Analysis of Business Environment and Industry Survival and Success Factors

This report analyses the business environment and industry survival and success factors of M & CO. group in the world-clothing industry in 2015. It includes PEST analysis, Porter's five forces, value chain, business model canvas, and VRIN framework.

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Contents
Introduction......................................................................................................................................2
Analysis of the business environment and of industry survival and success factors.......................3
PEST analysis..............................................................................................................................3
Porter’s five forces.......................................................................................................................4
Survival and Success Factors...................................................................................................5
Porter’s value chain.........................................................................................................................6
Business Model Canvas...................................................................................................................7
VRIN................................................................................................................................................9
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Introduction
The aim of the report is to analyse the organisation business environment and of the industry
survival and success factors. The analysis of the business environment is done with the support
of Porter's five forces and Pestle analysis that majorly shows the impact of the emerging trends.
In addition to this, the industry analysis has been done which reflects the performance of the
company in the industry, which is supported with value chain, business model canvas, and VRIN
framework. Further, it includes the implications for the survival and success of the industry in
the near future. The case study on which the analysis has been done is a world-clothing industry
in 2015 that is linked to the selected company that is M & CO. group. The report majorly
identifies key issues and concludes with the recommendation for the strategies that is majorly
based on the analysis of the factors that are discussed above.

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Analysis of the business environment and of industry survival and
success factors
PEST analysis
The PEST analysis is considered as one of the major tools that are majorly used by marketers
with the motive to analyse and to monitor the external marketing environment (Baker, 2014).
 Political: - The change in rules and regulations by the government is one of the emerging
challenges that are faced by companies. M and co. The company also need to face the
political changes related to the tax and other charges.
 Economic: - The clothing industry is continued to grow with approx. 4% and varies
according to regions. The clothing industry contributes effectively in enhancing the
economy and GDP of the country (Chernev, 2018). In the present world, developing
nations become exporters within the developed countries. This export contributes to
improving GDO of countries like China, Hong Kong, Bangladesh and many others.
 Social: - The social elements include a change in customer’s preferences and tastes due to
which the companies in clothing industries are getting influence (David, 2011). The
retailers that are present in the industry are trying to design spaces that are flexible, in
recognition of the fact that customers taste fluctuates rapidly. Similarly, M and Co. The
company also bring changes according to fluctuations in need of customers.
 Technological: - The technology is readily and maturely available for the manufacturing
of textiles and garments in developed and developing countries. Developed countries

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generally make use of technology while production (Ho, 2014). This has been found that
technological advancement and up-gradation affect working.
Porter’s five forces
Porter's five forces are one of the tools that are used by companies with the motive to analyse the
competition that is faced by the business.
Competitive Rivalry- High
The competitive rivalry reflects intense competition in the retail space as a major brand and
downmarket has shopping stores in London’s Oxford Street. Zara, TopShop, H&M, Primark, and
many other local companies compete in the market. M and Co. Company deals with high
competitions with some of the brands that are present in the market.
The threat of substitutes- High
The threat of substitutes in the global clothing market is medium but for the companies who are
dealing in the market found that there are different trendy clothes available at stores. In addition
to this, most of the customers likely to visit the departmental stores from where they can get the
clothes.
Power of buyers- High
The bargaining power of buyers is high in the market because there is the presence of a large
number of companies who are present in the clothing industry (Dawson, 2014). This makes the
customers easily shift to the other company who is offering the clothes at the best price with
trendy stuff. M and co. The company ensures to keep competitive prices so that they can attract
customers.

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Power of suppliers- Low
In the clothing industry, there is the presence of a large number of suppliers that allow the
clothing retailers to the source the clothing from their choice of the suppliers. In addition to this,
the retailers are adopting dual sourcing policy with a least one supplier that is being located very
nearby.
The threat of New entrants- Medium
In the clothing industry, the high threat of new entrants has been found with the fact that industry
is growing and attracting to fashion and glamour. This increase allows the young to become
more creative which allows the company to attract the new entrants. M & co. deals in London
market where they find the high threat of new entrants (Frynas and Mellahi, 2015).
Survival and Success Factors
In order to survive in the clothing industry, M and co. A company need to offer trendy and classy
clothes with the effective value added services. The company can succeed in the market by
adding new brand who can offer trendy clothes at affordable prices.
Clothing
What does the customer want? Customers want trendy clothes with good quality at an effective
price.
How the firm survives the
competition?
The firm survives in the market by providing trendy clothes.
Key success factors Increasing brand categories for men’s and women’s in brand at
affordable prices.

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Porter’s value chain
Type of activity Description
Primary
Activities
Inbound logistics M and co. company source products from different
suppliers across the world (Grant, 2016). Along with
this, the company has a tie-up with different brands.
Operations The major operations of the company include
manufacturing or sourcing trendy clothes. The
operations include offering the final products to the
customers according to their preference.
Outbound
logistics
The outbound logistics include the distribution of a
product that is possible through online as well as the
franchised stores of the company.
Marketing and
sales
Marketing and sales activity is important to be
considered by the company. The company make use of
different tools like Social media or through other online
platforms. In addition, mouth promotion is also done by
employees of M and co.
Service M and co. franchised stores are located at the prime
locations due to which companies are able to offer
effective services before and after the purchase of
products.
Support
Activities
Firm
infrastructure
The infrastructure is maintained by the company to
attract the customers through the infrastructure of stores

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and can be reflected on the website of the company.
Human resources Employees of the company are their strength as through
this they are able to form a strong relationship with the
customers by providing them exceptional services.
Procurement The procurement of the fabric is done my M and co.
from the different sources with the motive to meet the
fluctuating demands of customers.
Technology
development
The technology adoption is essential for the company at
the time of manufacturing of products. In addition, the
technology can be used for marketing and for offering
value-added services.
Business Model Canvas
Key partners
 Carol
Bokuniewicz
 Liz Trovato
Key activities
 Orders
 Shipping of
products
 Customer
service
 E-commerce
Value
proposition
 High-quality
design and
trendy
clothes are
provided at
affordable
prices.
Customer
Relationship
 Customer
support
throughout
the journey
of product
 Customer
loyalty
Customer
Segments
 Fashionist
people
 College
students
 Mid-Income
shopper
 Young, price-

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program (M
and Co.,
2018)
conscious
people
Key Resources
 Online
 Shops
 Human
resource
(Employees)
 Brand value
Channels
 The company
offers
products at
online stores
 M and Co.
has Eleven
franchise
stores
(Hendriksz,
2017)
Cost Structure
 Marketing expenditure
 Depreciation
 Marketing
 Research and development
Revenue Streams
 Online stores
 Franchising store

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VRIN
M and co. The company make use of VRIN framework for the strongest resources and
capabilities that allow the company to determine the competitive advantage.
Resources Or
Capability
Valuable Rare Inimitable Non-
Substitutable
Impact On
Competitive
Advantage
Online
presence
Yes No No Yes Realized
Competitive
Parity
Effective
employees
Yes No No Yes Realized
Competitive
Parity
Effective
sourcing
Yes Yes Yes Yes Realized
Competitive
Advantage
Online presence: - M and co. The company is able to maintain an online presence in the market,
which is valuable but rare and unique as other brands are also able to maintain its unique
presence. However, the online presence helps the company to deal effectively with competitors
like Zara, H & M and many others.
Effective employees: - The employees of the M and Co. are valuable and non- Substitutable
which helps them to deal with the competitors. The company is equipped with employees who
are able to maintain diverse skills.

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Effective sourcing: - The sourcing of products is required for the company and they ensure that
sourcing remains valuable, rare, inimitable and Non- Substitutable that helps them to deal with
the competitors by offering quality products at affordable prices.

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Conclusion
In the end, this can be concluded that M and co. Company deals with different opportunities and
threats that have been witnessed in the business environment of the company. The
competitiveness of the clothing industry is very intensive. In addition, the survival and success
factors of the company are discussed. The business model of the company is explained which
shows the major operations of the business. The value chain and VRIN model is included which
shows the analysis related to the activities and resources of the company.

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References
Baker, M. J. (2014) Marketing strategy and management. London: Palgrave Macmillan.
Chernev, A. (2018) Strategic marketing management. Chicago:Cerebellum Press.
David, F.R. (2011) Strategic management: Concepts and cases. India: Pearson/Prentice Hall.
Dawson, J.A. (2014) The Marketing Environment (RLE Marketing). New York: Routledge.
Frynas, J.G. and Mellahi, K. (2015) Global strategic management. USA: Oxford University
Press.
Grant, R.M. (2016) Contemporary strategy analysis: Text and cases edition. New Jersey: John
Wiley & Sons.
Hendriksz, V. (2017) M&Co eyes up expansion as annual profits climb [Online]. Available
from: https://fashionunited.uk/news/retail/m-co-eyes-up-expansion-as-annual-profits-climb/
2017090425711 [Accessed on 3rd March 2018]
Ho, J.K.K. (2014) Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), pp.6478-6492
M and Co. (2018). M&Co [Online]. Available from: https://www.mandco.com/ [Accessed on 3rd
March 2018]
M and Co. (2018). M&Co Loyalty Card [Online]. Available from:
https://www.mandco.com/loyalty-card/loyalty-information.html [Accessed on 3rd March 2018]