Marks & Spencer's Business Policies and Marketing Strategies - Case Study Example

? Critical Issues in Globalisation Executive Summary This paper critically evaluates Marks and Spencer’s policies using the key frameworks of global business. Research shows that Marks and Spencer has effective business policies and marketing strategies. Nevertheless, the firm does not preserve these advantages incessantly. Indeed, it instigates some disadvantages. The aim of this paper is to analyse how Marks and Spencer survives within the ever-changing market. In addition, it deduces how micro and macro environment affect M&S marketing strategies and explores the weaknesses, strengths, threats and opportunities of M&S Company. Through evaluating its existing business situation, Marks and Spencer needs to review its market segmentation, share out its products to diverse target markets, and serve its clients efficaciously. Introduction Marks and Spencer is a worldwide company that spreads throughout Europe, Asia and North America. It sells footwear, clothing, food, house appliances and gifts. This paper will comprise three sections. Principally, it will evaluate the micro and macro environment of Marks and Spencer. Secondly, the paper will employ SWOT to evaluate the four facets of its business. Lastly, the paper will a draw an inference concerning the whole evaluation and provide the necessary recommendations. PEST Analysis The extensive external factors, which indirectly affect a company, comprise legal, political, social, economic and technological aspects. These frameworks will show how the macro environment influences M&S in formulating its marketing decisions. Legal and Political Environment It is very crucial for firms to adhere to government policies and global organisation structures such as the World Health Organisation, when formulating their marketing policies. Governments, particularly in the advanced countries, pay attention to the human and ecological environment life. Governments devise policies and systems to monitor companies and their products, for instance, energy saving strategies and genetically modified foodstuff regulation. The United Kingdom government has initiated energy saving policies such as climate change duty and Green Tariff on energy usage to reduce carbon dioxide and supplied subsidisations to enhance its policies. Marks and Spencer has instituted an incentive scheme in which stores can retain a 10% value of every savings they generate in its budget (Marks & Spencer 2012). This scheme aids Marks and Spencer in saving around 5 per cent of M&S energy. In current years, the gene technology has increased significantly. Some of the technology has been utilised to manufacture food. Nonetheless, some of the technology can bring about environmental pollution and jeopardise human health. Marks and Spencer declared that it would be stocking non-GM foods upon its shelves. Economic Economic aspects affect firms to either develop or retrench their business, for instance, loss-generating operations and their non-primary business operations. For example, the 9/11 misfortune in United States caused numerous firms to encounter depressions within Europe and North American countries. The 9/11 mishap in United States caused consumers to alter their purchasing habits and sales decreased tremendously. In fact, M&S lost about 8.6m pound worth of profits in 2001-2002 from its worldwide retailers. However, M&S has shut its deficit-generating operations within Continental Europe and sold out its non-core business within North America (Marks & Spencer 2012). Social Factors Buyers’ needs change incessantly. People desire to feel modern, special, and well situated. Therefore, people buy fashionable apparel and spend credit cards to fulfil their needs. M&S keeps up with the newest colour and style. Though it has high-ranking quality goods, M&S co. does not take into account the customers’ needs, particularly in clothing market (Marks & Spencer 2012). Technological Factors In the current era, information technology has been changing very rapidly, and most firms have developed their own databases, websites and online shops to aid them upsurge their commodity sales from on-line clients. They gather information and evaluate their clients to understand their wants and needs. Therefore, M&S has utilised information technology by creating an online shop. M&S uses the Electronic Point of Sale system to propel sales, increase client service, and enhance its effectiveness. Conversely, M&S does not control effectively its EPOS system and online shop. In fact, its website sometimes does not display its stocks instantly. Clients who utilise its online workshop find it inconvenient (Marks & Spencer 2012). Five Forces The role of marketing managing is to draw customers and begin an effective affiliation with clients by creating the satisfaction and worth of customers. Nevertheless, marketing supervisors not only have to heed to the requirements of the target marketplace but also have to realise the effect of microenvironment on business that comprises the distributors, suppliers, competitors and the customers. Suppliers Marks and Spencer has established commendable affiliation and reciprocal earnings with suppliers and upheld during partnerships to collaborate with suppliers. Suppliers provide the needed resources to firms to manufacture services or products. Marks and Spencer values suppliers to maintain its business. However, this may trigger suppliers to increase the cost of materials. M&S has created a commendable repute for supplier supervision. If a contractor declines to supply resources to M&S, it can go to another contractor. The firm has this benefit where it will always have unfailing stock of resources. If contractors do not supply resources to the firm instantaneously, customer’s loyalty could be reduced because of inadequate products. However, Marks and Spencer has regulated this matter (Marks & Spencer 2012). Threat of New Entrants Marks and Spencer is the leading and largest variety storehouse retailer within the United Kingdom. Most successful and original initiatives for new brands and product development for over 10 years in United Kingdom have been taken over by retailers and not manufacturers. This threat of new entrants has prompted M&S to alter its marketing strategy from manufacturers to retailers and encouraged other leading retailers to follow suit. This is an incredibly substantial strategy even for the vendors. Conversely, Marks and Spencer does not regulate the stock on trendy selling clothing (Marks & Spencer 2012). Buying Power M&S believes that clients are an extremely crucial component of consideration and understands that clients are very significant for its commencing. Businesses must understand that client fulfilment is more crucial than product and service sales. Marks and Spencer understands this main trait and provides commendable services and distinguished quality products to clients to increase the clients’ loyalty. Marks and Spencer believes that accurate quality control has to persist forever. In 1999, Marks and Spencer assured that each of its food products would be non-GM. Therefore, the company considers the customers’ needs and endeavours to offer the best quality services or products to customers (Marks & Spencer 2012). Competitors M&S centres its business upon the quality of the service and the product. Tesco and Sainsbury are the main rivals for Marks and Spencer and centre their business upon quality, breadth of variety and convenience. A firm not only fulfils the customers’ needs but also considers tactics of competitors within a similar target market share. M&S has certain competitive advantages, which have been in business for over a 100 years, distinguishable brand name, and good supplier rapport (Marks & Spencer 2012). Precisely, Marks and Spencer has its individual market testing and exercises strict quality control. The quality service and product can retain customers’ loyalty. Marks and Spencer has accomplished this greatly. Unluckily, Sainsbury and Tesco have not only underscored the quality but also established their stores across the world. Threat of Substitution M&S understands that new products will always emerge to substitute their products. Alternative products can make a company run out of business especially when the substitutes are of great quality and at an affordable price. M&S has continued to provide quality products that have retained its clients’ loyalty. SWOT Analysis High Quality High quality services and products are the main strength which renders M&S successful. Clients always obtain high quality commodities such as fresh vegetables, fruits, and other superior commodities in M&S food stores. With many individuals preferring to consume vegetarian diets, M&S has met this need of these customers. M&S has distinguished quality products, which include food and other commodities, for instance, baby products and women’s clothing. Customer Service M&S has an extraordinary repute for centering on client service. Customer service is among the most critical methods of generating an effective relationship between the clients and M&S. For instance, when female customers want to buy apparel, the shop assistants can aid them with size measurement and offer them commendable suggestions as well. Shopping Environment Marks and Spencer strives to make clients feel better situated and contented. It does this by making the stores brighter, and uses up-to-date designs. All commodities within the shop are accessible. Additionally, clients do not fear of being drenched in countless shelves and meeting multitudinous people. Management Training One of Marks and Spencer’s strengths is its outstanding and strict management coaching structure. Every manager at M&S has to be conversant with responsibility of each post. Indeed, managers at M&S arrange and practice roles of each post. This aids them in enhancing both job experiences and their managerial skills. Weakness Stock Control There has been non-performance for the home-based delivery and shopping service, which sometimes comprises wedding lists as well. Clients are sometimes told that the commodities are unavailable. Customers also complain about the inefficiency of e-shopping and delivery services. Slightly, M&S is impaired by the unbalance in the information technology structure and stock management. Wastage of Store Spaces M&S has many unutilised store spaces. In effect, it has extra 76% of square footage ever since the early ‘80s; however, its market share in apparel has not risen. M&S must find some fresh products to fill its extra-unutilised spaces. Opportunities Internet Technology Internet technologies have advanced very rapidly; Internet technologies offer a prospect to boost the online products sales. In respect to this context, purchasing products online has become the new trend. Clients have accepted this model and integrated it into their day-to-day lives, and the demand for these online products has increased. Healthy Eating Healthy eating suggests an opening for the exigency of a particular food will increase. People concentrate on quality life; they appeal to firms to offer wide-ranging products to fulfill their needs. For instance, within the food market share, M&S has done an effective segmentation in provision of organic food, low fat, or vegetarian. Marketing Outspreading The firm owns storehouses in the Ireland Republic and Hong Kong, and has more than 136 franchise stores within 28 countries, functioning through a net of efficacious partnerships. In the future, the firm should expand its enterprise beyond the current regions. Threats While M&S has its specific strengths, weaknesses, and opportunities, it still has certain threats from competitors and itself. Strong Competitors Strong rivals are the most threatening to M&S business. For instance, within the food market share, there are other four main super stores such as Safeway, Tesco, Sainsbury and Asda. They offer not only distinguished quality products but also value-added commodities to foster clients’ loyalty. Within the clothing market share, Gap, Top-shop, Next and other trendy brands rival with M&S (Marks & Spencer 2012). Social Environment Change Apart from the rivals, M&S is affected by the change in the social environment. As social environment changes, so are the customers’ tastes. For instance, when people migrate to other territories, their culture has to affect the indigenous people’s way of life, e.g. eating and clothing. M&S, therefore, has to adjust its goods to fulfill different needs. Chemical Pollution Environmental pollution is also a threat for Marks and Spencer. The M&S environmental systems supervisor claimed that each of the thirty thousand product line which M&S vends is reliant on chemicals. Most governments have taken actions to protect the natural environment and lessen pollution. This impending risk will influence M&S development in the forthcoming future. The 4Ps The 4ps denote the marketing mix in a marketing process. These comprise the product, price, promotion and place. M&S continues to utilise the marketing mix efficaciously by providing high quality products since it understands that clients have a choice and numerous ways of spending their money. It is, therefore, important for it to offer high quality goods that will compel customers to have them as their first choice. Clients’ view of value determines the price of goods. When a product is highly valued, people tend to pay more for it. M&S provides quality goods where its customers are not afraid to spend a little cash just to obtain them. M&S promotions include use of sales promotions, direct mail, displays, exhibitions, TV, cinema, radio and online via its website. These methods have aided M&S in reaching its target audience, thereby affording effective results for the company. Lastly, M&S stores are strategically located to ease access by the clients; therefore, stores are not hard to locate (Marks & Spencer 2012). FDI FDI (Foreign Direct Investment) refers to direct investment towards business or production within a country through a firm within another country, by purchasing a firm in the targeted country or through opening out operations of a prevailing business. M&S has established sourcing offices within countries such as Thailand, Hong Kong, India, Italy, Bangladesh, China, Turkey, Sri Lanka, and Indonesia. M&S has benefitted through low corporate levy, infrastructure subsidies, and investment financial incentives as well as R&D support. Such incentives have rendered M&S business operations effective in these foreign countries (Marks & Spencer 2012). Conclusively, M&S is an efficacious corporation. In a macro setting, M&S adheres to the government strategies and safeguards the physical environment. Furthermore, M&S is swayed by the social, economic and technological factors to formulate its business policies. Alternatively, in a micro setting, M&S has fashioned an effective and long-term affiliation with the customers and suppliers. As of the SWOT assessment, the most crucial aspect for M&S is to fulfill clients’ needs. Its main advantage is the provision of distinguished quality products, which it utilises to build clients’ loyalty. In contrast, its main disadvantage is the inadequate stock control, which can instigate M&S to lose customers because of inconveniences. However, most of the substantial M&S’s policies are generating potential clients and sustaining the existing clients. To summarise, the evaluation of M&S reveals that its corporate structures follow the society’s trend, retain the position within the market, and increase its prospective market share. References Marks & Spencer 2012. [Online] Available from: http://www2.marksandspencer.com/thecompany/ourcommitmenttosociety/environment/info/food /whatarewedoing-food.shtml (Accessed 23 February 2013). Read More