Analysis of Mark and Spencer's Competitive Strategies

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Report on Mark and Spencer
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Contents
Introduction.................................................................................................................................................3
Part A..........................................................................................................................................................4
Introduction to the company....................................................................................................................4
Key relevant changes within the UK fashion retailer...............................................................................5
Part B...........................................................................................................................................................9
Suggest and discuss strategies and tactics that can be used by Mark and Spencer...................................9
Recommendation.......................................................................................................................................12
Conclusion.................................................................................................................................................13
References.................................................................................................................................................14
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Introduction
Fashion retailing is one of the largest retail industry once the clothes have been prepared they
need to be sold out. The process in which the prepared clothes use to buy from a manufacturer
for selling them to the consumer is called fashion retailing. The fashion marketing is a process of
arranging the stream of products from the beginning assortment to their presentation and to make
available them to the consumers. In the process of fashion retailing the organization tries to
increase its sales and profitability. Victorious fashion marketing depends upon recognizing the
needs and demands of consumers and replying them with an appropriate product.
The retail marketers use a different type of sales tracking data, coverage of media, focus gaps
and the other processes that can provide the retailers feedbacks of their consumers. By the help
of these feedbacks marketers guide the manufactures to produce the products according to the
demands and needs of consumers.
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Part A
Introduction to the company
The organization Mark and Spencer are leading British multinational fashion brand and
headquarter of this organization is located in Westminster, London. The organization is famous
for selling high-quality clothing products and the organization also listed in the London stock
exchange. Mark and Spencer founded by Michael Mark and Thomas Spencer in the year of 1884
in Leeds. In the year of 1998, the organization becomes the first British retailer organization to
create a pre-tax profit of over £ 1 billion. In the beginning, the organization was founded into a
partnership between Michael Marks and Polish Jew. The organization had maintained its growth
in the early 20th century. The organization made a long term relationship with the British
manufactures and sold their clothes under the command of St. Michael brand that was brought in
the year 1928. The brand accepted a return of a product which a consumer does not want to
purchase and provided them their full payment if they show their receipts. The product can be
returned no matter when it was purchased. The organization Mark and Spencer paid £ 5000 to
purchase the super marine Spitfire fighter aircraft which they provided a name called
“Marksman”.
The organization is presently having 80,787 employees in their environment and the net income
of the organization was recorded £37.3 million. The operating income of this organization was
recorded £ 601 million in the year of 2019. The revenue of the organization was recorded £10,
377.3 million in the year of 2019. The organization is providing its services overall the world.
The organization is continuously doing their best according to their brand image.
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Key relevant changes within the UK fashion retailer
The macro-environment is related to the external environment of an organization and in the
context of Mark and Spencer, many external factors could affect the organizational environment.
The external factors, directly and indirectly, affect the internal functions of M&S. The
organization can take some needed actions by knowing about those factors. The external factors
which can affect the internal environment of M&S are below:
Political environment: The political steadiness of a country makes an attraction towards the
investors to invest in the business. The better investment is the key factor for the enlargement of
business. Mark and Spencer increasing the investors so they can make a better enlargement of
their business at the global level. The other thing like trade policy of the government which can
be hard and flexible at some time. The organization Mark and Spencer operate with the policy of
their government in the trade environment and the related legal framework. In the legal
framework, Mark and Spencer need to cover rate of taxes, benefits of their employees,
legislations of wages, regulations related to trade and tariffs. The political environment also
affects the suppliers, customers of the organization and their competitor organization (Blázquez,
2014).
Economical environment: The economic conditions of the other country can affect the different
internal function of Mark and Spencer. The economic factors like rate of taxes, price rises, a
supply of money, need of government, growth of economic rate and propensity to expend at a
national and international level can affect the internal functions of mark and Spencer.
Social environment: By the social environment of Britain it could be understood that the normal
population of the UK is bent over on a particular product or service. For the consumes of the UK
the quality matters a lot but the competitors can reduce it by launching the new products at the
same price. The consumers of Britain prefer fashionable style in comparison to classic
collections. The organization M&S is currently struggling for the better value of a market share.
It indicates that the population of the UK is very keen about purchasing the products.
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Technical environment: At present, a large number of the UK population is using different
internet facilities to buy various products. By the help of E-commerce, many organizations are
selling their products on the online platform and it is making a great level of competition for the
organization mark and Spencer. On the online platform the e-commerce organizations doing
their various operations which are counted in well-provided services to their consumers. The
Fairmont organizations like Tesco, Sainsbury, and Asda are providing their online e-commerce
services to the consumers and it is making the huge level of competition for the organization
Mark and Spencer (Mallampalli, et. al., 2016).
Ecological factors: The natural resources are counted as the ecological factors that can affect the
internal function of Mark and Spencer. These ecological factors are needed to be impalement by
Mark and Spencer to achieve their value in the marketplace. These resources are having the
abilities to attract consumers towards them. The environmental concern needs to be remembered
by Mark and Spencer in their production process. They should try to reduce the air, water, and
other pollutions in their production process. The government of a particular country needs to put
better resources for decreasing the level of pollution by the production process. The plants of
their organization need to be established in areas which are far from the reach of the local
population. So, Mark and Spencer need to remember the environmental concern in their various
processes.
Demographic forces: These forces relate to people and their populations. These factors involve
volume, compactness, gender, age, work occupation and many other factors. People are the most
important factors for organizations to develop their marketplaces. The large dimension of the
population can provide Mark and Spencer a broad market to create better opportunities. It will
help them to increase their revenue and sales level as well. The factors can provide them
opportunities and it can also create a better level of competition for them. The changes in
dimension refer to change in the marketplace. The organization need to understand these changes
and should try to manage their actions accordingly (Fox, et. al., 2012).
Relevant changes in the Micro environment of Mark and Spencer
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It can be the opening environment of an organization because the micro factors directly and
immediately affect the different functions of the organization. The interlink between
organizational factors and micro factors is stronger than the macro factors. Here is some
important element of the microenvironment of Marks and Spencer:
Consumers: Consumer is the most important factors for the organization and Mark and Spencer
produce their various products by knowing the needs and demands of their consumers. The
organizations always try to please their consumers and increase their revenues in return. The
most important aim of Mark and Spencer is to satisfy their consumers in anyhow.
Competitors: Competitors are one of the important factors for Mark and Spencer. Various
organizations are providing the same products at a cheap price level. These situations create a
great level of competition for the organization. For making a better competition environment
Mark and Spencer always try to differentiate their products from their competitors. The
organization need to include some USP factors in their products and should try to remain
affordable for the consumers.
Employees: Employees are the most important elements for any organization and in the process
of production they needed most. The human resource can take credit for the success and failure
of an organization. The organization Mark and Spencer always try to include those people in
their organization who are able and capable of taking part in their different operations. Mark and
Spencer always try to invest in the training and development programs related to their
employee’s productivity (Darmawan, et. al., 2012).
Shareholders: The shareholders are those who invest in the organization. They purchase the
shares of the organization and it could be said that they can be the owners of an organization in
the other way. The shareholders of Mark and Spencer demands the return of their investment and
the respective organization must earn better profit to return it to their shareholders. The
organization needs to develop wealth for its shareholders. Mark and Spencer pay a dividend to
their shareholders. It becomes helpful for them to make a balance between the organization and
the profit of their shareholders.
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Suppliers: The different type of material managed by the suppliers of an organization. The
organization Mark and Spencer need to make better relationships with their suppliers for making
better productivity of their work.
Media: Mark and Spencer always make their effective media promotions to attract consumers as
well. The organizations try to maintain a better relationship status with the media to reduce any
bad coverage about their organization. The organization also hired expert PR managers for
making positive use of media (Darmawan,et. al., 2014).
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Part B
Suggest and discuss strategies and tactics that can be used by Mark and Spencer
Two major aspects were found in the macro environment of Mark and Spencer. The
demographical and technical factors are the most important factors of the respective
organization. These two abstracts of macro environment can affect the environment most of the
time. The demographical environment includes age, gender, work occupation of a person and
many other factors. The demographic environment can affect the organizational functions of
Mark and Spencer. The level of competition is so high of Mark and Spencer and the other
organizations like ASDA, Tesco and Sainsbury are offering the same products at a cheaper price.
It is increasing the level of competition for them. The organization can apply porter’s model of
competition for making a better level of competition.
Porter’s model of competition
The competitive strategy of Porter is mainly having five force model, generic strategies, value
chain analysis, diamond system, and industrial cluster. The five forces model of porter is useful
for the respective organization to provide the analytical framework to know about the
competitiveness of marketplaces. The model can be useful to arrange some specific strategies for
maintaining a better level of competition. Porter believed that the level of industrial competition
is responsible for changing the structure of the economy. The inner competition of industry can
describe the eventual productivity of an industry. The models and analysis of Porter can be used
by Mark and Spencer in their strategic planning.
The environment of Mark and Spencer could be affected by five kinds of factors. These factors
are the risk of the probable entrance, risk of replacement, buyer’s bargaining power, supplier and
the bargaining power of accessible competition within the industry (Jung, 2014).
The general strategy theory: The strategy can become useful for Mark and Spencer as it
explains that the fight with five forces can provide two types of basic competitive advantages to
an organization. These two advantages could be “low cost” and differentiation of the product.
The organization Mark and Spencer can draw their business ideas by using three types of
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strategic philosophies and these three strategies are overall cost leadership strategy, separation
strategy, and centralized business strategy. These general strategies can provide Mark and
Spencer a better competitive advantage.
Value chain analysis: The value chain analysis is a tool which can be useful for Mark and
Spencer to know about their internal activities. The analysis could become useful for the
respective organization to know about the value of each activity. By using this analysis Mark and
Spencer can get an idea which activities are valuable for them and which are not. The analysis is
useful to provide competitive advantages to the organization. By recognizing inner activities of
the organization the management could identify the competitive advantages and disadvantages.
The analysis presents all the abstracts that the organization uses to produce products and goods
(Riasi,2014).
Diamond System theory: The diamond model of porter can be useful for Mark and Spencer to
know about their competitive position in the global market. The Diamond model of porter also
known as porter’s diamond theory of national advantages. The theory explains the factors which
are important make a better level of competition at the global level. The theory determines that
the success of a business is based upon the level of competition with the other industry. The
theory provides an idea about the needed factors of global competition.
Tactics that could be used by Mark and Spencer
Different types of challenges can affect the external an internal environment of an organization.
Mark and Spencer could face a different type of challenges in their working environment. Some
political challenges like governmental policies that can affect the business of Mark and Spencer.
At the level of legal challenges, the organization can face the involvement of new acts and
legislations and the management of Mark and Spencer need to state workplace legislations in
their working environment. The other challenges like global warming are increasing at every
state of a country and the respective organization can apply a strategy where they can reuse their
used materials and they can plant their factories far from the population are. The economic
challenges like high increase in price, higher interest rate are the factors that can affect Mark and
Spencer. The organization can decrease their rate of interests can do cost-cutting. The
organization may face some technical challenges also like technical factors can be changed in an
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organization according to time and it is not good for the organization as the employees take some
time to understand about the new technologies of the organization. For making this situation easy
the organization can arrange some technological training for their employees to make them
understand about the latest technologies (Kiragu,2014).
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Recommendation
According to the above report, it could be recommended that the organization Mark and Spencer
knows about the internal and external environment. The internal and external challenges also
faced by them. It can be said that the organization should try to implement better strategies for
facing those challenges in an effective manner. The factors like political, social, environmental,
cultural and other can affect them positively and negatively. To face those challenges the
organization can put some effective strategies that could help them to face them adequately. By
implementing various strategies the organization can positively face changes that are involving
in their working culture.
Mark and Spencer can use Porter’s various strategies to get competitive advantages from a
competitive marketplace. The value chain analysis can be used by them to know about the values
of their different operational activities. It will help them to know about the importance of
different activities. By the help of general strategy theory, the management of Mark and Spencer
can know about the details of their products. The management of the respective organization can
know about the strategy of its competitors and can make their product different from its
competitors. This strategy could provide their product uniqueness from the others. The
organization can change its product according to the need and demand of consumers. The
organization also can use the diamond system theory for getting a better competitive advantage.
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