Marks and Spencer plc was set up in 1884 in Leeds by Michael Marks and re-branded
as Marks & Spencer (M&S) ten years later when a partnership with Thomas Spencer
was formed. Having begun as a market stall, today it is considered to be one of the
UK’s leading multinational retailers with ove...
Introduction
Marks and Spencer plc was set up in 1884 in Leeds by Michael Marks and re-branded
as Marks & Spencer (M&S) ten years later when a partnership with Thomas Spencer
was formed. Having begun as a market stall, today it is considered to be one of the
UK’s leading multinational retailers with over 1,382 stores worldwide, including 468
stores in Eurasia and the Middle East. M&S offers clothing, home products and luxury
food products both in store and online (Marks &Spencer, 2015).
The company’s 914 UK stores – 222 owned and 349 franchises of Simply Food stores –
as well as the 302 full-line clothing and home stores and an e-commerce platform with
over seven million registered users serve 33 million customers in two divisions (food
and general merchandise) with a revenue of £5.2 billion and £4.0 billion respectively. In
the UK market, M&S is a market leader in womenswear and menswear. The company’s
international business, which comprises 468 wholly-owned, jointly-owned or franchised
stores and spans 59 territories in Europe, Asia and the Middle East, had revenue of
£1.1 billion in the last financial year (Marks & Spencer, 2016).
Pestle Analysis
These are external environmental factors and include Political, environmental, social, technological,
economic and legal factors affecting Marks and Spencer in executing its strategies. This tool highlights
the factor which is important and what an organization needs so as to compete in its industry,
Political
Free trade agreements and European integration has opened up new markets for the UK and other
organizations and countries to invest in Europe. This has greatly affected M& A and has caused it to fight
hard so as to maintain its position and market share with innovative and aggressive strategies. In
general, any trade can be performed in The UK as long as it does not affect the country’s existing laws,
public orders and policy. However, for M& A political factors which greatly affect it are those that deal
with industrial relationships and labor laws. It affects the company’s development efforts through labor
law infringements in both its international initiatives and local operations
Economic
The retail sector in the UK is quite prawn to economic recessions and it is also very sensitive to interest
rate changes. The economic recession of 2009 set the country’s economy struggling for survival but it
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, has managed to get back on its feet again. Therefore, consumers are nowadays optimistic of the
economy and the retail industry and Marks and Spencer operations are booming. Nevertheless, UK is the
hub of ecommerce in Europe which means that Customers are not limited to local retailers’ only but also
to external tourists which creates a diverse retail business and base trends.
Social
Consumer’s tastes, preferences and lifestyle changes have presented both threats and opportunities for
the UK retail industry. Consumers in the UK have the tendency of being loyal to one brand and the
quality of products. However, this easily changes with a competitive pricing strategy from other
competitors. In addition to that, consumers have a preference for trendy styles as opposed to classics
which presents a threat to M&A in regaining a big market share for its consumers. This means that
consumers in UK’s retail industry usually place a high value on their spent money.
Technology
The retail industry in UK has witnessed radical technological changes. Changes as such include the use of
internet as a basis of online shopping store which widens the use of ecommerce in the industry. In
addition to that, paperless operations are being used and IT systems have offered a basis for this
operation. Online marketing is also another technological aspect being used by Marks and spencer and
other retail companies in the market as a basis for competitive advantage in the market place.
Environmental
Most companies nowadays opt for environmental friendly and renewable resources in their production
which has posed a great challenge for many companies to maintain their market share. Consequently,
this has caused Marks & Spencer to place great concern on the use of environmental friendly fabric and
raw materials.
Legal
Legal regulations and laws are being enacted and companies are closely monitored in the UK retail
industry. Bodies as such include National Legislation for health and safety which looks out for the rights
of the consumers and the production of renewable and natural resources when making clothes.
Porter’s Five Forces Analysis
Porter’s model was designed and developed by Michael Porter in the 1980s to determine the
competitive intensity and attractiveness of an industry (Spencer, 2015). In the case of M&S, the five
forces that influence the industry are as follows:
Level of competition
Competition in the retailing sector is extremely fierce. The problem is exacerbated by the fact that
companies are trying to diversify into non-core fields thus creating additional competition.
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