Monday, June 3, 2019

Marks and Spencer Internal and External Factors

Marks and Spencer Internal and External FactorsAnalysts did not expect there to be a double-dip ceding back first, but changes in consumer spending trends raised disturbs for keeping a keen eye on consumer confidence by carrying out in-depth customer surveys every month. This was to buzz off and stay realistic. Leaders of large firms argon very cautious regarding UK economic environment.UK is considered to come through the deepest ravages of the economic turmoil recently and in such a situation still MS managed to post profits of 632.5m for the last financial year. With the worst effects of the recession behind , the sloshed foundations in place, and its core secure helped MS set for growth under hard circumstances. At 632.5m, MSs adjusted pre-tax profits for the 12 months to 27 March were 4.6% higher than a year ag unrivalled but well below the 1bn profits achieved in 2008. These stats along with the tonic budget announcement, impact on consumer spending remains a cautious e vent and will arouse impact on outlook for the year ahead.Business Environment AnalysisPESTLEThe external environment of Marks Spencer is comprised of all the elements that get back what the it needs to compete in its respective industry. Following is highlighted some factors of MAs external environment and how they effect Marks Spencer in executing its strategies(P)OLITICALEuropean Integration and openhanded Trade Agreements have opened up markets for British other Companies to invest in Europe. Thus, causing MA to fight hard to maintain its market function with aggressive strategies. Generally any trade is allowed in UK provided that it does not oppose public policy, public order, or any existing law in the land. scarce for Marks and Spencer, the most troublesome political elements that they have to contend to deals with the issue of labour laws and industrial relationship.In the long history of MA, its development efforts have been controlled by many infringements in labo ur laws in local operations and excessively in international initiatives.(E)CONOMICUK Retail sector is quite recession prawn and similarly very sensitive to changes in interest rates. With the event of folk 11, the world economies have suffered heavily, Once the customers and economy was on boom track after September 11 post effects, the financial crisis of 2009-09 has again set the economies struggle for survival. UK economy after fighting hard has direct regained its system and consumers are again rose-colored and the retail industry is once again booming. The United Kingdom being a hub of commerce in Europe, has consumers not limited to only locals but flocks of tourists also, therefrom creating much variations in base trends and retail business.(S)OCIALChanges in consumer taste and lifestyle represent both opportunities and threats for the industry. UK consumer have a loyal tendency particularly towards brand. fictitious character of the product, but these factors give t he bounce be easily overcome by fairly private-enterprise(a) pricing strategy from a competing brand. Moreover, consumers preference towards trendy styles rather than classics are also apparent in UK consumer market. This is specially in case of Marks and Spencer, as it has struggled hard to gain a greater market share of its customers. This makes lucid that UK consumer places high value on their money.(T)ECHNICALChanges in retailing methods such as Internet used as online shopping store is a common practise in retailing, widelyning the scope of ecommerce. Moreover, Paperless operation and use of IT systems has provided flexibility in the executing operations of the business. Online marketing activities over the net is also becoming one of the competitive advantages held by the leading retail companies in UK.(E)NVIRONMENTALThe renewable and environmentally friendly sources of resources used in production are opted by most of the companies crosswise globe now which has posed grea ter struggle for companies to maintain its market share. For Marks Spencer, careful use of fabric and raw materials is a greater concern now.(L)EGALNational legislation for health and safety both in terms of consumer rights and also in terms of production of own natural renewable resources for devising clothes is closely monitoring practices of companies so as to evaluate them on complying with legal restrictions .Analysis of the External Environment of Marks and SpencerThe retail environment in UK appears to be extremely attractive. Companies, although have government go for still there exists in the market some level of difficulty in penetrating the retail market, especially for new entrants, repayable to the strong hold of monoliths This is also true companies like Marks and Spencer, having strong historical background that their environment is essentially welcome and neglecting the fact of cutthroat nature of the competition there are chances of immense demise for companies .PORTERS 5 FORCESPorter explains that five forces exist in a market, which determine the intensity of competition and profitability of MS .The first is the threat posed by new entrants, the high capital expenditure and customers changing expectations put meaningful barriers to entry, making market also sensitive to reputation. But, with emergence of low cost manufactures a significant threat is posed for MS market. There is an opportunity in the low price/ low economy (fast) sector and BHS and Top Shop or ASDA may also consider introducing low cost home products. The southward is the threats from substitutes, as there are many retailers in both clothing and food sector, MS has serious concerns regarding this. The third force is the threats from the bargaining situation of buyers, this is strong for both MS and the entire food retailing industry with a large number of alternative suppliers, hence, the aggressive pricing strategy which causes strong competitive rivalry in the indus try and is getting intensified because of little or no differentiation in the basic product offered. Last is the threats from the suppliers bargaining power which is considerably low for food industry, due to a range of alternative sources of supply available for products.SWOTSWOT Analysis will help us in understanding Marks Spencers current situation in terms of strengths and where improvements are required within the business and what outside environmental threats it faces along with what new opportunities are available in the short and medium term.(S)TRENGTHSDiverse ranges of Products Food, Clothing, Financial products, furniture, wine and HomeLargest retailer in the United Kingdom by sales. impregnable Cash Flow PositionIncrease turnover and trading profitsLeading Premium Quality Food RetailerBrand Awareness(O)PPORTUNITIES freshly ProductsInnovation AlliancesCustomers demand change to to a greater extent value for money productsDevelop overseas supply chain(W)EAKNESSESPercept ion of High PricesCustomer disinterestenvironmental issues PollutionsSubstitute products or technologies(T)HREATSNew existing competitionVolatility in Price of raw productsNew legislationsEconomic recessionLow cost retailers highly high competitionAnalysis of the Macro environment MicroenvironmentMS is rated a successful multinational corporation. It has created its large number of loyal customer base by providing them with its high quality, good service, comfortable shopping environment and convenient access to outlets and products. But, due to the immense competition in market and also MSs own wide product ranged offered it has to revise its marketing segmentation approach, especially in reference to clothing market. Consumers have changing fashionable design and coloring requirements and MS as is facing different fag markets need to change its designs, cuts and color schemes to meet their demands. These need to item and separate for women and young consumers who are its main target.MS also needs to enhance stock management. Combing its information technology system with stock management ca help MS find problems immediately and turn them efficiently to supply products timely.MS also needs to consider the global economic environment, where the economic recession has caused deciling sales for MS, it should focus more towards mid-age and mid-class as its target group as now their incomes can afford the high price of MS.Trend Impact AnalysisProposed Strategic Plan for MSAfter doing analysis of the environment of the MS, the proposed strategic plan will be considering both the internal as well as external environment. Initially its value chain should be focused onValue ChainThe value chain of the organisation is coined primarily by Porter as a tool to recognise the intrinsical capabilities of the organisation to realise its competitive advantage. The following will describe the primary activities and support activities of the company.Primary ActivitiesThe primary activities take in hand several specific functions of the company inbound logistics, operations, outbound logistics, sales and marketing, and service. Marks and Spencer receives its inventories from its suppliers, initially the strategy was to stay limited to English suppliers but eventually this trends is now shifting and now suppliers include international suppliers also. Marks and Spencer is involved in the direct selling of apparel, foodstuff, and even home furnishings. The sales and marketing of the company should be the most prioritised elements for the organisation, due to the intense competition present in the industry, vying for consumer favour and to add value to the brand , it takes a step above the rest of these primary activities.Support ActivitiesFor these support activities, the company needs to have hold of its f human resource and technology, where with help of proper training of common employee, the company can ccreate knowledge of its products and their k en during the processes of selling to customers. Use of technology in similar manner can significantly infused in the operations of Marks and Spencer. This includes providing online transactions and loyalty cards on which they should be doing continuous improvements and innovation.Strategic Options AvailableTo create sound strategic options for the MS, they must consider the gain grounds and impacts those can have on company financial locating and customer base also. Following are discussed some options which following the current recession and UK competitive market structure can be of good benefit for the companyBrand move this technique if used to create fresh feeling in the minds of customers for the brand after frequent intervals. Moreover brand repositioning requires a lot of work on new targets, segments and options, the changing consumer trends and demands can be well handled by MS using such strategiesThe rapid competition demand fast and logical decisions which are flexi ble and designed in such a ways that immediate implementation is possible as customers dont have time now and immediately switch to other brands. Thus the structure of decision making should be redesigned to make it more integrated and flexible.Of the many strategic options available for Marks Spencer it appears that Marks and Spencer could focus on to refurbishing its operations. For instance, the company should look into a partnership with the more current and competitive players in the retail industry. This can help broaden the overall outlook of Marks and Spencer regarding their standing in the market.Marks Spencer needs to move ahead with major technology-driven change projects, despite caveat over the economy. Improvement in systems can also take place to improve supply chain processes which includes enhancing stock management systems to provide more precise real-time stock level information.Getting Cost efficiencies by introducing some new point-of-sale system and better c ustomer service to all stores create a strong multichannel capability can also be useful which will result in more website development and introduction attractive and more efficient facilities and stock availability information for customers

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