ANALYSIS

Strategic Analysis of Marks and Spencer

Strategic Analysis of Marks and Spencer

Introduction

Marks & Spencer is one of leading retailers of United Kingdom, with more than 21 million people visiting the stores each week. The product offerings of Marks & Spencer include high quality home products and clothing as well as exceptional quality foods reliably sourced from around 2,000 global suppliers. Marks & Spencer have employed around 78,000 people in United Kingdom and other countries with having more than 700 stores in United Kingdom with an expanding international business.

Marks & Spencer is the number one provider of lingerie and women's wear in the United Kingdom and is further growing its market share in kids wear and men's wear due to growth of online business. The 49% business of Marks & Spencer consists of sales from clothing and home ware. The remaining 51% of business constitutes of food, where it sells everything from fresh produced meals, groceries, partly prepared meals and ready to eat meals (Marks and Spencer plc2013, p. n.d).

External Analysis

The external analysis consists of study of the external market environment in which the business operates. The external analysis focused on analyzing different factors like, customers, demographics, competition and other relevant data. The external analysis examines the threats and opportunities that are present in the market for Marks and Spencer. This analysis will help the management of Marks and Spencer to decide the future path of the organization. The external analysis of Marks and Spencer includes the Pestle Analysis and Porters Five Forces Model Analysis.

Pestle Analysis

The Pestle analysis is a tool used by Marks and Spencer for strategically analyzing the environment in which they are operating. This analysis provides a framework for reviewing the external macro-environment in which Marks and Spencer is operating. The pestle analysis of Marks and Spencer is useful in evaluating market growth or decline, position potential and direction of a business. It includes Political, Economic, Social, Technological, Environment and Legal aspects of the analysis (Downey 2007, p. 6-7).

Political

There has been a significant effect of global politics on Marks and Spencer. The Soviet Union collapse, the incident of 9/11 and policies of World Trade Organization had a significant effect on the company's business operation. The results of these global political incidents slowed down the development of Marks and Spencer. The decrease in Value Added Tax in United Kingdom has encouraged the public spending but it could have a detrimental effect on Marks and Spencer if the UK economy will not be secure enough.

Economic

The recent recession has affected major western economies, in a way that disposable income of people might go down. In return consumer spending has also gone down due to higher inflation and uncertainty in the job market. Marks and Spencer goods are known to be non essentials and thus this decline in consumer spending could have damaging affect on the sales of the company. For this Marks and Spencer will have to encourage more promotional schemes in its stores. Consumers could switch to other UK brands like ...