Retail Theory and Practice Assignment : Marks & Spencer

Retail theory and practice

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Introduction to the company........................................................................................................1
Key relevant changes in fashion retail company.........................................................................2
Relevant changes within micro environment...............................................................................3
Suggestions and discussion of strategies.....................................................................................4
RECOMMENDATIONS.............................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Retail refers the process of selling of goods and services to users and consumers through
multiple distribution channels. The main aim of retailing and choosing different channels is to
earn profit and also satisfy demand that is identified through a supply chain. This present report
is based on Marks & Spencer's consumer fashion retailer. This report is going to show different
changes that occur in the fashion retail industry. There are several micro factors like increasing
level of competition in the market, strengths, weaknesses etc. Further it will also cover different
external factors like political, social, technological factors that have a significant impact on the
performance and growth level of the selected company (Toms and Zhang, 2016). With the help
of PESTLE analysis the company makes itself able to analyse all factors and take competitive
advantages. This present report also shows an effective use of strategies and theories of solving
problems that occurs due to changes in the fashion industry.
MAIN BODY
Introduction to the company
Marks & Spencer's is a British multinational public limited retailer company whose
headquarter is in London, UK. This company was founded by Michael Marks & Thomas
Spencer in the year of 1884. Marks & Spencer's company specialize and famous for offering its
qualitative clothing, home products & food products to consumers. It is also listed on the London
stock exchange and has started to sell other branded goods which includes Kellogg's corn flakes
from November 2008. In the context of stores it has approximately 959 stores across the United
Kingdom and 1,380 stores are all around the world in which 615 stores only sell food products.
So it can be said that most of its stores are specialized in food products. It has around 80,787
employees at all stores which generate operating income of £601.0 million and £37.3 million net
income (Freear, 2015).
The mission of this company is to make aspirational quality accessible to everyone. It has
achieved several opportunities and one of the best ability which give its several opportunities is
to meet the ever changing needs of a wider range of customers base. It has several competitors
such as Aldi UK, John Lewis Partnership, Tesco, Asda etc. This company has also set
benchmarks in the context of caring for its employees and society in which it operates. It has
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made several changes and developed itself. Its financial services was re branded, Marks &
Spencer's money to coincide with the national launch in September 2003.
Key relevant changes in fashion retail company
There are different types of changes occur within Marks & Spencer's fashion retailer
company. It is stated that this company is facing 6 challenges such as changing tastes of
customers, rising overheads, squeeze in income, too many shops and competitors, high debts and
shift to online shopping. It can be said that all changes and issues are related to technological,
political, social and other factors. For solving this problem, Marks & Spencer's make an effective
use of PESTLE analysis model (Rastogi and Trivedi, 2016).
Political: There are several political factors that have impacted on the performance of
this company in positive and in a negative manner. According to the analyst it is stated that this
company affected by the European commission free trade agreement which deducted sourcing
costs. On the other hand it is also stated that Marks & Spencer's company was accused of not
abiding the standards for & also was charged for neglecting the safety regulation of employees.
The main 2 factors that have impacted on its performance to the great extent includes political
stability and VAT. Sudden increment in value added tax can decrease the overall income of the
company because due to increment in VAT, Marks & Spencer's also has to rise in its prices.
Economic: There are some economic factors like exchange rates, labour cost, economy
growth rate, inflation and interest rates etc. Some factors have positive impacts and rest of the
factors have negative impacts on its performance and brought some changes. For example, at the
time of financial crisis in the year of 2008, some competitors of this company followed and
preferred to choose to discount pricing whereas, Marks & Spencer's company choose higher
quality products & better satisfaction at higher prices. Due to this strategy it has to face
decrement in sales for temporary but long-term increase in consumer confidence. Currency
impacts of Brexit give negative impacts.
Social:. The main social factors by which the company has to face several problems is
changing values and changes in consumer behaviour. Due to changes and generation shift as
baby boomers retiring so this company has to make changes in their technologies and products.
Different generation of people have different perspectives regarding fashionable items. So it can
be said that it has impacted on its performance (Barba and et.al., 2016).
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Technological: Constant changes & evolution in technology has supported this company
to operate more effectively. For example, online shopping has made this company able to
accelerate purchase and reduce the cost of supply chain. For increasing efficiency this company
is increasing its investment in technology. It seeks higher investment cost but give various
opportunities.
Legal: There are several laws and legal factors which are essential for all types of
companies to abide them. It is reported that this company was fined 1 million GBP over asbestos
risk. It was also accused for sweatshop in which companies paid 25p per hour to Indian workers
and also force them for overtime which this company did. So it is important for the company to
follow all rules and laws for protecting against any lawsuit and claim.
Environmental: Climate change, weather change, laws regarding environment pollution
are some factors that have impacted on the growth level of Marks & Spencer's fashion retailer
company. Increasing consumers' pressure of green and ethical practices need to be adopted
stricter standards by this company. It is stated that Marks & Spencer's has already shown its
interest in making ethical and green environment to take development advantages. For this it
makes animal welfare policy by which it stops selling all those products that contain Angora
Wool.
Relevant changes within micro environment
There are some micro environmental factors that also have impacted and impacts on the
growth and efficiency of Marks & Spencer's company. Micro environmental factors includes
strengths, weaknesses, opportunities, threats, level of competitors, distribution channels,
availability of employees etc. With the help of swot analysis it can analyse and examine all
micro factors that can impacts on this.
Strengths:
 The main strength of this company is it perceives value for money because it serves
wider range of qualitative products to customers.
 It has approximately more than 1000 stores across 40 countries.
 It has high recognition of brand and also have a strong financial condition in the market.
All these strengths can help them in taking competitive advantages and being a market leader in
the industry.
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Weaknesses:
 The main weakness of Marks & Spencer's company is its products have ability of imitate
and its competitors can easily imitate its products which can decrease its sales.
 There are several brands and competitors that can limit and decrease its market share.
 Manual working or not following the new techniques can increase the costs.
All these weaknesses can influence its decision making process and can also hamper its
performance (Oh and et.al., 2016).
Opportunities
 Marks & Spencer's has the ability to take opportunities and for that it can introduce new
market segments for achieving more profit.
 There is also a future opportunity to expand its brand into India & China.
Threats
 Its competitors use discounted pricing strategy which is a threat for this company.
 Different governmental policies for this sector is also a threat for Marks & Spencer's
company.
Customers
 Customers also play a vital role as they have more bargaining power. Customers can take
advantage of their bargaining power which can decrease the sales of this company.
Employees
 Employees with relevant skills and experience can help and support the company in
accomplishing their goals. On the other hand lack of skilled and experienced employees
can decrease brand image and productivity of the company.
So it can be said that micro environmental factors can have also impact and influence efficiency
of Marks & Spencer's company. Marks & Spencer's need to focus on all these factors that can
have significant impacts on its productivity (Arya, 2018).
Suggestions and discussion of strategies
From the macro environmental analysis it is analysed that Marks & Spencer's fashion
retailer company faces several changes related to legal, political, social and economy. The main
impact of legal factors is it was accused many times due to not abiding rules and laws like it was
fined 1 million and accused for sweatshop. It followed laws related to environmental but did not
focus on employment laws. Regarding this it can be suggested to this company that it should
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now more focus on abiding and following all rules. In the context of strategy and style it can
follow leadership style which more focus on employees and customers oriented rather than being
task oriented. By following relationship oriented management style, Marks & Spencer's can
increase employees loyalty and trust. It also encourages an effective team work which can
increase its reputation which it decreased due to not following laws. So it can be said that
relationship oriented style can be suitable in this situation and for decreasing negative impacts of
legal factors.
Other main factor that have negative impacts on its performance is social factors. Due to
changes in generation and perspectives of people, it was required to recreate and develop its
products. It also impacted on its demand and supply forecasting strategy. In this situation it can
be suggested that Marks & Spencer's company require to more focus on segmentation,
targeting and positioning strategy of marketing. By more focusing on STP strategy it can
easily target and satisfy their needs. A market segment is a subgroup of people that have similar
characteristics and that cause them to have and use the same products needs.
It is also stated that this company also faced some challenges due to instability of politics
and increment in value added tax. It was also accused due to not following employees safety
laws and these situations impacted and decreased its brand image in the industry. So it can be
suggested to Marks & Spencer's company that it need to focus on developing a strong
relationship with politics in order to take support. It also requires providing and make a safe
and healthy culture for employees. By having and providing sustainable and qualitative products
to customers it can make a good image in the market which can help this company to decrease all
these factors that have negative impacts (Lane and et.al., 2018).
In the context of micro environment, it is stated that this company do not focus on pricing
strategy as it only focuses on making and providing qualitative products. It is good somehow but
it can decrease its sales because competitors of Marks & Spencer's company more focuses on
discounted pricing strategy for attracting more customers. It is the main weakness of this
company. It can be suggested to this company that it should more focus on pricing strategy
along with qualitative products. With the help of pricing strategy it can attract wider range of
customers and increase sales.
Other threat and weakness of this company is its competitors that provides wider and
diversity of products. For being in a competition and for seeing market situation it can take help
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of Porter's 5 forces model which can help it in analysing all competitor factors. Porter's 5 forces
model have 5 factors like bargaining power of consumers, suppliers, threat of new substitutes
etc. It can easily gain competitive advantages by using and making an effective use of this
model. In addition, it can also take help of VRIO model. VRIO involves valuable, rare, imitable
and organization (Green and et.al., 2016). All these forces and elements of this model can tell
this company about its products and services. Its products and services have value, and have the
ability to imitate and are rare in the industry or not. Both models can help this company to the
great extent. By analysing and dividing all resources which it uses such as workforce, financial
and other resources it can see if their resources have value or not.
Marketing strategy and marketing segmentation is the best strategy for this company
which can help this company in analysing all its potential customers and can attract them. It
should also focus on increasing and developing relationship with suppliers and also treat them as
a business partners. Suppliers and buyers have more bargaining power that can decrease its
overall sales, so by focusing on improving relationship it can decrease these type of situations.
RECOMMENDATIONS
On the basis of according report there are some things and changes which need to be
adopted by Marks & Spencer's fashion retailer company. It is stated that it has faced and accused
for not abiding laws and regulations. So it can be recommended that this company should more
focus on following all rules and also make an effective policy. It has weakness as its products
have ability to be imitated so it should focus on making such products that can not be imitated by
other retailers and its competitors. For this it requires including some unique features and make
an effective use of technology in their products and services.
It should also focus on providing training to its employees in order to make them able to
provide attractive consumers services and increase their experience. Social factors and changes
in perspectives also impacts its performance in a negative manner, so it should focus on target
market and need to more invest in marketing strategy. With the help of targetting it can easily
satisfy needs of consumers. It also requires making strong relationship with suppliers and politics
as instability of politics and bargaining power of suppliers can have negative impacts.
It should also consider cultural differences among its customers. Due to globalization
there are several employees and customers of different cultural background, so it is important for
Marks & Spencer's to address cultural differences when devising products & services.
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CONCLUSION
From the above study it has been summarized that different policies and laws played a
vital role in developing retail company and increasing sales. This study has shown different
changes that occur within fashion retailer and in the selected company. Different changes
includes and related to politics, economy, technology, social, environment and legal that have
impacted the selected retailer company's performance and growth in both positive & in a
negative manner. Further it has shown some important and effective use of strategies and
theories for taking competitive advantages and also for decreasing negative impacts of factors
and changes. Some internal factors like strengths, weaknesses, opportunities also made changes
at workplace of Marks & Spencer's company. Lastly this report has shown some ways and
recommendations for making a positive change and for accomplishing all determined goals.
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REFERENCES
Books and journals
Arya, P., 2018. A Study of Consumer Buying Behaviour of RS Jeans and Gap Analysis of
Declining Sales of RS Formal. NIFT.
Barba, F.C. and et.al., 2016. A technical evaluation, performance analysis and risk assessment of
multiple novel oxy-turbine power cycles with complete CO2 capture. Journal of cleaner
production. 133. pp.971-985.
Freear, J., 2015. Marks and Spencer and the social history of food c. 1950-1980, with particular
reference to the relationship between consumer behaviour and retailing
strategies(Doctoral dissertation, University of Leeds).
Green, D.J. and et.al., 2016. Historical and contemporary patterns of mercury in a hydroelectric
reservoir and downstream fishery: Concentration decline in water and fishes. Archives of
environmental contamination and toxicology. 71(2). pp.157-170.
Lane, C.S. and et.al., 2018. Compound-specific isotope records of late-quaternary environmental
change in southeastern North Carolina. Quaternary Science Reviews. 182. pp.48-64.
Oh, S. and et.al., 2016. Development Direction Research Of Korean Lifestyle Brands Through
Analysis For Global Lifestyle Brands-Focused On The Trend Analysis. The
International Business & Economics Research Journal (Online). 15(2). p.41.
Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify external
risks in construction projects. International Research Journal of Engineering and
Technology (IRJET). 3(1). pp.384-388.
Toms, S. and Zhang, Q., 2016. Marks & Spencer and the decline of the British textile industry,
1950–2000. Business history review. 90(1). pp.3-30.
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