Competitive Environment Analysis of Marks and Spencer

This assignment analyzes the competitive environment of Marks and Spencer using Porter's 5 Force analysis model. It also examines the inbound logistics, operations, and outbound logistics of the organization. Key value adding activities are identified.

MANAGING INFORMATION AND
TECHNOLOGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................2
Competitive environment analysis of Marks and Spencer..........................................................2
Porter’s 5 Force analysis..............................................................................................................2
Analysis of inbound logistics, operations and outbound logistics...............................................4
Analysis of human resource management and firm infrastructure..............................................5
Identification of key value adding activities................................................................................6
REREFENCES................................................................................................................................9

INTRODUCTION
Overview
Due to advancement in technology today it has become extremely important for
organizations to adopt and implement advance information technology within the organization
for growth and development of an organization for this it is important for organizations to
analyse their internal and external environment. This assignment will lay emphasis upon
introduction and background information about marks and Spencer organization, analysis of
competitive environment by applying Porter’s 5 Force analysis model. In this assignment
analysis of primary and supportive activities of the organization with the help of Porter's Value
Chain model will also be done and lastly ways in which information technology can be deployed
within the business will also be analysed.
Organization Introduction
‘Marks and Spencer’ is a multinational British retailer that was founded in 1884 whose
main Headquarter is in London, England, UK. It is a public limited company that operate
globally and are focusing upon expanding further more. This organization was founded by
Michael Marks and Thomas Spencer together (Marks and Spencer about, 2020). Currently Marks
and Spencer have their stores in more than 1487 locations. Out of these 1043 stores are located in
UK itself and rest of the 444 stores are present at other locations all around the world. They have
employees approximately 80 thousand employees working for them. For of these 80 thousand
approximately 70 percent are of the employees are female employees. In 2019 their overall
revenue was £10,377.3 million.
Background information of the organization
This organization was started by partnership of Michael Marks who had migrated to
England in 1880 and Thomas Spencer who was a cashier from English market town. In 1884
Marks acquired a permanent stall in the Leeds covered market and invited Spencer to become his
partner. From their marks and Spencer was started. In 1903 they acquitted a pair of stalls in
central aisle and opened Penny Bazaar. In early 20th century by selling British made goods they
build a reputation and their business started growing. Till 1970’s they had continued to expand
domestically but in 1973 they focused upon expanding internationally and opened approximately
47 stores internationally. But in 1999 approximately 38 shops were closed due to losing money
in Canadian operations.
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Products and services of the organization
Marks and Spencer specialize in selling home products, food products and clothing’s. In
2008 they also started selling Kellogg’s Corn Flakes. They provide clothing products for all age
group people and for men, women and kids. They are also known for providing quality and fresh
food products. Other than these they also have Marks and Spencer Bank subsidiary which is
owned by HSBC bank since 2004 (Marks and Spencer about, 2020).they have other Brands such
as Per Una, Autograph, Limited, Rosie, Blue Harbour, M&S Collection, and M&S Energy.
Marks and Spencer bank provide financial services to people including services such as credit
cards, current accounts and savings, insurance and mortgages. marks and Spencer Energy focus
upon providing renewable electrical energy to people.
MAIN BODY
Competitive environment analysis of Marks and Spencer
A competitive environment is an environment in which an organization compete with other
organizations in order to gain competitive advantage. Today due to increasing competition it has
become extremely important for organizations to analyse their competitive environment and
develop their organizational strategies accordingly (Kurnianto and et. al., 2019). There are
various kinds of models that can be used by organizations for analysis of their competitive
environment. One of the most common models that can be used for analysis of competitive
environment is Porter’s 5 Force model. It is one of the most appropriate models that can be used
for analysis of competitive market and environment in which Marks and Spencer operate.
Porter’s 5 Force analysis
Porter’s Five Forces Analysis is a model that was defined by Michael E Porter. It is a
kind of strategic management tool that can be used by companies for analysis of their
competitive landscape. This model focuses upon five significant forces that can impact an
organization’s profitability and operability. Five forces upon which this model focus are: Threat
of New Entrants, Bargaining Power of Suppliers, Bargaining Power of Buyers, Threat from
Substitute Products, and Rivalry among the existing players. This model can be used to analyse
the competitive environment in which Marks and Spencer operates and ways in which these
external factors can impact their business.
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Threat of New Entrants: Marks and Spencer have lower threat of new entrant because of
various reasons. First and the foremost reason is that in order to establish a new entrant require
high capital investment. Other than this in order to sustain within the market they require
implementation of a new and innovative idea. Not only this, new entrant also required high
economies of scale in order to sustain within retail market. Retail sector is one of those sectors in
which competition is extremely high and there are many top players that have already established
themselves in this industry (Scott and Walker, 2017). Due to this factor it becomes difficult for
the new entrant to compete and sustain within this environment and as a result. Marks and
Spencer is one of the top organization that operates in this sector and have high loyalty among
their customers due to which it becomes even more difficult for new entrants to sustain within
this market due to which threat of new entrant for marks and Spencer decreases.
Bargaining Power of Suppliers: Till 1990’s when more than ninety percent of suppliers of
Marks and Spencer were British, then at that time their Bargaining power of suppliers for them
were high. But now they work with more global suppliers who offer them much more low and
competitive prices because of which threat of Suppliers for them decreases. Due to this factor
control of suppliers over prices decreases. Not only this, today there are a greater number of
suppliers available for Marks and Spencer’s because of which switching cost for them from one
supplier to other also decreases. These are some of the main reasons because of which threat of
this force reduces.
Bargaining Power of Buyers: Retail sector is one such sector in which bargaining power of
customers is extremely high. Switching cost from one brand to another brand is extremely lower
for customers or buyers due to which threat of this force increases. This is majorly because there
are many organizations in this sector that provide substitute products in competitive prices. It is
quite easy for the customers to switch from Marks and Spencer to another brand as switching
cost is extremely lower. Choice for buyers in this industry is high as there are many big or small
firms that provide high quality products in lower prices for their customers because of which
threat of this factor increases (Wilson, 2016). Due to this it becomes important for Marks and
Spencer to maintain high quality of their products and focus upon product differentiation as
today most of the buyers focus upon buying products that have high quality or want to purchase
products with more features or are different from other substitute products. Not only this, in
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order to maintain their customer base other than this, Marks and Spencer also need to focus upon
providing products and services to their buyers at lower cost.
Threat from Substitute Products: Threat of this force is also high as there are many substitute
products available in the market. Marks and Spencer operate in an environment in which it is
extremely important for organizations to focus upon innovation and fulfil ever changing market
requirements in order to gain competitive advantage and maintain current customer base. Marks
and Spencer need to focus upon product differentiation and price of their products with high
quality so that threat of substitute products can be decreased. Due to increasing competition
preference of customers is shifting continuously (al Habibi, 2019). If customers find similar
products then on the basis of three factors, they take buying decision such as quality, new
features and price. There are four major super markets that provide similar products as Marks
and Spencer such as Tesco, Asda, Sainsbury's and Morrison's because of which threat of
substitute factor increases.
Rivalry among the existing players: Threat of this factor is also high. The industry in which
Marks and Spencer operates have competition. This competitive force in this industry is so
strong that it can impact overall profitability and growth of an organization in many ways. Marks
and Spencer face intense rivalry in this industry especially from four major competitions that are:
Tesco, Asda, Sainsbury's and Morrison's. These four competitors provide similar clothing
products as marks and Spencer. In this industry many organizations are focusing upon providing
online sales services with free home delivery service in order to gain competitive advantage. Due
to this reason competition among existing players also increases. In order to attract more number
of buyers or customers every existing competitors focuses upon providing differentiated products
to their Customers.
Analysis of inbound logistics, operations and outbound logistics
Inbound Logistics
This activity includes receiving, storing and distributing materials. This is first step in the
production of the products because this includes receiving the material which is required for
operations and is used as input in the products. This requires M&S to build strong relationship
with suppliers so that material can be acquired at best price available and material can be
supplied whenever M&S requires that. In relation with its inbound logistics M&S has won GBS
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award for sustainable supply chain. Supply chain is important part of logistics and with
increasing focus on sustainability of the environment M&S has take step to do so (Koc and
Bozdag, 2017). This reflect that this activity is an value activity for the M&S contributing in its
sustainability and also improving its image.
Operations
Operations are concerned with operational activities that an organisation gets indulge in.
M&S is continuously working on improving customer experience. M&S is working towards
increasing visit and spending of customers through inspiring and effortless experience. This is
the kind of experience in which teams are trained and rewarded for. Regarding its online
operations M&S is working on improving its IT system to improve which also improves supply
chain management. Operations in relation with M&S refer to its store and retail activities and
operations. This is very important activity and quality of the product and service depends mainly
on quality and efficiency of this activity.
Outbound Logistics
This activity involves when finished goods are supplied and in context of M&S this
means delivering the product to customers. In other words, this is mainly concerned with
collection, storing and distribution of products to customers. M&S provides several option
through which customers can shop with M&S. these are in-store, home catalogue, online and
click and collect option for shopping. Along with this M&S is also investing in warehousing and
focuses on merging smaller warehouse so that distribution supply chain can become more
efficient. This activity is very important for M&S because especially success of its online
business depends on this activity and how efficiently firm can deliver products to the customers.
Analysis of human resource management and firm infrastructure
Value chain of the company includes primary and supportive value activities. Value
activities discussed above suggests some of the activities which are primary value activities
which means are they are most important in carrying out business functions (Amara, Halilem and
Traoré, 2016). Supportive activities are that activities which facilitate primary value activities.
Human resource management and firm infrastructure are two of the supportive activities.
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Human Resource Management
This is an important supportive activity because M&S cannot perform its any primary
activity without support of human resource management. This is important that M&S effectively
manage its human resources in order to get most benefits of knowledge and experience and skills
that are possessed by the human resource employed in the organisation. This activity involves
several other functions which involve recruiting, hiring, training, developing and retaining
human resources in the organisation. There are several ways to analyse effectiveness of this
activity and M&S can do that. M&S employs best employees and candidates available in the job
market. This is followed by giving adequate and effective training to employees in order to
develop their complete potential for the job. Presently IT is also being used in carrying out this
activity and there are several ways in which M&S can recruit employees such as through job
portals allow to find required type of candidate. Regarding selection telephonic and conference
interviews removes all the unnecessary hassles of interview.
Firm Infrastructure
This is concerned with legal, financial and management structure which help organisation
to grow and facilitate all the functions. Financial resources and proper structure is important so
that M&S can properly invest in required activities and this also needs to be properly managed so
that organisation does not experience shortage of finance (Evans and Mason, 2018).
Infrastructure is also important so that all resources can be adequately utilised and this also
ensures that resources does not get wasted. M&S also requires to maintain its stores because they
are used in form of its firm. Its operations and efficiency both gets affected by the way in which
M&S stores are managed and organised.
Identification of key value adding activities
In context of M&S format of value activities is different because these activities are
mainly concerned with manufacturing firms and M&S is a retail organisation. Value chain
analysis is divided in two types of activities and these are primary which means activities which
are completely based on the core business activities (Thuku and Kombo, 2019). Supportive
activities are those with help of which primary activities and core business activities are carried
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out. Among all the activities discussed and mentioned above in context of M&S the activities
which are key value adding activities are;
Inbound Activities, inbound activities includes receiving storing and supplying inputs for
the operations. M&S involves very effective and efficient practices for inbound logistics in terms
of its sustainable supply chain. This is important in many ways as this ensures long term success
of M&S and also contributes in its share in environment sustainability. This is environmentally
sustainable and also important for success of the M&S in long term. But along with these it also
has helped in improving image and reputation of the M&S. this is because firms who are
involved in environment friendly practices enables themselves to build goodwill and enhance
their reputation. This is because this reflects that firm is environmentally responsible. Another
activity which is key value adding activity is human resource management. This activity is value
adding because efficiency in all other activities is based on competency of human resource
management and its practices (Iftikhar, Pourzolfaghar and Helfert, 2019). Competency of human
resource is based on how they are managed by M&S and then what practices are employed to
ensure that they perform to best of their capacity. This is why this is another value added activity
of M&S.
Summarise and reflection
From the above data, it has been interpreted as the more level of advancement in the marketing
environment have been considered as extremely important for organizations. This is helpful in
gaining more level of advance information technology which will succeed growth and
development. As per the performing of the internal and external analysis, it tends have been clear
that firm is making the sever level of collaboration and development to focus upon innovation
and fulfil ever changing market requirements in order to gain competitive advantage and
maintain current customer base (Bhati and Trivedi, 2016). The firm have also displayed the
series level of grace for providing the financial services to people including services such as
credit cards, current accounts and savings, insurance and mortgages. In addition, the firm have
succeeded in focus upon providing renewable electrical energy to people. Porter’s Five Forces
Analysis have turned out to be significant forces that can impact an organization’s profitability
and operability. This have made the Marks and Spencer with high quality of their products and
focus upon product differentiation. On the other hand, the today world best scenario as today
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most of the buyers focus upon buying products that have high quality and high technological
development to purchase products with more features which are evaluated to be different from
other substitute products. For the porter five force model it has been analysis that’s the company
have the intense rivalry in this industry especially from four major competitions that are: Tesco,
Asda, Sainsbury's and Morrison's. These four competitors provide similar clothing products as
marks and Spencer. So it is very important for the firm to have major focus innovation and fulfil
ever changing market requirements in order to gain competitive advantage and maintain current
customer base. So it is important for the company to have the adaption of Enterprise resource
planning (ERP) is the integrated management of main business processes, often in real time and
mediated by software and technology. This will be helping in out to have the pertinent data and
software system so that’s the respective employees can have the access the information which is
needed to do the job (Pohludka, Stverkova and Ślusarczyk, 2018). In order to be informative for
the company to gains the significant competitive advantages have the proper level of involving
of the formation of a central database that works as a repository for information originating in
different parts of the business.
As the part of benefits, it will be helping out in the maintaining of higher level of productivity in
order to does more with fewer level of organization and better level of insights. The better level
of use of information technology will be helping it out in the accelerated reporting and fast track
business and financial reporting in order for easily sharing the results. This will be also helpful
in attracting a greater number of buyers or customers every existing competitor focuses upon
providing differentiated products to their Customers.
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REREFENCES
Books and Journals
al Habibi, B., 2019. HR practices of Marks & Spencer, Selfridges, Primark, and
Sainsbury’s (Doctoral dissertation, University of Science & Technology).
Amara, N., Halilem, N. and Traoré, N., 2016. Adding value to companies' value chain: Role of
business schools scholars. Journal of Business Research. 69(5). pp.1661-1668.
Bhati, P.S. and Trivedi, M.C., 2016, February. Applicability and Impact of ERP: A survey. In
2016 Second International Conference on Computational Intelligence &
Communication Technology (CICT) (pp. 28-31). IEEE.
Evans, B. and Mason, R., 2018. The lean supply chain: managing the challenge at Tesco. Kogan
Page Publishers.
Iftikhar, R., Pourzolfaghar, Z. and Helfert, M., 2019. Omnichannel value chain: mapping digital
technologies for channel integration activities.
Koc, T. and Bozdag, E., 2017. Measuring the degree of novelty of innovation based on Porter's
value chain approach. European Journal of Operational Research. 257(2). pp.559-567.
Kurnianto, A.M., and et. al., 2019. Marketing Strategy on the Project Planning of Retail Business
for Garage Shop. International Journal of Multicultural and Multireligious
Understanding. 6(1). pp.217-228.
Pohludka, M., Stverkova, H. and Ślusarczyk, B., 2018. Implementation and unification of the
ERP system in a global company as a strategic decision for sustainable
entrepreneurship. Sustainability, 10(8). p.2916.
Scott, P. and Walker, J.T., 2017. Barriers to ‘industrialisation’for interwar British retailing? The
case of Marks & Spencer Ltd. Business History. 59(2). pp.179-201.
Thuku, N.W. and Kombo, H., 2019. Effect of value chain management practices on peformance
of medium and large scale retail outlets in Nakuru County, Kenya. Hypothesis. 11(14).
Wilson, D., 2016. Marks & Spencer: the quest to master the new millennium. The Business &
Management Collection.
Online
Marks and Spencer about. 2020. [Online]. Available Through: <
https://corporate.marksandspencer.com/aboutus >
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