Marketing Strategies For Marks & Spencer Assignment

Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK 1............................................................................................................................................1
Overview of the company............................................................................................................1
Organizational structure...............................................................................................................1
TASK 2............................................................................................................................................3
Importance of carrying out PESTEL analysis for the organization.............................................3
PESTEL analysis of the company................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Environment is the wider term where various activities perform which affect the
organization and it can be done through internal as well as external factors. In the business
environment, different types of influencer available which impact organizational productivity or
profitability. These internal or external factors can be positive as well as negative which affect
operational functions (Adeoye and Elegunde, 2012). It is important for the organization to
analyse and identify those factors which impact business and then develop strategies
accordingly. Marks & Spencer PLC selected for the better understanding of this concept. It is
British multinational retailer organization and its headquarter established in Westminster
London. Company deals in high quality cloths, home & food product and Marks & Spencer PLC
listed in London stock exchange and constituted with FTSE 100 Index. This report include
various topics such as history of the company and how it govern & structure. Evaluate the effect
of external business factors which impact organizational productivity or profitability.
MAIN BODY
TASK 1
Overview of the company
Marks & Spencer PLC also known as M&S which is British multinational retailer
company situated in UK. It is founded in 1884 by Michael Marks & Thomas Spencer and
currently Marks & Spencer PLC have 1463 stores across the world. Total stores in the UK is
approx 959 including 615 that only sell food items (Marks & Spencer PLC, 2019).
History of Marks & Spencer PLC: This organization founded as partnership of Michael
Marks who is Polish Jew & Thomas Spencer who is cashier. In 1901, Marks moved to
Birkenhead to open a retail store with Spencer. They get the stall number 11 & 12 and open their
store in famous Penny Bazaar. M&S profit will peak in the financial year 1997-1998 and get the
huge growth. To run their business, both have to face various difficulties and challenges such as
suppliers issue regarding credit.
Organizational structure
It is the arrangement of activities which done according to authority, power,
communication, duties and rights in the organization. It determine the the role and responsibility
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according to authority and flow of information between various level of management.
Organizational structure define that, what are the procedure of sharing information from top level
to the bottom level management (Belás and et.al., 2015).
In context of Marks & Spencer PLC, company follow flat organizational structure there
are limited level of management from operations to from line employees. Basically this structure
follow to encourage their staff members to give their valuable suggestions and take part in
decision making process.
Flat organizational structure: In this structure, organization contain low level of
management between top authority to the staff members. In Marks & Spencer PLC, company
flow flat structure in order to increase employees contribution in the decision making process.
By using this structure, staff members can easily share their thought, opinion or suggestions
which can adopt by the manager in order to make their decision more effective. By using this
structure, Marks & Spencer PLC get the various benefits which is discuss below:
 It helps in evaluating staff members responsibility in the organization and make them
accountable for this.
 It reduce the complexity due to low level other wise higher management level will
increase complications (Bah and Fang, 2015).
 It will improve coordination and increase communication among the different
departments which provide efficiency as well as effectiveness.
 Flat organizational structure helps the Marks & Spencer PLC to motivate their staff
members to participate in decision making process.
 It provide efficiency due to few level of management which helps in saving additional
expenses such as employees salary and other expenditures.
 It will reduce organizational budget which affect the productivity as well as profitability.
Due to above mention benefits, Marks & Spencer PLC follow this organizational
structure. Below mention graph represent the flat organizational structure which follow by the
M&S. There are chairman of the company who management all the functions develop strategy
for the decision making process.
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Illustration 1: Flat organizational structure
In the Marks & Spencer PLC, there are total nine members in the board of director where
is 3 out of 9 are females and rest of male members. Patrick Bousquet and Humphrey Singer are
executive director of the company. Richard Solomons, Vindi Banga, Humphrey Singer, Katie
Bickerstafe, Pip McCrostie and Justin King all are executive director of the company(Annual
report of M&S, 2019). Along with this, Archie Norman is the chairman of the company and he is
appointed September 2017.
In the flat organizational structure, all the department are interlinked with each other and
it will generate effective flow to communicate among the department. It will reduce complexity
and increase communication which further helps the manager to develop strategy and take
important decision. Staff members can freely give their suggestions and participate in decision
making process (Winnubst, 2017).
TASK 2
Importance of carrying out PESTEL analysis for the organization
PESTEL analysis is a business tool which is used to identify external factors that affect
organization in terms of productivity as well as profitability. This analysis includes political,
economical, social, technological, environmental and legal factors which impact business
operations. By using this analysis, organization get the various benefits which is discussed
below:
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 Cost effectiveness: Time is the cost of PESTEL analysis where additional actions help
the organization to take their inputs & feedback. Intense research of market is required to
analyse the effectiveness of time and it will helps in analysing in what time period
business get the right opportunity (Csaszar, 2012). This analysis will be done by anyone
for the better results and effective strategic decision. Manager of Marks & Spencer PLC,
adopt this tool in order to analyse effectiveness of time which can provide various
opportunity.
 Deep understanding: With the help of PESTEL, organization understand the direct or
indirect impact of external factors in the business. It helps the manager to PESTEL
analysis in order to measure impact of external factors on production or profit margin.
Marks & Spencer PLC use this analysis for the better understand of this external impact
on business operations. By using PESTEL analyse, organization understand marketing as
well as customers desire in order to modify their strategic plan and formulate new
strategy in order to achieve market growth and identify potential customers.
 Provide alertness: It will provide alertness regarding various things such as specific
product, market plan, customer relation etc. By using PESTEL analysis manager get the
idea regarding current market trends (Mahmoudsalehi, Moradkhannejad and Safari,
2012). So they have to build their strategy according to market condition and it will
provide alertness which helps in decision making process. In context of Marks & Spencer
PLC, manager regular analyse market trends which helps in building strategy and take
effective decision which positively impact organizational productivity or profitability.
 Exploit opportunity: With the help of PESTEL analysis, organizations identify various
external opportunity which is important to identify and grab this chance to enhance their
performance. Here, research & development team need to analyse political as well as
social factors in order to identify any future potential opportunity which helps in
increasing productivity and profitability. It further helps the organization to achieve their
business goals & objectives. Manger of Marks & Spencer PLC need to evaluate external
factors such as other countries culture, values and believes which helps in measuring
customer's needs and desire. With the help of intense research manager identify those
factors which is beneficial for the business in order to enhance their efficiency as well as
effectiveness.
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Above mention importance of PESTEL analysis help the Marks & Spencer PLC to
analyse those factors which can impact operational functions in order to achieve high efficiency
or effectiveness (Wautelet, 2012). Before developing any strategy manager of Marks & Spencer
PLC analyse external factors which affect the business environment as well as organizational
production and profitability. With the help of PESTEL analysis manager identify various
opportunity which is beneficial for future. At the time of building any strategy, manager have to
analyse these factors which affect the business productivity and profitability.
PESTEL analysis of the company
By using PESTEL analysis, Marks & Spencer PLC able to identify those external factors
which positively as well as negatively affect the business. Manager of the company develop
strategy according to its impact (Yüksel, 2012). They develop strategy to grab opportunity and
take precaution from negative impact. In context of Marks & Spencer PLC, manager done
PESTEL analysis to identify their affect in the operational activities. It is discussed below:
Political factor: It includes the government interferences in what level because it affect
the organization and operational functions in order to complete their task. Political factor
includes government stability, trade & tax policy, labour or environmental law etc. These factors
affect the business, so they have to prepare themselves to responds current and anticipated
legislation and adjust their marketing policies according to it. In context of Marks & Spencer
PLC, company accused for not abiding various standards such as safety regulation due to door
fell on the customers during shopping. M&S is the first company who achieve fair trade policy
route where organization cut the salt and sugar in their food items. Basically two major factors
affect the Marks & Spencer PLC such as political stability and VAT. UK government is stable,
so there is no fair of frequent change in policies and another factor is VAT. If government
increase VAT rate then M&S increase their product price which can reduce customer demand
and it automatically reduce the profitability of the company.
Economic factor: This factor has significant impact which affect organizational growth
and profit margin. It includes interest rate, exchange rate, inflation, disposable income etc.
Manager of Marks & Spencer PLC done economic analyse where they identify that how
economy affect the business. UK has open economy and its rank is fourth in worldwide, they
manage their monitory and fiscal policies which helps in maintaining low inflation. Marks &
Spencer PLC have to done complete economic analysis and consider all the issues which occur.
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After this, manager have to consider these factors at the time of developing strategies and try to
encounter all the problems through changing their marketing plan.
Social factor: It is also called social culture factor which include shareholders belief,
attitude, value or types of population. This factor include, career attitude, age discrimination,
social culture etc. In context of Marks & Spencer PLC, manager have to evaluate whole market
and identify customer's needs and demand regarding any specific product. M&S already fill their
stores as per the current market trends and customer need (Grünig and Kühn , 2015). Most of the
customer base is around 40 to 55 age group. M&S working on their clothing range in order to
target young people from the age of 20 to 35. Closing range totally depend upon locality and
customer expectation. For example: London situated shop does not have classic collection.
Technological factor: Change in the technology also affect the organization in order to
achieve high efficiency or effectiveness which further affect production and profit margin of
business. Organization need to analyse that which technology affect the market and customer's
need and how it will affect the business. Manager of Marks & Spencer PLC done regular
research on market in order to identify latest technology which is beneficial for the business to
find new way of production, distribution and communicate with customers regarding goods &
services. Company invest huge amount of technology in order to gain high competitive
advantage. Recently, M&S equipped with Wi-Fi and they think that people can explore more
product which offer by the organization. In addition, they provide customer assistance through
iPad which provide various information regarding different products that enhance awareness in
the customers regarding products & services. Along with this, they installed big screens in the
stores and they believes in hospitality offer. Marks & Spencer PLC use world class warehouse
technology in order to centralized all the information regarding availability of inventory in
business.
Environmental factor: It is very important factor for the organization because it affect
the organization and their operational functions. These factors include, change in raw material,
targeted market, follow ethical practices in order to maintain sustainability in the organization.
Due to these factors business can face lots of issues and it affect the consumers and their
demands. In context of Marks & Spencer PLC, they promote a scheme which is called
“Shwopping”. In this plan, customer can donate their old clothes which is going to sell Oxfam
otherwise they recycle or resell in the other market where it will be demanded but people does
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not have enough money to buy. In the four years, “Shwopping” collect more then 11 million
clothes and it has approx 8 million GBP value which donate in form of recycle. By using these
strategy M&S increase 10% efficiency as well as reduce 15% packaging. Currently Marks &
Spencer PLC charges 5p per plastic bag as per customer demanded to carry out their things. All
the money generated from carrying bags will be transfer to the Groundwork, it is foundation
which invest in a project that develop and improve parks, play ground across the UK (Heise,
Crisan and Theuvsen, 2015). If organization done these kind of activities then it positively affect
the business in term of their brand image, product popularity etc.
Legal factor: Every organization have to follow different rules and regulation according
to their nature of business. If any entity not follow these legislation then they have to face
various circumstances which further impact production or profitability of the company. Marks &
Spencer PLC face the legal complications where BBC news reported that organization have to
pay 1 million GBP to the government regarding asbestos risk. M&S fail to provide safety to the
customers and their staff member from highly heated resistance silicate mineral. After that
incident, court pass the judgement that company more interested in making profit rather then
safety of their customer and employees. In 8th august, 2010 Marks & Spencer PLC accused for
sweatshop scandal company pay 25p per hour to the Indian workers and also force to work
overtime. It will affect the organization in negative way and it further impact organizational
productivity or profitability.
CONCLUSION
From the above discussion, it has been concluded that business environment include
various factors which affect production functions of the organization. Organizational have to
adopt effective structure in order to reduce the complexity of work. Such as flat organizational
structure reduce the complication if they apply any changes in the business. So it is very easy to
communicate with others and it helps in maintaining regular flow of information. By using
PESTEL analysis, manager identify those factors which can positively as well as negatively
affect the business. Before taking any strategy decision manager have to evaluate all the external
factors which is beneficial to implement at the time of decision making process.
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REFERENCES
Books & Journals
Adeoye, A. O. and Elegunde, A. F., 2012. Impacts of external business environment on
organisational performance in the food and beverage industry in Nigeria. British Journal
of Arts and Social Sciences. 6(2). pp.194-201.
Bah, E. H. and Fang, L., 2015. Impact of the business environment on output and productivity in
Africa. Journal of Development Economics. 114. pp.159-171.
Belás, J.and et.al., 2015. The business environment of small and medium-sized enterprises in
selected regions of the Czech Republic and Slovakia. E+ M Ekonomie a Management.
Csaszar, F. A., 2012. Organizational structure as a determinant of performance: Evidence from
mutual funds. Strategic Management Journal. 33(6). pp.611-632.
Grünig, R. and Kühn, R., 2015. Global Environmental Analysis. In The Strategy Planning
Process (pp. 89-96). Springer, Berlin, Heidelberg.
Heise, H., Crisan, A. and Theuvsen, L., 2015. The poultry market in Nigeria: Market structures
and potential for investment in the market. International Food and Agribusiness
Management Review. 18(1030-2016-83098), pp.197-222.
Mahmoudsalehi, M., Moradkhannejad, R. and Safari, K., 2012. How knowledge management is
affected by organizational structure. The learning organization. 19(6). pp.518-528.
Wautelet, T., of thesis: Exploring the role of independent retailers in the circular economy:
a. Production Engineering. 33(5). pp.308-320.
Winnubst, J., 2017. Organizational structure, social support, and burnout. In Professional
burnout (pp. 151-162). Routledge.
Yüksel, I., 2012. Developing a multi-criteria decision making model for PESTEL
analysis. International Journal of Business and Management. 7(24). p.52.
Online
Annual report of M&S. 2019. [Online]. Available Through:
<https://corporate.marksandspencer.com/documents/msar-2019/full-annual-report.pdf>
Marks & Spencer PLC. 2019. [Online]. Available Through:
<https://corporate.marksandspencer.com/?intid=gft_company>
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