Influence of External Factors on Marks and Spencer: A PEST and Porter's Five Forces Analysis

This presentation discusses the influence of external factors on Marks and Spencer through a PEST and Porter's Five Forces analysis. It covers the political, economic, social, and technological factors affecting the company, as well as the threats to new entrants, bargaining power of suppliers and customers, threats from substitutes, and rivalry against existing competition. The conclusion suggests that innovation is necessary for the company to attract customers and gain a competitive advantage in the industry.

BUSINESS
ENVIRONMENT

INTRODUCTION
Business environment is the collection of the internal and
external factors which can influence the operations of the
enterprise. The analysis of the business environment is
essential part for the managers and marketers of the
business to formulate their business strategies critically
while keeping in mind the environment. Marks and Spencer
is a multinational British retailer organisation which is
headquartered in London , England(Yuen,., and et.al.,
2019)..

PEST ANALYSIS
It is tool which is used to identify the external
factors of the environment which can influence the
operations of the business organisation. It is helpful
for the marketers as the external factors can have
both negative and positive aspect. So it is important
for the organisation to evaluate this tool in order to
achie4ve its goals.

Political- it is an extent to which the government policies and actions may interfere the business
organisation. Such factors include tax policy, tariffs, trade restrictions etc. this factor had a positive
aspect for the marks and Spencer. As the free trade policies in the United Kingdom gave a massive
benefit to the organisation with its 1500 stores
Economical- It considers the various aspects of the economy and focuses that how the
performance of the economy can impact the business enterprises. Such factors include economical
growth rates, inflation, unemployment rates etc. The crisis in the economy has become a threat to
the Marks and Spencer as the people of UK are shifting towards the local retailer shops and marks
and Spencer deal in the luxury product.

Social This factors focuses on the cultural and demographic aspects in the society which can
influence the operations of the business organisation. The marks and Spencer was dealing in
home products, clothing and food but as the change in the latest generation their types of
apparels. So this factor affected the company in loosing the customers of the young
generation.
Technological- These factors are related to the innovation required in the industry or the
business organisation. As the modern world is adapting the new technologies in their retail
store which has become the important aspect for Marks and Spencer to introduce new
technologies in its stores. For this the company has introduced the self checkout system in its
stores to attract the customers.

PORTER’S FIVE FORCES
It is a framework or tool used by the organisation for the
competitor analysis. This model determines the intensity
of competition in an industry is a combination of five
factors which is explained below in context of Marks and
Spencer:
 Threats to new entrants- This factor refers to the
ability of new businesses to enter the industry. It can
pose a threat to existing companies as new businesses
will have innovative products in their stores.This
ensures that Marks and Spencer has low risk of the
new entrants in the market

Bargaining power of suppliers- This factor measures the number of suppliers that are there
in the industry and at what level the organisation holds the power to bargain from businesses
Here the power of suppliers is weak in case of Marks and Spe4ncer because of the huge
number of suppliers in the industry
Bargaining power of customers- It focuses on the bargaining power of the customers. If
there are less number of buyers in the industry which can be the biggest threat for the
company. As Marks and Spencer deals in luxury products so there are chances of high
bargaining power of buyers in this case.

Threats from substitutes- This threat arises when the customers can find the substitute for
the product rises.
This creates a high level of threat for the Marks and Spencer as the products are easily
available in the market and the customers can get the similar services from other businesses
organisations
Rivalry against existing competition- This comprises of the level of the competition
between the organisations of the same industry. Here the Marks and Spencer faces the high
level of the rivalry against its competitors as in UK there are several retailers in the same
industry with high market share.

CONCLUSION
From the above report it is concluded that there is an influence of the external factors
on the Marks and Spencer. The pest analysis shows that the company need to have
innovation to attract customers in order to have a competitive advantage in the
industry. Also the porters five forces suggests that there is huge competition in the
market but the relationship of the company and the brand value can take to new
height and by analysing few things the company can reach to its objectives.

REFERENCES
 Bell, R.G., and et.al., 2018. From the guest editors: Opportunities and challenges
for advancing strategic management education.
 Boone, L.E., Kurtz, D.L. and Berston, S., 2019. Contemporary business. John
Wiley & Sons.
 Grover, M. and Khattar, K., 2019, October. A PEST Analysis on the Impact of
Make in India Program on Manufacturing Sector’s Productivity. In Proceedings of
International Conference on Advancements in Computing & Management
(ICACM).