Marks & Spencer Invasion in Georgia - Case Study Example

Number] Marketing Analysis of Marks & Spencer invasion in Georgia Introduction Marks & Spencer M&S is a world renowned brand retailer which has incepted world market in a glimpse of an eye. Spread over in more than 40 countries and having headquarters in United Kingdom, M&S ensures sheer elegance and class. Specialization of the firm lies in clothing and food items. Company’s legacy of providing versatility in clothing has been its unique selling point and its target market includes individuals of all ages, races and colour. M&S has also made a reputed name in the food sector and it has been rated as one of the prime food stores in United Kingdom. Brand name of M&S is considered as a status symbol. In the past years results show that M&S has been one of the most successful companies in London stock exchange. The financial position of M&S is quite impressive and profitability figures are commendable. M&S holds a spectacular position in consumer market and is the ultimate choice of people (Karol, 1985) (Peter, 2011) states that Georgia is one of the most booming economies in Europe. The country showed a lot of promise in the economic sector as it moved from 112th to 18th position in the countries where business has minimal restrictions. Georgia has proved to be an ideal place for investment and thus World Bank depicted is as the supreme economic reformer of the world. Georgia has been historically famous for the business activities and currently they have done immense development in transportation sector so that business growth would be ensured. Marketing Analysis Models Every company requires some strong marketing proofs and financial proclamation to enter into a new geographical boundary. Hence to support M&S entrance into Georgia, different marketing tools and techniques will be applied to support the arguments. In this regard PEST Analysis, SWOT analysis, Porters five forces and Competitor Analysis will be applied. These models, tools and techniques will depict that whether M&S should enter into Georgia or not. PEST Analysis PEST analysis is the primary marketing tool which illustrates various segments of a region and becomes an essential tool in the decision making of a business. PEST is an abbreviation of political factors, economic factors, socio-cultural factors and technological factors. Following are the deductions from PEST analysis. (Tbilisi, 2012) points out that the political situation of Georgia is very stable and encouraging. It’s a democratic state and laws have been made which guarantee the safety of foreign direct investment. The elections of October 2012 brought previous opposition to form new government and their action plan depicts that they induce and appreciate foreign investment in the country. No law and order problems have been reported which would discourage businesses. Economically as discussed in the introduction, World Bank considers as the thriving economic power and its ranking which changed from 112th to 18th in calmness of doing business is admirable. Georgia is a free market economy and believes in open markets so there are no economic sanctions or embargoes on this state hence making it the perfect business spot. It is a member country of WTO, UN, Council of Europe, Asian development bank and several other economic units. It has close economic ties with reputed strong influential countries of the world (Khaduri, 2006) Socio-culturally Georgia is a state with majority of Christian population. It has rich cultural roots and is a liberal state. There are no barriers what so ever for business development as people are secular and adaptable to change. They prefer brands and many eminent giants have already invaded the land and attained satisfactory results. Technologically advancements of the country are substantial as the constructions of new roads, bridges and transportation system is done by the skilled technologically sound Georgian citizens. They are making considerable progress in information technology and in the coming days it is predicted that Georgia will hold a distinguished position in Europe technology wise (Peter, 2011) Porter’s five forces Porter’s five forces enable strategy formulation for a company. M&S business expedition heavily relies on the findings of Porter’s five forces impact. It comprises of bargaining power of customers, threat of new entrants, bargaining power of suppliers, threat of substitute products and competitive rivalry within the industry. M&S is a company with defined rules and regulations. Bargaining power of customers is the first thing which M&S needs to take care of. M&S brand good will has such an impact that customers are driven in their purchase decisions. Although there is no such thing as bargaining on M&S stores but clearance, Christmas and other quarterly sales ensure that customers don’t have to explicitly bargain about products (Nazli, 2012) For a company like M&S it’s important to know about the substitutes which would be brought in after their substantial position in the market. Substitutes can lay an impact on consumer mind if same quality product is available on a minimal rate, then purchase decision are tilt. To cope up with scenario M&S should have a contingency plan to follow. Previous history of the firm shows that M&S has successfully catered these scenarios (Anderson, 2011) New entrants are always there to enter and their goal is to capture mass market, in Georgian region M&S will face the new entrant’s indulgence in the industry but it will not disturb the stance of M&S as it has a developed brand name. New entrants will however have to suffer in order to make position. M&S has its own mechanism of supplying products. Without any store in Georgia they are still operating in the country and they have successfully supplying their products which shows a strong network of M&S in the country. (Novo, 2012) Mango- a famous clothing brand of Novo Group is the biggest competitive rivalry which M&S will have to face in Georgia. Novo group has eminent brand names under its umbrella such as United Colour of Benetton, Mexx, Mango and Sisley. Due to early presence they have captured most of the Georgian market and in order to be supreme in the country, M&S have to take care of Novo Group particularly from the very first day because the sales figure of this brand are very promising. However brand loyalty exists and prevails in the country so it depends upon M&S strategic planning of attaining and retaining new customers. However Novo competitive rivalry in the clothing sector will be a test of nerves for a company like M&S. SWOT Analysis Marks and Spencer needs to perform Strength, Weakness, Opportunity and Threat analysis at first place before entering into any market. SWOT analysis with respect to Georgia will describe the role which M&S can prevail in the country in coming years. Strength of M&S lies in Strong brand name, cult following, brand loyal customers, uniqueness and versatility in designs. Government encourages foreign direct investment and law & order situation is preferable for business setup. It is the land of opportunity right now as it has generous growth in economy according to recent economic reports (Elisabeth, 2011) Weakness of M&S identified is that pricing of M&S will have an effect on consumers. Georgia doesn’t have a high set of living. Comparatively to European countries, income of individuals is low and unemployment rate is slightly high. Opportunity which M&S has that Georgia has not been flooded with such famed brands and the market of M&S prevails with huge promises out there. It can easily gain relative power in the industry as it is a renowned international brand. Due to relatively low operational and wage rate, it can easily establish its operations in Georgia. Threat can be from its leading competitor in Novo Group brand Mango. Pricing of Mango and M&S will be the major threat as prices of M&S are slightly higher. Review of M&S clothing and food prices will be required (Mango, 2012) Competitor Analysis (Biz, 2012) Competitor analysis of M&S in Georgia represents that major competitor of M&S in Georgia is Novo Group brands. In order to win the battle with the competitor, M&S has to go through various strategic tactics. Promotional activities and pricing will play a vital role in this regard. Promotion if done in the accurate precise direction will take M&S to leaps and bounds. Novo Group would never want M&S to enter into Georgian market so they will try to play different tactics to disturb brand equity of M&S. As Novo Group also has a reputed quality so due to it’s already presence in the market, it may cut down the prices which will be a setback for M&S as their prices are high and quality at prestige. Competitor will thus play a vital role. Conclusion The qualitative and quantitative research done on M&S invasion in Georgia gives positive indicator for M&S to reach Georgian markets. The economic situation of the country is favourable and perfect. Government of Georgia also makes sure that investment companies must not be disturbed in any regard and supports foreign direct investment which gives green signal to M&S. Geographically, Georgia is located in such vital position where M&S should definitely go and expand its operations into the neighbouring countries. Having sea routes access is also a very good sign and Georgia can be the next base camp for M&S endeavours in Europe and rest of the world. Weaknesses and threats identified were of very low importance as those were not such major procedural barriers which would discourage M&S. M&S invasion in Georgia shows benefits at both ends. Georgia has taken essential measures to eradicate all sorts of business barriers and countries political, economic and social position is best for foreign direct investment. M&S on the other hand is a tycoon in clothing and food industry. It has colossal brand following and people love to go for M&S brands. Brand equity and Good will among customer minds has already been developed due to its eminent position in the business sector. The financial position of M&S will definitely reach peaks after its inception in flourishing Georgia. The position of Georgia today is ideal to start a new business as they recently signed some major economic treaties with developed countries and there is a massive technological boom coming in a couple of years. The unemployment rate is also going down and due to some serious steps taken by the government, living standards of people have also been lifted which shows development of a nation in all regards. M&S should take a step forward and stride into the Georgian market or its leading European competitors will grab an eminent position in the country. Bibliography & References Karol. K., (1985) Marks & Spencer: Anatomy of Britains most efficiently managed company, Oxford, Pergamon press. Goronwy. R., (1973) St. Michael: A history of Marks & Spencer, London, Pan Books. Richardson, G., (1972), “The Organization of Industry”, The Economic Journal, Vol. 82, August, pp. 883-896. Khaduri, N. (2006). Georgian Economy, Central Eurazia, May, Vol. 2, pp. 147-152. 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(2011) M&S, Interflow Both Claim Victory in Case over Internet Ads, [Online] Available: [27 Oct 2012] Tbilisi, E. (2012) Georgia political transition, [Online] Available: Read More