BUSINESS

Coursework Assignment (Extract From The Module Handbook)

Coursework Assignment (Extract From The Module Handbook)

Introduction

This report deals with the overall Analysis of Marks and Spencer Company. The area of focus for this paper is to analyze whether the company is worth investing in or not and how its key ratios are performing in comparison with other competitor. In this case, we have chosen Urban Outfiters as another competitor for Marks & Spencer.

Investment Decision Analysis

Would You Invest In Marks Spensor?

From business diversification to the outsourcing the cloting manufacturers are on the top of the financial charts even afater the heavy financial crises and declining purchasing power the brands are fighting against each other to lead the market. In this regard M&S is one of its own kind. M&S is one of the leading retailers of clothing, foods and home ware in the UK. The company has expanded its food product offering significantly in the recent years. New products launches focus on expanding healthy products, promotions, and competitive prices are all helping the company attract customers in a highly competitive market. However, surge in shoplifting could negatively impact the cost structure for M&S. In order to make an investment decision for this type of business there are a number of factors which needs to be looked into.

Product Diversification

The company has expanded its food product offering significantly in the recent years. In 2009, M&S consistently highlighted it is cheaper than Waitrose on a basket of 1,200 items by about 2%. The company, in 2009, decided to invest in its margins in order to provide its customers better value. As a result of this, M&S saw improved perceptions of value by its customers. The company, in FY2011, launched around 1,800 new products in food and positioned itself as the UK's leading high quality food retailer. The key product launches of the company include Taste Italia, and Made Without Wheat range of gluten-free bread and cakes, With the success of Made Without Wheat product range, the company launched gluten-free sandwiches, sausages, stuffing, and crisp bakes. As of FY2011, the company offered 125 gluten-free products. M&S also became the UK's second largest favorite health food brand with the launch of its Simply Fuller Longer range which encourages customers to manage their weight with a menu plan. The gross margin of food division increased by 20 basis points to 30.8% in FY2011. This was mainly driven by better management of promotions and waste. Further, in the fourth quarter of FY2012 ended March 2012, M&S launched 500 new products in the food division. The sales in this quarter increased by 3.1%, The company's promotions such as roast dinner for £5 ($7.8), Dine In, etc offered its customers with great value solutions for special occasions. M&S' food division has been performing well in a very competitive market and against tough competitors. By launching innovative products and with an expanded food offering, the company has been able to attract the customers in a highly competitive ...