Industry Analysis and Possible Adaptations

This document provides an analysis of the fashion retail industry and explores possible adaptations that can be made in response to the external environment. It includes a case study on Marks & Spencer, examining their strategic position and potential areas for improvement. The document also discusses the use of Porter's Five Forces model in understanding the business environment.

Industry Analysis and Possible Adaptations 0
Title: The Retail Brand-Marks & Spencer
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Industry Analysis and Possible Adaptations 1
Contents
Introduction......................................................................................................................................1
Reflective Essay on Industry Analysis and Possible Adaptations...................................................2
Adaptations to be undertaken in Response to External Environment.............................................7
Conclusion.....................................................................................................................................10

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Introduction
The customer and market needs must be streamlined with the development cost and return on
investment must be taken into account. Industry analysis and possible adaptations analyzes the
different approaches for determining how competitive is a specific market and consequently how
the market can profitable it can be for a fashion Industry. The framework works on value chain
analysis and helps in analyzing operating environment in which the product or service is
working. How to decide what makes the retail and apparel industry unique? How can the
individuals work in the most effective and productive methods to achieve the results? Porter Five
Forces Model helps to put your strategy into action.
Reflective Essay on Industry Analysis and Possible Adaptations
The Fashion retail industry is known for having the market value of billion dollars and
the average price being at nineteen dollars.
The usefulness of the Porter’s 5 Forces model in understanding the business
environment
In my opinion, the viability of the fashion retail industry can be viewed through the help
of the Porter Five forces model. The first force of this model is Buying Power. The purchasers
have the ability to reduce the price of the product or service. The primary force is from the
bargaining ability of the purchasers who will help in pushing the prices down and not purchase
the products and switching retailers. In this fashion industry, purchasing power is known to be
the large force. Clothing shoppers will be typical individuals with none towards little bargaining
and this is comparable with huge companies who purchase in bulk and can be the main clients of
various industries. The individual buyers have an alternative places to do shopping for the
apparel and take small part of incentive for staying with 1 company and providing sufficient

Industry Analysis and Possible Adaptations 3
indirect bargaining power (Dulčić, Gnjidić and Alfirević, 2012). There can be fewer buyers for a
given product and this means prices may go down. If buyers will be large, sellers can decide for
not to supply to a few of them as other buyers can step in.
The second aspect is the Supplier power. According to me, it can be described as the ability
of distributors towards increasing the product cost or service cost. In the retail fashion sector,
supplier power is regarded as a relatively insignificant and small force. There are very less
fashion apparel companies that source the services from third-party distributors and receive the
profits in small amounts. Suppliers are known for having lesser control over fashion industry.
These are regarded as dispensable and will remain swapped too. The prices for the fashion
apparel industry are considered as lower and will stay until the development gaps are shutting
down significantly. It is essential to answer these questions- What is the supplier power in the
industry. How the actions will have an effect on cost, supply, and developments.
The third significant aspect is Competitive Rivalry. It can be described as the intensity of
competitiveness and activities that can have an effect on how a business or the company receives
and what is the sustainability margin ratios. The retail and fashion industry can be regarded as
interesting as it analyzes the competitiveness rivalry intensity. As we can see that the numbers of
retailers are large in the market who is selling similar products. There also exists a brand concept
through which companies sell the garments at very extraordinary rates. There has been a lot of
innovation in fashion market and also becoming saturated with the similar services
(Krishnamurthy, 2010). The fashion industry is going through a phase which is very difficult to
get in and this is also known as the race towards the bottom which will not be considered best for
retailers. All the resources are at organization disposal and this can be put into market shares and
sales to know what is the intensity of competitive action and how can this be countered.

Industry Analysis and Possible Adaptations 4
The Threat of New Entrants is the fourth force in model. Uniqueness is very rare and this
force is not large. However, the new entries will find different ways for popularizing this
products or service(which may not be particularly special). Creation of novel brands requires
using social media. As it can be diagnosed with the emerging trends that fashion and apparel
industry in its present state which is at high risk and provides high rewards for the new entrants.
The competitors will be able to enter from any industry, function, channel, marketing or form
(Newing, Clarke and Clarke, 2014). The threat of Substitution has been regarded as the last and
important aspect of this model. This threat is posed through the possibility of changing the
product or service in a given market. Fortunately, for the people who are present in the retail
fashion industry, the fashion experts have huge bargaining power. In my opinion, this force is
very negligible and any substitutions in the apparel industry are regarded similar to competition.
In order to sum up, the fashion industry is very difficult to get into. The five forces analysis has
shown that there are very lesser threats and less bargaining power of supplier. It cannot be
considered good when the market will reach saturation. Buyers are presented with a large
number of indirect powers through which they bargain that is plenty of options. There are many
competitors which make harder to sustain in this market (Asad, 2012).
The broad outline of Marks & Spencer has been given through PESTEL analysis and this
offers all-inclusive look at the organization tactful business environment. The in-depth SWOT
analysis can assess strengths and weaknesses and also opportunities and threats surroundings of
this organization (Vaněk, Mikoláš and Žváková, 2012). The Marks and Spencer Plc was
established in the year 1884 at Leeds through the Michael Marks and got rebranded as Marks &
Spencer after completion of ten years. This has begun as the small market stall and presently
considered as UK giant multinational retailers and comprises of more than thirteen hundred

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stores all over the globe. This also includes five hundred stores in the UAE. The Company offers
vast range of products such as clothing, home products and luxury food products both online as
well as store. The company comprises of nine hundred UK stores and 200 owned and also 350
franchises of food stores and 302 clothing along with home stores. The company also comprises
of e-commerce virtual stores with 5 million as registered users and has revenue of 5 billion
pounds (Ashish, 2011).
The PESTEL analysis will provide the framework for investigating the organization external
factors and this comprise of the large potential to effect on the operations. By the examination of
these factors, the organization is in the shape to take into effect and the likely consequences and
reduce the future organization related risk. Marks and Spencer have been greatly affected
through the -free trade contracts through European Commission and this has made the product
import easier and this has led to decrease in sourcing cost. Due to the increasing cost structure,
the organization has been suffering in the market with share losses while entering in the new
market (Agrawal, 2012). In the year 2015, Marks and Spencer have experienced the losses in
shares and decreased growth in the international business. This is mainly because of decreased
profitability, future uncertainties and substandard infrastructure in the new market. This has led
to the closing of 12 outlets in the year 2016. A geopolitical issue has affected the organization
operations. The international franchise global business which is running in the UAE and Russia
have been grieving with significant decline and this is mainly because of fluctuations in local
currency, geopolitical instability and decrease in consumer demand (Sagin and Ayvaz, 2018).
Possible Limitations
The company is eponymous with environmental as well as ethical Plans A of the green
strategy. The company has shown the scarcity of importance in the governmental energy

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effective scheme. This can be regarded as a green deal and shifting and also measures legislation.
Marks and Spencer have followed the strategy of greater quality products along with consumer
satisfaction.. According to my viewpoint, this has resulted in a long term increase in customer
confidence. This strategy has been adopted to pursue both quality and value. In the year 2015,
this tactic has helped the company maintaining the company share in different markets and the
achievement of the strong sales in different markets like India and Hong Kong. Besides this, the
monetary crises have led to an increase in prices. In addition, in the last few months, there have
been different macroeconomic issues, pound fluctuations and decrease in commodity prices.
Furthermore, clothing sale has reached ten years lower in Britain (Önören, Arar and Yurdakul,
2017).
I can detect from my understanding that there are two external factors which have an effect
over the retailers and this also includes the changing value and minds of the population. When
Baby Boomer generation has shown its retirement, the company needs to focus its attention on
the X Generation and also Millennial. The technology and channels utilize how the products are
perceived in the market. Retailer's needs to take two trends into consideration are various
generations. Green Consumerism as well as customers ethical concern regarding the socio-
environmental prices of brands. This includes sustainability reporting and other inter-related
activities (Rathee, 2012). In the scenario of Marks and Spencer, the company has been able to
place a considerable emphasis on the social agenda. A large focus is on strategic sustainability
plan of company-this involves building associations with suppliers.
Marks and Spencer is in its best strategic and tactful position and can reap the benefits of
social media and altering benefits proliferation and increasing mobile wave. According to the
fashion business, the latest trends will be communicated to the designers is increasing with the

Industry Analysis and Possible Adaptations 7
transportation speed. The shopping experience can be considered as seamless with the
amalgamation of tablet, online and mobile and also the ambience experience in the shop
(Groznik and Heese, 2010).
The company has moved from the traditional platform which was hosted through the
ecommerce giant Amazon and switched to own the ecommerce portal which has been launched
in the end of the year 2014. This provides a number of the service options and has aligned the
multichannel services. The companies have been launching big data plans like data analytics and
predictive analytics stream as well as allocation replenishment. The digital strategy has been
adopted through the mobile approach. This answers the consumers' needs that are assessment of
latest trends through web and mobile. There is dedicated working group of software engineers
who ensures the company will remain ahead in technological developments.
With strict regulations and rules of environmental level and also at domestic as well as
international levels and enhanced pressure from the customer that concern the business aspects
and the worldwide retailers and luxurious brands examination of the product life cycle (Fearne,
Garcia Martinez and Dent, 2012). Company has been fully accountable. The ethical and
environmental plans of Marks and Spencer have adapted for serving as the support towards the
methods into which the business will be carried outside and within the company. In the year
2015, the company's products will be sourced through sustainability standard producers.
Continuous investments in the plans have resulted in sustainable products and services. The
company has become concise and clear regarding its value chain through the publishing of map
where the company is sourcing its products (Grant and Roques, 2010).
Consumer rights, safety, and health regulations and different legal factors has shown
effect over the company. One of the organization initiatives, "Behind Barcode", provides

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customers with multi-channel experiences and also enables the customers to pre-order the items
online through in-store collection and home delivery. This takes place through the scanning of
products. Marks and Spencer ensure that it is not obstructing any regulations both in the home
market and also in the international market during the time of expansion and alongside the value
chain. The legal environment of company and as well as legal department has been paramount
and has allocated new stores at various stations (Abbasi, 2017). The different reporting
regulations have been adopted through the Marks and Spencer in the year 2014 and this includes
the summary of the payment framework and has been providing and transparent to shareholders.
In the UK, the company has been losing access to local markets and this will have an effect over
the supply chains. The decisions will require the operation of new VAT rules, imports, as well as
tariffs, will get imposed. Also, in combination of decreased pound buying power and revenue
coming through the domestic and also international markets, the orgaization will be required to
put the strategic plan together and minimize the policies impact on its operations (Brun and
Moretto, 2012).
Adaptations to be undertaken in Response to External Environment
The value chain analysis or methodology is regarded as a tactic tool which is used for the
identification of the activities with respect to an organization and this lead towards the
development of any product or service. This comprises of storage, transport and delivery of items
which are coming into the business. With launch of schemes in the year 2007, the organization
will be ahead of the competitors with regard to the environmental as well as social impact of
business (Sharma, 2012). The value chain targets are being backed through monetary incentives
that are used for purchasing the buying teams that includes sustainable sourcing and making the
company as the most sustainable retailers. Furthermore, the company has been reducing the

Industry Analysis and Possible Adaptations 9
dependency on the suppliers and has corporate control on the value chain (Yu, Ramanathan and
Nath, 2014).
Marks and Spencer have made investments in different brands and has improvised in-store
experiences of the customer. The company has been able to meet with the changing demands of
consumers. However, in the year 2016, the corganization has been experiencing difficulties in
carrying its virtual activities. This has resulted in the cancellation of delayed orders. Further,
investments have been made in logistics and IT systems network and providing the aim of
delivering flexibility. During the year 2015, the company shut down the website due to worst IT
integrated systems and the security breach were experienced by the company (Walker, Curren
and Kiesler, 2013).
Outbound Logistics have been related with storage, transport as well as goods delivery which
are eradicated from the network. Marks and Spencer has been running multiple channel
operation and allow its customers with greater tractability with reference to order and also
delivery options. This includes virtual shopping.
The marketing strategy of Marks and Spencer has been to emphasize the quality of its
products and services. To streamline and creation of distinct trademark across the different
offerings in the year 2014-2015, the company has been successful in creating the unified brand
for its clothing and food market (Saxena, 2012). Marks and Spencer have made huge investments
in digital development and engaged 2.5 million people through social platforms as well as virtual
media websites like Facebook, Instagram, and Twitter. Traditionally, the company has made
investments in magazine and TV advertising along with visual merchandising. The customer
loyalty data has been utilized for targeted marketing and largely focusing on the high-impact

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advertisements that have resulted in creating the value for the customer and enhanced sales
(Castillo and Salem, 2012).
The company has faced several setbacks in its retail operations. The company has been
making investments in the customer service. In its garments service line of business, the
organization has been introducing the free delivery for the customers and that are above fifty
pounds for the next day from store (S., 2013). In the sector of food, the company has been
introducing the staff engagement across the food outlets and this has led to an increased number
of staff members in store and this is being done on an ongoing basis.
Marks and Spencer is regarded as prominent and superior UK retailers of garments, food
processes and home garments with more than 1300 stores all around the globe. Since its
beginning from the year 1884, the products have got prominence as the essence of style, quality
as well as growing investments in the garments innovation. Despite its positive marketing in the
market, the company has been facing the reduction in deals and trades and enhanced race
through virtual retailers, fast fashionable brands and discounters and also in the food business
and clothing (Hasni et al., 2018). The flagship of the company has been suffering the reduction in
shares and reached fifteen percent lower in the second quarter of 2016. The weakened
confidence in customers and a reduction in purchasing power of pound have a lot of impetus on
the trade growth and this location will have an impact on the retailer in different ways. I think
they may require restructuring the supply chain as it responds to the open market and UK
citizens. The company has been facing macro as well as microeconomic issues despite having a
strong brand, ongoing innovations in the virtual changes in its business operations, robust
positioning in food business, environmental and social and ethical business strategy (Kennedy,

Industry Analysis and Possible Adaptations 11
Kapitan and Soo, 2016). The company must be almost prepared to preserve the prominent food
sector and garments retailer in UK market.
The company has been losing the key service people due to increasing competition coming
through product and service developers, general merchandise and food technologists. In my
viewpoint, this requires the company to make future investments in selection, training, and hiring
of the new and fresher employees and also the organization going through the menace of
knowledge and experience and contacts such as potential or current business contracts that have
become readily available to the community. The company has made a decision on the digital
transformation in the year 2010. Marks and Spencer have been launched in the year 2014. Apart
from this, the company has experienced technical difficulties as well as security breaches on the
virtual sites particularly introducing the member's club as well as card scheme leading to the
temporary shutdown of the website (Khare, 2013). However, sales have been falling in M&S and
successful specialist training is required to lead an increase in sales. The company has been
making use of the trend through expansion in convenience network stores, fastest food planning
opening in the year 2015/2016.
Conclusion
The Company Marks and Spencer has four million virtual consumers and which are
reachable, can be engaged and converted the fourteen million patrons who regularly interact with
the company employees at High Street. The retail outlets and shop virtually with those of the
participants. The company has been trying to provide a personalized shopping experience. Mark
and Spencer is regarded as the largest garment retailer through volume and has been on the third
position after Asda as well as Primark. The company has been holding the 1st position with

Industry Analysis and Possible Adaptations 12
regards to sales by value and preceding a one-off rise in revenue and it is likely that the company
can switch from garments to food.
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