Mark and Spencer Strategic Management

Document Type:Thesis

Subject Area:Business

Document 1

Company Background M&S is leading multinational retail based in the United Kingdom with its headquarters in the City of Westminster. M&S was founded in 1884 by Sir Michael Mark and Thomas Spencer. It trades on the London Stock Exchange as MKS and is a constituent of FTSE 100 index. The retailer specializes in clothing for men, women and children, luxury food and home products. M&S operates 1,025 stores across the UK and has approximately 454 international stores. In 2017 fiscal year, the company reported revenue of £10. billion of which £3. billion was generated by the clothing and home products, £5. billion by the food segment and £1. billion from the international segment (M&S, 2017). Social and Environmental Policies In 2006, M&S launched a new marketing campaign known as ‘Look Behind the Label’ which sought to explain to consumers how the products were sourced and produced. ‘Look Behind the Label' was an initiative that seeks to respond to consumers who had increased concern about how companies make their products. In 2007, the company launched Plan A with the aim of addressing the major environmental, social and ethical challenges facing the company. Plan A was meant to help the company in remaining relevant to consumers by providing exceptional products and services despite resource scarcity caused by social change ("M&S LAUNCHES PLAN A 2025 ? AN AMBITIOUS, CUSTOMER FOCUSED SUSTAINABILITY PLAN," n. d. M&S donates unsold clothes food and the rejected equipment to charity partners such as Oxfam, Shelter, FareShare, and Newlife. PESTEL Analysis PESTEL analysis is a management tool used in analyzing the external environment factors that affect an organization.

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Such factors include political, economic, socio-cultural, technological, legal and environmental (Hill, Jones & Schilling, 2014). Below is the PESTEL analysis for M&S. Political Firstly, Britain voted in Brexit mid-2016. Social-cultural The retail industry is greatly affected by changes in consumer tastes and lifestyles. For instance, changing from baby boomer to generation X affected firms such as M&S that deal with clothing. Finally, the need to preserve the environment and healthy lifestyle increases the demand for organic and green production. Technological Advancement in technology has had a great impact on the retail industry. Social media has become one of the greatest marketing tools which reduces advertising costs thus increasing revenues. Other brands can easily substitute food and apparels. Many factors can cause consumers to choose to buy from brands other than M&S.

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for instance, Tesco and Asda have introduced cheaper alternatives. The threat of new entrants into the industry is low. The market at which M&S operates is highly matured thus discouraging new firms from entering the market. M&S SWOT analysis is as follows: Strengths M&S is a famous and highly recognized brand in the UK. It attracts customers across ll social status which means it does not need to advertise to create awareness. Secondly, the company has assorted products thus providing customers with various alternatives in which to choose from. Finally, M&S has many stores in Europe. Weaknesses The most prevalent weakness for M&S is that a high percentage of the products the company sells is its own brand. The UK retail industry has reached its maturity.

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Besides, the revenues generated are huge and continue to grow as the profit margins begin to decline. This is a typical characteristic of an industry in its maturity stage. M&S is also in the maturity stage. Strategic Group Analysis Immediate competitors Next Debenhams John Lewis H&M Newlook Distant competitors Gucci Prada Versace Polo Ralph Lauren Strategic group analysis is a concept used in strategic management in which organizations with similar business models are grouped (Peteraf, Gamble & Thompson Jr, 2014). That way, the company can identify opportunities or problems relating to a particular product. The Boston Consulting Group matrix is as follows: for the General segment, the company has many different lines and a wide range of products. Secondly, although the home and clothing segment continues to grow, the market share for M&S is still very low.

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Finally, food segment has a high market share, but the growth rate is low. Ansoff Matrix Ansoff matrix helps management in developing strategic options for the organization (De Waal, 2016). If the company opted for a strategic alliance or advertising, this would lead to short-term growth. However, improving the home and clothing division would guarantee the company long-term growth. Conclusively, M&S should consider improving its home and clothing division to enhance growth and remain relevant in the retail industry. References De Waal, G. A. Jones, G. R. Schilling, M. A.  Strategic management: theory: an integrated approach. pdf Peteraf, M. Gamble, J. Thompson Jr, A.  Essentials of strategic management: The quest for competitive advantage. McGraw-Hill Education.

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