Retail Theory and Practice of Marks & Spencer: A Formative Report

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Retail Theory and Practice of Marks & Spencer
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Table of Contents
Formative Report Planning..............................................................................................................3
Report..............................................................................................................................................5
Introduction to retail........................................................................................................................5
Introduction to the company............................................................................................................5
Key relevant changes within the UK fashion retail.........................................................................6
Relevant changes within the microenvironments............................................................................8
Recommendation...........................................................................................................................11
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Formative Report Planning
Retailing is a convincing, convenient and comfortable process of selling products and services.
In recent time, retail industry has taken new forms and shapes to develop the business. This is
because of new management methods, marketing process and due to ever changing and dynamic
customer psychology. Retail is one of the broader aspects in terms of e-commerce (Schwarz and
Hunter, 2012). I think that with the more number of literate and educated consumers are entering
the market, the retail industry has to read the pulse of their consumers to remain competitive in
the market. However, my first concept about the fashion market is the method of controlling the
flow of merchandise to produce the products towards retail consumers, with maximise
company’s profitability and sales. Successful market of fashion industry depends on recognising
of consumer desire and responding with the proper items (Viljoen and Wiskerke, 2012).
In this report, I will be looking into Marks & Spencer’s (M&S). M&S is one of the leading
retailers in the region of UK. They are committed towards making each moment special through
their quality. The company offer branded food, home products and clothing within their stores
(Pantano, 2014). I will be selected another retail industry if this may not work out. I will be
applied several strategies and theories to evaluate the main purpose of retail industry in the
international market. This would be my backup activities that may useful in case of failure.
The micro and macro surrounding of the retail industry is very vital for the fashion industry.
Macro environmental factors are affecting the clothing industry, which lie outside small
companies and their competitors (Ryan, 2012). As per my knowledge regarding the retail
industry, macro environmental factors such consumer’s factors, economical and technological
factors that must adopt by the small companies to stay competitive in the market. However, the
legal and political factors are also impacted on the retail industry. In case of macro
environmental factors, I think that workers and their perspectives have a huge effect on the
fashion retail. Employees produce, sell or service the goods, which drive the business of fashion
retail. The accessibility of skill-full, motivate employees in the business is important aspect
towards economical success (Schmiedel et al., 2012).

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Consumers are the most direct micro environmental factor that would be direct effect on a
business. Another factor is the distribution channels and suppliers that may be driven the
business towards success (Nguyen and Aiello, 2013). On the other hand, I will be applied several
theories and concepts for evaluating the situation and surroundings of fashion retail industry. For
discussing the details about the retail sectors, I would be utilising important theories such as
Pestel analysis. However, SWOT analysis and Porter’s five force concepts will also be
implemented in this report. For writing and planning the task, I will use several resources like
articles, journals, books and magazines for collecting the necessary data regarding the given
topic. To carry out the task, I would also prefer internet sites and portals for acquiring proper
knowledge about the retail and fashion industry. Finally, I will be capable to start my task
effectively and properly.

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Report
Introduction to retail
Retail industry is the largest and popular business sector in the international market. The
company may offer exceptional products compared to other retailers. However, retail marketing
is undergoing in the direction of radical restructure. This is because of enlargement in the gross
domestic products, increase in buying power of consumers and changing tastes of different
people. However, retail industry is the fastest changing and vivacious sectors within the world. It
has also given towards the financial growth of several nations. Retail sectors may also be
recognised as the appropriate release of products and services that may be demanding by the
consumers at competitive and affordable price. Besides, the management of retail system targets
midsize and small retailers as seek towards automate their stores in the international market.
Fashion retail has been the most favours sectors regarding the view of consumers. It has achieved
huge popularity for their superior quality of items.
Introduction to the company
The company has selected Marks and Spencer for this report. Marks and Spencer is also known
as M&S, one of the largest retail clothing and food companies in the region of UK. The company
has started their business in the year of 1884 at Leeds, Yorkshire. In this time, the company has
operated more than 400 outlets within the region of UK- known as “Marks and Sparks”. The
company has 1380 stores around the world (Marksandspencer.com. 2019). The M&S Company
is an important business asset of over 70,000 historical products and acts towards preserve, use
and collects the material relating all the aspects (Garg and Garg, 2013). They also serve food
services for the consumers and the items are exceptional compare to other retailers. Over few
years, the range of products has gradually drifted to becoming more premium for the consumers
and they have lost some of their valuable clients.
In the year of 1998, the company has implemented both strategies of product improvement and
market development by attaining Brook Brothers and they has expanded their business by

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opening a new store in the region of Hong-Kong (Ellickson et al., 2013). In 1999, their
management has adopted a new business model “Merchant model” for the process of online
shopping. Due to huge business loss, the company has closed their 38 stores. Their main strength
is the diversification of unique items that deal with clothing, food, furniture, home and
economical items (Niranjanamurthy et al., 2013). They have the best organisational structure that
is developed based on five divisions such as financial service, international retail, UK retail,
property and ventures. They always maintain long-term connection with the employees and
suppliers.
Main changes within the retail market of UK
The main applicable changes, which occur within the UK fashion retail may assessed through
evaluating the macro environmental factors of M&S. These factors will be determined with the
support of PESTEL analysis (Friel et al., 2013). A Pestel analysis gives a framework towards
investigating an organisation’s non-controllable external factors, which have the probable affect
towards its operations.
Political factors
M&S has been extremely impacted by free trade regulations of the European Commission that
have developed their product import much easier. Besides, the company has decided to decrease
their source prices. For having high cost structure, the retail sector has suffered in share of
market while occurring in the new market (Fernie, 2014). In 2015, M&S has experienced the
stall expansion in their international business for having the global uncertain conditions.
However, decreased productivity and substandard structure has directed to closing several stores
in the year of 2016. The global business of company has suffered in the region of Middle East,
Ukraine and Russia due to the fluctuations of local currency, geographical instability and
reduced demand of consumers.
Economic factors
Due to competitors like Aldi and Tesco, M&S has emphasised on the high quality items and
focused on the better satisfaction if consumer. In the timed of economical crisis, the company
has to cut out the pricing strategy of products (Decker et al., 2014). This strategy has directed

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towards a short-term decrease in the sales and resulted in long-term enlargement of consumer
confidence for their value and quality. This marketing strategy has also supported the company
to control most of the marker share and attained better sales in the main owned markets like
India or Hong Kong.
Socio-cultural factors
Two exterior factors, which have affected on the retailer sectors, include changing the values
within population and a generation shift (Lin and Bennett, 2014). The company has redirected
towards attention of generation X. Besides, several generations have brought the perceptible
shifts within behaviour of consumers. Two trends that M&S must take in consideration are
consumer preferences of fashionable products and the increasing perception. In case of M&S, the
retail sector has located substantial importance on their social schedule.
Technological factors
Technology is the most important factor in the retail sector. Most of the branded companies are
spending huge amounts on Ads as create brand awareness among consumers and build their
preference and loyalty (Green et al., 2014). In recent time, M&S is within a better strategic place
to enjoy the advantages of a rising mobile wave, social networks and altering media scenery.
Shopping experience is now seamless through the implementation of online price, mobile and
tablet. M&S has launched big data projects to adopt the digital strategy as attract more
consumers towards them. Their website is very interesting with bright colours and very simple to
utilise. The company is also updating their new products and brands in their sites (Akinboade,
2015).
Environmental factors
With the recent environmental stands, problems of environments are being promoted daily on the
television. All the companies, organisations and industries are being pressured towards change
their ways while it come towards materials they utilise and how they produce in the environment
(Hortaçsu and Syverson, 2015). M&S have established their green policy where the ethical and
environmental plan has adopted to serve a backbone towards the way of business. The company

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has stayed ahead of the curve by sourcing responsibility, helping the stakeholder and reducing
the wastes.
Legal factors
M&S tend to carry out re-training every year in order to remain update of the new legislations
and if the legal protection is updated or not. They also tend to invite the methods, which are
required to change towards ongoing development (Green et al., 2014). For instance, Fair
Packaging and Labelling Act (1996) provide regulation for labelling and packaging of customer
goods in terms of the fashion accessories.
Relevant changes within the microenvironments
M&S has faced the huge competition from market as social networks and internet is developed
the perception of consumers. They easily access the latest fashion and compare the costs of
items. The Company has built up the better association with their suppliers and carry out this
relation as long as possible. The development of suppliers would bring huge influence towards
the company. It is the proper strategy that M&S has valued their suppliers for controlling its
industry (Gregory, 2015). It would be the main reason for the suppliers to raise the price of
materials. M&S requires considering this change. The company has to build a better reputation
for the supplier management. M&S is the most important diversity retailer store within the
region of UK Their management has changed their advertising strategy to deal with the suppliers
and inspired other retailers to follow them. This is an important aspect for changing of the
retailers. M&S does not monitor the stock based on their popular selling products. Consumers
may not buy the items that they really desire. This condition required to be developed and solved
by the company (Hingley et al., 2015).
The company thinks that consumers are the most significant aspect to consider while entering
new market. Company must recognise that the satisfaction of consumers is more significant than
the sale of product. M&S understands this major attributes and gives high-quality services and
items towards customers for raise the consumer allegiance. M&S thinks that cost superiority
monitors the consumer’s perceptions (Cao and Li, 2015). The company must focus on the
product quality and service. Sainsbury and ALDI are the main competitors for M&S as their
company aims on the breath of range, convenience and quality. An organisation not only satisfies

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the requirements of clients but estimate the strategies of competitors within the similar target
market. In particular aspect, M&S has own marketing testing and exercise the tight quality
control in their management. They know that service and quality may keep the loyalty of
consumers. Sainsbury and Tesco has not only emphasise the quality and but set up their stores all
around the world. M&S requires developing this disadvantage certainly (Falguera et al., 2012).
Suggest and discuss strategies and tactics that could be used
In recent time, M&S retail industry has been facing the main challenges, namely: the shift
towards the process of online, change the tastes, elevated debt ratio, numerous shops. However,
5000 people have previously out of a job within the region of UK, emphasizing on the
economical contact of failing high street. It shows that M&S is pugnacious as an outcome of the
alternative tests in the retail industry (Pantano et al., 2017). M&S has been struggling with the
strategic shift that indicted towards the gradual deterioration of competitiveness to falling of
knowledge and response towards the challenges in business. For example, M&S has undoubtedly
attained their base of loyal consumers over few years, but these consumers are “older” to
compare with the consumers, who buy in ZARA, H&M. On that note, M&S is not successful to
attract new consumers.
M&S is recently countering the competition as the networks developed more easily for
consumers to compare the prices and shop around (Iannone et al., 2013). This has resulted for
the high-level retailers to experience lower footfall. This affects also the profit-ratio, which
respective stores may attain. M&S should take the tricky decisions about the prospect feasibility
of specific outlets. However, the company is capable to proffer interval from the rough situations
face in the industry, but this part of the industry is also experienced the unconstructive
enlargement. Waitrose and Tesco have adopted the market culture and start to give food items
alike towards M&S erode to aggressive benefit.
To solve these challenges, the company would require to SWOT and Porter five forces analysis.
SWOT analysis is given the detail about the issues that may be faced by the company (Lin and
Bennett, 2014). This research indicates the SWOT analysis of Marks and Spencer the recent
condition and implements the strategies to give a tough competition towards its competitors in
the upcoming years.

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Strengths – M&S has a variety of items in each store that supports the consumers to select the
best. To discover the perfect taste of consumers, the company has tested strawberries for three
years before launching in the market. At present, the company has more than 1200 suppliers with
over 400 several products (Pantano et al., 2017). The company’s wide range of brand is helpful
for the company. They have 1300 stores all over the world. It indicates that large numbers of
stores develop the business wider and the process of sales enlarges due to the wide range of
items.
Weaknesses- M&S has a drawback within the marketplace as the company is out shaped and
non-trend. On the other hand, the organisation has huge variety of items and several brands as
the common persons have an incorrect assumption (Falguera et al., 2012). These incorrect
postulations are developing the industry low. Their organization must build up the latest strategy
to focus on the young consumers.
Opportunities- Fashion is an engaging business and novel segment are coming on the daily basis.
In the region of Asia, there is a huge expectation for the cultural and conventional wear that
recently M&S has been unable towards capitalise on. This is where they may show promises
towards existing consumers to develop the relation between consumers and them.
Threats- Threats are those factor within the environment in which the company may be
determined their growth of business. The major competitors of M&S are ZARA, Tesco and
ALDI. It is suggested to enlarge the stores where they would augment their profits, as the
administration require coming with new-fangled scenario (Green et al., 2014). They require
coming with a strategy to overcome all the obstacles.

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Figure 1: SWOT analysis of M&S
(Source: Google.co.in. 2019)
M&S is particularly vulnerable towards any competition as they sell not food items but also
apparel and household items. Thus, it faces lots of competition from both supermarkets like
Sainsbury, ALDI and ZARA.
Threats of substitutes- M&S food and apparels may be substituted by their products from other
retailers. The most direct rival within the food market is possibly Waitrose, whereas Peter Jones
and John Lewis provide the highest quality apparel. Tesco and ALDI have generated the
cheapest alternatives. Thus, the threats of substitutes are high (Lin and Bennett, 2014).
Threats of new entrants- The Company has taken enormous capital investments towards
establish a successful chain of stores. An entrant would require offering something new that is
rather difficult to in the food.

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Bargaining power of suppliers- M&S is not depending on their suppliers as other stores does.
This indicates that they have capable too deal with the suppliers.
Bargaining power of buyers- The concentration of buyers is high and they may dictate their
tastes and rules. They have many alternatives (Falguera et al., 2012).
Intensity of competitive rivalry- Competition is strong for the retail sector. M&S has been
capable to build up the online sales with the high percentage of products (Lin and Bennett,
2014).
Recommendation
M&S is one of the best companies in the world and this is quite normal that they will have a
certain level of competitors in their field. It is recommended that M&S take some important
strategies to counter the effect of several competitors within the market. M&S Company must
ensure lower cost for production as they may deliver their items to their customers at affordable
rate. However, it will be recommended that this company will deliver quality production until the
cost of the production goes higher than the selling products. For this kind of problems, cost
management team need to take some steps for reducing the production cost without having any
compromise with the quality (Lin and Bennett, 2014). M&S maintains strong organizational
bonding to get the optimum level of production from their employees.
However, the face lots of issues with their selling item. Further, it would be suggested that
maintain a better connection with their suppliers as they would deliver the products in a given
time. Their management require upgrading their facilities to attract more consumers. They adopt
skilful employees to promote their brands in the international market (Falguera et al., 2012).
They will enlarge their sales in the online process as it more preferable by the consumers. M&S
requires enlarging their stores in some nation where consumers would able to get a hand on
experience.