Global Business Environment Analysis: A Case Study of Marks & Spencer

This report provides a comprehensive analysis of Marks & Spencer (M&S) within the global business environment. It begins with an introduction to the concept of the global business environment and then proceeds to a SWOT analysis, evaluating M&S's strengths (brand reputation, product quality, strong supplier relationships), weaknesses (supply chain limitations, traditional operations), opportunities (global expansion, e-commerce development, market segmentation), and threats (increased competition, Brexit, changing fashion trends). The report further delves into an operation impact analysis, focusing on the financial implications (brand equity, cash flow, shareholder interest) and operational aspects (supply chain management, production processes, adapting to market changes). The conclusion summarizes key findings, emphasizing the importance of strategic adaptation to maintain competitiveness in the retail industry. The report highlights the need for M&S to improve its supply chain, embrace technology, and respond to evolving customer demands. The study is supported by references to academic journals and books.

GLOBAL BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
SWOT analysis ...........................................................................................................................1
OPERATION IMPACT ANALYSIS..........................................................................................3
OPERATION – PRODUCTION & SUPPLY CHAIN...............................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Global business environment is known as the various types of environment of different
countries which affects the business (Anderson and et.al., 2017). The chosen company for this
project is Mark & Spencer. In this project with the help of SWOT analysis the different strengths
and weaknesses of the company is evaluated. This project also talks about the impact of different
operational activities of the. business with the help of Operational impact analysis.
MAIN BODY
SWOT analysis
SWOT analysis is a tool which helps in understanding the strategies of the company with
the help of the identification of its Strengths, Opportunities, Threats and Weaknesses. SWOT
analysis of M&S is as follows,
Strengths:
M&S has great reputation as in the fashion retail market it provides the customers with
great quality product. Many people in UK prefer to visit M&S for shopping this is to the
recognition of this brand. According to a study it has been found out that M&S is the second
most popular brand in UK. This company has been also known to provide different types of
products to its customers. This company is known to be offering products such as different
variety of vegetables and other home products. Company has very good relationships with the
farmers and thus they get fresh products for serving the customers (Zhu, and et.al., 2020).
The company started to put emphasis on investing in technology on IT and logistics to
enhance its capabilities and develop in the e-commerce market of the UK. This action of M&S
led to increase the distribution of its products, many portals were established for the customers to
purchase their products. Their products were being sold through 44 websites globally, increasing
the company’s revenue. M&S developed various socio-economic and environmental plans which
build trust and did good for the nature and the society. The positive cash flow of M&S every
year indicates that the company has the capabilities of paying off its debt and invest in some
better investing opportunities. This also determines that the company have good liquidity ratios.
These are the strengths of M&S which has led the company to take advantage amongst its other
competitors and has brought the company to the position where it is right now (Arhuiri and
Humberto, 2019).
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Weaknesses:
One of the weaknesses of M&S is the company is facing difficulty in extensibility and
are unable to widen their supply chain to deliver their products across the globe. This company
needs to explore newer marketing techniques and improve their online existence to strengthen
their position back in the market. In Christmas, 2017, a decline was seen in the sales of the
company due to the unviability of the products in some of the stores. The company's
incompetency to meet the requirements of food and clothing for the customer, leads to its poor
financial performance. Due to the lower margin the operating profits of the M&S has been
dropped by 37% before adjusting the company's items. The speed for change or innovation is a
threat to every business aspect in today's world. Another major drawback of the company is that
it uses traditional manual operations and its inability to cope with the changes and acquire latest
technology to remain competitive and win in their business strategy. The company should
identify the significant technology that could be beneficial for the organization and the potential
advantages to be gained from early adoption. It should examine how organizations are using
disruptive technology to improve operations and to increase efficiency. A company's growth also
depends on its ability to predict customer behaviour and the perception of the customers about
the company. There is a misconception in the public that the company does not produce clothes
for the youngsters and the majority of the customers are elderly which is also one of the causes
for its downfall (Jin, Miao and Park, 2018).
Opportunities:
M&S has established successfully in many countries expanding its operations such as
China, India, Brazil, Poland etc. company needs to focus globally and increase the no. of stores
in these countries. The company may also try to get into some more countries which would lead
in expansion of the company. M&S has established their stores online but could not dominate the
internet as the competitors like eBay or Amazon. M&S has the opportunity in investing IT and
technological services and develop themselves in the online market also. E commerce is the next
big thing in the upcoming future because people are getting concerned about their health and
prefer to shop online from the comfort of their homes. M&S announced that the company is
going to bring its clothing and home products online soon.
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M&S needs to target its market into smaller segments or group which would increase their
profits and reduce costs. The company has always followed the principle of establishing mega
stores everywhere. The company can create by segmenting them on the basis of the needs of the
customer. The management and maintenance costs of the company would decrease, smaller
stores would have lower rents resulting in decrease in the rental costs. These are the
opportunities of the company which can lead to the growth of the company given if the company
grabs these opportunities. Grabbing the opportunities and implementing these actions are the
tasks of the company which would decide the company’s future (Islam and et.al., 2019).
Threats:
The retail businesses are growing all over the world and creating huge competitors for
M&S such as Amazon, John Lewis, Gap etc. The competitors are getting stronger and
resourceful. The competition had increased and developed their sources of operation online. The
major example of online store is amazon being the most established online. In order to stand out
in the market and create an advantage the company needs to establish tight grip on the internet.
The company needs to develop various and innovative strategies in order to stand in this
competition. The company is effected by the UK’s decision to leave the European union and
creating the Brexit. Businesses in UK are going to be dependent on the UK’s market and the
large share of revenue depends on the UK’s market and the decline of the sterling.
The environment of the world is totally disturbed by the global pandemic which hit in the early
2020. The UK was in lock down so as other countries which resulted in the decline of sales
drastically. The company did manage to change and get familiarized and create certain strategies
which did not let the company to the downfall. The biggest threat in today’s world is change in
trends in fashion (Khan, 2021).
OPERATION IMPACT ANALYSIS
The success of every business depends on the decisions and the actions taken to perform
the business functions, thus it is very important to analyse the results of these taken actions and
decisions. The decisions of any business whether it be big or small should be revaluated and
analysed. The following are the selected to carry out the operation impact analysis on the Marks
and Spencer group PLC. (Mustafee and et.al.,, 2017).
FINANCE
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The brand name is the brand equity which is the company’s biggest advantage and it also
helps in making better revenues for the company. Mark and Spencer is a Big name and a well-
recognized brand which attracts the shareholders to invest in the company or the brand. This
leads to a better cash flow in the company. Better cash flow means a better liquidity ratios and
the company’s ability to pay of the debts and invest in some better investing ventures. The
company can pay off dividends to the shareholders and can enhance in the growth of the
company. The shareholders are attracted and invest in companies which are concerned about the
socio-economic and environmental issues of the society, Mark and Spencer has conducted
effective corporate social responsibilities which has done good to the society and the
environment and also created a better public image in the eyes of the shareholders. It enhances
the company’s goodwill and image amongst the shareholders and the society. This increases the
shareholders’ interests in investing in Mark and Spencer (Wilshaw, Fowler and Wallace, 2021).
OPERATION – PRODUCTION & SUPPLY CHAIN
If the brand name is well-known and established, then it is important for the company to
maintain a strong and well managed supply chain. Supply chain are the crucial activities which
are performed by companies in order to distribute their products in their desired region. The
company Mark and Spencer has a wide variety of products which leads to a big supply chain.
The company’s supply chain is not the best in the world which resulted in the decline of the sales
and following the revenue. The company saw a decrease in their sales in the year 2017 and 2018
which was cause due to a poor supply chain management. This decline was at the time of
Christmas as the company could not fulfil the demands of the customers for food and clothing.
Mark and Spencer has developed from that state and has introduced online stores trying to
balance and maintain their supply chain but the company needs to improve in this field as the
companies which are the competitors are putting their best in maintaining the availability of their
products into the market via various sources (Burgess and et.al., 2017).
The UK’s decision to leave the European union also created certain challenges and has
resulted in the change of the infrastructures of the market. This has led to the increase of the lead
time for the custom and increased costs from the material brought from other countries. The
processes which Mark and Spencer uses are manual which are not efficient as the new upgraded
technologies introduced recently. These new technologies are being used by the competitors of
Mark and Spencer which has given an edge over the company and a puch in the market. These
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manual processes have slowed down the production process of the company, thus increase in
costs. The ability of Mark and Spencer of not being able to fulfil the demands of the customers
has left them behind their competitors. The change in trends and fashion has always been there in
this industry creating a huge challenge for the companies forcing them to adapt to new ideas and
innovations. The demands of the customers change as per the change in the trends and fashions
which are to be fulfilled by the company (Anderson and Le, 2018).
CONCLUSION
With the help of this project we conclude that M&S (Mark and Spencer) is the third
largest company with respect to the market share in the UK market in the retail industry as per
the Statists. M&S has a large online presence on the internet but it is not as big as its competitors
such as Amazon and eBAy. M&s can be recommended certain strategies for implementation in
order to reduce the cost of production of the company. With the help of SWOT analysis this
project is successful in determining the strengths and weaknesses. It also has help in determining
the opportunities which the company can grab for improving its business. In this project the
threats to the business of M&S are also explained. With the help of this project its is understood
that the companies supply chain is not sufficient to successfully fulfil the demand of the
customers.
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REFERENCES
Books and Journals
Anderson, D.J. and Le, H.D., 2018. Using System of Systems M&S to Assess Operational Energy
and Inform S&T Investments (No. SAND2018-6138C). Sandia National Lab.(SNL-NM),
Albuquerque, NM (United States).
Anderson, W., and et.al., 2017. The dialogue and advocacy initiatives for reforming the business
environment of the tourism and hospitality sector in Tanzania. Tourism Review.
Arhuiri, P. and Humberto, J., 2019. Diseño e Implementación de un Plan Estratégico para una
Empresa en el Sector Metalmecánico en la Región Sur, caso METCOM M&SE EIRL.
Burgess, T.F., and et.al., 2017. Mapping the operations and supply chain management field: a
journal governance perspective. International Journal of Operations & Production
Management.
Islam, S.R., and et.al., 2019. THE IMPACT OF ONE BELT ONE ROAD IN THE GARMENT
SECTOR OF BANGLADESH. European Journal of Social Sciences Studies.
Jin, H., Miao, Y. and Park, S.T., 2018. A Case Study of Marks and Spencer lost China. Journal
of Industrial Convergence. 16(2). pp.15-23.
Khan, A., 2021. An Empirical Study on Lead Time of Readymade Garments in Bangladesh. Adv
Res Text Eng. 6(1). p.1059.
Mustafee, N., and et.al.,, 2017, December. Purpose and benefits of hybrid simulation:
contributing to the convergence of its definition. In 2017 Winter Simulation Conference
(WSC) (pp. 1631-1645). IEEE.
Wilshaw, R., Fowler, P. and Wallace, B., 2021. Working in Marks and Spencer's Food and
Footwear Supply Chains.
Zhu, J., and et.al., 2020. Energy–Economy Coupled Simulation Approach and Simulator Based
on Invididual-Based Model. Energies. 13(11). p.2771.
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