Feasibility Analysis: Marks and Spencer Plc - Case Study Example

Feasibility Analysis Report Table of Contents Sources of Data Collection 3 of the Methodology and Sampling Frame 4 Presentation of the Data 5 Recommendations 14 Critical Path Analysis 16 Conclusion 17 References 19 Appendix 21 Introduction Marks and Spencer plc is a leading United Kingdom based multinational retailer that deals with selling of clothing products, luxury food products and home products. It has global presence across 41 nations spread in different parts of the globe including Europe, the Middle East and Asia. It has in excess of 766 stores located in diverse locations of the UK and 418 stores in overseas locations in high streets, major shopping centres and retail parks, as well as railway stations, airports, petrol and service stations (Marks and Spencer plc, 2014). The company now intends to open up a branch of their business close to the Coventry University in UK. For this purpose, the company has approached our Business and Management Consultancy to undertake feasibility analysis report for them. In this regard, it needs to be pointed out that as a consultant of the Business and Management Consultancy, the prime responsibility would be to carry out both primary and secondary research to reach a valid conclusion about the feasibility of the business proposition by the large retail chain i.e. Marks and Spencer. Sources of Data Collection In order to conduct feasibility analysis report both the primarily and the secondary sources of data collection method were used. As a secondary source of data collection, books, peer-reviewed journals, articles, annual report of the company, company’s online websites and other relevant business reports were used. The company’s website evaluation facilitated to judge the number of stores and locations of the stores. Moreover, Coventry University and Foundation Campus population, gender, religion and ethnic factors were also considered to reach a justifiable feasible conclusion. Besides, Coventry City Council area shops and demographic split were also evaluated. On the other hand, questionnaire was framed as a primary source of data collection which was distributed to the selected sample size. The questionnaire was designed based on the information compiled from the secondary data. The primary purpose of the questionnaire was to collect data related to consumers’ values, beliefs, behaviours and attitudes along with prevailing market trends close to the Coventry University in the UK. The data obtained from the questionnaire facilitated in deriving valuable insights regarding the consumers purchasing intentions close to the Coventry University as well as it offered knowledge regarding the competition prevailing in this particular segment. Gantt Chart For the Plan On When will the Required Data be Obtained Description of the Methodology and Sampling Frame Self-completed, open-ended questionnaire was used as the survey method which was directed towards the selected people as sample. In terms of the choice of the questionnaire, Self-completed, open-ended questionnaire was selected based on the demographic selected for the study i.e. students near to Coventry University in the UK because this pattern of questionnaire would quite easy for them to comprehend and respond to (Leung, 2001). Convenience sampling strategy was applied for selecting samples for the report. Convenience sampling strategy was chosen as it is considered as the least complex technique which involves the selection of most accessible subjects. It is also determined as a non-probability sampling technique (Marshall, 1996). In this regard, the sample was decided to be a total of fifty participants irrespective of demographic differences including students near to Coventry University in the UK for the feasibility analysis report as sample size. The formed questionnaire is presented in the appendix. The key purpose of closed ended question was to make justifiable decision about the tastes and preferences, their motivation to purchase, their frequency of purchase, their spending amount and the seasonality factor among others. Subsequently, the open ended questions facilitated to reach a decision regarding the perception, value proposition and related service improvement suggestions by the respondents that can be taken into account by the retail store. Fifty respondents were considered to be sufficient as to acquire comprehensive information relevant for preparing feasibility report and thereon providing recommendations to Marks and Spencer plc regarding their decision to open up business branch close to the Coventry University in UK. Besides, the conducted research is quantitative in nature as various statistical tools, charts and graphs are represented to reach a valid conclusion regarding feasibility. Presentation of the Data The analysis of the data ascertained from the questionnaire findings revealed that there exists a strong coorelaton between the age and the yearly income of the respondents. Accordingly, the the cofficient of correlation was ascertained to be r= 0.992285259. The graphical representation depicting the scatter diagram along with the trend line is being depicted below. Fig 1: Correlation Coffecient between Age and Income of the Respondents It has been ascertained from the analysis of the survey questionnaire that 12 respondents among the 50 total respondents were inspired for new purchase seeing their friends while 6 respondents were influenced by their family members. Nonetheless, it has been ascertained that 20 respondents were significantly influenced by the outfits worn by celebrities and 12 respondents were further identified to influence by the styles they see in the store. The chart representing the differences in the inspirational factor for their new purchase is being depicted below: Fig 2: Q1. Where Do You Usually Take Motivation For New Purchases? Besides, it has been determined from the analysis of the questionnaire surveyed from 50 sample for which percentile were calculated in order to detrmine the frequrency of purchasing new items of clothing. According to the calculation, more the 12% respondents were engaged in purchasing of new clopthing items for 1-5 times in a year. While less the 24% were engaged in the purchase of new clothing in 5–10 times per year. Similarly, it was also ascertained that more than 18% of the total respondents were engaged in the purchase of new clothing items more than once a month. The highest 30th percentile below this figure 30% of the observations were found of the total respondents who were engaged in the purchase of new clothing items more that 2-3 times a month. On the contrary, 0% of total respondents were reported to engage in buying of clothing items more 8 times a month. Table 1: Percentile Results From question 3, it can be analysed that during the year, clothing as well as accessories are purchased in a different manner. Thus, spending in relation to clothing as well as accessories is recognised to be different. In this respect, the valuations of quartiles are determined with the aim of ascertaining variability. It has been identified that purchases are mainly made in summer and winter. Respectively, the values of lower quartile (Q1), upper quartile (Q3) are 6.5 and 13 respectively. Additionally, the value of quartile deviation (IQD) is ascertained to be 3.25. The quartile deviation value is low, which signifies that variability in data collected is minimum. Moreover, it is observed that because the upper quartile or 3rd quartile value is 13, thus it is inferred that 75% of the observation are below this amount, signifying that the most preferred period of the year to spend most on clothing and accessories is summer. The rest 25% comprise the other periods of the year such as autumn, winter and spring. Contextually, it can be comprehended that the business will be feasible for better business performances with respect to the spending made in different seasons. Fig. 3.0 Q3. What Would Be The Period Of The Year You Spend The Most On Clothing And Accessories? Fig 3.1 Besides, it has been ascertained that 10 respondents were engaged in the spending less than £10 on clothing and other accessories while 15 respondents were identified to spend £11 - £30 and 25 respondents were ascertained to spend more than £31 - £50. The graphical representation of the customer spending on clothing and accessories is being illustrated below. Fig 4: Q4. How Much Would You Usually Spend Per Month On Clothing And Accessories? The findings from question 5 implied that on an average an individual makes purchase of clothing and accessories through online medium. It has been identified that the average number of respondents makes online purchases. Additionally, in order to ascertain the reliability of the data collected, measure of dispersion i.e. standard deviation is performed. The value of standard deviation is calculated to be 3.73, which implies that the data set is close to the mean. Fig. 5.0 What Is the Percentage of Clothing and Accessories Purchases That You Buy Online? Furthermore, it has been reported that 20 respondents preferred quality as the main criteria while purchasing, conversely 15 respondents considered price to be the primary factor. Additionally, 10 respondents reported comfort to be the most important factor while purchasing. The small portion of the respondents which include 2 and 3 respondents placed importance on style and brand respectively. The graphical representation of the findings has been illustrated below: Fig 6 Q6.What Are Your Key Measures’ When Purchasing Clothing? At the same time, it has been ascertained that most of the respondents involving 20 respondents considered their purchase to be unplanned (Spur of the moment) while 15 respondents considered it to be planned and remaining 15 respondents also classified their purchase decision either planned or spur of the moment. Fig 7. Q7 Are Your Procurements Generally Planned Or Spur Of The Moment? Moreover, it has been observed from the questionnaire survey that 15 respondents were engaged in purchase of more than 70% of clothing items during the sales while 13 respondents were engaged in in purchase of 51-70% of clothing items during the sales. Nonetheless, 7 respondents reported to engage in purchasing 31-50% of clothing items during the sales and 10 respondents were identified to engage in purchase of 11-30% of clothing items during the sales while 5 respondents were reported to purchase less than 10 of clothing items during the sales. The graphical representation of the percentage of clothing items purchased by respondents during the sales is being illustrated below: Fig 8: Q9. What Percentages Of The Clothes You Buy Are Bought When On Sales? Again, it has been observed that 15 respondents were engaged in the purchse of clothing items alone while 25 and 10 respondents reported that they were engaged in purchasing of clothing items with their friends and family members respectively. Given below is the graphical reprtesentation of the shoping behaviour of the respondents. Fig 9: Q10 Who Do You Mainly Shop With? The analysis of the data obtained from the questionnaire survey further revealed that 13 respondents were inclined towards repeat shop from the same shop they had purchase earlier while a small portion of 3 respondents reported that their decision to purchase is influenced by the window diswplays in the stores. On the other hand, 5 respondents reported that they would prefer to try new shops and 7 responndents reported that they would gather information prior to making any selection. Nonetheless, 15 respondents reported that they would prefer to shop from the shops offering discounts and sales. Given below is the graphical representation of the respondents shopping pattern: Fig 10: Q11 When Shopping For Clothes Do You The analysis of the data obtained from the questionnaire (see question 12 in appendix) further confirmed that a majority of the respondents were highly influenced by the prevailing social trends and the fashion demonstrated by their favourite actors. Similarly, most of the respondents also revaeled their familarity with the products offered by Marks & Spencer (see question 13 in appendix). The analysis also illustrated that most of the students were engaged in buying clothing items from small boutique rather than shopping mall because of the cost factor (see question 14 in appendix). The further analysis comphrended that most of the respondents perceived clothing items offered in the shopping malls to be expensive (see question 15 in appendix). The analyisis of the data illustrated that a majority of respondents were highly price sensitive and suggested that retailers should engaged in offering products at affordable prices and seasonal discounts as well as discounts on bulk purchase should be offered in order to attain loyal customers (see question 16 in appendix). Recommendations It can be comprehended from the findings of the survey that the commencement of business operations by M&S in the campus of the university can be a success as the data collected from the respondents signified to be positive in relation to buying and spending pattern. Moreover, the analysis as well as findings of the data signified that it might be reliable for the business to conduct its operations successfully. In this respect, based on the analysis, it can be recognised that youths are inclined towards making purchase of clothing and accessorises in an immense manner in different seasons. Besides, youths visiting the university campus will be attracted towards the store. Contextually, the development of the branch of M&S is determined to be feasible (Gopaul, 2013; Gresty & et. al., 2008). Moreover, it can be recommended that the company on the basis of the findings is required to adopt certain strategies with the aim of ensuring that business operations are commenced successfully. According to the findings, the business organisation is required to provide products i.e. clothing and accessories based on the preferences of customers located near the university campus (Gresty & et. al., 2008). Additionally, the company should develop online store for better convenience of customers. The online store will also assist the company in meeting the needs of the customers effectively, as an average number of respondents are identified to make online purchase (PWC, 2012). The branch of the company near the university campus is required to have a trendy atmosphere for better attraction of customers i.e. youths. Additionally, the trendy atmosphere will be effective in attracting a large customer base, as individuals usually visit clothing shops with friends as identified from the findings of the data. Moreover, the company in order to ensure effective business performances is required to adopt different sales promotional activities, which include special offers and discounts. Respectively, the branch of the company will be able to conduct operations successfully (Oliver & Shor, 2003). Critical Path Analysis Figure 11: Critical Path Source: (Stelth & Roy, 2009) Gantt Chart Conclusion The purpose of this report was to present feasibility analysis to Marks and Spencer plc which is intending to open its new business branch close to the Coventry University in UK. It is a multinational company that has global operations spread in many different countries across the world. In order to conduct the feasibility report both primary and secondary sources of data collection were used. At the same time, the questionnaire method was used to collect primary data. The secondary data were used to frame the questionnaire. Moreover, 50 respondents were selected as sample size to whom the self-completed set of questionnaire was distributed. According to the data compiled from the primary sources, it has been observed that there exists significant opportunity for the company to open its new branch. It has been observed that there exists positive correlation among the age and the income of the respondents which implies that it would be beneficial for the company to target young customers. Besides, it has been identified that majority of the respondents that is more than 30% of the respondents were engaged in purchasing of clothing items 2 -3 times in a month which can be considered to be a positive aspect for the company to open its branch in this location. It would be worth mentioning that 25 respondents out of 50 respondents were engaged in making more than £31 - £50 spending per month which also reflects the positive trend. At the same time, the factor of quality is being placed among the prime importance by the majority of respondents which indicates the greater propensity of success for the company. The majority of respondents were also reported to conduct purchase in an unplanned manner which reflects that the seasonal factor will have less impact on the operations of the company. However, it is crucial that the company engages in discounts and offers as a majority of the respondents were ascertained to make 70% of their purchase during sales. Correspondingly, it has also been ascertained that the factor of customer loyalty does exist in this market segment but offers and discounts play a major role in retaining customers. It can be concluded that as a consultant it is recommended to M&S that it would be feasible to open the business branch close to Coventry University in the UK. References Gopaul, S., 2013. Feasibility Study for a Global Business Network on Apprenticeship. International Labour Organisation. [Online] Available at: http://www.ilo.org/wcmsp5/groups/public/---ed_emp/---ifp_skills/documents/publication/wcms_222180.pdf [Accessed May 08, 2014]. Gresty, C. & et. al., 2008. Meeting Customer Needs. BT Technology Journal, Vol. 26, No. 1, pp. 11-24. Leung, W., 2001. How to Design a Questionnaire. Education, Vol. 9, pp. 187-189. Marks and Spencer plc, 2014. Annual report and financial statements 2013. Publications. [Online] Available at: http://corporate.marksandspencer.com/documents/publications/2013/annual_report_2013.pdf [Accessed May 08, 2014]. Marshall, M. N., 1996. Sampling for Qualitative Research. Oxford University Press, Vol. 13, No. 6, pp. 522-525. Oliver, R. L. & Shor, M., 2003. Digital Redemption of Coupons: Satisfying and Dissatisfying Effects of Promotion Codes. Journal of Product & Brand Management, Vol. 12, No. 2, pp. 121-134. PWC, 2012. The Rapid Growth of Online Shopping Is Driving Structural Changes in the Retail Model. Australian Online Shopping Market and Digital Insights. [Online] Available at: http://www.pwc.com.au/industry/retail-consumer/assets/Digital-Media-Research-Jul12.pdf [Accessed May 08, 2014]. Stelth, P. & Roy, G. L., 2009. Projects’ Analysis through CPM (Critical Path Method). School of Doctoral Studies (European Union) Journal, Vol. 1, pp. 10-51. Appendix Questionnaire PART 1 Name: Gender: Age: Yearly Income: PART 2 Q1. Where do you usually take motivation for new purchases? Friends Family Celebrities Styles in store Q2. How often do you buy a new item of clothing etc? 1 – 5 times per year 5 – 10 times per year Once a month 2-3 times a month 4-7 times per month 8+ per month Q3. What would be the period of the year you spend the most on clothing and accessories? Spring Summer Autumn Winter I dont know Q4. How much would you usually spend per month on clothing and accessories? Less than £10 £11 - £30 More than £31 - £50 Q5. What is the percentage of clothing and accessories purchases that you buy online? 0%, I never buy these items online Less than 10% From 11% to 30% From 31% to 50% From 51% to 70% More than 70% Q6.What are your key measures’ when purchasing clothing? Quality Price Comfort Style Brand Q7. Are your procurements generally planned or spur of the moment? Planned Spur of the moment Either Q8. When purchasing a new item, do buy a matching outfit item? (shoes, hat, bag, coat) Not very often Sometimes Quite often All the time Q9. What percentages of the clothes you buy are bought when on sales? Less than 10% From 11% to 30% From 31% to 50% From 51% to 70% More than 70% Q10. Who do you mainly shop with? Alone Friends Family Q11. When shopping for clothes do you: Always return to the same shops Decide to go in owing to the window display/adverts Try new shops Search beforehand for information and then visit the right store for me Go to shops where there are special offers Q12. What would encourage you to try out new fashion and style? Q13. How did you hear about Marks & Spencer? Q14. Where would you buy most of your clothing items & Why? Q15. How do you perceive the existing fashion brands in terms of value for money? Q16. 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