M&S Strategic Analysis: Applying Porter's Five Forces and Value Chain

This report provides an analysis of Marks and Spencer (M&S), a British multinational retailer, focusing on its competitive environment and value chain. It begins with an introduction to M&S, including its background and product offerings. The report then applies Porter's Five Forces model to assess the competitive intensity of the retail industry, examining the threat of new entrants, substitutes, bargaining power of customers and suppliers, and competitive rivalry. Following this, the analysis delves into Porter's value chain framework, scrutinizing inbound logistics, operations, outbound logistics, marketing, sales, and service activities to identify areas of competitive advantage and potential improvement. The report concludes by highlighting the importance of information technology and innovative ideas for enhancing business processes within M&S. Desklib provides access to similar reports and solved assignments for students.

Marks and Spencer

Table of Contents
INTRODUCTION...........................................................................................................................3
Introduction of Marks and Spencer.............................................................................................3
Background information about M&S..........................................................................................3
Product and services of Marks and Spencer...............................................................................3
Analyse the competitive environment of M&S by applying Porter's Five forces model ...........4
Analyse Porter's value chain of M&S ........................................................................................5
Summarise and reflect on how business can deploy information technology and use
innovative ideas for improving business processes ...................................................................7
CONCLUSION................................................................................................................................8
Reference.......................................................................................................................................10

INTRODUCTION
Introduction of Marks and Spencer
Marks and Spencer is one of the best British multinational retailer which is headquartered
in Westminster, London and this brand is famous for selling home appliances, effective quality
of clothes and food products. It has been formulated in the year of 1884 by Michael Marks and
Thomas Spencer in U.K. This organization is listed on London Stock Exchange and currently
operating 959 stores across the U.K. in which 615 only sell food items. Respective organization
is dealing with large number of product and services so that they have many more opportunities
to attain future goals and objectives.
Background information about M&S
In terms of products, M&S developing their own knowledge and understanding for
offering exact goods which is required by customer's at marketplace (Acuña-Carvajal, and et. al,.
2019). Thus, they are focusing on their each and every product by which they can easily satisfy
consumer's needs and wants through giving them high quality of goods. As this brand deals with
large number of home appliances, clothing and many more so that it increase market value of
respective firm and encourage them to achieve specific goals on time. By having such kind of
background they have opened so many stores in different different place in order to increase
themselves productivity and profitability to attain competitive advantages in an effective manner.
Therefore, by having large number of stores globally, they have opportunities to gain successful
business.
Product and services of Marks and Spencer
M&S is leading British retailer that always bring high quality, great value of food items,
clothing and home ware to large number of people across the globe. Food items of this brand
includes different types of food and taste that directly influence several customers at one time.
This is because respective organization use new techniques and supply chain of their items by
which they can give better quality food of their customers and make them happy. Through
applying innovative thoughts within the food they become more relevant and gain high profits.
On the other side, this brand dealing with clothing and home wares that reflected their sales in a
positive manner (Amran, and et. al., 2016). When this brand saw rise in consumers numbers and
their growth towards purchasing products of this company than their aspiration is to be famous

for effective value of business. Thus, their efforts towards making several kind of home
appliances and fashionable clothes has been increasing day to day. At present time the main aim
of this brand is to become more successful and develop huge competition for others at
marketplace. Sometimes respective firm has faced few issues while manufacturing its goods such
as lack of employs, funds, machines and so on. In order to improve these sorts of issues they
have been developed training and development programmes for their employees so that they
worked effective and able to achieve goals successfully (Johnson, 2016). Therefore, the
effective collaboration of different products have positive impact on customers that maximising
overall sales of respective firm with high profit and sales properly.
Analyse the competitive environment of M&S by applying Porter's Five forces model
This is a strategic tool used by management of the company for analysing industry and
profitability levers. The leaders of M&S uses this model for determining different competitive
forces which affects profitability. These are used for developing strategy and enhancing
competitive advantage of M&S. By evaluating this model effectively, M&S is able to attain
competitive edge in market. There is need for analysing this model in effective manner. This is
an important part for an organisation to analyse the need of competitive advantage that will help
a company to build within market. It is essential for a company like Marks and Spencer to know
it's value within market as in this way, the managers will know what are the segments in which
this company can work. The managers and leaders of M&S have to pay more attention for
analysing market condition. The five forces given by Porters model are explained below -
Threat of new entrants: This is defined as entrance of new entrants in the market for
identifying competitive edge. The main reason behind this is that M&S is taking enormous
capital investments for setting up new and successful retail stores (Kono, 2016). Market of retail
industry is mature and this requires offering of new products in market and gaining competitive
edge. Different major retailers of market are establishing strong brand image. It is helpful in
increasing customer loyalty and trust. Major business people know in what way business should
be done and market share will be enhanced. There is barrier for foreign companies to enter
international markets. Marks and Spencer has good reputation and it has strong image in market.
This helps it to have low threat of new entrants.
Threat of substitutes: In the retail market, there are no substitute of clothes and food.
The threat of substitute for M&S is very low. There is substitution of products offered by M&S

like there are many other brands who are selling clothes and apparels. But the quality which is
provided by this company is very high. Big brands like Waitrose and Tesco are rivals of this
company as they are also providing good quality products (Lai, Melloni, and Stacchezzini,
2016). The other companies like Peter Jones and John Lewis are major competitors of M&S as
they offer high quality clothes and apparels. On the other hand, ASDA and Tesco have launched
alternatives and they are selling dinner jackets. The threat of substitution of M&S is high.
Bargaining power of customers: It is defined as framework in which customers could
place business for getting high quality products and services. The bargaining power of buyers
within M&S is high. The number of buyers in market for apparels and other products sold by this
company are high. There are many options for people to go in different brands for buying their
favourite stuff. The economy of UK is slowing down since 2008 and this has forced retail brands
to lower their price and offer products. Income of people has become uncertain and thus
customers are shopping in different brands.
Bargaining power of Suppliers: It is referred to forces on suppliers that company could
increase its prices as well as reduce the prices. This power in context opf M&S is very low. This
is one of the huge brand in market and the profits earned by this company are also high. This
brand is seen to sell products of own brand (Linder, and Williander, 2017). This brand is not
dependent on suppliers. They are having their own way to provide goods in different region of
the world. They manage the raw materials and goods on their own. The basic selling and
supplying of this brand depends upon western company contract.
Competitive Rivalry: It is analysis of competition towards the various existing firms.
The competition in retail sector is very high and it is important for this company to work hard
and develop strategies that will help in gaining competitive edge. This company is facing
vulnerable competition and it is dealing in various sectors like food, clothes, apparels, etc.
From above analysis of Porter Five Forces Model, it is analysed that Marks and Spencer
is facing great competition in market. It is essential for this company to manage it's strategies
effectively and do great work for attaining organisational goals and objectives.
Analyse Porter's value chain of M&S
Porter's value chain is a concept that refers to the chain of events which happen within firm right
from the acquisition of raw material to the transfer of product and sales services. On the other
side the value chain analysis forces is considered as an most important part for organisational

activities. These types of activities are mainly concerned with delivery or creation of goods that
involves inbound logistics, operations, outbound logistics, marketing, sales and services. On the
behalf of several activities firms can easily achieve their goals and make effective decision
towards better sales of particular product and services (Madhushree, Kumar, and Aithal, 2018).
Some of the activities are going to discussed below:
Inbound logistics: These type of activities are generally concerned with storing,
receiving and distributing inputs in order to develop best goods and services. In reference with
Marks and Spencer, they recently won GBS supply chain award therefore, it is necessary for
them to make successful plan towards A Sustainability programme, therefore, they needs to
create few changes in its global supply chain. Along with this, respective firm has also received
commendation from European business award for the best environment. Thus, Marks and
Spencer is known as strong organisation who has effective sustainability in order to achieve
competitive advantages through giving competition to their competitors at marketplace (Oldman,
and Tomkins, 2018). By having these sorts of advantages within inbound logistics they can meet
its desired goals and achieve targeted objectives.
Operations: It refers converting material into the finish goods is known as operations. It
maximise entire value of customers step by step if operations are up to mark and product is
prepared in a right mode and able to meet quality of standards. Herein, Marks and Spencer is
currently working on overall experience of customers in order to maximise consumer's visits and
gives them effortless experience. For making operational activities more better respective firm is
giving benefits and rewards to their employees so that they are working properly and make
effective product and services that gives huge satisfaction to consumers. In addition to this, M&S
is investing huge fund for upgrading its IT system so that they can provide much better
management of supply chain. As this firm dealing with online so that they have ample number of
customers who are buying their products on regular basis. With the help of conducting sorts of
operations firms can achieve fixed goals and able to get control on financial systems to increase
worth of their goods.
Outbound logistics: Sending end goods from fabrications point to retailers and
distributors. Herein, the value chain of Porter's model boos out bound logistic process which is
carried time with effective cost and product is supplied to the finish consumers with proper
quality of products and services. On the other side, these sorts of logistics are associated with

goods and services as well as receiving or collecting particular services to consumers. In the case
of Marks and Spencer, they deals with shopping as well as in store shopping by having effective
home catalogue, online shopping and collect or click options. Into the current scenario M&S
regularly investing in warehousing along with they currently acquired warehouse in Bradford
which would be well known national distribution centre for home and clothing business
(Ransbotham, and et. al., 2017). Moreover, Marks and Spencer is also concentrating on merging
small warehouse in order to create effective supply chain so that they can distribute products in a
more better way.
According to the above specified supported activities from Porter's generic model this
can be said that, there are 2 activities such as Operations and Outbound activities, both activities
are considered as supportive system for Marks and Spencer which helps them to make high
quality of goods and services in order to improve their value adding system. If this system will
work accordingly then it would be beneficial for themselves as it improve sales of their goods
and services in several departments and increase large number of customer's day to day.
Therefore, Marks and Spencer needs to implements on those activities carefully for improve their
overall sales and quality of their products. On the other hand if respective firm will add these
activities then they can work properly and able to focus on several marketing elements by which
they could become more successful and able to achieve business targeted goals.
On the behalf of following these services or activities they would maximise or manage
entire value of their products (Wood, and Logsdon, 2017). For further improvements, Marks and
Spencer needs to maintain consumer loyalty through offering effective customer services as it is
more important to become more successful. Therefore it is considered as the first priority of
Marks and Spencer to focus on different types of product and their availability at marketplace
along with speed of delivering products to the end consumers. M&S has needed to make
effective delivery mode for customers orders by which they can supply goods to the end
consumers within short period of time. Through giving best services to consumers they can get
large number of benefits and competition at marketplace for achievement of targeted goals. As
this company deals with fashionable clothes so they also required to make clothes according to
current trend and fashion. By focusing on these assorted types of factors they can grab large
number of marketing opportunities and achieve huge success. Through giving these services to
customers they can develop huge competition for other people at marketplace and able to

maintain their position in marketplace in a perfect manner. Thus, it shows that value adding
supply chain system is very important for firm to increase business profit and probability at
marketplace through providing several qualitative goods and services to consumers. It enhance
customer's confidence towards brand which will further help firm to achieve targeted output in a
easiest way. Thus, both operation and outbound logistics activities help firm to improve supply
chain of goods and services so that they can deliver products to consumers on time. Therefore, it
improves sales and marketing experience of consumers at high level.
Summarise and reflect on how business can deploy information technology and use innovative
ideas for improving business processes
There is increase in globalisation of retailing due to points of supply and point of sale and
thus IT is used for enhancing operations. For a company of retail sector, it is essential to have
competitive advantage for sustaining in market. This is done by conducting a good market
research and controlling information and data. The use of information technology is impacting
business in one way or the other. The reason behind success of M&S products is that this
company do not buy products “off the shelf” from the supplier. The strategy followed by this
organisation is to fill products quickly and avoid storage. If the company is not selling, products
are quickly descend on shelves and this is replaced by the products which are already sold. In
context of Marks and Spencer, it is essential to increase the ability of company for evolving
marketplace through flexibility and speed. This is used for collecting and analysing customer
data while enhancing differentiation. Marks and Spencer needs to have one system working
across stores in order to ensure use of stock as well as improve the business processes (Zhu, and
Chertow, 2017). The benefits of enhancing information system within Marks and Spencer are
mentioned below -
Decision making – Within Marks and Spencer, information systems are central for
providing “real time” information. The leaders running this retail company have to make quick
decisions in business. For instance, the manager has to make decision on how to correct design
of custom as per needs of the customer.
Improvised jobs – By the usage of information systems, it is easier for this company to
improve the way of finding candidates who can effectively work in the company. Employees of
M&S are selected by using new systems which are technically advanced. The new system is able

to collect statistics, data and other relevant information that is used while managing processes of
the company.
Coordination of supply and distribution - The information system is helpful in
monitoring and managing inventory (Zucchella, and Previtali, 2019). The managers of Marks
and Spencer use this system for managing the supply of goods, supply chain management and
goods distribution. When there is any problem, it is easy to identify and adopt proper solution.
Differentiation - Information system is important for defining strategic planning. This is
helpful in enhancing the competitive advantage of the company within marketplace. A unique
design is provided that provides permission to the company for making profit within business.
Customers – The managers of Marks and Spencer have integrated information system
with web for maximising the technology. These system are helpful in generating good products
within less time and effectively deliver the goods to potential customers and suppliers. Other
thing which is enhanced by using new IS is improved shopping experience.
New technology in Marks and Spencer
M&S has unveiled its new 'technology transformation programme' which aims to turn the high
street department store into a digital-first driven business. The new programme, part of Marks &
Spencer wider five-year transformation plan, has been designed to offer more agile, faster and
commercial technological functions to drive future growth. M&S plans on implementing a
number of changes to its business strategy following an extensive review which aims to bring
real value to its customers and the overall company. New changes include the creation of a new
Technology Operating Model, which is set to drive significant efficiencies in how M&S works
with new tech partner i.e. Tata consultancy.
CONCLUSION
From the above discussion, it is concluded that for analysing the competitive advantage
within market, Porter's Five forces model is used. This model helps to know what are the
various opportunities in market. This model enables to know bargaining power or supplier or
consumer. As per this analysis, new strategies are developed for managing and controlling
competitive edge. Moreover, Porter's value chain model consists information about inbound
logistics, suppliers and distribution strategy. Information system and technology are important

for managing the process of company effectively. This enables to manage business activities and
tasks properly and efficiently.

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