Marks & Spencer in UK Fashion Retail: Changes, Strategies & Tactics

This report provides an overview of Marks & Spencer's operations within the UK fashion retail industry, highlighting the company's scope and the significant changes impacting the sector. It delves into both macro and micro environmental factors, utilizing frameworks like PESTEL and Porter's Five Forces to analyze the external forces shaping Marks & Spencer's strategies. The report discusses the political and economical factors including the impact of Brexit, social factors, technological advancements, environmental concerns, and legal regulations. Furthermore, it evaluates the threat of new entrants, substitute goods, bargaining power of buyers and suppliers, and competitive rivalry. The report concludes by recommending strategies and tactics that Marks & Spencer could implement to enhance productivity, profitability, and overall market position, particularly focusing on adapting to technological advancements and evolving consumer preferences through diverse distribution channels.

Retail theory and practice

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
Introduction of Company.............................................................................................................1
Key relevant changes within the UK fashion retail.....................................................................2
Relevant changes in micro environment of business...................................................................4
Relevant Strategies and tactics that could be used......................................................................5
Recommendations........................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The sale of goods and services of particular things to large number of public in small proportion
is refer as retail. Retail industry is a wide area of network where many companies involving in
same merchandise are operating together with cut throat competition from each other. Likewise,
fashion retail companies joins manufactures to the end customers. It is a growing industry in UK
as some leading companies like H&M, Topman, John Lewis, Nike, Asos, etc have been
successful in covering a large market area all over the world. For this report the chosen
organisation is Marks & Spencer, which is a leading retail fashion company with around 1000
stores in UK (Bechikh, 2020).
This report covers the scope as well as the importance of fashion retail companies. It also
discusses the major relevant changes in both macro and micro environment of retail industry that
can impact operations of fashion retail organisations. This report highlights some strategies and
planning on basis of external environment that can positively influence fashion retail industry.
Introduction of Company
Fashion industry is gaining tremendous important in UK in recent times. People are switching to
organisations that can offer them quality products and great services. One such company that is
catering to the needs of people of UK is Marks & Spencer. Marks & Spencer is big name in the
fashion retail industry of UK founded in 1884. The company has its stores globally with around
1000 stores in UK as well as around 500 stores situated all over the world. There are over 78,000
employees working for the firm globally. In addition to physical stores, Marks & Spencer also
has its own website where people can order things online from any part of the world. The
company’s headquarter is in England but the scope of company is widely distributed across
various parts of Malaysia, India, Italy, Hong Kong, etc. Marks & Spencer have recently pledged
to become carbon neutral firm so that it can contribute to save the environment. With fashion
retailer, the company is also engaging in the operations of foods and beverages with the aim to
provide healthier lifestyle to its employees and customers (Demuljnck and Murph, 2022). Marks
& Spencer is also associated with various charitable trusts to help as well as support several
causes. The main objective of the firm is to engage more people in brand as well as help them to
maintain their standard of living by providing them variety of things with at affordable prices.
Marks & Spencer strive to improve experience of their consumers by offering them wide range
of new varieties at regular intervals.
Key relevant changes within the UK fashion retail
From the evaluation of past years of UK fashion retail industry, it has been analysed that it
witnessed some major changes over time. Tastes as well as preferences of customers are
dynamic in nature and highly fluctuating. Thus, sometimes it gets difficult for companies in retail
fashion to cope up with the demand of customers. Due to the wide area of functional network,
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Marks & Spencer operations are also highly impacted from the external factors of UK.
Comprehensive market research and proper analysing of customers demands is important to
successfully deal with the changes of market, so the changes does not impact productivity as well
as profitability of company (Dholakia, Dholakia and Chattopadhyay, 2018.). PESTEL is a
framework used by companies to determine external forces which can impact organisation
operations directly or indirectly. Changes in fashion retail industry can be assessed by critically
evaluating each force. A detailed explanation of PESTEL in context of Marks & Spencer is
discussed below:
Political factors- This force plays a significant role in the operations of business as it is
related to the decisions and political situations of a country. Political landscape of UK is stable
and favourable as well as it generally allows various opportunities to retail industry to grow. But
the decision of Brexit has highly impacted the operations of Marks & Spencer as it had to shut
down its stores due to the problem of supplying apparels and fresh foods. Brexit trade deal also
significantly affect company’s EU stores because of the complex paperwork delays company’s
operations resulting in declining revenues for company. The political disturbance due to Brexit
fallout slumps sales of fashion retail industry result of which is that many people lose their jobs.
Economical Factors- These factors are related to the income level, interest rate, inflation,
unemployment rate, standard of living of people of country, etc. As UK is a developed nation,
thus provides various advantages and opportunities to retail organisation operating in country.
The GDP of UK in 2021 was approx 3.44 trillion pounds. Hence the income level of people in
UK is relatively high which is why their standard of living is also very high (Frei, Jack. and
Krzyzaniak, 2020). Likewise, unemployment rate is quite low, thus the spending capacity of
nation as a whole is increasing with every year. Marks & Spencer management always works
towards fulfilling demands of customers and bringing necessary changes in organisation
according to changes tastes of people to improve the profitability of business.
Social Factors- These factors plays significant role in changing people minds about certain
products or services. Social factors are the cultural perceptions, health consciousness,
demographics trends of society etc. UK has been witnessing a high rise in the usage of social
media sites and online shopping. People are following several big celebrities and influencers who
influence them to wear nice and trendy clothes. Customers’ needs are changing as they now
demand designer and comfortable clothes at economic prices. Marks & Spencer benefits from
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social factors by understanding the needs of its customers’ through social media platform. Thus,
it gets easy for the company to provide products and services to public which fully satisfy their
wants.
Technological Factors- These factors are associated with innovations and technology
advancement in an industry. In fashion retail industry of UK, changes in techniques and growth
in technologies has greatly impacted the operations of companies. Higher management of Marks
& Spencer always attempts to implement advanced technologies in business in order to
effectively carry out business activities with optimum utilization of all the available resources
(Kotni and Karumuri, 2018). These factors allows the business to properly investing in their
R&D department which helps in ascertaining methods to create products that best needs the
demands of customers. This also enhances the quality and affordability of products and services
offered.
Environmental Factors- Those elements of business that are impacted by environmental
causes such as weather conditions, temperature level, climate change, natural calamities, etc.
Within UK, each business takes the responsibility of keeping environment safe and harmless to
improve the lives of its people as well as of nation. These factors allow Marks & Spencer to
manage its production and distribution activities in a way that do not harm environment. The
management has stopped using plastic packaging and instead use environment friendly things.
Helping environment thrive provides business the opportunity to improve their brand image.
Legal Factors- These factors defines what a company can do legally and the practices which
are not legal. These include industry regulations, licenses, labour laws, property legislations, etc.
In UK, the fashion retail industry is governed by several laws and regulations to safeguard the
interest of public as well as effective operations of organisations (Lee, 2018) Marks & Spencer is
obligated to pay various taxes to government in order to contribute in the growth of economy.
Legal factors has a positive impact on the functioning of Marks & Spencer as it allows the
business to smoothly run their operations and effectively work towards their goal of earning
maximum profits.
Relevant changes in micro environment of business
Business operations are impacted by several variables one of them is the micro environment
it works in. Micro environment has power to significantly impacts the functioning of an
organisation. This assists fashion retail industry to examine their strengths and penetrate future
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opportunities as well threats for business. Marks & Spencer management undertakes a full
research of elements of market to strategically form future planning. Porter’s five forces is a
framework used by companies to evaluate and analysis competitive intensity, attractiveness and
profitability of an industry. Porter’s five forces in context to Marks & Spencer is explained
below:
Threat of New Entrants- Marks & Spencer is one of the leading companies in fashion retail
industry of UK. It is difficult for new entrants in the industry to pose threats for the company or
to capture their market of operations (Naeem, Ozuem and Ward, 2022). In addition to that, the
company has maintained to provide best quality products and services to customers which fully
satisfy their needs. Hence the impact of new entrants like Bolongaro Trever, Alves, Elevate your
sole, etc is low on Marks & Spencer profitability.
Threat of Substitute Goods- Marks & Spencer faces a high risk of substitute products as
there is numerous numbers of companies selling similar products to customers. Change in
fashion industry is a never ending and thus companies always find ways to satisfy customer’s
demands by launching variety of products that acts substitutes to others. Marks & Spencer
management can face this risk by increasing quality and uniqueness of products in order to retain
consumer base in the company.
Bargaining Power of buyers- This force is assessed by the role played by customers in the
success of business as buyers plays crucial role in a company’s success. Business profitability is
significantly impacted by bargaining power of customers (Pantano and Vannucci, 2019). But
Marks & Spencer do not face this threat as it is a big fashion retail chain in UK which provides
products to customers at fixed prices and have been successful in maintaining its brand image
that loyal buyers do not switch to other brands.
Bargaining Power of Suppliers- This force is examined by the power of suppliers which
can increase the cost of production of companies. There are various suppliers in fashion retail
industry of UK who supply raw materials to many big brands. Marks & Spencer management is
not dependent on one or two suppliers which is why the threat posed by bargaining power of
suppliers is relatively low.
Competitive Rivalry- Within UK, many companies operate their functioning in fashion retail
industry. The presence of other big brands in the market like H&M, Zara, Next Plc, etc poses
high competitive intensity for Marks & Spencer. Rivals can decrease the profitability and
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customer base of the company. In order to successfully avoid this threat, Marks & Spencer
management can create strategies on how to retain customers and how to minimise switching
costs of customers (Park and Yoo, 2021). Competitive rivalry can also be managed by catering to
customers demands and satisfy their wants fully.
Relevant Strategies and tactics that could be used
For successful functioning of business in long run in fashion retail industry, it is important
for firms to create various strategies and tactics. By applying these changes, companies can focus
on achieving their objectives effectively. Marks & Spencer management can look out for
different areas related to customers, production, and distribution to increase efficiency of
organisation. Strategy that could be used by Marks & Spencer to overcome the macro
environment issue of technology in order to maximise the productivity and profitability of
organisation is diverse distribution channels. Fashion retail industry is highly impacted due to
COVID-19 outbreak as it diminish consumer’s spending power which further affects profits of
firm. In recent times, consumers’ attraction is increasing towards online shopping which is both
convenient and time saving (Roggeveen and Sethuraman, 2018). Hence, Marks & Spencer
should work on enhancing its technologies to provide products and services in every corner of
world. The company can also aim on implementing advanced technologies and ensure that
employees are using it effectively. Next tactic to understand the changing customer’s behaviour
is diversification in products offered. This tactic will help solve the problem of macro
environment social factors. This strategy will assist management of Marks & Spencer to
comprehensively research market changes and trends to accordingly plan their production. This
will help the organisation to increase customer attractiveness in the firm and to fully satisfy their
needs by offering best quality products at economical prices.
Economic pricing is another strategy that Marks & Spencer can adopt to maintain and
retain its customer base in brand. This tactic allows the company to create products in a way that
people can afford as well as that can earn maximum profits for company. In addition to this, the
firm should ensure that the management is following every law and policies made by
government to legally conduct business operations. This will help the firm to minimise conflicts
created both at workplace and in market between rivals as well as to avoid issues as effectively
as possible. Providing quality products at affordable prices will benefit company over its rivals in
the market. This strategy will also overcome the issue of competitive rivalry in fashion retail
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industry. Another vital strategy that could be used by Marks & Spencer is brand expansion as
this will allow business to increase customer awareness about brands through various ways such
as more advertisement, campaigns, seasonal offers and discounts etc (Sibindi., 2020). The more
people knows about brands and its products, the more it will improve firm’s engagement with
customers. The upper management level of Marks & Spencer should also motivate their
employees in order to maximise their productivity so they create best output.
The primary concern of Marks & Spencer is to overcome the challenges posed by their
rivals in the market. Therefore, the management of firm should make strategies by
comprehensively studying all market forces and the by examining rivals tactics. This will help
organisation to improve efficiency of both business and its employees. Strategic planning also
involves assessing trends of fashion industry in order to achieve competitive advantage over its
rivals and to create products that best suit customers’ desires.
Recommendations
From the above discussion, it is assessed that it is not easy to operate business functions as
its environment is dynamic and not stable in nature. For that reasons certain recommendations
has been made for Marks & Spencer, one of them is technological development. Marks &
Spencer management should invest proper time and resources in R&D department to ensure that
the company is using best available techniques in production that will both saves time and efforts
of its employees (Van Damme, 2019). Marks & Spencer is recommended to maintain its quality
and provide diversification in products so the customers do not switch to other brands. The firm
can also focus on implementing performance tracking techniques to assess which of their
strategies are providing suitable results to company.
CONCLUSION
As per the above information, it has been concluded that retail business environment is
highly fluctuating in nature. It is very crucial for every retail organisation to assess various macro
and micro elements of the market to ensure successful business operations. A company can
achieve its objective of maximum profitability by implementing various strategies related to
technologies, pricing, workforce, etc. The report describes the best methods that Marks &
Spencer can adopt to increase customer interactions and their experience in brand.
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REFERENCES
Books and Journals:
Bechikh, N., 2020. Corporate governance and management roles in mitigating operational ris
within retail banks in the UK (Doctoral dissertation, University of the West of Scotland).
Demuljnck, G. and Murphy, P., 2022. Retail Practitioners’ Views vs. Ideal Theoretical Positions
Concerning Ethical Business Practices with Garment Suppliers. Business and Professional
Ethics Journal.
Dholakia, R.R., Dholakia, N. and Chattopadhyay, A., 2018. Indigenous marketing practices and
theories in emerging economies: Consumer behavior and retail transformations in India. Journal
of Business Research. 86. pp.406-415.
Frei, R., Jack, L. and Krzyzaniak, S.A., 2020. Sustainable reverse supply chains and circular
economy in multichannel retail returns. Business Strategy and the Environment. 29(5). pp.1925-
1940.
Kotni, V.D.P. and Karumuri, V., 2018. Application of Herzberg two-factor theory model for
motivating retail salesforce. IUP Journal of Organizational Behavior. 17(1). pp.24-42.
Lee, K.C., 2018. Grocery shopping, food waste, and the retail landscape of cities: The case of
Seoul. Journal of Cleaner Production. 172. pp.325-334.
Naeem, M., Ozuem, W. and Ward, P., 2022. Understanding the accessibility of retail mobile
banking during the COVID-19 pandemic. International Journal of Retail & Distribution
Management.
Pantano, E. and Vannucci, V., 2019. Who is innovating? An exploratory research of digital
technologies diffusion in retail industry. Journal of Retailing and Consumer Services, 49,
pp.297-304.
Park, J. and Yoo, W.S., 2021. Editorial introduction: Retail innovation in the 4th industrial
revolution. Journal of Retailing and Consumer Services, p.102675.
Roggeveen, A.L. and Sethuraman, R., 2018. Understanding the JR heritage, publishing in JR,
and the evolving retail field. Journal of Retailing. 94(1). p.1.
Sibindi, A., 2020. Corporate governance quality and financial performance of retail firms:
Evidence using South African data. Academy of Accounting and Financial Studies
Journal. 24(5). pp.1-15.
Van Damme, I., 2019. Reinterpreting shopping in the Enlightenment: retail practices, consumer
experiences, governance. History of Retailing and Consumption. 5(3). pp.195-204.
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