Retail Theory in Practice: Marks and Spencer Case Study

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Retail Theory, Practice Assignment on Marks and Spencer
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Table of Contents
Introduction to retail........................................................................................................................3
Introduction to company..................................................................................................................4
Key relevant changes within the UK fashion retail.........................................................................5
Relevant changes within the micro environment.............................................................................8
Suggest and discuss strategies and tactics that could be used.......................................................10
Recommendations..........................................................................................................................12
Conclusion.....................................................................................................................................13
References......................................................................................................................................14
Appendix........................................................................................................................................16
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Introduction to retail
The selling of the goods in small quantities to the customers is a retail business and this is spread
globally. The retail fashion industry design and manufactures clothes for the customers
according to the demand of the customers. The prices are decided by the retailers in respect to
supply of the product and making expenditure incurred by the company. There are various
boutiques, stores and online sales medium which spread retail fashion business. In the UK there
is a wide spread of retail business with the increase in the market at global level. In present
scenario, the fashion retail business has increased more in comparison to the multinational
business companies. In the UK industry of the retail business the Around 556,000 employees are
employed in textile and fashion retail business. There are about 415,000 people with the ration of
75% are involved only in fashion industry in retail clothing business. The retailers in UK are
earning more profits in the business than of a wholesale business market (Jones and Tadajewski
2016).
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Introduction to company
Michael Marks form the company Marks and Spencer Plc in 1884 in UK. This was rebranded
with the name Marks and Spencer in the partnership with the Thomas Spencer. Today it is one of
the leading retailer companies with 1382 stores all over the world. Marks and Spencer offers
home products, food products and clothing selling online and in stores (Marks and Spencer
2015). In the UK market the Marks and Spencer is leading brand for clothing including
womenswear and menswear. The company is generating the revenue in general merchandise of
£4.0 billion in a last financial year.
The company has 914 stores in UK itself and it has maintained its brand positioning in a global
market. There were the hard times for the company during financial crisis in year 2008 but
company survived and maintained its brand by pricing and backing through investments in
advertisements. The sales were reduced which gradually improved by the policy of foreign direct
investments and hence escaped from the hard time by managing the prices as of the competitive
retailers. The company has improved its ethical environmental and social factors have
encouraged the brand to get a dignified position and increase the business by responsible
community care, waste reduction and outsourcing. Currently, Marks and Spencer has expanded
its business in worldwide especially in the clothing and fashion retail industry. The annual
generating revenue by the company is of £1.1 billion in every financial year (Marks & Spencer,
2016).
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Key relevant changes within the UK fashion retail
Figure 1: Pestle Analysis of Marks and Spencer
(Source: Bocken 2017)
PESTLE analysis is the macro or external factors that have to be examined by the Marks and
Spencer reduce the risks and to get the better position in the industry. These factors are
mentioned below:
 Political Factors: The European Commission has affected the free trade agreements due
to which the company has to suffered losses and imports of the products become difficult
for Marks and Spencer. The company was not able to enter in the new markets zone
(Davey 2016). The company further has to face the local currency fluctuations,
geographical instability and there was a decrease in the consumer demand as well. Marks
and Spencer has decreased their profit ratio and has slow downed its growth in the
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international market. Under government flagship energy, efficiency scheme the company
has followed the strategy by cost cutting in the plastic carrier bags.
 Economic Factors: The Marks and Spencer has the high quality product with the decent
price and the policy of the customer satisfaction. Due to which the company has to face
the economic crisis and this lead to decrease in the sales for a short term whereas the
competitors has opted the discounting price scheme to sustain in the market. However,
the company has gained the confidence of the customers as their long-term assets and
increase in the sales demand. The Marks and Spencer increased their market shares.
 Socio-cultural Factors: The customers of today’s generations have a fashion taste are
more likely to have the goods at their doorsteps. The Marks and Spencer have to deal
with factors, as there is an involvement of the generations and shifts in the consumer
behavior with the change in the society. The Marks and Spencer have to look over the
preferences and perceptions of the customers. The company has built up the relations
customers and with the suppliers and in which they operate. The company by engaging
employees organized the ‘Spark Something Good’ campaign for community work and
charity (Scott and Walker 2017).
 Technological Factors: The Marks and Spencer have overcome the technological factors
by having actively participating in the social networking and having the benefits of media
for popularizing its brand. The experience by the stores of the company has also gained
positive responses through customers at worldwide.The fashion business of the company
has reached to the customers through online marketing and has increase the
transportation. The mobile first approach was used by the company to increase their
digital strategy and has personalized the latest trends used by the customers. The
company is still working on to improve the technological developments for future
growth.
 Environmental Factors: The business practices are regulated in order to provide
transparent and tactical environmental practices. There are regulations by the European
regarding the environmental rules. The Marks and Spencer has used various ways to
contest the environmental factors by reducing waste and helping stakeholder
communities. The initiative has also taken by the company where 10.6 million clothes
were donated to Oxfam. The company on the use of the plastic bags imposed the ban.
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The company encouraged to use the paper bags for the customers so that it can be
recycled easily. Marks and Spencer has also made investments in schemes for the
sustainable products and services in the factories
 Legal Factors: there are legal factor such as patent rights, consumer rights etc that can
affect the company. The Marks and Spencer has the policy to obey all rules and
regulations in both domestic and international market. The company has legally
maintained a new policy in respect to pay remuneration to employees. The Marks and
Spencer has also maintained transparency in the profit sharing for the stakeholders.
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Relevant changes within the micro environment
Figure 1: Micro Factors of Marks and Spencer
(Source: Vecchi, A. ed., 2016)
 Competitors: The competitors of the Marks and Spencer are Debenhams, John Lewis
Partnership etc. are increasing their business in a global market. The company can lower
its price with the better quality then of the competitors companies to maintain and to gain
attention of the customers. The Marks and Spencer has to increase its product value,
which is popularized among customers, and ensure that they purchase it (Robinson and
Hsieh 2016).
 Shareholders: The shareholders of the company are the owners of the companies. The
shareholders of Marks and Spencer are earning profits through business and investing
more in the company. It is a duty of the company to pass the benefits to shareholders
when it earns profit. The Marks and Spencer can increase the profit sharing ratio which
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can invite more shareholders in the company and more investment can increase business
globally.
 Customers: The Marks and Spencer have the loyal customers, which are satisfied by the
product, but due to increase of the competition, globally the customers have more choices
and options with the variety of brand. The customers for the company are important as
they only purchase the product and gives profit to the company. The Marks and Spencer
has to fulfill the demands by receiving feedbacks by the customers and improve the
quality of the product as required by the customers.
 Employees: The Marks and Spencer have the trusted employees in the company. The
employees are important for an organization to run a business. In the competitive world a
good employee is required and hence employee retention is needed so that best
employees do not go to other competitive company. The employees participation is lead
the company to attain its objectives (Hornibrook et al., 2015). Therefore, the employees
must provide with all the necessary facilities, as they are backbone of the company.
 Suppliers: The Marks and Spencer have the suppliers internationally as the suppliers of
the company can tell the real demand of the product of the company. The company has to
provide a good range of the product to the suppliers who early sell the products of the
company among the customers.
 Media: The media is important for advertisement and promotion of the product of the
company. The best way presently for Marks and Spencer is social media for the direct
advertising and popularizing the brand among the customers. The customers gets
knowledge about the product and therefore company has to adopt this platform more for
its brand popularity (Vecchi 2016).
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Suggest and discuss strategies and tactics that could be used
The company Marks and Spencer can use strategies and tactics in order to grow more and
increase its profits in the business are as mentioned below
 Economical factor: Marks and Spencer has brought changes in the economic policies in
order to gain attraction of the customers. The products of Marks and Spencer were costly as
compared to competitive companies, which are less affordable by all the customers.
However, competition has created difficulties for the company. The Marks and Spencer has
made the strategy to sell its product at the lower price and maintain the quality of the product.
The company has invited more customers after applying this tactics. The image of the brand
has also increased among the customers (Yang et al., 2017).
 Technological factor: The Marks and Spencer has made relevant change for popularizing its
product by using the latest technology. The company used this strategy used to popularise its
product through various platforms on social media. The company has followed the latest
trends to attract the customers towards the brand (Nash 2019) and has developed the
promotional strategies to use the latest technology to connect the customers. The company
has also using the print media for popularizing its brand by providing advertisements in TV
and magazines. The has also used new technological changes in the stores for the benefit and
growth of the company in international market as well.
 Social factor: The Marks and Spencer has adopted the strategy of making those goods,
which are in fashion trend. The company has followed the concept of making theme based
clothing and products to attract the customers. The company manufactures products for
women and men according to the fashion demand. Marks and Spencer celebrates fashion and
festivals by launching the clothes related to those occasions. The company has recently
launched beachwear clothes for both women and men (Pantano and Gandini 2018). The
company are involving in more social events in order to get popularized its brand in the
customers.
 Environmental factor: The Marks and Spencer has made various policies, which are
environment friendly. The company has replaced plastic bags with paper bags for supplying
goods to the customers. The Marks and Spencer installed environmental friendly machines in
their manufacturing factory of clothing. The company preferred to use organic material in
making of the clothes. The company adopts these strategies for the customers. The customers
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likely to wear comfortable clothes, which are maintained by the Marks and Spencer. The
other strategies used by the company in relation to support environment as it stated selling
woven hand stitched clothes, which has also generated the employment and it is environment
friendly too. The minimum use of the machines in the manufacturing factories reduces waste
which is beneficial for the environment (Jones and Comfort 2017).
 Employees: The Marks and Spencer has given benefits to employees in order to retain the
good employees in the store. The employees of company receive training for treating and
welcoming of the customers. The various programs were organized by the company so that
feedback can be received from the employees and improve the flaws in the company. The
company also encourages and welcomes employee’s innovative ideas as the employees made
direct contact with the customers. The employees also suggest the improvements and various
policies are made for the benefit of the employees, as they are important for the company to
achieve its goals. (Thompson and McLarney 2017).
 Competitors: Marks and Spencer has the competitors like Debenhams, John Lewis
Partnership etc. The competitors must be analysed first in order to maintain poise in the
market. The Marks and Spencer has made its product different from the competitors with the
reasonable and affordable price. The main competitor company of Marks and Spencer is
Debenhams, which has attracted the customers. Marks and Spencer has increases its sale by
advertising its product at online platforms and compete with the competitors. The company
has also provided in store benefits, which gives a positive and friendly environment to
customers on visiting to stores of Marks and Spencer. The company has also provided
discounts on the clothing products on the special occasions, which attracts the customers and
has increase the sale of the company
 Customers: Marks and Spencer have made good relations with the customers at stores and in
the online market business. The strategy used by the company by providing a return policy
on the clothes in case of fittings and size issues. The company has charge free delivery
services that made the customers happy while shopping.
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Recommendations
 The Marks and Spencer can make garments and clothing, which can give inspiration to
generation and encourage customer to buy those products. The company has to reduce the
value cost of its product according to the price quoted by the competitors. The customers get
attracted on getting the product at the reasonable price.
 The Marks and Spencer has to increase its retail business more in the online market as the
consumers of today is most likely preferred to be delivered goods at its doors. The online
business is famous in the world of the globalization. The customers relax and select the
products based on the brands and need of their choice.
 The Marks and Spencer has to popularize its brand so that brand attracts the customers
emotionally and bound them to make the purchase of this brand only. This can be made
popular by receiving more goodwill of the company (Morgan 2017).
 The Marks and Spencer can expand its business more by making it popular through
advertisements. The company must attract its targeted customers by providing discounts on
the clothing at special occasions. The latest source of advertising is social media, which is
widely popular among the youth.
 The Marks and Spencer has made the clothes, which are in trend for both women and
menswear so that customers get attracted at the large numbers towards the company.
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