Market Expansion Strategies for M&S

This assignment analyzes the apparel industry through the lens of Porter's Five Forces framework. It then examines potential market expansion strategies for Marks & Spencer (M&S) as it considers entering developing economies like India and China. The analysis delves into cost leadership and product differentiation strategies, emphasizing market research as crucial for success in these new markets.

BUSINESS REPORT

EXECUTIVE SUMMARY
The present business report focuses on Marks and Spencer company which operates in
retail industry across the world. Aim of the study is to enter in developing countries of the world
which are like India and China with clothing products only. In order to make analysis of Marks
and Spencer company, basic three models are used which include External environment factors,
Porter's five forces and SWOT model. By making analysis of these models it will be founded
that company should enter in such emerging markets or not along with appropriate strategies. In
accordance to the Porter's Five Forces analytical framework, the cited apparel industry's business
has low level of threat of substitute items and new entrants. At the last, on the basis of SWOT
model Marks and Spencer has chance for entering in those countries who are under developed or
developing. With the help of effective strategies it has capabilities in order to boost up positive
influences and eliminate negative impacts of external environmental elements. Moreover, in
order to gain competitive benefits in these countries it should consider cost leadership as well as
product differentiate strategies.

TABLE OF CONTENTS
1. INTRODUCTION.......................................................................................................................1
2. FINDINGS AND ANALYSIS....................................................................................................1
2.1 External Environment factors...........................................................................................2
2.1.1 Economic..................................................................................................................2
2.1.2 Political or Legal.......................................................................................................2
2.1.3 Socio-cultural or demographic.................................................................................2
2.1.4 Technological...........................................................................................................3
2.1.5 International..............................................................................................................3
2.2 Porter's Five Forces Analysis...........................................................................................3
2.2.1 Threat of new entrants..............................................................................................3
2.2.2 Threat of substitute products....................................................................................4
2.2.3 Threat of existing rivals............................................................................................4
2.2.4 Bargaining power of suppliers..................................................................................4
2.2.5 Bargaining power of buyers......................................................................................4
2.3 SWOT Analysis................................................................................................................5
2.3.1 Strengths...................................................................................................................5
2.3.2 Weaknesses...............................................................................................................5
2.3.3 Opportunities............................................................................................................5
2.3.4 Threats......................................................................................................................6
3. CONCLUSION............................................................................................................................6
4. RECOMMENDATIONS.............................................................................................................7
REFERENCES................................................................................................................................8
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1. INTRODUCTION
Nowadays, apparel industry is growing rapidly in the worldwide and its products as well
as services are highly consumed by each and every people. Due to this particular condition, cut
throat level of competition is occurred where the firms not able to gain competitive benefits in
one market. In order to make solution of this particular issue, firms are trying to enter in those
markets where they have huge opportunities. In the present business report, Marks and Spencer
company is undertaken which has huge presence across the world. It is a public limited company
and operates in the retail industry worldwide. It provides home products, luxury foods items and
cloths in the world. In the current assignment, only clothing products are considered where
Marks and Spencer will enter in the emerging or developing countries. As compared to other
retailers, the cited firm provides better quality along with lower prices which is attractive point of
this. By taking base to this specific kind of attribute the people of developing economies will be
attracted in huge number.
Aim of the present business report is to expand clothing products of Marks and Spencer
company in emerging markets like India and China. Local community of these markets always
concerned towards the firm for higher quality and lower price of the cloths. The M&S business
enterprise has this characteristic and due to which it will able to gain competitive advantages in
the apparel industry. The present study shows about mega environment analysis and for which
two frameworks are taken into consideration. These analytical models are like External
Environment Elements and Porter Five Forces analysis. Apart from this, SWOT analysis is also
considered which helps to assess its capabilities for entering in emerging markets. At the end of
report, appropriate suggestions are given to M&S for taking expansion decisions with the help of
apparel products.
2. FINDINGS AND ANALYSIS
In the present section of the business report, some analytical frameworks and models are
used. The reason is that, they reflect situation of the apparel industry along with position of the
chosen company in appropriate manner. So that, management able to make better decisions that
in which ways the aim should be achieved smoothly. As per the current case scenario, Marks and
Spencer company is entering in India and China market with its clothing products. In order to
make analysis of this, basic three models are used which include External environment factors,
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Porter's five forces and SWOT model. Moreover, findings as well as analysis of these models are
stated below:
2.1 External Environment factors
When a company presents in specific market then wide range of factors and issues create
either negative or positive impact. As per the present chosen framework, some elements are used
which are of the external environment and affect to the Marks and Spencer, explained below:
2.1.1 Economic
In an economy several aspects included which are like interest, inflation, GDP rate etc. In
order to combat with such factors the company must have adequate profit generation capacity
along with better cash position (Chen and et.al., 2014). The Marks and Spencer enterprise
performs well in the industry in form of financials where it able to grab such issues. On the other
side, in India and China economies, fluctuations of such economic aspects is comparatively low
than developed countries. On the basis of this it each easily enter in the emerging economies
with its apparel or clothing products.
2.1.2 Political or Legal
Another external environmental aspect which has both positive and inverse impact on the
business is political or legal. In accordance to this, the Marks and Spencer country must follow
all the laws like employment, equality, discrimination, health and safety etc. In comparison to
developed countries, government of emerging economies imposes comparatively lower legal
rules, laws and regulations. On the other side, tax rate which is part of legal factors is also
bearable by M&S as compared to other than developing nations. In addition to this, it has
capability to attract people by providing higher standard of the cloths at comparatively low
prices. Due to this, it should enter in these both countries with the aim of gaining competitive
benefits.
2.1.3 Socio-cultural or demographic
This external aspects include taste and preferences, needs and wants, requirements etc. of
the customers. Until and unless an enterprise not fulfil needs as well as requirements of the users
then unable to attract them and generate sales (Kalamas, Cleveland and Laroche, 2014).
Consumers of emerging economies are basically concerned with prices which should be lower.
As compared to existing retailers, the M&S firm allow users for purchasing cloths at the lower
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charges with better quality of fabric. Therefore, it can gain benefits of competitive and sustain
for the long term.
2.1.4 Technological
In the present era, technology come up with more features and innovations which is
beneficial for the Marks and Spencer. In the developed countries it has to provide highly unique,
fashionable and trendy cloths to the people. On the other side, within the developing kind of
countries if it offers little trendy and standard cloths then able to attract them. Moreover, cost of
implementing innovative technologies will also save which is additional advantage for M&S.
2.1.5 International
It is one of the highly affecting aspect where wide range of things are included in this.
Major elements associated with this are like competitors, export import policies, rules for
entering in new market (Wilson, 2015). For example: If Marks and Spencer wants to enter in
Indian market then it must do joint venture with existing apparel company up to at least 10 years.
In other developed economies these rules are very rigid which affect highly negative of the firm.
By analysing external environment elements it can be found that, India and China these
both developing economies are suitable for M&S for entering with apparels and gain competitive
benefits.
2.2 Porter's Five Forces Analysis
A framework or model which helps to make an effective competitive analysis of an
organisation is considered as Porter's Five Forces Analysis. It consists with major 5 types of the
aspects which show overall competitive position and on the basis of this M&S able to make
profitable decisions for expansion. Moreover, interpretation of this model is described below:
2.2.1 Threat of new entrants
In the apparel industry of every country threat of entering potential businesses is very
low. The reason is that, in order to set successful chain and operate smoothly in the market, huge
capital investments are required (Arshed and Pancholi, 2016). In the chosen economies, these
kinds of the enterprises are existing with low proportion where M&S can easily make brand
image. Further, by using cost and product differentiate strategies able to gain competitive
benefits smoothly.
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2.2.2 Threat of substitute products
When looking at the second aspect of this analytical model then it shows availability of
substitute items of the cloths. Further, in the worldwide there are not any substitute goods are
available of cloths as well as foods. Therefore, threat of such products towards the M&s
enterprise is very low. On the other side, apparels of this firm can be substituted with rivals
which are also low in India and China in terms of price and quality. As per this, it should enter in
the developing markets for fulfilling desired aims and objectives.
2.2.3 Threat of existing rivals
It indicates to the threats of various competitors of an organisation in specific market or
industry. When considering to the apparel industry of whether developing or developed countries
then rivals are at the cut throat level (E. Dobbs, 2014). The Marks and Spencer apparel brand has
diversified businesses in other sectors also where it has capability for providing cloths at lower
prices. In the India and China market competition is relatively low as compared to developed
nations. On the other side, it applies cost leadership and product differentiate tactics which will
be highly supportive for boost up competitive gains.
2.2.4 Bargaining power of suppliers
According to this, power of the retailers in order to bargain with customers is reflected
which is low with reference to Marks and Spencer enterprise. The cited firm generates massive
sales and turnover from clothing products where it allows customers at low prices. However, it is
not totally depended on manufacturers as it mainly sells cloths as own branded items. Moreover,
due to purchasing raw materials rather than finished goods has capacity to sale at lower prices
(Kasia, 2017). On the basis of this attribute easily able to enter in selected developing markets
and sustain for long term.
2.2.5 Bargaining power of buyers
This factor is opposite to the above stated in which power of customers for bargaining
cloths against to the sellers is analysed. When talking about this aspect with reference to M&S
then bargaining of users is very high (Cheng, 2013). Basic cause behind this condition is that, in
apparel market there are huge of rivals available which provide different kinds of cloths. In
addition to this, there are enough alternatives as well as switching costs are low in the developing
countries which support to meet expected goals.
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On the basis of Porter's five forces analysis it can be said that, India and China these
emerging economies will be highly suitable for providing apparel products. Moreover, it will be
easily able to generate competitive benefits in an appropriate direction.
2.3 SWOT Analysis
In order to analysing internal environment of the en entity the SWOT model is taken into
consideration. It comprises with four factors which are strengths, weaknesses, opportunities as
well as threats. Further, with reference to Marks and Spencer apparel company internal analysis
is stated below:
2.3.1 Strengths
 The Marks and Spencer company is one of the highly powerful brand in retail and
apparel industry across the world.
 It has more than 1000 stores or outlets in 40 countries of the world.
 When looking at the workforce then it provides employment to more than 80000 people
globally.
 The Marks and Spencer is perceived in front of people as 'value for money' because of its
standard, price, product range and convenience.
 In terms of financials also the company has better performance which will major factor
for becoming successful in developing countries like India and China (Marks and
Spencer SWOT Analysis, USP & Competitors, 2017).
2.3.2 Weaknesses
 Strong or cut throat competition from another retailers lead to create adverse impact on
market share.
 As a popular brand in the world, it must use some protectors which help to reduce misuse
of brand name by fake imitation products.
2.3.3 Opportunities
 The Marks and Spencer not having its own website where it can develop or make
websites on social networks.
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 It has opportunity for introducing new market segments which will support to generate
huge profit and margins in that market (Oh and et.al., 2016).
 Apart from this, the future opportunities Marks and Spencer has is related to expand
business or brand in emerging economies like China as well as India.
2.3.4 Threats
 Major threat is that, other retailers can offer huge discounts and schemes to the customers
in existing or potential market.
 Government rules, policies and regulations for the retailers.
 Further, being a retailer at global level it is compulsory to apply all the rules and
regulations in legal manner.
3. CONCLUSION
From the above analysis it can be summarised that, Marks and Spencer has huge and
worldwide presence in the apparel industry. It provides better quality of fabrics in clothing items
in exchange to the low prices as compared to it competitors. From the external environmental
elements it can be assessed that, there are huge factors create impact on it in negative and
positive way both. With the help of effective strategies it has capabilities in order to boost up
positive influences and eliminate negative impacts up to the larger extent. If any of the external
factor create inverse impact then M&S is capable to reduce it with the help of financials and
profitability condition in developing countries. In accordance to the Porter's Five Forces
analytical framework, the cited apparel industry's business has low level of threat of substitute
items and new entrants. On the basis of this, it can easily attract the local community of that
market in which it is going to enter. The reason is that, it has fashionable and trendy kind of
cloths which is one of the attraction point for people of developing countries. At the last, on the
basis of SWOT model Marks and Spencer has chance for entering in those countries who are
under developed or developing. Along with this, it is financially strong which will support to
exist in new market properly as well as become successful. Henceforth, it can be concluded that,
the Marks and Spencer can easily achieve aim of gaining competitive advantage in clothing
industry of developing countries like India and China.
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4. RECOMMENDATIONS
From the present business report it has been ascertained that, Marks and Spencer
performs well and has popular brand image as well. However, it is limited up to certain levels in
terms of market presence and has various opportunities. For bridging this mentioned gap some
recommendations are given to Marks and Spencer which are stated below:
 It can be advised to the Marks and Spencer that it should enter in India and China nations
due to having nature of developing economies. Further, as per the above analysis it has
opportunity of this also which will support to gain competitive benefits in apparel
industry.
 As it provides high quality of cloths at low cost of now but while entering in such
developing nations it should use basically two strategies like cost leadership and product
differentiation. On the basis of these, M&S will able to attract customers, enhance market
share and sustain for long term.
 Apart from this, it needs to consider highly strong market research strategies so that, it
will be able to assess the future demand of cloths in Indian and Chinese markets.
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REFERENCES
Books and Journals
Arshed, N. and Pancholi, J., 2016. 9 Porter’s Five Forces. Enterprise and its Business
Environment.
Chen, Y. and et.al., 2014. IT capability and organizational performance: the roles of business
process agility and environmental factors. European Journal of Information Systems.
23(3). pp. 326-342.
Cheng, D. S., 2013. Analyze the hotel industry in porter five competitive forces. Journal of
Global Business Management. 9(3). p. 52.
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review. 24(1). pp. 32-45.
Kalamas, M., Cleveland, M. and Laroche, M., 2014. Pro-environmental behaviors for thee but
not for me: Green giants, green Gods, and external environmental locus of control. Journal
of Business Research. 67(2). pp. 12-22.
Oh, S. and et.al., 2016. Development Direction Research Of Korean Lifestyle Brands Through
Analysis For Global Lifestyle Brands-Focused On The Trend Analysis. The International
Business & Economics Research Journal (Online). 15(2). p. 41.
Wilson, J. P., 2015. The triple bottom line: Undertaking an economic, social, and environmental
retail sustainability strategy. International Journal of Retail & Distribution Management.
43(4/5). pp. 432-447.
Online
Kasia, A., 2017. Porter Five Forces Analysis of Marks and Spencer (M&S). [Online]. Available
through: <http://mba-lectures.com/marketing/1620/porter-five-forces-analysis-of-mark-
and-spencer-ms.html> [Accessed on 27th October 2017].
Marks and Spencer SWOT Analysis, USP & Competitors. 2017. [Online]. Available through:
<http://www.mbaskool.com/brandguide/lifestyle-and-retail/5219-marks-and-spencer.html>
[Accessed on 27th October 2017].
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