Corporate Strategy and Governance: M&S Competition Analysis Report

This report presents an analysis of Marks & Spencer (M&S), examining the impact of a lack of awareness regarding changes in competition on the company's profitability. The report begins with an introduction to corporate strategy and the background of M&S, highlighting the significance of the research and outlining the aim, objectives, and research questions. A literature review explores the competitive market, financial performances, and the effects of competitors' actions. The research methodology section details the primary and secondary research methods employed. Findings from both primary and secondary research are presented, followed by a conclusion, recommendations, and an action plan. The report emphasizes how M&S's strategic decisions, influenced by a lack of awareness of market dynamics, led to challenges in sales and profit margins. The study aims to provide insights into the importance of adapting to competitive changes and formulating effective corporate strategies to ensure business success. The report also uses Porter's Five Forces model to analyze the competitive landscape and highlights the importance of financial planning and competitive rivalry within the retail industry.

CORPORATE STRATEGY
AND GOVERNANCE

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Table of Contents
TOPIC - “An analysis of the lack of awareness of changes in competition and its impact on the
profits of company. A case study of M&S.”....................................................................................3
CHAPTER 1....................................................................................................................................3
1.1 INTRODUCTION.................................................................................................................3
1.2 BACKGROUND OF M&S...................................................................................................3
1.3 SIGNIFICANCE OF THE RESEARCH..............................................................................5
1.4 Aim........................................................................................................................................5
1.5 RESEARCH OBJECTIVES.................................................................................................5
1.6 RESEARCH QUESTIONS...................................................................................................5
1.7 PURPOSE OF THE STUDY................................................................................................5
CHAPTER 2: LITERATURE REVIEW.........................................................................................1
2.1 Competitive market...............................................................................................................1
2.2 Financial performances.........................................................................................................2
2.3 To assess the effect of the competitors actions.....................................................................3
CHAPTER 3: RESEARCH METHODOLOGY.............................................................................5
3.1 Primary Research..................................................................................................................6
3.2 Secondary Research..............................................................................................................7
CHAPTER 4: RESEARCH FINDINGS..........................................................................................9
4.1 Findings on the basis of primary research.............................................................................9
4.2 Findings on the basis of secondary research.......................................................................19
CHAPTER 5..................................................................................................................................20
5.1 Conclusion...........................................................................................................................20
5.2 Recommendation and action plan.......................................................................................21
REFERENCES..............................................................................................................................24
APPENDIX....................................................................................................................................26

TOPIC - “An analysis of the lack of awareness of changes in competition and
its impact on the profits of company. A case study of M&S.”
CHAPTER 1
1.1 INTRODUCTION
In modern business world, corporate strategy can be defined as actions or directions taken
by board of directors of a company which may aid in hitting both desired long and short term
targets. Strategies made by organisations related to governance needs to incorporate both
strengths and weaknesses of the organisational resources so that to compete in today's
challenging environment (Tricker and Tricker, 2015). Failure in developing a right corporate
strategy may lead an organisation to face a range of issues like decrease in sales, decline in
market share of the company and so on. Marks and Spencer is one of the famous British
multinational retailer headquartered in Westminster, London which is dealing in a range of
sectors like clothing, home and luxury food products has been chosen for conducting the present
report. Marks and Spencer's corporate strategy had faced a range of problems which impacted on
both sales and profits which impacted negatively on its reputation as well. This is the reason
behind opting Marks and Spencer for this assignment. Along with this, report will include,
literature review, research methodology and data analysis section which will help in
understanding the concept of lack of awareness of changes in competition and its impact on the
profits of company.
1.2 BACKGROUND OF M&S
Marks and Spencer was found in the year of 1884 by Michael Marks who was a Polish
refugee, the first store was opened as a market stall in Leeds. Then in the year of 1894, Marks
went into partnership with Thomas Spencer, who was a cashier at a wholesale company named
as Dewhirst. It is listed on London Stock Exchange. It is considered as one the best company
which offers high quality of branded products worldwide. But as competition is rising rapidly in
international marketplace, therefore, this firm needs to develop effective corporate-goals
strategy. This would help in running business organisation more effectively. At current time,
organisation is having approximately 980 stores in all over the world (Dubuc-Charbonneau and
Durand-Bush, 2015). M&S is not only a market leader in clothing sector but is performing its
business in Food and luxury home products. Organisation's corporate strategy which was made

by the company was related to restructuring the organisational structure, this led Marks and
Spencer to go through a range of problems. Just because of this, company's performance level
got decreased and became a major reason behind fall of sales from 2% to 11%. Due to course of
change, M&S was required to make alterations not just in its structure but in its production as
well because, clothing, food and home products.
All of these industries are rising which raised competition as well in the market and along
with this, targeted customer's tastes regularly gets changes which was very much required for
company to first analyse and then adopt new tools and technologies for gathering the reputation
which was lost because of lacking in different sections like research and development
department and so on (Srinivasan, Rutz and Pauwels, 2016). For this, Marks and Spencer was
pretty much required to adopt new technologies which could help company in making alterations
among sections where company was lacking. This would also aid in fulfilling requirements of
public and develop products and services based on the trends that were faced by the company in
modern market. This section was not covered by Marks and Spencer and the strategy which was
made by the company was some how lacking. This section started lacking and
Illustration 1: Marks & Spencer brand perceptions on the rise as it is rated one of the UK’s
top brands, 2018

With the help of above graph, it is being interpreted that due to lack of awareness of
changes in competition Marks and Spencer's profit margins is having a really low market share
in United Kingdom and this is rapidly going down as well because of less analysis done of
market and so on.
1.3 SIGNIFICANCE OF THE RESEARCH
The basic reason behind adopting the case of M&S is that corporate strategy which was
made by the company was not at all effective in nature and this took place because it was
developed with lack of awareness related to the rising competition and changes as well at the
same time. This led Marks and Spencer to go through a range of problems in decrease in their
sales, decline among profit margins as well (Pulles and et. al., 2016). This led the whole
strategies of the company to make modifications among its corporate strategy so that maximum
benefits could be carried by them right on time so that competitive advantages can be gathered
by Marks and Spencer.
1.4 Aim
The aim of this research is “To analyse the lack of awareness of change in competition
and its impact on the probability of M&S”.
1.5 RESEARCH OBJECTIVES
 To determine the competitive market.
 To analyse the financial performances.
 To assess the effect of the competitors actions.
1.6 RESEARCH QUESTIONS
 What can be considered as competitive market?
 Evaluating of financial performances?
 What is the effect of competitors actions?
1.7 PURPOSE OF THE STUDY
Research is basically being conducted to identify or analyse the role of wrong decisions
taken by a business organisation that could lead to face a range of issues like decrease among
sales, decline in profit margins and so on. In the same way, Marks and Spencer made wrong
determinations, and this was done because of lack of awareness in competition are being
considered as some of factors that led them to face major decline among annual profits.

CHAPTER 2: LITERATURE REVIEW
2.1 Competitive market
As per the thoughts of McCahery, Sautner and Starks (2016), it has been analysed that
their retail industry of United Kingdom is fastest growing industry as competition in the same
industry is increasing day by day. It has been evaluated that with the changing time taste and
preferences of people are changing. This creates demand of innovation for retailers as they have
to enhance number of employees of marketing team. It will be helpful I understanding actual
requirements of customers and their expectation from organisation. As a result, with effective
marketing workforce his industry can grow at its highest speed. It can be said that, it is essential
for this industry to focus on customers so that they can sustain longer. Along with this, it also
helps companies belonging to this industry in retaining customers and makes them loyal
towards their products and services (Jiang and Kim, 2015). At the same time, another author
have said that at one stage increasing competition is beneficial for the whole industry as their
overall market share as whole is maximising. But, on the another it also minimises their
profitability ratio of all companies at individual level. Thus, it is required by whole industry to
analyse competition at market place as well as whole industry to check out their sustainability
proportions and number of threat which might affect them in negative manner and also keeps
them away from being successful successful.
According to the viewpoint of Jacoby (2018), It has been analysed that competition in
market is beneficial for customer as well as companies because they are able to identify number
of emerging opportunities which have been grabbed by competitor company and remaining one
can be grabbed by them. Therefore, it is important for them to analyse whole market effectively
in order to grab right opportunities. It can be said competitive analysis can be done by using
porters five forces model. This model was given by Michael Porter for evaluating actual
competition level in the industry. It is done on the basis of five forces that are defined as below:
Threat of new entrants: Retail industry is very vast in size because there are number of
companies who are planning to enter into same industry. Thereat of new entrant is high for small
companies who belongs to this industry. Because, at the same financial level companies can
easily enter. But In context to large companies, it is difficult for new entrants to enter as it is
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required by them to invest high amount to manage their work. Therefore, it can be said threat of
new entrant is high.
Bargaining power of Buyers: This for retail industry is low because all the companies belong to
this sector have to focus on influencing interest of buyers in order to make them loyal. As
buyers have no alternate option to buy product from another industry (Ranson and Lissenden,
2016) . But, in order to remain competitive it is important for companies to provide best quality
of products and services to the customers in effective manner.
Bargaining power of Suppliers: It can be said that bargaining power for supplier is very low
because retail industry is very vast in size and supplier have no alternate option to avoid rates
which have been given by retail industry.
Threat of Substitutes: Retail industry is sum up of many products and services. It includes vast
range of products. Thus, it is important for the company's belonging to this industry to introduce
unique products to its customers in order to gain competitive advantage
Rivalry among existing firms in the same industry: Competitive rivalry among retail industry
is increasing day by day. Thus, it is important for the retail companies to offer high quality
products so that they could remain competitive within the industry.
2.2 Financial performances
As given by Walls, Berrone and Phan, (2012), retail industry of United Kingdom that
includes different companies that are dealing in different sectors like clothing, food and home
products to consider arrangements of capital as one of the essential term so that to develop
products and services at marketplace. In present context, United Kingdom's retailers have faced
as range of problems like range of consumer's price inflation dropped to 2.5% in March (its
lowest level in a year) from 2.7% in February. This was primarily because the price of women’s
clothing and footwear rose at a slower pace. Meanwhile, average wages climbed 2.8% in March,
which is being supported by continued high levels of employment placing pressure on companies
to up their game to both entice and retain staff (De Haan and Vlahu, 2016). The latest quarterly
figures show the more people than ever are in work, standing at 32.2 million, while the UK
unemployment rate of 4.2% is at its lowest level since 1975, with just over 1.4 million people
seeking work.
Due to this, it can easily be said that an organisation's that are doing business at
international level or in United Kingdom's market. Company had faced a range of problems
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which was impacted negatively on all over performance level at it also affected market share as
well. With the help of this, it can easily be said that organisation could easily face a range of
problems which impacted negatively on their profit margins (Cintuglu, Martin and Mohammed,
2015). Through this, it can easily be said that, developing a corporate strategy considering
finance could help the whole industry to reach to an all new level at modern business world.
2.3 To assess the effect of the competitors actions
According to the perception of ArAs, (2016), it can be said that competition plays an
essential role in the growth of the industry but at the same time reduces profitability ratio of the
company belonging to same industry. It has been analysed that competitor are making different
strategy in order to reduce cost of each and every product. Thus, if companies provide high
quality products at lower price then they can easily influence maximum number of customers. It
can be said that it is important for business organisations to adopt certain ways by which they
can gain attention of customers and also influence them to remain loyal with company for longer
period of time. Along with this, it is essential for them to analyse different actions by which
competition in the same industry can be assessed. Some of these action are defined as below:
Building self-awareness: A company may assess its competitors actions by analysing it
self from historical data and strategies made by its rivals (Kajalo and Lindblom, 2015). Self-
awareness is the best way to know the market standing of competitors. This is based on the
assumptions by considering various factors such as growth, financial position, market price of
shares, legal compliance level, business position in local market, etc. However, it is useful for
those, who have been operating in a specific market from a very long time.
Encouraging Differentiation: Differentiation helps in gaining competitive advantage
through product or service by providing customer satisfaction. A company shall make unique
and different products from its rivals in order to meet the specific demands and gain competitive
advantage (Wilden and Gudergan, 2015). A company can evaluate how variety and unique
products its compertitors are providing. It may be analysed on the basis of brand image,
technology used, customer service etc.
Conducting market research: It is important business organisation to conduct effective
market research for analysing competitors actions which have been taken by them. It can be said
that an effective market research will help company in making right strategy that could
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contribute in gaining competitive advantage. In addition to this, it can also help them out in
maximising their profitability ratio by grabbing attention of customers.
As per the above specified different ways of assessing competitors actions, it can be said
that if all of them are followed by business organisation belonging to retail industry then they can
easily enhance their command over customer and gain competitive advantage. Along with this,
they can also maximise their profitability ratio (Alfalla-Luque, Marin-Garcia and Medina-Lopez,
2015). In context to the retail industry, it can be said that assessing competitors action is helpful
for overall industry as they could enhance overall market share.
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CHAPTER 3: RESEARCH METHODOLOGY
This section of research is regarded as the most crucial aspect which assists the researcher
in collecting reliable and suitable information with respect to the top under study in the most
effective manner. Research methodology helps in gaining an insight into a number of
methodologies such as primary as well as secondary research techniques. These methodologies
helps in gathering the information so as to conduct the study in an optimum manner (Cucchiella,
D’Adamo and Gastaldi, 2015). In this regards, researcher makes use of various techniques for
collection of reliable as well as valid data to conduct study in a desirable manner such that the
objective of conducting research is fulfilled. In addition to this, project maker organises the data,
conduct analysis of the information and then does interpretation to draw relevant and suitable
conclusions out of the information. On the other hand, in the secondary research, investigators
gather information from external sources such bas books, government sites, articles, journals,
newspapers, consensus and other already published data. Under secondary research, a number of
authors as well as professionals express their thoughts and opinions upon the topic under study.
Thus, primary and secondary research assists the researcher in gaining an overview of the
information collected and conduct analysis as per their views and perceptions. With regards to
current research, management within Marks and Spencer have used both the researches, namely,
primary and secondary to gain information related to topic under study. Under this research,
investigator has used qualitative methodology so as to carry out the research in an appropriate
manner.
Research Design: This is a plan which specifies the methods and processes that will be
utilised by researcher for gathering, organising and analysing the required information. In other
words, it is a structural presentation of the way in which investigation will take place in order to
gather answers to research questions and to effectively control the variances (Ainin and et. al.,
2015). Thus, this is the systematic arrangement of the various conditions associated with
gathering and analysing the information in such a manner that it is able to generalize the findings
of taken sample upon the total population. This is essential for making the research as effective
as possible, thereby delivering the maximum reliable information with minimum usage of
efforts, money as well as time. Research designs are of two types, namely, exploratory and
descriptive design. While the former is carried out for the purpose of getting a much better
overview of the issue, the latter is the one in which researcher possess no control over the
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research variable. With regards to the present study, researcher has used descriptive design
which assists in reaching out to the conclusion within the stipulated time.
Data collection: This is the process of collecting and measuring data related to variables
of interest in a structural and systematic manner which enables respondents to adequately answer
the specified research questions, test the hypotheses and effectively analyse and evaluate the
findings. Although methods of data collection may vary from research to research, the focus is
still upon making sure that accurate as well as reliable information is collected (Chen, Feldmann
and Tang, 2015). The two basic methods which are being utilised by the researcher for carrying
out this investigation are described below:-
3.1 Primary Research
Methodology in which researchers do not collect data from previous studies rather they
collect data directly. Primary research requires in-depth analysis of data. Collection of data is
done through direct communication and observation of customers and business competitors.
Highly validated data is required in business to make decisions. Every organisation relies on
collecting data on their own as it is more authentic. As related to present research, researchers are
going to analyse role of human resource allocation in achieving competitive advantage. For this
purpose, they have analysed different techniques of primary research in order to get required data
and information. It includes questionnaire, online and offline survey, interviews and more
(Coccia, Falavigna and Manello, 2015). These ways of collecting primary data are listed below:
Interviews: Interviews are qualitative research method in which information is collected
by directly communicating with respondents. This provide detailed information gathering from
customers about research questions. Advantage of using interview is interviewer has control over
flow of process and any query or doubt of customers is clarified are at same point of time.
Moreover, it is successful in building customer relationship. Interviewers have to be perfect in
order to conduct research with the interviewee. Positive environment and friendly
communication is required so that person can express his views and feelings without fear.
Online surveys: Online survey is collection of information by customers or respondents
in the form of questionnaire over world wide web. This is research methodology is currently
used by investigators for their research. More respondents are reached by using such method. It
is less time consuming and as it based on internet it is not very costly (Cucchiella and Rosa,
2015). Online surveys provide highest rate of response. As people are using internet all over
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world information is gathered from any part of world. Online questionnaire is sent by email or
web to respondents and these participants get a certain period of time to answer these questions,
then sent back to researchers. This would aid researchers to get feedback of participants and
gather proper information.
Questionnaire: It is a kind of qualitative research method in which respondents are given
a printed or written series of questions about research topic. Participants are allowed to filled this
questionnaire on the basis of their experience with any product or service. Feedback of answers
given by respondents help to improvise quality of product. They are not very expensive and
information gathering requires less time and efforts.
3.2 Secondary Research
It involves in summary, collection and synthesis of existing research and the part of
primary research with include generation of data where secondary research uses primary research
sources of data for analysing the situations. According to the experts this research is very useful
which includes in book, journals, article and some particular issues in a specific manner. It also
involves in research materials such as research reports and documents which can be made by
publishers, websites and so on. Therefore, some government and non government data can be
used for the purpose of research (Snieskiene and Cibinskiene, 2015) . It has much more cost
affectivity as compare to the primary research that makes use of existing data on the other hand
primary research data collected by first hand from the organization or business or they can be
arrange a third party for data collecting process. Secondary research helps to guide for selection
of correct data which reflects the proper way of structure in the organization. It has a lot of
knowledge about data which helps to identify the answer reduces errors from the research report.
Many organization uses this resear4ch because it has a low cost and best knowledge skills of the
topic and identify the audience and market for good future growth of the company. Therefore,
these studies are easy to find data and applicable to apply company's situations.
In order to collect primary data about M&S and techniques by which its above mentioned
issues can be resolved, researchers have taken a sample of 50 customers. These respondents are
grouped under 18 to 35 years old. For taken their feedback, questionnaire format has been
chosen. This would help in taking their reviews and responses on lack of awareness of changes
in competition and how it impact on profitability of M&S. For this purpose, project manager has
developed following questionnaire:-
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