Case Study - Marks & Spencer

PART A:

Evaluating the internal and external strengths and weaknesses of M&S

M&S company is a multinational UK company which deals in offering clothing, home and food products across worldwide due to which they attain strong brand image in competitive market environment. Therefore, in order to maintain their exist brand image the management are liable to analyse the internal and external strengths and weaknesses so that they are able to take corrective measures in order to improve them so as to achieve competitive advantage as well. Fro this, the management of M&S need to conduct SWOT analyses which are as follows:

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Human resource: As M&S is multinational retailer company who operated their business operation across worldwide. Therefore, to operate business functions in different countries the company has attained large number of employees. According to the international report, it has been observed that the company has attained more than 84,939 employees in 2017 which contribute more efforts in achieving growth and success of an organisation (Charles, Bustard and Black, 2011).

Financial resources: M&S deals in multiple products such as clothing, home and food products due to which they have generate huge revenues every year. According to the report, M&S becomes the first British Retailer who made pre-tax profit of over £1 billion in 1998. The company has generated 9.536.6 million profit during every financial period.

Company's image: M&S is one of largest retailer and responsible business has been easily recognised by the customers of different countries. The company has also been awarded as Top retailer company in the year 2006 which increases their brand image in competitive market.

Weaknesses:

Poor management: M&S have an ineffective management ho sometimes failed to recognise the changing market trends due to which their sales may affected. As the taste and preferences of customers changes frequently which need to be identified on regular basis and provide quality products and services accordingly. If failed then it will make negative impact on company's customer strengths.

Focused on brand rather than products itself: M&S attained strong brand image in competitive market on the basis of which they provide products and services. Thus, they are not focused on enhancing their quality of their products due to which customers may show less interest in purchasing their products (Docherty and et. al., 2010).

Lack of marketing strategy: The advertising strategies of M&S has been poor due to which their sales goes down even during Christmas. This will negatively impact on their revenue as well.

Opportunities:

Changes in technology: The management of M&S should required to implement advanced technology in their process of executing business activities due to which their production cost has also been minimised. It also help in producing quality products due to which they can able to attract large number of customers through providing goods at an affordable prices. Therefore, the management of M&S required to invest funds in adopting modern IT systems and advanced technologies which help them in reducing cost of process of different business activities.

Producing cloths on the basis of their age: As M&S fails to attract interest and buying behaviour of young women as they offered old fashionable clothing products. Therefore, in order to attract them the management of M&S need to produce clothe according to the taste and preferences of customers.

Focuses on product diversification: The customers of UK prefer to consume international dished such as Indian and Chinese as compared to local dishes. Therefore, the company need to focus on producing international dished in order to attain huge customer strengths.

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High competition: There are large number of competitors which gives tough competition to M&S such as Sainsbury, Tesco etc. due to which their sales and revenue may affected. The company faces competition from both supermarket such as Tesco, ALDI as well as retailer companies such as John Lewis, Zara due to which they find difficulties in attracting large number of customers.

Increment in online shopping: As customers usually prefer to buy products through online rather than reaching to physical stores. This will make huge negative impact on sales figure of M&S. Because of this, Online retailer companies takes advantage of this and achieve huge revenue. Thus, the management of M&S also required to use online platform in order to sale their products and services.

Changing economic conditions: M&S operated its business operation across worldwide thus global economic recession may largely affect their business due to which their existence in different countries may comes in danger (Fernie, Fernie and Moore, 2015).

PART B

Evaluation of strategies of M&S using different theories and practices

M&S is multinational retailer organisation which deals in offering multiple products such as clothing, food and home products across worldwide. Through this, the company capture large market share and attain huge customer strengths. Therefore, to maintain their stable position they need to make an effective strategies and policies which brings profitable result to company in near future. There are different models and theories which need to be applied within an organisation which are given as below:

• Resource based theory
• Porter's generic competitive strategies
• Porter Five forces

Resource based theory: Such theory refers to managing and controlling resources that an organisation have in order to execute business operations in more effective and efficient manner. Through applying such theory, the company can able to achieve competitive and advantage. This theory suggests that an organisation should required to look within the company to identify resources with an objective of utilising them in an optimum manner so as to achieve competitive advantage. M&S should required to make an effective decisions and strategies regarding allocation of resources in different areas where they get profitable outcomes. For example, As the company fails to attract customers due to selling old fashionable clothing products at high prices. The company faces more problems related with high production cost due to improper utilisation of resources. Therefore, the management of M&S should required to make an effective strategies regarding allocation and utilisation of resources through implementing an effective techniques and tools so as to reduce wastage and maximise efficiency in production process (Gilligan and Wilson, 2012).

With the help of this theory, the management of M&S can able to utilise their available resources instead of focusing on acquiring new skills for different opportunity. There are different types of resources such as financial, physical and intangible resources. If company can effectively manage all of its resources in a systematic manner then if will ensure in providing competitive advantage to the company. Resource based theory is based on the facts that all resources are not homogeneous but also limited in mobility.

Porter generic strategies: Such strategies useful to apply in order to achieve competitive advantages for company. Such strategies includes three main generic strategies which are briefly described as below:

Cost leadership: Through such strategy, the company mainly focuses on controlling cost while producing quality products. As M&S faces problems of increasing cost in production due to which they charge high price from their customers. Due to poor management the company generate low profit. Therefore, it is important to adopt such strategy in which the management should required to implement new technologies and equipments in production process due to which the chances of facing lots of wastage will be less.

Differentiation: In this strategy, M&S seeks to produce unique products which makes them different from their rivals. As the company provide local food products to the people of UK due to which they failed to attract large number of customers. As the people prefers to consume international food products such as Indian, Italian etc. therefore they need to expand the variety of food products and should include international food products in their stores which help them in attracting lots of customers. Offering low prices than their rivals also shifts customers from rivals to their company's products and services.

Focus: The management of M&S need to focus on dividing the customers on the basis of their interest and preferences. The focus strategy consists of two variants such as:

• In cost focus, the company need to focus on achieving cost advantage in their target segment
• In differentiation focus the company need to focus on differentiating target segment.

These two strategies help M&S helps to identify the needs and preferences of customers due to which their management are able to make an effective decisions and planning to offer quality products and services. Changes in preferences and interest of customers changes frequently due to which the company need to make changes in their strategies as well in order to maximise the satisfaction level of customers (Kelly, 2011).

Porter five forces Strategies:

The management of M&S should also required to analyse the competitive environment through using porter five forces strategies so that an effective decision and plans should be formulated in order to achieve competitive advantage. It includes five key factors which include:

Level of competition: M&S deals in providing multiple products such as food, home and clothing products due to which they faces tough competition from both supermarkets such as Tesco, Asda as well as clothing retailers such as John Lewis, Zara. Porter five generic strategies tell that the company should require to produce different products than their rivals in order to positioning itself as a higher quality value for money brand. Competing with rivals through analysing their strategies help company in making an effective decision and pans regarding achieving competitive advantage.

Threats of substitutes: The threats of substitutes are high in retailing sector. There are large number of small retailers who provides quality clothing products at cheaper prices which brings challenges towards M&S to generate huge sales. For example, Tesco offers substitute products at reasonable prices due to which the chances of losing customers will be more. The management need to focus on improving their quality of products and changing pricing policies in order to attract large number of customers.

Threats of new entrants: There are few companies who decide to enter into retail industry as it requires huge amount of investment. As M&S already has attained strong brand image in market and has many distribution channels as well, Due to having high knowledge about this field the company faces less threats of new entry. Therefore, M&S faces no problems in operating business in more smoothly.

Bargaining power of buyers: The people of UK are more prices sensitive due to which they prefer to buy those products and services which are less in price. Therefore, M&S may find difficulties in increasing their sales as they charge high prices on their products due to high cost of production. Therefore the management should require to reduce cost of production and offered quality products at an affordable prices (Lalor, Lorenzi and Justin, 2014).

Bargaining power of suppliers: There are more than 90% of the M&S suppliers are British thus the company faces no difficulties in getting raw material from suppliers on time. The bargaining power of suppliers is low as M&S focuses on purchasing from few suppliers only. Therefore, the management should required to choose best suppliers among various who agreed to provide them raw material on time at an effective prices.