Case Study Report: Macro, Industry, and Strategy Analysis of M&S

This case study report provides a comprehensive analysis of Marks and Spencer (M&S), a major retail company operating in the UK and globally. The report begins with an executive summary and an introduction to M&S, detailing its business operations in the retail industry, including food, clothing, a...Read More

Individual case Study
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EXECUTIVE SUMMARY
The report is based on Marks and Spencer which work in retail industry since 1884. it
specialises in selling food items, clothing, home products and many more under its own label.
The report includes macro environmental analysis, industrial analysis, company analysis,
competitors analysis and strategy analysis. It is also recommended to add digital technologies in
its marketing strategies and concept of Flash Sales in its eCommerce strategy so to achieve
identified objectives effectively.

Table of Contents
EXECUTIVE SUMMARY...............................................................................................................
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
Macro Environmental analysis....................................................................................................1
Industry analysis..........................................................................................................................2
Company Analysis.......................................................................................................................4
Competitor Analysis....................................................................................................................5
Strategy Analysis.........................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Marks and Spencer is major retail company with headquarters situated at London, UK. It
have more than 1463 locations across the globe and is specialised in selling food products,
clothings, home essentials and many more. The company operates in retail industry that includes
supermarkets, chain stores, franchise stores and online merchants (Marks and Spencer Case
Study, 2020). The company is facing issues relates to changing legislations, advances in
technology along with changing behaviours and attitudes of consumers. The report includes
macro environmental analysis through framework of PESTLE Analysis. It also covers industrial
analysis with description of life cycle stages and porter's five force analysis. Further, the report
includes company analysis, competitors analysis and strategy analysis.
MAIN BODY
Macro Environmental analysis
It is a strategic analysis that in turn assist in analysing factors of external business
environment which impacts on business and industry. Main purpose of the analysis is to
determine possible threats along with opportunities which can impact on industry as whole as
well as are outside control of company (Kawde, Baig and Sajid, 2016). PESTLE analysis is used
for macro environmental analysis that assist in examining profound impact of external factors on
business and its performance. In context to Marks and Spencer, the factors that are changing or
impacting on performance of company are as analysed:
Political: It is concerned with activities or practices of government and its administration
which impacts on company. In case with Marks and Spencer, political factors that impacts on the
business are trade restrictions, political stability, corruption level and taxation. Free trade policies
are said to be massive political benefit to Marks and Spencer to performs business in overseas
nations that impacts positively on expanding business and attaining growth.
Economic: The factor greatly impacts on investment value of entity in future. In case
with Marks and Spencer, economic factors including unemployment rate, wages, policies,
economic growth, business cycle and interest rates impacts operations and decision making of
company in great manner. For example, By hiring people at minimum wage rate is $ 19.84 per
hour and $753.80 per week impacts on business to get work completed on minimum cost and
make huge profits (Minimum wages, 2020).
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Social: Social factors means larger scale forces in societies and cultures which impact
behaviour and attitudes. In context to Marks and Spencer, trends in society, ageing population,
behaviour of customers and health consciousness are some factors that impacts demands on its
offerings and its practices. For instance, ageing population may be less willing to work and
increases labour cost because of which management have to made changes in there decision
making and are pressurised for adapting social trends that hampers their set criteria of work.
Technological: These factors means variables that relate to availability, development
addition to existence of technology. Technological aspects such as diffusion rate, R&D activity,
automation and incentives impacts widely on Marks and Spencer. For example, self checkout is
key technological trends in modern retail. With adoption of the technology, the company is
benefited in saving money that are paid to cashiers and also offers great experiences to customers
in terms of fast completion of purchase transaction (Zahari and Romli, 2019).
Environmental: This comprises ecological along with environmental aspects including
climate change, fair trade and sustainable produce. To maintain the image as luxury brand, a
pledge is taken by Marks and Spencer to become sustainable retailer that relates with multiple
environmental factor and vows for ethical production process to produce at less cost and
enabling eco friendly methods that impacts positively on its presence as well as gaining
recognition in the market.
Legal: It includes legislations such as employment law, health and safety law,
discrimination law and data protection law that impacts on demand, cost and operations of Marks
and Spencer. For example, Due to Covid-19, government have passed a legislation to close its
stores or open them for some duration only has impacted negatively on its operation to make
money and meet customer demands (Stauch and Dreuw, 2016).
Industry analysis
Description of life cycle stages of industry
Industry life cycle stages are defined as phases which are encountered by particular
industry. In context to retail industry, following are some of stages through which products of
Marks and Spencer passes:
Innovation stage: The stage is all about reformation along with developing business
models for promoting emergence of modern retail formats, lowering market share etc. Due to
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huge cost of development of new retail formats, Marks and Spencer finds it hard to apply new
methods for making profit in the stage.
Growth stage: Herein, new business formats are initiated to be accepted by retail
customers in the industry (Vezzetti, Alemanni and Morelli, 2017). In case with Marks and
Spencer, market share ascends and copycats are increasing at the stage. With rapid growth of
retail company, customers intends to buy products which are innovative.
Maturity stage: At this phase, retailers become incapable to expand customer base and
take more market shares. In case with Marks and Spencer, it tries to maintain its market share
and decreases product price so to sustain in industry for some more duration.
Decline stage: The stage in which existence of retail company gets disappear. When
Marks and Spencer reaches the stage they experiences changes in consumer purchase behaviour
as well as appearance of new formats. It also suffers from huge losses and makes plan to leave
the market.
Porter's five force analysis
It is majorly opted by entity to analyse attractiveness and competitive environment of
industry. It includes 5 forces that are as explained in case with Marks and Spencer:
Industrial rivalry: In retail industry, competitive rivalry is high because of presence of
strong players including Tesco, Asda, Waitrose and many more. In aspect to Marks and Spencer,
rivalry is intense as all these companies practice for taking more control of market shares and
offers similar price products with up dates designs and fashion.
Bargaining powers of suppliers: Suppliers are the people which arranges required
material for company at effective prices. In context to Marks and Spencer, suppliers in retail
industry have low bargaining power as it makes concentrated purchase from multiple suppliers.
If one suppliers makes changes in their pricing then the entity switches to others suppliers.
Bargaining powers of buyers: In retail industry, buyers generally have high bargaining
power as they are more price sensitive. Buyers of Marks and Spencer bargains in huge manner so
to get products are less prices.
Threat of entry: The force explains threat on new entrant on the company within the
industry (Gander, 2017). For Marks and Spencer, there is high threat of entrant in retail industry
as new companies bring innovation as well as puts huge pressure on practices of entity through
providing new propositions to customers and lowering pricing strategy.
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Threat of substitute: Substitute products are those products which reduces demand
among customers for specific class of commodity as this help customers to switch towards
alternatives. In case with Marks and Spencer, threat of substitute within retail industry is high
because of huge variety of similar products produced and manufactured by multiple retailers at
significant low prices.
Company Analysis
It is the process that is carried out by stakeholders of business to evaluate resources and
capabilities so that objectives and strategies are achieved effectively (Daniel, Neves and Horta,
2017). Resources and capabilities are potentials of business that assist in dealing with identified
environmental factors and achieving strategies and objectives.
VRIO Framework
In case with Marks and Spencer, its resources and capabilities are analysed through
VRIO framework which is company analysis model which forms part of organisational larger
strategic scheme. The VRIO analysis of Marks and Spencer are as follows:
Resources and
capabilities
Valuable Rare Inimitable Organised
Financial resources ✓ ☓ ☓ ☓
Distribution channel ☓ ✓ ✓ ☓
Business practices ✓ ✓ ☓ ✓
Valuable: The resources and capabilities that are valuable helps the company to exploit
opportunities as well as neutralise external threat. In association to Marks and Spencer, financial
resources and business practices are categorised as valuable for company. Financial resources of
the company are valuable as they help in combating ant type of external threat and investing in
opportunities so that all the identified objectives are achieved effectively. Business practices of
Marks and Spencer are also valuable or effective as they allow to make attempts of operations in
most cost effective manner that results in dealing with dynamic external factors.
Rare: Resources and capabilities which are control in hand of relative few are defined to
rare. In context to Marks and Spencer, distribution channel and business practices are rare.
Marks and Spencer have effective distribution channel that enhances its sales demand in at far
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distant places and helps in capturing larger market share. Moreover, business practices including
being worlds first as well as only carbon neutral, the company have achieved objective of
sustainable position (Kemsa, 2019).
Inimitable: Resources of company which are inimitable are generally difficult to develop
and duplicate by others in the industry. In context to Marks and Spencer, tactics and strategies
that are used in distribution channel are inimitable by others. It is because the company holds its
suppliers to same expectations that are social standards, meeting high quality, etc that are
effective in achieving objectives.
Organised: Business practices of Marks and Spencer are organised to deal with
recognised environmental factors and achieving objectives. The managers provides clear
instructions to employees so that all the practices are systematically followed to meet obligations
and achieve strategic objectives.
Competitor Analysis
Competitive threats refers to the intense competition which haven't occurred but have
possibilities for occurrence. In case with Marks and Spencer, potential threat of intense
competition from Tesco, Waitrose, Next and many more is major competitive threat. The threat
have huge potentials to increase threat of substitute as the rivals attract customers by offering
similar products are low prices. At same time, it also creates high rivalry in industry as the
competitors captures values which competes with business model of Marks and Spencer and
creates situation tough. It also gives high bargaining powers to customers as they switches to
other retailers to get the required product at relative low prices (Jin, Ji and Gu, 2016). Suppliers
bargaining power remains constant as the retailer supports practices of suppliers and holds same
expectations. This also results in high threat of new entrant as new companies brings innovation
that puts pressure on Marks and Spencer to add something innovative or new in its offerings in
order to gain competitive advantages.
Strategy Analysis
As per the case study, it is analysed that Marks and Spencer have devised and
implemented various number of strategies including eCommerce growth strategy, marketing
strategy, supply chain strategy and many more. ECommerce managers still work with
eCommerce growth strategy in order to succeed in online retail with the aim of increasing sales
of its products and attain growth related objectives. At same time, it is also perceived that
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marketing strategies such as social media strategy, relationship marketing, word of mouth, etc
still work as they help the firm in appealing to its local consumers and enhancing awareness of
prospective buyers about its products and services (Cotterill, 2019).
Managers of Marks and Spencer are recommended to make certain changes it marketing
strategies through using digital technologies to make promotional content. The company is also
recommended to introduce Flash sales in its eCommerce strategy as it is specific good tactic to
sell out-of-season inventory as well as underperforming product lines that are taking huge
storage space. These recommendation will work because any change in strategy assist the
company to work with fuller determination to attain objectives and establish leading position.
CONCLUSION
From the report, it has been summarised that an organisation undertakes various
frameworks to identify potential threats or challenges that may impact the business and practices.
For macro environmental analysis, PESTLE framework is used to scan and monitor external
factors that are changing or impacts on company and industry. Industry analysis is conducted
through describing life cycle of industry and Porter's five forces to analyse attractiveness in the
industry. Key capabilities and resources of company as per VRIO Framework are distribution
channels, financial resources and business practices. The company is recommended to introduce
Flash sales and use digital technologies in its strategies. It is predicted that in coming years, the
company will gain huge success in the industry and will have sustainable practices.
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REFERENCES
Books and Journals:
Cotterill, R. W., 2019. Competitive strategy analysis in the food system. CRC Press.
Daniel, M., Neves, R. F. and Horta, N., 2017. Company event popularity for financial markets
using Twitter and sentiment analysis. Expert Systems with Applications. 71. pp.111-124.
Gander, J., 2017. Strategic analysis: a creative and cultural industries perspective. Taylor &
Francis.
Jin, J., Ji, P. and Gu, R., 2016. Identifying comparative customer requirements from product
online reviews for competitor analysis. Engineering Applications of Artificial
Intelligence. 49. pp.61-73.
Kawde, A. N., Baig, N. and Sajid, M., 2016. Graphite pencil electrodes as electrochemical
sensors for environmental analysis: a review of features, developments, and
applications. RSC advances. 6(94). pp.91325-91340.
Kemsa, D., 2019. Theoretical and Conceptual Background. In An Investor’s Perspective on
Marketing Excellence (pp. 5-12). Springer Gabler, Wiesbaden.
Stauch, T. and Dreuw, A., 2016. Advances in quantum mechanochemistry: electronic structure
methods and force analysis. Chemical Reviews. 116(22). pp.14137-14180.
Vezzetti, E., Alemanni, M. and Morelli, B., 2017. New product development (NPD) of ‘family
business’ dealing in the luxury industry: evaluating maturity stage for implementing a
PLM solution. International Journal of Fashion Design, Technology and Education.
10(2). pp.219-229.
Zahari, A. R. and Romli, F. I., 2019. Analysis of suborbital flight operation using PESTLE.
Journal of Atmospheric and Solar-Terrestrial Physics. 192. p.104901.
Online:
Marks and Spencer Case Study. 2020. [Online]. Available
through:<https://blog.contactpigeon.com/marks-n-spencer-ecommerce/<
Minimum wages. 2020. [Online]. Available through:
<https://www.fairwork.gov.au/pay/minimum-wages>
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