Internal and External Environment Analysis of Marks and Spencer

This report analyses the internal and external environment of Marks and Spencer using SWOT, VRIO, PESTLE and Porter's Five Forces models. It includes a risk assessment and action plan to manage the identified business risks. The report identifies the strengths, weaknesses, opportunities and threats of the company and provides recommendations to manage the risks. The subject of the report is BAM4009 and the course name is Business Environment.

BAM4009

Contents
INTRODUCTION:..........................................................................................................................3
TASK:..............................................................................................................................................3
1.1 Carry out an internal environment analysis of marks and Spencer using suitable
conceptual models.....................................................................................................................3
1.2 Carry out an external environment analysis of marks and Spencer using suitable
conceptual models.....................................................................................................................6
1.3 Undertake a risk assessment of marks and Spencer, identify the business risks and
prepare an action plan showing how these risks could be managed....................................9
CONCLUSION:.............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION:
A business organisation can be defined as any entity which is basically formed with the purpose
of running all the commercial activities which basically includes the buying and selling of the
goods and services. The main purpose of any business entity or an organisation is to maximise its
profits and get renowned in the society with a clear brand image but also fulfilling its purpose for
the society by adopting the corporate social responsibilities. Companies however also adopt
many kinds of analysis models which basically helps them to analyse both the internal as well as
the external factors which affect the company i many ways. This helps the entity to mould their
business strategies in a way to get most out of it in the future and the decision making also
becomes very easy. In this report however, the models which help to analyse the internal and
external factors that helps to analyse the structure of marks and Spencer has been taken into
consideration which is a British multinational brand with the headquarter in London, United
kingdom (Bonamigo and et. Al., 2022) . It basically deals sin the supply of clothing, food
products, and home products. For this report, the clothing line of marks and Spencer has been
chosen.
TASK:
1.1 Carry out an internal environment analysis of marks and Spencer using suitable
conceptual models.
SWOT ANALYSIS OF MARKS AND SPENCER:
Swot analysis can be defined as the analysis which analysis all the internal as well as the external
factors of any company which affect them in many ways. They internal factors include all the
strengths and the weaknesses of the company and the external factors which basically includes
the opportunities and the threats of the company (Díaz-Portugal and et. Al., 2022).The swot
analysis is important for any company to know all the factors and then make all the strategies
and decisions of the company for the future.
STRENGHTHS OF MARKS AND SPENCER:
CLEAR BRANDIMAGE: Marks and Spenceris a brand which basicallytargets people with
mainly high-income values.They basically deal in the clothing which is modern and

sophisticated.Hence, they have aclear brand image which only targets some particular sections of
the societyand make them understand clearly what to accept from the brand itself.
DIVERSITY: the company has around 80,000 employees which work for the brand across the
world. They work in different offices, showrooms and at the production centres as well. Hence in
addition to his he companies also have aa diversity of people working under themin spite of their
cultures, casts ethnicities and the genders. The company however also give equal opportunities to
everyone in order to make sure that there will be no discrimination at the workplace (Egger,
2022).
WEAKNESSES OF MARKS AND SPENCER:
LOW CUSTOMR SATISFACTION: customershowever feel low customer satisfaction when
they shop from the brand and however sometimes have issues with the return and exchange
policies of the brand especially when the shop from in-store.
INABILITY TO PENETRATE SUCCESSFULLY IN MARKETS: since it has a well-
established store in Europe, United Kingdom, it fails to penetrate its successful business in many
countries. However, they have successfully opened stores in the middle eats and Asia but fails to
win customers attraction as they don’t offer traditional designs in their collection.
OPPORTUNITIES OF MARKS AND SPENCER:
ONLINE STORES: e- commerce retailing for any brand is the future of shopping tings by
staying at home. Aspeople have no time to go out in the crowded places and buy stiffs for them
instead they get it by sitting a home. Marks and Spencer however havean online retailing store
but when it is compared to any other e- commerce retailing like amazon or eBaysites it lacks
behind in the race (Kayas and et. Al., 2022). Therefore, the brand has a very good opportunity to
grow its business on online by giving more attention to the e-commerce retailing also.
GLOBAL EXPANSION: already being a multinational brand, marks and spencer has opened
up its franchises in many countries like India, Russia, Poland and many more. But in addition to
this many countrylack behind in having attention from the brand. Hence it has a very good

opportunity to have a global expansion of its brand and get recognised by the people of across
the world.
THREATS TO MAKRS AND SPENCER:
HIGH COMPETITION: this industry has a lot of competitors in UK as well as across the
world. Marks and spencer have got many competitors in UK only which includes amazon,
Tesco, ADSA, Sainsbury and many more. The brand however needs to adopt appropriate
strategies for the company in order to attract more customers and increase its sales, which if not
can harm the brands image.
NO DVERSITY IN CLOTHING: marks and spence is a brand which basically only deals in
the western clothing only. However, in many countries like Indiasome parts of Asia want
something which can define their culture world widely (Lee and et. Al., 2022). Hence, marks
and spence’s sales will automatically decrease in countries like India for not having enough
diversity in their designs and clothing.
VRIO ANALYSIS OF MARKS AND SPENCER:
Vrio analysis can be defined as the analysis in which all the analytical techniques and toolsare
being used for the evaluation and the analysis of all the company’s resources. It includes the
dimensions named valuation, rare, imitability and organisation of any company. It is however
very important in any business organisation as it helps them to plan their strategies by enabling
the systematic analysis of all the resources including the tangible and the intangible resources
along with the capabilities of the company to grow its business.
VALUABLE: the resources that mark and spencer uses at the tie of its production activities are
veryvaluable for the company. The resources however include the team of management of
operating activities and experts of marketing team, its finances and personnelassets. The cost
structure is however is not a valuable resource for the company. This is mainly due to the
methods they adopt for the production activity which in the end results in the greater costs when
compared to any other competitive brand which therefore results in the overall net revenue of the
company (López-Fernández, 2022).

RARE: the resources of marks and spencer to run their business are very important and rare,
which means those resources are only fund by the particular company or brandfor their operating
activities. Hence, if these resources are found by the rival companies, it would be very easy for
them to come in the competition.
IMITATION: this basically increasesthe fear of threat for the company for distribution of its
products in the current structure in industry. In this factor, the replica cost for the production of
the same goods of some other company, which in this case is marks and spencer becomes very
costly. I basically have two methods in which the products replica is made by marks and spencer
but thereplacement of the items requires to switching expense.
ORGANISATION: the vrio analysis basically helps to know the compatibility ofany company
and to use all its resources valuably to get most out of it. Hence for marksand spencer, the
resources are being used strategically to be placed in the right places, making a road of
opportunities for the company and decreasing all kinds of threats for it (Mishra and et. Al.,
2022).
1.2 Carry out an external environment analysis of marks and Spencer using suitable
conceptual models.
PESTLE ANALYSIS OF MARKS AND SPENCER:
Pestle analysis of any company can be defined as the framework which basically helps the
organisation to analyze and monitors all the macro- environmental factors which affect the
company in many ways. They use tools and technologies for this. Macro envidonment factors
include the political, economic, social, technological, legal and environmental.
POLITICAL FACTORS:
The most positive factor to run any business has to be the political factors. The marks and
Spencer company has almost 1500 stores overseas. One of the major political factors for marks
and Spencer has to be the brexit. Because of the brexit hanging close, there are many rules and

policies which may not be applicable for the company (Rajagopal, 2022). Brexit basically helps
with the tax embargos which will ultimately affect the shipping to trade its products out of the
borders of England. Thus this will eventually increase the cost of production of the products
which will make the products costly for the final users. This will tend the company to lose its
customers.
ECONOMIC FACTORS:
Nowadays, the current make of retailing items is majorly shifting to the small retaining stores
rather than choosing the top brands to support the small households as well. This economic effect
can be very harmful for the company as it will again tend to lose the customers of the company.
Also as it only targets the premium customers of the society this will become a threat for the
company.
SOCIAL FACTORS:
We can call the marks and Spencer Company as a household name instead of the retailing chains
in the front of every generation of the society. One of the main reasons for this condition is due
to be in the competition for a very long time, from the year of 1800s. However, this long time
reputation has many consequences going on with it. Generations are considering this brand as a
part of the past and have the thinking that the company is becoming less trendy when compared
to any other new competitor in the marketplace.
TECHNOLOGICAL FACTORS:
All the companies regardless of their production activity are shifting towards the use of new
modern and advanced technology for their production processes (Scuotto and et. Al., 2022).
Talking about marks and Spencer, the company has launched many new self checkout stores
across the world and adapt the new technology which will help the customers to save the time in
queue and can check out their items purchased at the billing counters all by themselves. In
addition to this it has also introduced the e-commerce sites as it is the new way of shopping in
today’s time.
LEGAL FACTORS:

The company marks and Spencer has been involved in many legal activities over the years and
the disputes have made it more difficult for the company to hold on to its positive brand image
all over the world. Brexit will again come in one of the main legal factors which affect the
company in many ways. For this the business strategies taken into the considerations by the
company also does not play a very important role as this factor is out of their hands.
ENVIRONMENTAL FACTORS:
The environmental factors can be defined as those factors about which any companies get
warned about their operating activities, which by the affects the environment in many ways.
Marks and Spencer is also however given the vows to be understandable and careful about their
production activities. With the high rate of climate change, the company has a very high risk of
losing their brand image in the society (Seeling and et. Al., 2022).
PORTER FIVE FORCES ANALYSIS ON MARKS AND
SPENCER:
Porters five forces model is basically a model which helps to analyze the competitive structure
and the environment of any company which will help them to make the decision making process
for the future very easy and appropriate. It includes the competitor’s powers, new entrances in
the market, the suppliers and the consumers of the company and the subtitle products which are
available in the marketplace.
THREATS OF NEW ENTRANTS:
New entries of new companies and especially in the cloth retailing industry are constantly
increasing. They come up in the market with new ideas and strategies to attract huge number of
customers and also use modern and advanced technology to decrease the cost of production. This
becomes a major threat for the company and forces them to lower the prices of their goods in
order to increase their customer base numbers.
BARGHAINING POWER OF THE BUYERS:

Buyers often become very demanding to the companies or brands when it comes to buy their
products. As consumers are treated like god for the companies, consumers however take full
advantage of this statement. They want the best offerings and want to pay as lower prices as they
can in return for the goods or services (Sutherland, 2022). This makes a pressure on marks and
Spencer to give more offers and discount in order to maintain its customer base.
THREAT OF SUBSTITUTE PRODUCT OR SERVICES:
New entrances often make many substitute products of known brands and make them sell at very
lower prices. This is very expensive for the company as people are tend to buy more of that
substitute item rather than the original ones.
RIVARY WITH EXISTING COMPETITORS:
Marks and Spencer has many rivers in the industry all across the world. This makes it import to
be in the rivalry with them for the survival in the market. In this process sometimes the company
has to give a huge offers and discounts and also lower the prices in order to be in the level and
save their customer base. However it sometimes also increases the price as it is a well known
brand for its quality products and people with high incomes will tend to pay the amount to buy
the products.
1.3 Undertake a risk assessment of marks and Spencer, identify the business risks and
prepare an action plan showing how these risks could be managed.
One of the main business risks that marks and Spencer is facing is that it is failing to provide a
reasonable price to the customers and also the fashion formula of the brand is also not up on the
level. Marks and Spencer has many rivals in the clothing retailing industry such as Zara, Primark
and also some new labels in the market place like hush. However, marks and Spencer is very last
in the race with these competitors. Although the brand has its own e-commerce sites but it also is
not that great with other competitors that has been discussed above. The company needs to plan
careful strategies to have its position back in the market and has to come up with more designs
and patterns with more reasonable prices in order to increase the customer base (Wang, 2022). In
addition to this the brand also need to adopt the corporate social responsibility in order to gain

some more attention in the society and can gain its reputation and clear brand image back in the
market place.
CONCLUSION:
From this respective report, it has been concluded that swot analysis and vrio analysis identifies
the internal factors of the business and swot refers to the analysis of all the internal as well as the
external factors of any company which affect them in many ways. On the other hand, Vrio
analysis uses all the analytical techniques and tools are being used for the evaluation and the
analysis of all the company’s resources. Pestle and porter five forces helps to analyze the
external factors of any company and Pestle analysis can be refers to the framework which
basically helps the organisation to analyze and monitors all the macro- environmental factors
which affect the company in many ways and porter’s five forces helps to analyze the competitive
structure.

REFERENCES
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(Bonamigo and et. Al., 2022) (Díaz-Portugal and et. Al., 2022) (Egger, 2022) (Kayas and et. Al.,
2022) (Lee and et. Al., 2022) (López-Fernández, 2022) (Mishra and et. Al., 2022) (Rajagopal,
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