The paper analyses M&S external environment. Today, the economic environment -- in UK especially, but also globe wide -- raises the threats of higher credit costs (Floud and Johnson, 2004). The external environment of Marks & Spencer is comprised of all the elements that determine what the it needs to compete in its respective industry. After two years of growth, the food and fashion giant has been stopped in its tracks by a grim combination of economic factors, ranging from bad mortgages in the US to rising petrol prices and the mountainous personal debts of British shoppers., Marks & Spencer became the first British retailer to make a pre-tax profit of over 1 billion BBC News online 1998 Though a few years later Marks & Spencer were hit by the credit crunch which has had a dramatic effect on the company as they struggle in the current economical climate., References: Marks & Spencers Press Release, 2010. *You can also browse our support articles here >. New media technologies can be used for efficient delivery of new taste and fashion trends from factory to store displays, better communication with designers, producers and suppliers is very important for the company, Zara is one of the fast market changing competitors of M&S, it is important that M&S be ahead of any of its competitors while keeping its classic touch of style in some range of products. For the assessment of business strategic feasibility company before new product development should en sure whether they have enough technological and human resources to manage business functions effectively or not. Within 10 years Michael Marks had at least 12 premises, his business skills took him to his friends in the search of potential business partner, he approached one of his friends Isaac Dewhirst, whose money had loaned towards his original costs at start up, refused his offer but referred Mark to Thomas Spencer who was working for Isaac as a senior cashier. Marks and spencer is operating in a very competitive environment and there are many factors that affect the company in the outside environment. Smith, P.A & Cockburn, T 2013, Dynamic leadership models for global business : enhancing digitally connected environments, Business Science Reference, Hershey, PA. Stanford, N 2007, Guide to Organization design: creating high performance and adaptable enterprises, The economist Newspaper Ltd., New York, NY. Environmental analysis To make the analysis of external environment of Marks and Spencer, this report will cover two key model that are PESTLE and Porter's five forces. -This school emphasis on analysis and calculation can be a very strong support to the strategy development process Discuss this statement with reference to the performance of the UK retailer Marks & Spencer over the last 10 years. The Organization also has a Twitter handle where those who want to know more about it are requested to follow the Twitter handle. Marks and Spencer (M&S) is one of the top retailers chain in UK which claims to be the top womens wear and lingerie seller as well as better quality food seller. Specific needs of chief executive officers: The following are the ideal communication channels for all the segments: Organizations to realize their mission and vision, need to take care of the welfare of their employees. Human resource cannot be imitated and helpful to firms value. 2021, ivypanda.com/essays/marks-amp-spencer-companys-marketing-environment/. Cost Leadership: In cost leadership, an organisation aims to become the low cost provider in its industry. The competitive retail landscape and evolving shopping behaviors of customers means it is essential for M&S to have access to the most efficient and effective technology throughout its . Copyright 2022 IPL.org All rights reserved. Noticeably, M&S is competing in the tough market of home-use products, and also in the food selling in comparison to others food companies, where they are selling products from freshly produced groceries items and meals both partly and ready meal. are all compete on price, quality, range, and service in order to strive for business success. This feature enables the company to store videos and pictures of various products. Basically external environment defines the competitive situation of organisation and potentially have both positive and negative impact on businesses analysis targets four major categories of external factors that affects company's capability to grow. Boosting personalized selling (Thompson & Martin 2005). Don't waste time Get Your Custom Essay on "Marks & Spencer Operations Management" Specific needs of the middle-level employees: What M&S would want the employees in this segment to know is that personal, professional, and career growth are based on the commitment to the set goals and objectives. Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning. 3. The UK turnover is split between Food (54%) and General Merchandise (46%). In each part of the business M&S has a lot of competitors like BHS, NEXT, Burton and Gap. After analysing M&S business environment we come know that M&S should have to make some changes in its operations and research and development department. The bureaucratic structure is based on the bureaucratic theory of management. Also there will be, analysing the two companies in terms of size and perception, in the sense of the growth of both companies over the years and perception on how the Tesco and Sainsburys are perceived by their customers and also themselves., Marks & Spencer have recognised that they havent responded quickly enough to consumers changing needs and preferences. The second most important thing is price control. Its main competitors include NEXT PLC, GAP, and H&M. M&S is using less packaging and less bags to save environment and natural resources. . Recycling is the most important part in Plan A. M&S sells the products of high standards to its customers. The management believes in collecting and assigning cost data that is being shifted away from control. MARKS AND SPENCER GROUP PLC QUARTER 2 2010/11 TRADING STATEMENT [Online], The company that our group has chosen to analyse is Tesco. One of the most effective ways that the Marks & Spencer brand has evolved to adopt new ideas of "value" in the modern world, is with their "Plan A" strategy. M&S has a responsibility to ensure our products are responsibly sourced and uphold ourGlobal Sourcing Principles. However, pre-eminent retailer the John Lewis Partnership ('the group'), with its partnership structure so unusual in retail, seems to be fitted with some kind of antigravity device. As a result, companies need to keep on marketing their products on Amazon.com for the products to be properly known by customers (Lunden 2012). The VRIO Framework or VRIO Model is part of the Resource-Based View (RBV), which is a perspective that examines the link between a company's internal characteristics and its performance. Developing a vision, mission and values is the foundation for the log term success, as demonstrated by Collins & Porras in Built to Last. M&S should introduce new non-M&S food brands without increasing cost. Women. M&S targets various segments of customers such as the youth, low-income earners, high-income earners, and the elderly. The discussion has been described in detail about the core analysis of M&S' internal and external environment, SWOT analysis of M&S has been included. Something else which M&S would want them to know is that the Organization has a potential for growth and as a result, they should dedicate all their efforts to help the Organization grow (Gattorna 2009). M&S: 2015 A year in preview for sustainable business 2015, Web. In other words, the Organization uses Twitter for acquiring and retaining customers (Jones & Silverstein 2009). There is a big opportunity for M&S to gain competitive advantage in home products. In 2008, the world underwent a global recession, which was the biggest since the great depression of the 1930s. M&S should introduce e-commerce, the use of web-based ordering system. The retailer said eight 'full-line' shops selling food, clothing and . This initiative was aimed at helping the Organization attain sustainable customer satisfaction (Smith & Cockburn 2013). The political environment under which the Organization operates is very stable. The reason is that it has established a good rapport with all its suppliers, who supply it with products at cheap prices (Business case studies: Using supplier relationships to serve customers better 2013). The Institute for Retail Studies's research (2003) reports that retail industry in the UK is quite competitive, dynamic, and innovative in recent years. Marks and Spencer need to market their products well thats one thing they need, Internal analysis tools are used to identify and evaluate an organizations strengths and weaknesses in terms of its resources, operational capabilities and core competencies. The objective of M&S has always been to transform itself into a leading player in the retail industry. To carry out this report we have selected a company named TESCO which is a worldwide grocery and universal products dealer founded in the year 1919. Primark has captured a big market in United Kingdom. M&S trades in clothing, ready meals, bakery, and households. The Organizations strengths and internal resources can be summarised as shown below: Some of the key issues which the marketing department of the Organization must address over the next 3 years are as follows: M&Ss overall objective is to become a global leader in the retail industry over the next decade. Company Overview They practice their business operations by maintaining the code of ethics so the business policies do not hamper with any adverse condition (Marksandspencer.com, 2017). Furthermore, hiring young motivated staff in addition to experienced staff would increase M&S competences in terms of innovation. Political decisions and circumstances are very important for the M&S. Iceland is the big player in food market and captured the big market in UK and emerging as a main rival for M&S. Ill evaluate each of the three core process and how they impacted J. C. Penneys strategy. As a result, it becomes easy and convenient for the Organization to reach many customers with comprehensive information about their products and services (Harman 2014). Price has always been a big factor in the retail industry, but the last few decades have seen numerous budget retailers pop up in the United Kingdom.From budget clothing stores to budget supermarkets, these new competitors are stealing away market share from more premium brands (like Marks and Spencer), by encouraging customers to enjoy similar . It would also want them to know that they are a sign of the growth of the Organization and as a result, they should always put the interests of the Organization ahead of their interests (Leat 2012). In other words, it should avoid operating at the extremes and embrace modesty. It depicts that for Marks and Spencer the proposed business strategies in reference to new product development must be scaled. In the world Coles and Woolworths ranked 19th and 15th among the selling retailers (Knox, 2014). M&S in a western world is a managerial giant (Drucker, 1974). Through e-mail, the Organization has been able to increase its audience on social media. The core strategy of M&S is quality, value, better service, innovation and trust. Marks and Spencer Group (M & S) is an iconic and leading retailer of food, home ware and clothing items in the UK and worldwide. Most of them are pensioners and upper class people would like to pay a lot for their clothes and food. The drop in sales in the clothing division has been taken by the management of M&S as an incentive for it to strengthen the marketing of the division. However, the management of the company is predominantly male, and so, a balance of male and female management would help meet the needs of its customers and product consumers. Out of all the stores, two stores were not making any profits, so Company Q has recently closed those two stores. Suppliers Jeremy, H & Steve, P 2012, Beyond performance management: why, when, and how to use 40 tools and best practices for superior business performance, Harvard Business Review Press, New York. Communication is an essential component of business strategy because it enables organizations to reach their customers. M&S is providing good customer services at the stores. To compete based on cost, the company must address labour, materials, overheads, and other costs, and to design a system that lowers the cost per unit of the product or service. Quality and care are at the heart of everything we do especially when it comes to making our products. The reactions of managers to such type of data rely on the expectations or the formal budget or planned targets. In order to achieve competitive advantage M&S needs to focus on the following steps: M&S is offering different kinds of products like food, clothing and furniture. We Will Write a Custom Case Study Specifically. Unlike many of its competitors, M&S does not operate factories and as a result, it does not manufacture any products for itself. M&S entered the market in the late 1880s with a 'no frills' strategy (Johnson G & Scholes K. 2002. pp320-323). If done well, differentiation enables customers to purchase specific products or services in a market flooded with many varieties of products and services (Thompson & Martin 2010). ' Evidence to support this quote comes in the form of Marks and Spencer . It is a chain of discount departmental stores around, Company Q is having few grocery stores in a metropolitan city. In order for M&S to boost the perceived value of its products and services without changing its products and services, it needs to invest more in marketing, especially through the promotion of its products using different marketing platforms. The store rotation programme plans to modernise stores and create a retail environment that customers want today. Lowering costs lead to lowering prices, which can increase demand for products or services, but if the product or services cannot be produced at a lower cost it also reduces profit margins. M&S structured business formula is being analyse by using academic model as following:- 1. PESTEL analysis gives us an idea about the external environment of M&S. The core strategy of M&S is quality, value, better service, innovation and trust. 2. Your privacy is extremely important to us. Due to the huge investments which it has made over the last three years, the Organization expects the next three years to be a time of reaping the benefits of the investments (M&S: From transformation to delivery 2014). Caring about our impact on the world today and in the future is good business. Coles service has more than 18 million transactions each week. Marks and Spencer (M&S) has a tough and competitive external environment. For any brand to be popular among customers, it does not only need to be marketed on popular sites like Amazon.com but it also needs the development of an excellent brand image. IvyPanda. Our academic experts are ready and waiting to assist with any writing project you may have. Global warming is a hot topic in the world. This process is started while idea generation and financial planning as well as continue to the process of implementation. Specifically, in Q4 2018's revenue was $3.9B. Its competitors have faced a financial crisis in 2020. Customers at M&S stores can leave their feedbacks freely. Handling competition in business can be a directly linked to the success or the failure of the company. Moreover, M&S should give more importance to the aspect of the internet and online sales. M&S can increase its growth through offering new kitchenware and bedding products. The reason is that they enable Organizations to achieve their objectives. The following are the stakeholder groups with an interest in M&S: The employee market sector is broadly categorized into: The skilled employees are further categorized into the following segment: In terms of Organizational design, M&S is structured in a bureaucratic manner, that is, it has a chain of command. In terms, if age, the customers are segmented as follows: Among all these segments, those that are most attractive to M&S include the following: The reason is that the M&S brand is perceived as expensive by its customers. (2011). - Spencer Marks has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. In each part of the business M&S has a lot of competitors like BHS, NEXT, Burton and Gap. Without satisfying customers businesses cannot run their operations for long time. Media has played a big role in communicating new Fashion and price comparison to the customer. As they operate in many segments like food cloths and home and beauty products they have to deal with a lot of competitors. Customer Assistant (Customer Interaction), To join M&S workforce, company offers the. The reason is that the Organization always aims at treating all its customers equally. M&S can gain competitive advantage through producing different products and services from those of its competitors. Marks and Spencer (M&S) has a tough and competitive external environment. M&S attracts its customers by promoting its products on every occasion and event by hanging promotional offers posters, sign boards and confetti. We know its our people who make M&S successful. These factors affect Marks and Spencer's marketing position, low price theory and . As a result, it has been able to open many stores in the UK and in other countries. This includes having an organisational culture which promotes diversity, inclusivity, personal development and respect. Tesco has expand geographically from the time early 1990s and into sections like electronics, furniture, and internet services etc. As M&S products are older fashioned and expensive, they have to make a strategy that deliver more customer oriented product on less prices. Positioning seeks to stabilize and retain the positions of the differentiated products for a particular Company so as to retain the competitive advantage of the Company in regard to those products (Ferrell & Hartline 2010). 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