Marks & Spencer's Expansion in Portugal

This assignment examines the feasibility of Marks & Spencer expanding its business into Portugal. It analyzes the current business environment in Portugal, identifying key factors such as consumer behavior, competition, and environmental regulations. The report suggests strategies for M&S to overcome challenges and successfully establish a presence in the Portuguese market, including conducting thorough market research, adapting products to local needs, and building strong brand loyalty.

Bsc assignment

Table of Contents
INTRODUCTION...........................................................................................................................1
Overview of the organization......................................................................................................1
Overview of the country and its market conditions....................................................................2
Issue in expanding the business in Portugal for M&S................................................................5
Suggestions to over come the issues...........................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
M&S is a leading clothing and food brand of the United Kingdom. The company is
wiling to expand its business in Portugal. Present report discusses about organisation's overview
and it strength and weaknesses. Further more, the report covers pestle and porters five forces
analysis of the country for identifying it market condition. Expansion issue and suggestion to
over come these issues have been discussed.
Overview of the organisation
Marks and Spencer is the most popular brand of clothing in the United Kingdom. It is
multinational retail company which has it headquarter in London (M&S . 2017). The
organisation sells clothing and home products. The enterprise is having more than 1200 stores
around the world. It stores are across Asia, Europe and middle east. It is a leading multinational
clothing brand in the country and it has successfully expanded in more than 40 countries. The
company is renowned for its luxury products and grocery services (Angeletti and eds., 2013).
The company was founded in 1884. In the year 1998 company has became the first retailer
organisation of Britain to earn profit of euro 1 billion. At present the business of organisation is
going well and it has more market share globally compared to its rivalries compared to its
rivalries. Sales of company in various countries like Greece, Czechoslovakia and Ireland is less
than other countries. Although M&S has enhanced it sales in other countries. Food segment of
the organisation is also generating high revenues. It can easily expand in new areas because it is
having strength of high brand popularity. SWOT analysis is a tool used to determine the strength,
opportunities, weaknesses, and threats for the organisation. Below is the SWOT analysis of the
Marks and Spencer's is as follows:
Strengths
M&S is one of the most popular retail company. It is highly recognized brand by it
consumers (Hamilton and Webster, 2015). The company makes wide variety of products and
services. Products of M&S perceives money value due to which it provides high quality
products. The company is having more than 100 stores which shows high strength of the
company. The organisation is having more than 80000 employee globally.
Weaknesses
The company is getting strong competition from other retailing firms. It also has limited
market share in the global market. Since the brand is very popular it has to protect its product
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form fake imitators. The company is having bad publicity in the market as its cloth products are
out of fashion and non fashionable.
Opportunities
Marks and Spencer's has recently launched its website on which people can buy products
online. New markets segments have been introduces by the organisation which will help them in
generating more profit. There are opportunities for the brand to expand its brand in other
countries of the world. In market segmentation they are splitting their customers to increase the
consumer base of the organisation.
Threats
The major threat to the organization is other retailing companies because these firms are
offering products at discounted prices. Since the organisation is a global retailer it is exposed
highly to political threats and corruption (Godinho and et.al, 2016). Government policies can
highly impact the brand. Increased competition in retail sector is the biggest threat for the
company.
Overview of the country and its market conditions
Mark and Spencer's is planning to expand it business Portugal. Before expanding its
business company has to research out the market condition of the country. This can be done by
using PESTLE analysis tool. PESTLE analysis PESTLE analysis is tool used to identify the
current political, economical, social, technological, legal and environmental conditions of the
country. Below is the PESTLE evaluation the Portugal:
Political factors
Political conditions of the country is not stabled. Instability is due to adversity in
economy in the region. Global crisis in economy in the year 2009 has majorly impacted the fiscal
condition. Shortfall of 10 percent was recorded in the year 2010 (Bah and Fang, 2015). Economy
of the region has showed annual deficit in year 2012. The major problem in the country are high
debt, trade problems and inferior growth in GDP. All these rates are levied by government of the
country. Corruption is also the major problem which can impact the business of Marks ans
Spencer's. High taxes are levied by government on clothing and food products which can
influence the expansion of M&S in Portugal. However, there have been much improvement seen
in the political conditions of the region. Government is trying to decrease the tax on some
products.
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Economical factors
Some positive improvement has been seen in labour market of the region. Rate of
unemployment is expected to decrease. Economic condition of the country is quite stable due to
which inflation will remain low in the country (Emslie, S.D. and et.al, 2015.). Economy of the
country was hit by financial crisis of 2009. Modest growth in the economy has been recorded in
the year 2010. Trade and services rate in the country is 74.5 percent which can affects the
business of M&S. The food and cloth industry of the country contributes moderately to the GDP
of the country.
Social factors
Social factors represents value and culture of the people living in the country. There are
various social laws in the country which can impact the business of Marks and Spencer's. People
of the region prefers wearing traditional garments and stocking caps. They give preference to
low cost products and services which are affordable . These factors must be consider by M&S
before expanding its business in the country. Socio culture phenomena of the country involves
lobbies and fashion. There are various acts in the country regarding social and culture values.
These rule must be complied by the M&S before expansion.
Technological factors
The country is well developed in the field of technology. Companies existing the country
are focusing on innovation in their product by making use of technology. Improvement in
technology is increasing rapidly which can help M&S to take advantage of it. Government of the
country restricts advertisement of any product which is the biggest disadvantage for the
organisation. Internet users in the country are very number. M&S can take advantage of this by
publicising its brand on social media platform. Good transportation facilities are also available in
the region.
Environmental factors
There are various environment laws made in the country which can affects the business
functions of the region. Now a days every country is focusing on less carbon footprint. This
should be considered by M&S before expansion. Company should make products which do no
impact environment in any ways.
Legal factors
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Country is having various legal norms regrading nay new business opening . Registering
a new firm in the country requires time of 2 months approximately. So this factor can impact the
business expansion of M&S.
Porters five forces analysis is a tool used to determine current competitive environment in the
country regarding business. M&S is planing to expand it business in Portugal (Ferreira and
Ferreira, 2016). This tool can support company in determining the bargaining power of buyer
and consumers, threat of substitutes and competitive rivalry in the region. Porters five forces
analysis is as follows:
Threat of new entrants
Threat of new entrants is medium of the company as Portugal is having less number of
clothing retail companies. It requires large amount for any business in retail industry of the
country. Marks and Spencer's has hight brand popularity due to which consumer attraction to this
brand is more (Godinho, and et.al, 2016). The company also provides services and products at
discounts which is helping it to become competitive.
Threat of substitution
Threat of substitution by other brands for M&S is relatively high. Existing companies in
the Portugal are making innovation in their products. So M&S has to make innovative products
and services. Food business of the country already getting overtaken by big enterprises. So
innovation in its food products is also required to remain competitive.
Bargaining power of Buyers
Power of consumer is significant for M&S. Consumers of the country are price sensitive
which can force the retail company to lower downs its prices (Hamilton and Webster, 2015).
Consumers have various options to switch form one bran to another. The company has to build
loyalty among it consumers. Customer loyalty would significantly impact the profit of the
organisation.
Bargaining power of suppliers
Supplier bargaining power for the company is relatively low. Suppliers of the Portugal
are highly dependent for delivering their raw material to these companies. So they are highly
reliable. Switching cost for a supplier is very high which in turn make the bargaining power of
suppliers low.
Competitive rivalry
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Rivalry form existing firms is very high for the company as there are various retailer
companies are present in the country (Angeletti and eds., 2013.). Online buying competition is
increasing rapidly as the country is developing continuously in the field of technology. Though
M&S (Wilson, 2016. ) has built up it website form which consumers can buy online . This can
help company to reduce this competition form other firms. Customer loyalty and rewards can
also help company in reducing this competition form rivalry firms.
Issue in expanding the business in Portugal for M&S
 Company will face the issue of poor political conditions in Portugal. Corruption and high
taxation problem can impact the expansion of business. High taxes are levied by
government on clothing and food products which can influence the business of the
organisation.
 There is a issue of bad brand image for the company which can impact its functional
activities of business. Organisation can also face the issue of strong competition form
rivalry firms.
 Consumers of the country prefers products which are affordable and of high quality. So
company can face the problem of making product according to the need and expectations
of the consumers.
 Country has recently faced economic crisis which can influence the expansion of the
business of Marks and Spencer's (Godinho and et.al, 2016).
 There are various acts in the country regarding social and culture values. These cats and
rules can hinder the growth of the business in the country. Rule made by government are
very strict which can be barrier for the organisation.
 Company is having major threat from other existing retailer organisations which is also a
big issue for the M&S (M&S . 2017). Government policies can highly impact the brand.
 Organisation can face the issue of high bargaining power of consumer. Power of
consumer is very high in the country and they can easily switch from one brand to
another. This is also a major hurdle in expansion of the business.
 The issue of environment protection is also associated with expansion of the company.
There are different environment laws made in the country which can affects the business
organization functions of the location.
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Suggestions to over come the issues
 To over come the issue of high taxation in the country company can increase its
profitability so that it can make balance between revenue and taxes.
 Reputation issue of the brand can be solve by company by making high quality and
affordable products. Customer base can be increased through promoting brand at various
platform in the region.
 Company have to increase its product quality by making product according to the need
and expectations of consumers. Brand loyalty would increase this way which can help
M&S to enhance it profitability in the country .
 Competition from rivalry firms can be reduced by making product different fork others.
 Power of consumers can be lower down by the M&S by offering various discounts on
products so that it can attract more consumer sin Portugal. In this way company can
successfully expand it business in the region.
 To over come the issue of environmental polices organisation can make products which
are environment friendly and do not harm environment in any ways.
CONCLUSION
Summing up the above report it can be concluded that Marks and Spencer's can expand
its business in Portugal by conducting proper market research of the country. It is required that
company should take into account all the external factors of the place.
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REFERENCES
Books and journals
Angeletti, G. and Bjørseth, A. eds., 2013.Organic Micropollutants in the Aquatic Environment:
Proceedings of the Sixth European Symposium, Held in Lisbon, Portugal, May 22–24,
1990(Vol. 13152). Springer Science & Business Media.
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.
Emslie, S.D. and et.al, 2015. Chronic mercury exposure in Late Neolithic/Chalcolithic
populations in Portugal from the cultural use of cinnabar.Scientific reports. 5.
Ferreira, M.P. and Ferreira, J.G., 2016. The impact of selected institutional environment
dimensions of sub-Saharan countries on their ability to attract foreign direct
investment.Apresentação,. 11(1). pp.21-36.
Godinho, S. and et.al, 2016. Assessment of environment, land management, and spatial variables
on recent changes in montado land cover in southern Portugal.Agroforestry systems. 90(1).
p.177.
Hamilton, L. and Webster, P., 2015.The international business environment. Oxford University
Press, USA.
Wilson, D., 2016. Marks & Spencer: the quest to master the new millennium.The Business &
Management Collection.
ONLINE
M&S . 2017. [Online]. Available through: <http://www.marksandspencer.com/>. [Accessed on
8th July , 2017].
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