Marks & Spencer SWOT and PEST Essay

attach and Spencer is the British multinational retail comp either that specializes on producing clothing and high-quality diet. cosmos the dominant force on the UK market label and Spencer owns 600 stores in the domicil country and over 225 stores gentlemans gentlemanwide. Bird (1986) claims tag and Spencer to be the closely the right way image of Great Britain the telephoner currently being the most paying UK organization also is one of the most innovative in the world. two main features of the mark and Spencer are centralization and simplicity. The firm tends to use centralised organizational structure and tries to keep everything simple avoiding the complexity in any aspect of systematic applications (Howells, 1981).Strengths mark and Spencer has been known for its highest standards of fair-trading, which include acquiring steadfast contacts with current suppliers, producing and proposing high-quality food, being friendly to the staff and having a flexible commutati on policy for existing customers (Grayson, 2011). Having a st adequate and positive reputation is inescapable for the bountiful worldwide brands. The company being initially more thanover rivet on producing garments lately diversified its market to the other(a) sectors, such as food, electronics and furniture (Hamil, Crosbie, 1990). Diversification guaranteed large-mouthedger amount of customers for the company and expanded its growth. The company tends to locate its stores in the high streets which leads to obtaining large amount of customers every day and therefore larger clams. (Bird, Witherwick, 1986). Further more(prenominal), Marks and Spencer does not rent the premises, it owns stores eliminating the possible letting costs. Marks and Spencer is an worldwide retailer which owns more than thousand shops approximately in forty countries, covering market of such a super sizing is beneficial for the companys income (Salmon, Tordjman, 1989). fit in to Doyle (1982), Marks and Spencer is the Britains strongest and most successful brand that makes company well known around the world and differentiates it from competitors making it unique.WeaknessesMarks and Spencer out-of-pocket to diversification and operating in more than one market (garments, food, furniture) is not concentrated on any circumstance segment, unlike its main competitors such as Tesco and Sainsburys whichretail only food (Lewis, Thomas, 1990). The inadequacy of the focus and concentration may lead to the cut back innovations and scarcity of the expertise in one particular market area. When Marks and Spencer tried to expand their market adding the clothing line for younger people, it experient loss and failure, as it wasnt able to follow latest expressive style trends to satisfy younger audience and kept a reputation of the retail brand mainly for elder women (Fletcher, 2007). According to Alon (2000), Marks and Spencer experience lack of inventory control which led to the under performing other major British companies by 25% in 1998. The average price comparison made by Telegraph in 2008 has shown that the prices on the Marks and Spencers food pass away those in Asda by 3.6%. The company is considered high-priced and looses large amount of customers from center field and lower class, who prefer daily shopping in other big retail chains like Asda, Sainsburys and Tesco, where prices are much cheaper and more reasonable (Avery, 2011).Political factorsEach company which desires to maximize its profit should break away within the governmental policies. Marks and Spencer is not an exception, as the company believes that engagement with the government is beneficial for the organizations income. According to Marks and Spencers official website, company tends to communicate with the political audiences either directly or through the trade memberships. afterward the green governmental policy in 2008, Marks and Spencer introduced the 5p charge for the plastic ba gs across its stores (Vaughan, 2011). Marks and Spencer is located in the UK, which has stable political background and tax policies (McGrattan, 2005). However, in 2005 the company experienced losses in the EU area and appealed to the court for the opportunity to educe international losses from its UK tax bill (European Commission Legal Services, 2005). After European Court of Justice announced that Marks and Spencer and other UK companies kick in the right to counterpoise British tax bill, Marks and Spencer has won this campaign receiving 30 million tax relief (BBC, 2005).Economic factorsThe majority of international companies are considering the USA a perfect area of franchising due to the big population and large size of the market. Marks and Spencer was among the early British retailers who consideredexpanding its stemma to the North America (Alexander, 1995). However, the September 11 attacks have caused economic crisis and transmit in the purchasing behavior of Ameri cl ear citizens which led to the extreme losses experienced by Marks and Spencer throughout the following year marvelous the company to close the non-core branch in North America (BBC, 2002). payable to the financial crisis taking place in 2007-2008 (Barrel, 2008) and later severe crisis in Eurozone, the sales of Marks and Spencer has significantly decreased, as the salaries of the middle-class didnt maths the high-priced food and garments offered by the retailer (Rayner, 2008).Social factorsAccording to Marks and Spencers official website, company is focused on applying ethical trading, producing harmless food and employing responsible use of an energy, as the company believes that adapting CSR is vital for the growth of business. Company is especially focused on the animal welfare, being the first UK retailer to sell only free-range eggs in its stores (Jones, 2005) and a huge with several other British retailers promotes food without additives (Jones, 2007). However, several yea rs past Marks and Spencer was accused in using the child labour in Morocco which might have damaged the companys reputation (Frankental, 2001). According to Moore (1995) and Campbell (2010) Marks and Spencer over the past years has increased the amount of advertizing using different types of commercials. Nevertheless, the company was not been able to satisfy customers needs, plot of land producing their clothing line for young people which led to the losses of profit (Jobber, 1999).Technological factorsAccording to Butler (2013), Marks and Spencer is the only big British food retailer that does not have an online shopping service, while other companies like Sainsburys and Morrison are making millions of pounds through the web. The company for the long time is using RFID (Radio Frequency Identification) technology that helped to achieve more expeditious supply chain system. After the success with Marks and Spencer other British supermarkets implemented this technology in order to reduce costs and better customer service (Jones, 2005). In 2012 Marks and Spencer announcedthe new market plan that included the wi-fi connection throughout its stores, planning that the customers would be able to see the full stock of products on their devises which would simplify searching for the pet item (Raddick, 2012).ConclusionMarks and Spencer is the indexful international retailer that can maximize its future profit taking into consideration further opportunities and threats of substitutes. Marks and Spencer should consider adding online shopping for its food products, as the other British food retailers like Tesco and Sainsburys already have this feature that gives a big percentage of companies income. Another way for developing company may be expanding to the Asian market which can guarantee huge profit due to the big size of population. One of the main threats caused by economic crisis two in USA and European Union is the loss of bargaining power of customers. Peopl e find it hard to afford the high prices offered by Marks and Spencer and therefore try to search for a cheaper alternative. Retailer in future should adapt to the social changes when producing their clothing line for younger people in order to satisfy this audience.