Retailing Strategy Analysis of Marks & Spencer

This assignment requires an in-depth analysis of Marks & Spencer's retailing strategy. Students must examine its current business model, identify its key competitive advantages, and evaluate the challenges it faces in the evolving retail landscape. The analysis should draw upon relevant theories and frameworks, such as the Wheel of Retailing concept, to provide a comprehensive understanding of M&S's strategic positioning.

Retail Theory and Practice

Table of Contents
INTRODUCTION...........................................................................................................................1
Overview of Marks and Spencer......................................................................................................1
PEST Analysis of Marks and Spencer.............................................................................................2
Changes within the Micro Environment..........................................................................................4
Strategies and tactics in adapting changes with influence of macro environment..........................5
RECOMMENDATIONS.................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
In old days, retail market was used to be known as small stores which were delivering
goods and services to consumers as per their needs and wants. But in modern era, these markets
have changed their faces into small shopping malls, supermarkets and etc. Process of retailing
can be understand in many ways like, selling quality goods to consumers as per their neediness
and this can be done through various channels of distribution (The Wheel of retailing concept,
2017). Main motive of these stores is to earn profit by providing commodities as per customers
requirements. In clothing sector, fashion changes in a rapid manner thus, it is mandatory for
these retail stores to adapt those alterations right on time by which they can grab attention of
most of people into their goods and services. Hitting targets in both effective and efficient
manner can lead organizations to catch a leading position in competitive world (Brigham and
Ehrhardt, 2013).
Overview of Marks and Spencer
In British, Marks and Spencer is one of the most famous retailer which was found in
1884 and its headquarter is in Westminster, London. They mainly focuses on selling clothing
products to their consumers. Michael Marks and Thomas Spencer were the founder of these
fantastic retailing stores. Apart from this, they have thousands of sales outlets in all over world.
But, they mostly target Citizens of United Kingdom as they have almost 979 stores in different
states. They are also dealing in food products and have almost 700 stores in all over UK. In the
year of 1998, M& S gone over its limit and earned profit more than a billion and became the first
British retailer to grab this position. This, act attracted most of the small and big investors of
United Kingdom which ultimately leaded M& S to become one of the powerful organisation.
Management of M& S, main motive is to grab the attention of consumers who likes to
wear trendy clothes. Rapid change of fashion is continuously helping them to improvise their
both productivity and profitability. Away from this, they have also trained their employees by
which M& S can sustain at the market for a long period of time. In today’s world, it is essential
for M& S to maintain its goodwill and brand image at marketplace. Because new local retail
stores with innovative are coming in market on daily basis which are giving hard competition.
Company has already given training to their staff members by which long term relation with
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customers can be maintained. It is also, expanding its business at international level in various
countries like China, Germany, Austria, Dutch and etc (Marks and Spencer Group PLC, 2017).
PEST Analysis of Marks and Spencer
This type of analysis shows that how external elements put impact on business of
organisations and these are as follows:
Political : Under this, Government of countries plays an important role, Changes in rate
of taxes, new policies and etc can affect both productivity and profitability of an organisation,
Here, M& S have to find out these alterations that has been made by government authorities and
apply them so that it won’t put any kind of bad impact much on quality of goods and services.
Mostly, these agencies modifies rules and regulations in betterment of economical growth of
United Kingdom. It is essential for authorities of Marks and Spencer to understand policies of
every single country wherever they have its retail stores so that better decisions can be made in
expanding its business (Dalkir and Beaulieu, 2017).
Economical : This factor may put both positive and negative impact on long term
decision making process of Marks and Spencer. As consumers comes from society, it is essential
for management of M& S to form products by looking at their pockets. If a good cost much than
a customer have it in his/her pocket, he/she might not purchase it. Apart from this, foreign
exchange rates can also affect profitability of the organisation because it can directly increase or
decrease rate of a product (Dant, Grünhagen and Windsperger, 2011).
Social : This type of external factor may affect both productivity and profitability of an
organisation. Every county has its own set of culture. Thus, management of M& S have to make
or manufacture goods and services as per different cultural areas. Perceptions of consumers helps
in modifying products. Apart from this, authorities can also find different ways by which they
can target most of consumers so that profit can get raised. These actions can easily give many
sort of advantages to Marks and Spencer at market. Like, gaining benefits in competitive world
Lorenzo-Romero and et. al., (2011).
Technological : This element can be stated as one of the main part which needs to be
taken care from time to time by M& S. In modern era, digitalisation is taking place of many old
tools and techniques which was being followed by industries. It is also must to adapt new
innovations in technology. Factor can easily help M& S in many ways like hitting their targets in
a short period of time than expected. Development is become vital for organisations like M& S
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to sustain in market. Here, automation of various things can give many sort of advantages in
market. Apart from this, it can also loose improve skills and knowledge on employees by which
they can become more effective and efficient at workplace (Sciacovelli and et. al., 2011).
Factors of micro environment and its effects on Marks and Spencer:
Customers: It has been analysed that Marks and Spencer needs to keep on altering
products and services on a regular basis as per needs of consumers. There requirements should
be filled by company if they wants to sustain at marketplace for a longer period of time. This can
be done through market research where they can locate what there competitors are selling and so
on.
Employees: They are the people who works in company in order to earn money so that
they can survive in this world. In Marks and Spencer, workers are said to be an asset for them. If
they hit their own targets on a regular basis it may be possible that firm may give high
competition to its rivals.
Distribution Channels and Suppliers: It has been analysed that Marks and Spencer's
manufacturers depends on suppliers of raw materials as they are the one who on which profit
margins rely on. If supplying has been done in a smooth manner then it won't cost much to M &
S which is related to buying or purchasing raw materials. With the help of this, firm can better
serve to consumers in an appropriate manner (Sorescu and et. al., 2011).
Competitors: Large number of competitors signifies that products and service demands is
high. Companies give rivalry to each other in order to gain competitive advantages at
marketplace. This may include various sort of promotional strategies. If Marks and Spencer is
not giving good rival then it may be possible that its profit margins get reduces.
Investors: When a firm is looking to grow they requires funds and investors are the one
who generates the fund. Thus, it is important for administration of Marks and Spencer to rapidly
influence capitalist in order to hit their goals and objectives. Failure into this, M & S may see
reduction in its brand image and goodwill. Plans should be made in order to convince investors.
By taking on investors, risk is also involved under this as money which was borrowed they have
to repay it whatever the situation or condition of firm (Lorenzo-Romero and et. al., 2011).
Media and the General Public: This can be another factor that can put impact on doing
business of Marks and Spencer. Media can do both appraise or diminish the brand image of this
firm. Along with this, Marks and Spencer should pay its bills, give wages to employees on time
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and pay its taxes as it will enhance its image in front of social world. Failure into this may lead
firm to create backlash in front of public,
(Source: Marks and Spencer, 2017)
Changes within the Micro Environment
Alterations in Micro environment can be understood as consumers needs and wants gets
changes in a rapid manner, or suppliers behaviour. These are the factors which may put
organisations to various sort of losses pr can create positive environment. In today’s world,
customers taste gets modifies from time to time thus it is essential for management of M& S to
understand those changes so that better decisions can be made from time to time with the aim of
improvising brand image at marketplace of the company. In other words, internal elements of a
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Illustration 1: Gantt chart of Marks and Spencer

company can be stated as Micro environment. Different departments of M& S can help
organisation in growing at marketplace. Like, research and development, finance, marketing,
operational section and etc. For an example : R&D subsection can show various ways by which
sale of goods and services of M& S can get enhanced .
Apart from this, adaption of new tools, techniques and technologies within Marks &
Spencer can help in getting gaining advantages at competitive world and can also aid in reducing
workload from manpower. Quality of products should be maintained so that consumers can reach
to their satisfactory level after using it. Taste gets changes of people therefore, it becomes vital
for companies like M& S to analyse those alterations so that modifications can be done. Under
this, competitors also plays a vital role who are selling same sort of products. Thus, it is
mandatory for management to take actions by which they can show their goods and services
different from others.
Policies which has been made by executives in favour of employees can improve
employees relations. Employer and staff members should have proper sort of abstraction so that
suggestions can be given so that better decisions can be made. Motivated workers will give their
best at workplace if they are happy with what their job is. Away from this, management can also
provide many sort of training and development programmes in improvising skills and knowledge
of them. As labour is said to be an asset for every single organisation therefore, it is vital for
management to keep on finding ways by which interest of employees can get increases. Small
change in operations can create huge profit or can make heavy losses henceforth, it is
responsibility of management to find out what is good or bad for them .
Strategies and tactics in adapting changes with influence of macro environment
According to Brigham and Ehrhardt, (2013), approach can be divided into various
elements like, social, cultural, resources, objectives, competition, economic, legal and political
environment. Thus, it is essential for Marks and Spencer to accept the fact that structure of an
organisation mostly gets affected by external elements. Government changes rates of taxes in
improving economical growth of the country and these alterations which has been made by
authorities may lead companies to create losses for it and etc. Thus, it is vital for management to
understand alterations that they are facing at external environment so that better decisions can be
made in advancing M& S to increase productivity and profitability (Combs, Ketchen and Short,
2011).
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Cyclical theories
The wheel of retailing theory:
Philip Kotler has propounded wheel of retailing theory in which he mentioned that
retailers who are new in market has to follow a proper cycle to sustain at market for a longer
period of time. In this context, some phases or steps are mentioned beneath: Step 1: Low prices, less margins and low reputation. Step 2: Heavy cost price, huge amount, good repute. Step 3: Under this, phase retailer sees profit gets increases without making any sort of
changes.
 Step 4: This stage belongs to same step as the first one when a new retailer enters the
phase.
Marks & Spencer on a regular basis hear about new comers who are entering the market.
Thus, they have to make changes in their quality of products and keep on making alterations in
their prices of clothes that they are selling (Wheel of Retailing Concept, 2017).
Accordion theory:
Accordion theory can also be understand as general theory which gives opportunity to
retailer to realize the institutional changes which may help him in taking initiatives. It is a
systematic way of understanding the institutions where it goes from a store with great mixture to
specified shop and then again to wide assortment institutional sales outlet.
The above mentioned theories has been adapted by M& S in order to make effective
decisions so that targets can get hit in more effective way.
As changes takes place in technologies just like that alterations needs to be done in set
objectives so that more benefits can be gained by management for company. New tools and
techniques can give so many sort of advantages to authorities by which huge decisions can be
made from time to time. After this, they can make changes accordingly so that better results can
be gained in near future. These factors are either "macro environmental" or "micro
environmental" forces. Macro environmental elements are encompassing; they include such
concepts as demographics, economics, social and cultural factors, political and legal factors,
technology and the natural environment; micro environmental forces are those that are distinct
and individual, such as customers, producers, marketing intermediaries, public entities and the
company itself. "Publics" are groups that may have a significant impact on marketing activities
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formulated to contribute to customers' satisfaction with a product and an organization. For
example, satisfied customers are a public that contribute to a marketing program through positive
word of mouth. Consumer advocates and watchdog groups are examples of publics that may
hinder marketing activities through negative word-of-mouth (The World of Retailing. 2015).
Retailing ideas
Marks and Spencer already has a big brand name in all over world but, it has been located
that administrations should keep on making alterations in cost price of their clothes. Just because
company faces raise in competition on a regular basis. Some of low cost ideas that are related to
mentioned beneath:
 Social Media: Almost every single person stays online thus, promotions can be done on
social sites which do not cost much to M& S.
 Website: M& S has already have a website but they also need to start selling their
products through online basis.
Business Partnerships: It is hard to understand culture if M& S is looking forward to enhance
their business in an all new country. Thus, they can take help of local business people that
belongs to nation and familiar with trends and culture (50 Retail Business Ideas on a Budget,
2017).
Retailing concept
Marks and Spencer likes to hit their goals and objectives on a regular basis. Thus, it is
essential for them to keep all the concepts that are related to retail sector in order to make
favourable conditions. Clear conceptions may help firm to run business, understand needs of
consumers and generate revenue at maximum number of level (Dalkir and Beaulieu, 2017).
RECOMMENDATIONS
From the above mentioned report, it has been examined that management of Marks and
Spencer should open online stores by which they can directly stay connected with large number
of consumers. Digitalisation can help Marks and Spencer in delivering its goods and products to
customers from various countries. This action will directly put positive impact on production and
profit of the company. Apart from this, they can also take feedbacks from end user and by these
suggestions which has been given through online can aid in many ways like improvising quality
of products and services or help at the time of making decisions in betterment of M& S. These
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online stores gives many opportunities like in promoting new products. It is also a cheapest way
of doing promotions of brand new goods that they are willing to deliver at marketplace from any
other media. Main aim of this type of element is to grab attention of most of the people from all
over world.
Apart from this, management can also use different social sites like, Facebook,
Instagram, Whatsapp, Twitter and etc while promoting their products and services. In modern
era, more than half of population of world stays connected to each other through these websites
thus a unique sort of advertisement can grab attention of these human beings. High percentage of
profit, improvised brand image and goodwill, long term relations with end users and advantages
at competitive world and etc. can be expected by Marks and Spencer after adapting digitalisation
CONCLUSION
From the preceding comprehended report, it has been concluded that retail stores are
rapidly expanding their business. In this, these small or big stores are continuously looking at
needs and wants of consumer which is helping them in making modifications in their goods and
services. This action is straight away positively affecting both profitability and productivity of
them. Away from this, various strategies can be formed by management of organisations in
grabbing attention of consumers in a huge number. Online stores should be open by which
rivalry can be given to competitors. Away from this, proper analysation of external environment
can aid in making many sort of favourable conditions for firms. All these factors can lead
enterprises to hit their targets in both effective and efficient manner.
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REFERENCES
Books and Journals
Bowen, D. E., 2016. The changing role of employees in service theory and practice: An
interdisciplinary view. Human Resource Management Review. 26(1). pp.4-13.
Brigham, E. F. and Ehrhardt, M. C., 2013. Financial management: Theory & practice. Cengage
Learning.
Combs, J. G., Ketchen Jr, D. J. and Short, J. C., 2011. Franchising research: major milestones,
new directions, and its future within entrepreneurship. Entrepreneurship Theory and
Practice. 35(3). pp.413-425.
Dalkir, K. and Beaulieu, M., 2017. Knowledge management in theory and practice. MIT press.
Dant, R. P., Grünhagen, M. and Windsperger, J., 2011. Franchising research frontiers for the
twenty-first century. Journal of Retailing. 87(3). pp.253-268.
Jones, A. and Murphy, J. T., 2011. Theorizing practice in economic geography: Foundations,
challenges, and possibilities. Progress in Human Geography. 35(3). pp.366-392.
Lorenzo-Romero, C. and et. al., 2011. Consumer adoption of social networking sites:
implications for theory and practice. Journal of research in Interactive Marketing.
5(2/3). pp.170-188.
Sciacovelli, L. and et. al., 2011. Quality Indicators in Laboratory Medicine: from theory to
practice. Clinical chemistry and laboratory medicine. 49(5). pp.835-844.
Sorescu, A. and et. al., 2011. Innovations in retail business models. Journal of Retailing, 87,
pp.S3-S16.
Stewart, D. W. and Shamdasani, P. N., 2014. Focus groups: Theory and practice (Vol. 20). Sage
publications.
Tate, W. L., Ellram, L. M. and Dooley, K. J., 2012. Environmental purchasing and supplier
management (EPSM): Theory and practice. Journal of Purchasing and Supply
Management. 18(3). pp.173-188.
Online
50 Retail Business Ideas on a Budget, 2017. [Online]. Available through:
<https://smallbiztrends.com/2017/06/low-cost-retail-business-ideas.html>.
Marks and Spencer Group PLC. 2017. [Online]. Available through:
<https://www.reuters.com/finance/stocks/company-profile/MKS.L>.
The Wheel of retailing concept. 2017. [Online]. Available through:
<https://www.marketing91.com/the-wheel-of-retailing-concept/>.
The World of Retailing. 2015. [Online]. Available through: <https://www.anchor-
publishing.com/document/304314>.
Wheel of Retailing Concept. 2017. [Online]. Available through:
<https://www.mbaskool.com/business-concepts/marketing-and-strategy-terms/2823-
wheel-of-retailing-concept.html>.
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