Pestle Analysis of M&S: Strategies and Recommendations

This report provides a detailed analysis of the macro environment of M&S through Pestle analysis. It discusses the political, economic, social, technological, legal, and environmental factors that impact the company's operations. The report also explores the strategies and tactics used by M&S to gain a competitive advantage in the retail industry. It provides recommendations for the company to maintain its strengths and capitalize on opportunities for future growth.

Project
TABLE OF CONTENT

INTRODUCTION.......................................................................................................................................3
Company Background.................................................................................................................................4
Pestle analysis..........................................................................................................................................4
Porter five forces.....................................................................................................................................6
Strategies and Tactics:.............................................................................................................................7
Tactics:....................................................................................................................................................9
Recommendations.......................................................................................................................................9
CONCLUSION.........................................................................................................................................10
REFERENCES..........................................................................................................................................11
INTRODUCTION
External environment of business scenario is highly important to consider while
formulating business expansion decisions, structuring the diversification into different sectors

and long term profitable revenue scales. M&S is one of the biggest retail company headquartered
in UK, with large portfolio of goods and services and has high goodwill among customers
around world. This report explains the various factors of macro environmental analysis which
can be analyzed through Pestle model, porters 5 forces where all elements are structured in
impactful way. It also explains tactics and strategies through which company can run into large
diversification and upgrade it revenue scale with high customer market share goodwill. The
report also provides recommendations through which company gain become potentially wide,
leverage high quality targets and become more effective towards business services. This report
gives detailed analysis on all arenas of macro environment, external forces which imply
management to become more productively active.
Company Background
Marks and Spencer is one of the biggest retail multinational company with headquarters
in London, offering high quality products in form of clothing, food items and home décor
products. The brand has established strong goodwill among people around the world, as it has
diversified high quality standards. It has stores and outlets in all countries around the world
where people have been highly appreciating the various products and services offered by brand,
leveraged strong legacy among people and has partnerships with various global brands and
companies. The management of M&S focuses on external forces as well as internal forces which
impact their functional operations through various levels and also variably diverges the
profitability goals (Tung,Ernstoff,Allen and La Shu,2019). Company has high capital funds and
investment opportunities for further business scale decisions which can be used for strategically
planning expansion into untapped countries market share areas. M&s clothing apparels are
strongly demanded by people around the world, due to high quality maintenance factors, strong
customer satisfaction services and the innovative designs brought up in fashionable structure.
The company has been strongly supportive in performing social responsibilities around world
and completing ethical business standards with high prominent services and determinants of high
profitable scale revenues in future. M&S has factored various elements of creativity and dynamic
business models which enable businesses to serve with strong ethical financial standards and
reach new segments of customers around world. The products and services of company are

available on various clothe shopping portals and websites through which people can reach out to
company management for feedback and grievances.
Pestle analysis
M&S business across UK can be analyzed by the fact that company has around 1000
stores in the domestic market which makes it highly competitive and structured, with high
reputation among public. Globalization has implemented various expansions of business
decisions into many counties and people around world have highly appreciated the quality
standards offered in stores. However further diversification into untapped countries needs to be
done with analysis on external macro environment, where various elements explain the strengths
and opportunities which can be vitally used for long term growth. These factors are as follows
(Clarke,2019) :
Political factors: Brexit decision of United Kingdom to leave European Union is one of the most
important factors which will impact M&S operations and further stability element along with
future revenue profitability scale. There is high unstable political scenario due to high tariff rates,
increased taxes of goods on export in European countries which is strong market for company as
there lays many stores and high goodwill among customers. These factors result in numerous
loss of free trade policies and ultimately increase in product cost, which affect customers
purchasing behavior on various levels.
Economical factors: The disposable income among public to use on shopping varying on
economic stability scenario of country where company invests for further expansion is also an
important factor impacting further revenue margins. M&S must maintains stable economic
pricing strategies for people affordability and strongly maintain equal balance between demand
and supply through which they will be able to construct their business for long term profitability.
Social factors: The changing preferences of customers to have innovative clothing apparels, high
quality standards are some of the most important social factors which affect company goodwill
among people in comparison with other brands and companies. M&S highly focuses on
maintaining strong parameters of social factors by bringing in latest fashionable trends of
clothing apparels and technological equipments which enable to get strong quality standards. The
company management is highly active to bring creativity in its portfolio and innovation through

customer satisfaction services on portals and websites (Kwak,Anderson,Leigh and
Bonifield,2019).
Technological factors: The technological factor of macro environment is one of the most
important external factor of dynamic business culture, where the new advanced technology and
machinery equipments used for production enables company to get more higher revenue profits.
M&S focuses on building this potentiality by investing in to bring more high equipped
machinery, tools and technology for speeding up the production process with cost effective use
of resources. Through this factor M&S will be able to cultivate high efficient operational
structure and regulate its business more strongly in comparison with other brands and companies.
Legal factors: M&S has to follow various legal responsibilities for starting their business with
expansion into new countries which are highly important for being ethically responsible towards
legal operations. The legal factors of company maintain strong parameters to follow all legal
responsibilities and various determinants are dynamically structured to have positive impact on
external force. Through compliance of legal factors M&S will be able to present itself as high
competent brand image globally, keenly become more responsible and potentially become
stronger (Curtin,2019).
Environmental factors: M&S focuses on marinating strong environmental factors which are
highly relevant to follow in the changing business scenario, where climate change is real issue
for people around the world. The environmental factors followed by company can be analyzed
by factors that M&S has been using eco-friendly ways in producing garments in production
department and using reusable products as stationery items for operations. Company has various
partnerships with charitable organizations where surplus production is sent by M&S on regular
periods, which helps society as well as improve brand image on global market.
Porter five forces
It is strategic framework that helps in analysing and evaluating level of competition in the
industry such as power of buyers, consumers, existing competition and threats of new entrances.
Company in order to gain competitive position in the market uses porter five forces to formulate
various strategies so that firm can achieve its desired goals and objectives (Aithal, Shailashree
and Kumar, 2016). Porter five forces framework is used by Marks and Spencer’s in order to

formulate appropriate strategies to gain competitive positioning in retail industry and expands its
market share. Therefore porter five forces of Marks and Spencer is as follows:
Rivalry among existing competitors: As Marks and Spencer’s operates in retail industry there
are large number of competitors that offers similar products and services to satisfy needs of
customers. Such as Tesco, ASDA and ALDI are some of the competitors that operate in retail
industry and offers similar products to customers. Therefore rivalry among customers is high but
company by maintaining its quality and continuous innovating products is able to attract large
number of customers.
Power of buyers: It refers to bargaining power of buyers as there are large numbers of retailer in
UK offers wide varieties of products so buyer bargaining power is high in retail industry. At the
same time consumers are highly price sensitive so it forces companies to reduce their price
(Murphy, 2016). Therefore Marks and Spencer by offering qualitative products and services is
able to charge competitive pricing from customers.
Threats of new entrance: New companies cannot easily enter into retail industry as large
number of investment is required to start business and numbers of retailers are also high so they
have to face high competitions. Marks and Spencer has also created barrier for new entrance by
building strong brand image and developing and maintain customer’s satisfaction and loyalty.
Therefore, threats of new entrance are low in which industry company operates its business.
Power of sellers: There are large numbers of supplier in retail industry so power of supplier is
low in which Marks and Spencer operate its business. It can easily purchase products from
number of supplier at lower prices as it has strong brand image and large market share. Company
also maintain strong relationship with supplier so that it can meet demand of customers within
limited time and cost.
Threats of substitute products: It can be stated that threats of substitute product is high as there
are companies that provide similar products at reasonable rates. But Marks and Spencer focus to
provide highly differentiate and unique products in order to charge competitive pricing from
customers (Kiseli, Senaji and Eng, 2016). Thus threats of substitute products and services is high
but company by patents its technologies and products and maintain its quality is able to satisfy
need of customers in most effective manner.

Strategies and Tactics:
Firms formulate strategies and tactics in order to gain competitive positioning and increase its
market share by influencing customers to prefer products and services of particular company.
Marks and Spencer also formulate strategies and tactics in advance to influence people and
increase its market share. Strategies refer to plans that helps company to attain specific goals by
targeting customers, setting objectives and deciding positioning in order to attract large number
of people to purchase products of Marks and Spencer’s (Laskowska, 2016). Whereas Tactics
explains exact way to achieve desired goals such as M&S has use 7p’s of marketing to influence
customers and effective build organisational structure so that company can easily and quickly
meet customers’ needs. Therefore various strategies formulated by Marks and Spencer are as
follows:
Objectives: It refers to goals and objectives that firm need to achieve within limited time and
cost by framing various strategies and tactics such as:
 Marks and Spencer is planning to increase its sales volume by 20% by satisfying
needs of customers.
 To increase market share by 10% by launching organic products range till 2020.
 To build rebuild brand image by 2021 in order to attract younger generation and
increase its profit margin.
Segmentation: Marks and Spencer has classified people on basis of gender, age, income and
demographical structures of the country. Company has also classified on basis of
physiographical behaviour of individual such as its preference, attitude and behaviour. Such as
offers wide varieties of products such as clothing for men, women and kids pertaining to each
age group (Fildes, Murphy and Porter, 2019). Therefore able to meet needs and demand of each
segments and increase its market share by providing qualitative and number of products range.
Target: On the basis of above segmentation firm has target its customer’s base so that it can
formulate appropriate strategies to attract such people. As company manufactures high
qualitative products so it target customers are high class people that prefer quality of products
more than prices. Younger generation is another target of company so that it can meet need of
increasing population and increase its sales and profit margin. Therefore, M&S has planned to
attract and influence high class and younger generation mostly to purchase its products. But at

the same time offers clothing for kids, women and adult so target customers of company are all
people that prefer quality of products.
Positioning: Company has effective position its brand image in mind of people by offering
qualitative products and services. There are more than 80000 employees that are working
together for common goals in various stores that are situated across worldwide. There are 959
stores among them 615 only sell food products so customer can easily come and purchase
products of M&S. Online presence also provide comfort to people to purchase products while
staying at their homes so such position strategy helps in increasing sales of M&S.
Tactics:
M&S has use 7’Ps of marketing to influence people to purchase company products in
comparison with other competitors Such as:
Products: Marks and Spencer’s offers wide varieties of products and services so that it can meet
needs and requirements of each customers such as clothing, food and home products. Brand
image of company also helps in increasing sales of products as everyone knows about quality of
products of M&S.
Price: Company has set competitive price for its products as its focus to maintain quality of
products rather than reduce price to attract customers (Bokek-Cohen, 2016). Therefore, quality
and uniqueness of products helps company to charge high price from people.
Place: There are more than 1000 stores that operate across worldwide in high street to provide
large varieties of products and services to customers. Online presences also help in attracting
large number of people to prefer products of M&S.
Promotion: Various promotional offers such as discount on occasion, combo offers and loyalty
card given to customers those purchase products on continuous basis from M&S. It also market
products through social media to attract younger generation to purchase products of firm.
Physical Distribution: Company has various warehouses and distribution channels that help in
distribution and delivery of products to customers. People can also come to stores and purchase
products as per their requirements and preference.
People: Highly skilled and knowledgeable, experienced employees work in company to provide
better and qualitative services to customers.

Process: M&S is a large organisation that has definite process and structure so that employees
can easily perform their activities without any confusion and delay. Good relationship with
suppliers also helps in effective delivery of products to customers within limited time.
Recommendations
The various innovative steps and business strategies which can be implemented within
M&S for maintain internal strengths and opportunities which needs to be integrated for gaining
external environment competency are as follows:
 Employees and management staff needs to be given training sessions, brainstorming of
innovative ideas which will improve performance standards along with quality maintenance.
Customer’s satisfaction services will be greatly improved extensively as people will be
delivered services with stronger standards, it will help company to gain large goodwill globally
(Tian,2019).
 There shall be integration of more creative ideas, innovative fashionable apparels through
which company can build internal strength in the portfolio of products and services, this will
enable M&S to gain brand reputation. The competitive external environment influences
financial outputs and profitability in revenue scales of company, as parameters of creative
functioning is important for companies to leverage new segments of customers.
 M&S by expanding business scale in new untapped countries market share will captivate
potential of competiveness in retail industry, through which company will be able to attract
new segments of customers around world, leverage more profits on long term basis. The global
presence of company is important for structuring strong place in retail industry where there is
high innovative growth and functions are dynamically operated.
 M&S management staff needs to be competent with creative ideas, logical operational
efficiency and build internal functioning with strong focus on dynamic working skills under all
situations. This internal strength is essential for becoming innovative and research
breakthrough will help M&S to be positively impacted from external environment and
influence the long term profitable revenues (Yang,Geng and Feng,2020).

CONCLUSION
From the above report it can be concluded that Marks and Spencer operates in retail
industry which function are affect by internal and external factors of environment. Marks and
Spencer is one of leading company that offers qualitative and unique products in order to meet
needs and demand of customers. Pestle analysis states that there are various factors that promote
growth and success of company but some effect negative on its operation so company by
planning in advance about strategies is able to meet its objectives (Malshe and Al-Khatib, 2017).
It can also be concluded from above porter analysis that Marks and Spencer is able to charge
competitive pricing from people by effective using effective marketing strategies to influence
people to prefer Marks and Spencer as compared to other companies. At last it can be stated that
Marks and Spencer is able to expand is market share and profit margin by providing qualitative
and innovative and unique products and services to provide better customer experiences.
REFERENCES
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