Competitive Environment Analysis of Mark and Spencer

This report analyzes the competitive environment of Mark and Spencer through SWOT analysis and diffusion innovation theory. It discusses the company's market size, competitive market, and its emphasis on quality, service, trust, and innovation. The report also evaluates the influence of CSR governance on the company and its plans to reduce waste and use more environmentally friendly products.

BUS3005 SM

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
LAUNCHING INNOVATIVE PRODUCTS..............................................................................4
DIFFUSION INNOVATION THEORY.....................................................................................4
SWOT ANALYSIS.....................................................................................................................6
INFLUENCE OF CSR GOVERNANCE....................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The company marks and Spencer first opened in Leeds as a grocery story in 1884. The
company is now known for their retailer product and is now the 2nd largest retailing brand in UK.
Their headquartered in London now and are specialized in selling clothes, home products or food
items. The company has currently approx 1000 stores in UK and out of by which 600 are
dedicated to sell food products. It also offers the online food delivery service through a joint
venture with Ocado. The company has a global presence and have a good market share in
international market. The company was initially known as Marks And Sparks. The company
made its reputation in early 20th century which has a policy that the brand will only sell the
British items or products. The company main emphasis is on the quality of the product rater than
the price. The company first international expansion was in Canada in early 70s.
The company usually operates in the market of retailing in grocery. The company does
not hold the huge market share in food sector and has only been around 3%. The company Mark
and Spencer has to increase its market share as compared to other brands who are also in the
retail food division so that Mark and Spencer can run into profitability and introduce new food
into their menu and may try to innovate new food items which will result in increase of
popularity of their food division segment. Mark and Spencer finance sector has been brought by
HSBC in 2004 by 100% share capital and is now run as a joint venture. The company is success
in the home country which is UK because Mark and Spencer promote core brand values which
are quality, service,trust and innovation. These elements or values have remained constant from a
very long time. The company has a sheer presence in the country and around the globe as it has
alone 300 stores in the country and have a expansion in around 30 countries (Omoikhudu,
2017).
MAIN BODY
LAUNCHING INNOVATIVE PRODUCTS
The company has launched their online clothing collection brand and this was a huge
success because of the factor that internet services are available 24×7 and the physical stores are
time bounded and that resulted in increase in number of sales as compared to the stores. The
company has a tough competition in online clothing and had an over the head edge on the basis
of their customer support. Mark and Spencer provide their employees a much higher payroll as
compared to any other retail company which affect in increase in loyalty of the employees

toward the company and also increases their work oriented culture. They produce customer
satisfaction which is the key reason a company would survive in this kind of competitive
environment. Apart from being their customer satisfaction on top the company also focuses on
innovation and creation of the product and their marketing style which lead to give them an
upper hand from their competitor in the market segmentation.
DIFFUSION INNOVATION THEORY
This theory states how, why and by what rate new ideas and innovation and technology
spreads (Arifin 2018). This theory has 5 key elements on which the theory is based on :
INNOVATION :
It is a broad category to the current knowledge. Any innovation may that be in
technologies, or a new product, service or good. The other element will study the unit of
adoption which could be considered as an innovation available to study.
EARLY ADOPTERS :
These are the initial people or unit which will adopt the innovation when the trial period
is going on. These people always use the product or service even when it is developing time.
Basically they use beta version that is used to collect the response for the betterment of the
service or product that has to be launched in the market as an alpha product or service. These are
the people who will comfortable with the new changes and can adopt new ideas.
EARLY MAJORITY :
These are the number of people who will use the innovation before the average number
of population uses it. The company will need the evidence that the product will work before
everyone adopts it. It is a very stage as It can decide the fate of the innovation where if the
people doest seem to understand the process because of the complexity then it might not be a
successful innovation. The innovation need to user-friendly to gain popularity and minimize the
time and effort of the customers. If this majority of the people like the innovations and adopt it
then the company has done their marketing right and will see the rise in popularity of the service

or product. The generation gap plays a vital role in the adoption of new technology as it is
preferred by Gen Z and Millennials.
LATE MAJORITY :
These are the people who are not easily convinced to change and are reserved in nature or
have doubts about the innovation and the change it will bring. These people will only and only
adopt the innovation after it has been generally accepted or adopted by the majority of the
people. They will doubt the safety and will rise their concern regarding the innovation of new
product or services. This is usually seen in the generation X ( Sartipi, 2020).
LAGGARDS :
These are the people who are very old-fashioned and are conservative in nature, these
type of majority of people use traditional methods and are the last one to make any changes in
their technological or new product usage. This category of the people are the hardest to convince
the usage and adoption of any new technology or product. They are the hardest to appeal to. And
might only adopt the innovation if it is really necessary to change unless and until they will work
in their traditional method.
SWOT ANALYSIS
This analytical framework is used to analyse the various strengths, weaknesses,
opportunities and threats that are faced by the company and evaluate the factors that will
challenge the goals and objectives of the company. This framework will be used in the micro
analysis of the competitive environment to achieve their goals and objectives (GURL, 2017).
STRENGTHS :
 Well-Experienced :
The company has been in operation from last 137 years which made them a very well
experienced brand. Experience of the company will give the brand an upper hand in competitive
market.
 Recognized Brand :

Brand recognition is one of the key strengths mark and Spencer have. This factor
provides customer to trust the brand and the quality of the product that are being purchased from
them.
 Multinational Company :
Being a multinational company means owning the outlets in other countries and running
their global operations successfully in various countries. This also means that the company will
make a huge profit by running their global operations.
 Variety of Products :
Mark and Spencer offers more than 70,000 products to sell and customers can select the
brand of the product that is needed. Having the variety of products can attract more customers
and will also lead to many collaborations with other brands.
 Famous Designers’ Brands :
Mark and Spencer has given their space to many famous designers brands and this made them
stronger. They provide autographed, customized and limited edition as well. When company
brought all this under on roof they lifted competition in the market.
WEAKNESSES:
 Declining Sales :
Declining in sales have occurred in 2019 in some stores because of the poor supply chain
system and products were not available. Similar thing happened during the Christmas season of
2017 when there was shortage of food and clothing and this had impacted badly on the image of
the company (Elmghaamez, and et.al. 2021).
 Perception of Public :
There is a wrong perception of the people that the company only serve elder people and
does not have clothing for kids and teens. Although, this is wrong but it costed company a lot. If
the majority of the customers are elderly people that does not mean that it will only serve them.
 High Cost due to Manual Processes :
One of the major drawback of the company is that heavily rely on manual operations.
This is costly and require alot more time. If the company will not modernize and use the latest
technologies to carry out their operation than it might be a problem.

OPPORTUNITIES :
 Global Expansion:
Mark and Spencer is already a multinational company and currently running their
operation in countries like India, Russia, Indonesia. But the company need to expand its business
where there is less competition and have a high market reach (Franco, and et.al. 2020).
 Online Store :
Mark and Spencer has recently opened their online clothing options and face a huge
success but adding a more and new and improved collection can bring the company on top. The
main advantage of online shopping is that it is open 24×7 but the physical store have a time limit
that can be opened till.
 Market Segmentation :
The company process the market segmentation by dividing the customer market into different
groups of similar interest. Mark and Spencer follows the similar principle and open large store
everywhere which will meet the requirement of the customers.
THREATS :
 High Competition :
The retail market across the UK and around the world is very competitive
and some main and leading competitors are Tesco, Amazon, John Lewis,
Sainsbury. If the company doesn't change its strategy according to the
market trend then it will fade away from the market eventually because the
competitors are very strong. For example the company is shutting down their
operation in France, China and some part of UK where they are facing high
competition.

STRENGTHS
 Well-Experienced
 Recognized Brand
 Famous Designers’ Brands
 Multinational Company
 Variety of Products
WEAKNESSES
 Declining Sales
 Perception of Public
 High Cost due to Manual
Processes
OPPORTUNITIES
 Global Expansion
 Online Store
 Market Segmentation
THREATS
 High Competition
INFLUENCE OF CSR GOVERNANCE
The company has always taken responsibilities toward their customers,
employees, partners suppliers, local communities. The company does their
business in a very responsible way which showcase their values; quality,
service, innovation and trust. This will show how they manage social, ethical
and environmental issues across their global business. The company is
taking care of very sensitive issues of the society may it include, charity
toward the local community, raising awareness toward the climate change,
industrial waste management and ethical trading. The company plans to use
25% less energy and will switch to green energy by considering more
sustainable source of energy like wind energy, solar energy and induce rain
water harvesting system in all the outlets. The company will promote local

suppliers and will opt for the suppliers who will provide fresh items so that
their customers can buy fresh items in cheaper price. The company has also
planned to reduce their waste and use more environmental friendly products
for packaging which will reduce the waste and can easily be recycled (Choi,
2018).
CONCLUSION
This report shows that how Mark and Spencer operates in their competitive environment.
It shows the brief introduction of the company, its market size, and the competitive market
company operates in. This report shows an analytical framework that is SWOT analysis which
will help the company to evaluate its micro business environment. The report shows a tabular
form of SWOT analysis for the better understanding of the factors in brief and can be evaluated
so that the outcome can be profitable for the company. The company seeks a competitive
advantage in some area which include innovation, strategic innovations, corporate social
responsibilities, ethics and governance.

REFERENCES
Books and Journals
Sartipi, F., 2020. Diffusion of Innovation Theory in the Realm of
Environmental Construction. Journal of Construction Materials.1. pp.4-
2.
Arifin, S.R.M., 2018. Ethical considerations in qualitative study. International
Journal of Care Scholars.1(2). pp.30-33.
Choi, T.M., 2018. Launching the right new product among multiple product
candidates in fashion: Optimal choice and coordination with risk
consideration. International Journal of Production Economics.202.
pp.162-171.
Elmghaamez, I.K. And et.al. 2021. The diffusion of innovation theory and the
effects of IFRS adoption bymultinational corporations on capital
market performance: a cross‐countryanalysis. Thunderbird
International Business Review.
Franco, S. and et.al. 2020. Are you good enough? CSR, quality management
and corporate financial performance in the hospitality industry.
International Journal of Hospitality Management.88. p.102395.
GURL, E., 2017. SWOT analysis: A theoretical review.
Omoikhudu, J., 2017. The Impact of Training and Development on Employee
Retention in the Retail Sector, an Examination of the Role of Coaching
in a Leading Retailer in Dublin, Republic of Ireland. A Case Study of
Mark and Spencer’s Store Dublin (Doctoral dissertation, Dublin,
National College of Ireland).