issuing various strategies like discount
practice ad coupons so that competitive advantage can be taken by the company (Nabee
and Swanepoel, 2021). The sector is highly competitive which require the constant
innovation and change in policies of company that would provide the support to the
business for addressing all the changing need and demand of the customers.
 Company can also prioritise to the digital promotion strategies of the company. This will
require the constant level of promotions through search engine and other digital platforms
like Facebook, Instagram and such other channels. This will support the company to
attract the buying power and decision making of the customer constantly.
 This is recommended that company may adopt the membership program in which it will
allocate a monthly or yearly members to its customers. This strategy will allow the
customer to grant access to the discount on every purchase (Szegedi, Khan and Lentner,

2020). This is great opportunity for the company that will further allow the organisation
to take on the competitive advantage.

REFERENCES
Books and Journals
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evolution of supplier codes of conduct. The International Journal of Logistics
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Kabir, M., 2017. Sustainable business practices and reporting: case study of a garment
manufacturing company in Bangladesh (Doctoral dissertation, Aston University).
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Solutions. Journal of Marketing. 85(2). pp.14-32.
Maclean, C. and et.al., 2020. Review of economic studies on the opioid crisis. NBER Working
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Profit Margin and Total Assests Turnover. International Journal of Finance & Banking
Studies (2147-4486). 9(4). pp.87-96.
Natalia, C., Purnama, E. D. and Tampubolon, L. D., 2021. Mediation Effects Of Capital
Structure And Profitability On The Influence Of Sales Growth On Firm Value In
Consumer Goods Companies. Primanomics: Jurnal Ekonomi & Bisnis. 19(3). pp.21-34.
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Online:
Marks and Spencer Group Plc Morning Star Financial Records, 2021. [Online]. Available
Through: <https://www.morningstar.com/stocks/xlon/mks/financials>.