The company has developed relationships with many local partners, which has allowed it to access new markets and customers. Marks & Spencer has to build internal feedback mechanism directly from sales team on ground to counter these challenges. - Low investments into Marks & Spencer's customer oriented services - This can lead to competitors gaining advantage in near future. - Access to International Talent in Global Market One of the challenges Spencer Marks facing right now is limited access to high level talent market because of limited budget. Using St.Michael brand the company started exported about $1,146,000 worth of merchandise. L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970) Looking for a flexible role? Marks & Spencer SWOT analysis evaluates the brand by its strengths, weaknesses, opportunities & threats. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. One of the reasons is that the adoption of products is slow in rural market. - Declining per unit revenue for Marks & Spencer - competitiveness in the Retail (Department & Discount) industry is putting downward pressure on the profitability. As the market is vast, so buyers have more choices and more power. It will provide better clues regarding where customers are going and what trends Marks & Spencer can leverage. Liability laws in different countries are different and Marks & Spencer may be exposed to various liability claims given change in policies in those markets. The Marks and Spencer are an organization that encourage their employees in terms of making decision process, the marks and spencer organizational structures basically to decrease bureaucracy and this organization hard more skilled on the employees by authorizing them to make decisions by communicate with the managers and base line employees thi. - Squeezing Middle Class in Developed and Developing World The growing inequality is one of the biggest threat to not only globalization but also to capitalism. Threats are factors that can be potential dangers to the firm's business models because of changes in macro economic factors and changing consumer perceptions. This helped to build astanding for good customer relations though the comfort and convenience of shopping with M & S was emphasised by providing a friendly and helpful service. Being a giant British retailer, M&S developed a strong future strategy, which is an environment friendly, and customer focused plan. Rose decision for international expansion also seems quit questionable because there are now 315 stores in 41 territories outside the UK. They should involve employees in their business for some activities and slightly in decision makings process because they are the main core which helps for the smooth functioning. Nobody get fired for buying our Business Reports Templates. Executive Summary Marks & Spencer is arguably the most recognized British retail brands having an estimated 885 stores across more than 40 countries, which was very successful in term of. The influx of new customers has also led to evolution of consumer preferences and tastes. These cookies will be stored in your browser only with your consent. Using this analysis complete option for the companys future strategies will be set out and examined for the most sufficient models. Marks & Spencer announced on Monday that it was bringing forward a plan to cut jobs due to the pandemic, with 950 roles set to go. *You can also browse our support articles here >. The successful organizations such as Spencer Marks are the one who able to predict market trends better than others, provide resources to develop products and services to leverage those trends, able to counter competitors threats, and meet customers expected value proposition. As mentioned earlier even though Marks & Spencer is successful at integrating small companies it has its share of failure to merge firms that have different work culture. If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template. Analytical cookies are used to understand how visitors interact with the website. M&S has also been able to capitalize on its strong distribution network in order to expand its reach. Describe the strengths and weaknesses of Marks & Spencers past internationalization strategies. 2006,Torgovicky et al. - Strong relationship with existing suppliers As an incumbent in the industry, Spencer Marks has strong relationship with its suppliers and other members of the supply chain. SWOT Analysis stands for - Strengths, Weaknesses, Opportunities, and Threats that Spencer Marks encounters both internally and in macro environment that it operates in. Some people say that Marks and Spencer is a shop for sixties and seventies but not for twenties and thirties. SWOT analysis can still help decision makers at Marks & Spencer to work out the pros and cons of new project, initial viability and long term scope keeping in the competitors strategy and macro environment development. Disclaimer: This work was produced by one of our academic writers to help university students with their studies. Consequently, Sales were reduced by 4.3%, with some improvement on a third-quarter decline of 7.1%. Labour party members were suggesting nationalising for the leading domestic retailers ( De Nardicole 1998). Moreover, they have more than 76,250 employers working with them and over 21million customers visiting their store. It was established in the UK for over 125 years. According to Cynthia A. Montgomery , this can reduce the potential of success of Spencer Marks in the international market. By taking Planet Sport as example Marks and Spencers has the chance of growing globally as it is recognised globally, The management need to take necessary steps to increase globally keeping in mind all the factors . : MIT Press, 1962). 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This challenge arises from within the M&S as Sir Stuart Rose was criticized by one of the shareholder. The company had introduced a no quibble refunds policy. Describe the strengths and weaknesses of Marks & Spencer's past internationalization strategies. Marks & Spencer maintains its dominant position in market by critically analyzing and reviewing the SWOT analysis. (http://en.wikipedia.org/wiki/Porter_generic_strategies). So, M&S should not look on others strategies and work on it. - Project Management is too focused on internal delivery rather than considering all the interests of external stakeholders. MBA & EMBA programs. This article discusses the SWOT analysis of Marks and Spencer, a British retail brand that specializes in luxury food products, clothing, and home products. Strengths and Weaknesses are often restricted to company's internal - resources, skills and limitations. Opening up of new markets because of government agreement the adoption of new technology standard and government free trade agreement has provided Marks & Spencer an opportunity to enter a new emerging market. Rest 80% of the strategic targets are not achieved because of incomprehensive planning, limited resource allocation, and poor execution. In this case, consumer is not price sensitive rather they have some special requirements, which can be satisfied by a unique product (which is made keeping in mind the special requirements of buyers)like M&S have a collection of tights which are very hi-Tec in the sense that they are made in a such a way that they give you a cool and comfortable feeling. For instance, customer has more reasons to choose things other than M&S because they are less expensive like John Lewis, Top shop and for food, they can go to Tosco or Sainsbury. Decision makers at Marks & Spencer can also use SWOT analysis to understand how key strengths can be extended either to adjacent areas or new industries all together. Threats can be managed but not controlled. Imitation of the counterfeit and low quality product is also a threat to Marks & Spencers product especially in the emerging markets and low income markets. Overall, M&Ss international expansion strategy has many strengths, including its focus on customer experience, its strong distribution network, and its strong brand recognition. High recognition of the brand : Marks and Spencers is the giant of the UKs high street is known by everyone in the market for the quality it is providing in the past years. If you use part of this page in your own work, you need to provide a citation, as follows: Essay Sauce, Strengths and weaknesses of Marks & Spencer (international expansion). In the starting M&S were having 275 stores in Canada and even started DAlliards excursion into New York State in late 1980s. For Spencer Marks it may result into higher logistics costs and higher packaging costs. No plagiarism, guaranteed! In this essay we will investigate how different theoretical strategic models account for the success and failure of Marks and Spencer. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Marks & Spencer. Necessary cookies are absolutely essential for the website to function properly. Marks & Spencer is in the dock this week - in defence not of its Colin the Caterpillar cake, but of its annual figures after a tumultuous year for the high street.. Last week the retailer's . It helps the company in catering to various customers segments in the Retail (Department & Discount) industry. For example with the partnership of Daiei in a wide agreement M&S exported goods to Isetan in Japan between the years 1970 and 1978. The second strength is that it has penetrated several markets across the globe. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. SWOT analysis is one of the most widely used tools for strategic analysis. Their main emphasis was on quality and to promote British goods. - Robust Domestic Market that Spencer Marks Operates in - The domestic market in which Spencer Marks is operating is both a source of strength and roadblock to the growth and innovation of the company. The first strength of M&S is that it has managed to place itself in a strategic position as far as competitiveness is concerned. Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features. It has over 80,000 employees and revenues of over GBP 10 billion. According to Cynthia A. Montgomery , brand recognition plays a significant role in attracting new customers looking for solutions in Managing people, Organizational structure adjacent industries. (Anon, 2004a; anon, 2004b). Especially M&S has a lot of competitor, which are more customer focussed (that means they made their cloths and other fashion things keeping in mind the demands of their customers like John Lewis, Top shop, Selfridges and many more whereas M&S is not. Back in 1970s Marks and Spencers persuaded small growers of strawberries to drive their crop straight to local marks and Spencers stores. As we all know that the main steps that a company should look before entering into a new market is to do the market study. If the stores and outlets increases the strength of Marks and Spencer goes high day by day, as it can be available to all the commodities of the people for reasonable cost and good quality. Marks and Spencer (M&S) is a major British retailer of household items, food products and clothing. Building strategies based on consumer oriented product development and marketing approach. Environmental analysis To make the analysis of external environment of Marks and Spencer, this report will cover two key model that are PESTLE and Porter's five forces. One of the biggest strengths of M&Ss international expansion strategy is its focus on customer experience. - High margins compare to Retail (Department & Discount) industry's competitors - Even though Marks & Spencer is facing downward pressure on profitability, compare to competitors it is still racking in higher profit margins. Consequently, M&S has very limited influence on their customers. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical. Info: 1944 words (8 pages) SWOT Example 1. Euromonitor (2018), "Services Sector Analysis ", Published in 2018. P. Smith P. Smith Research expert covering apparel industry and general merchandise Get in touch with us now , Mar 14, 2022 This statistic shows the perception of the Marks & Spencer retail. We make beautiful, dynamic charts, heatmaps, co-relation plots, 3D plots & more. Weaknesses come from lack or absence of five key resources & capabilities - activities & processes, human resources, financial resources, past experiences and successes, and physical resources such as land, building . * This essay may have been previously published on Essay.uk.com at an earlier date. Analyzing the macro trends from not only Services industry perspective but from a more holistic perspective. Threats are macro environment factors and developments that can derail business model of Spencer Marks. 3.1 PESTLE Analysis It stands for Political, Environmental, Social, Technological, Legal and Economical factors that are within environment. Importers of the St. Michael brand , who were familiar with the success of the brand in their countries started investing in the business of Marks and Spencer . - Commoditization of the product segment - The biggest challenge for Marks & Spencer and other players in the industry is the increasing commoditization of the products in Services industry. - Local Collaboration - Tie-up with local players can also provide opportunities of growth for the Marks & Spencer in international markets. It is an important technique to understand the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Marks & Spencer is facing in its current business environment. After weighing the pros and cons of the performance of M&S,we can say that it is giant British retailer but it need to focus on some thing like more customer focussed strategy, stable management and plans regarding international expansion. SWOT analysis shows the internal business in terms of strengths and weakness of an organisation, opportunities and threats of the external business. Given the scale of expansion and different geographies the company is planning to expand into, Marks & Spencer needs to put more money in technology to integrate the processes across the board. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. - Isolate the strengths and weaknesses of the Marks & Spencer as much as possible. Added on - 2023-05-30. Investing into customer oriented services and supply chain, Get out of the business and focus on growth areas, Please email for detail SWOT Matrix based on the Weighted SWOT Analysis of Marks & Spencer, Strengths are the firm's capabilities and resources that it can use to design, develop, and sustain competitive advantage in the marketplace. M&S shares closed up nearly 31p, or 12%. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. M&S had been in this field for the past 130 years which had made them a strong base internationally in the retail market. The company has recently announced plans to begin international expansion again. Weaknesses of Marks and Spencer Increasing Cost. - Saturation in urban market and stagnation in the rural markets - For Marks & Spencer this trend is an ongoing challenge in the Retail (Department & Discount) segment. Spencer Marks first hand witnessed the impact of it where it has seen lower demand of its products from middle class customers in US and EU market. Project management and feasibility analysis have become more specialized. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance. Increased competition in all areas of business: Marks and Spencer has the threat of losing its scope in the business due to the competition, the increased competition in the retailer sector is a big worry as the other retail competitors such as Asda, Sainsbury and Tesco are expanding themselves such as Sainsburys local and Tesco Express where as Marks and Spencer is still relaying on the mega stores, if the same thing goes on there is a risk of losing its reputation among the customers so it is recommended to increase the stores where they can increase the profits so the Management need to come with a new scenario to develop the risk management by increasing the stores. Using Spencer Marks strengths to consolidate and expand the market position. Investing into R&D to thwart Services industry disruptors. The site offers no paid services and is funded entirely by advertising. These cookies track visitors across websites and collect information to provide customized ads. Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet. - Low Return on Investment Even though Spencer Marks is having a stable balance sheet, one metrics that needs reflection is Return on Invested Capital. To manage these competitive challenges and macro environment trends decision makers at Marks & Spencer can use SWOT to pinpoint specific threats and allocate requisite resources to deal with those threats. - Customer preferences are fast changing - Driven by rising disposable incomes, easy access to information, and fast adoption of technological products, customers today are more willing to experiment / try new products in the market. With more cash in bank the company can invest in new technologies as well as in new products segments. However, despite displaying clear terms on our sites, sometimes users scan work that is not their own and this can result in content being uploaded that should not have been. The chance of growing increases only when Marks and Spencers is activated globally. Developments such as Brexit, Russian sanctions, foreign exchange crisis & inflation in Venezuela, lower oil prices etc are impacting international business environment. - Lower inflation rate - The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Marks & Spencer. The easiest objective for which SWOT analysis can be used by Marks & Spencer is for setting strategic goals, defining key objective areas and desired results. Often decision makers neglect trends in macro environment because of the narrow focus on the industry. One of the main weaknesses is that the company has been slow to adapt to the changing demands of the global market. Marks & Spencer can use the emerging trend to start small before scaling up after initial success of a new product. They have more than 2000 suppliers. Expansion into international market can help Spencer Marks to tap into international talent market. Need more investment in new technologies. Despite its many strengths, M&Ss international expansion strategy has some weaknesses. This means that the products which serves the same needs as the original product (here M&S product).For example; formal suits which are very expensive for some customers in M&S can buy from anywhere else (say from Zara). 3. Marks and Spencer have the Franchise agreement with developing countries such as Bermuda, Canary Islands, The Bahamas, The Czech republic and Israel (De Naridi cole , 1998) the company started franchising in the countries who have smaller per capita income . Marks and Spencer has the opportunity to increase the technique of market segmentation by increasing its branches all over the places which will increase the business, in general marks and Spencer mainly have the mega stores all over the places but they dint concentrate on splitting the customers according to the area of interest. - Rapid Expansion of Economy As the US economy is improving faster than any other developed economy, it will provide Marks & Spencer an opportunity to expand into the US market. Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Marks & Spencer, Certain capabilities or factors of an organization can be both a strength and weakness at the same time. The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. According to Cynthia A. Montgomery , the organization can increase products and services by leveraging the skills of its suppliers and supply chain partners. The new technology provides an opportunity to Marks & Spencer to practices differentiated pricing strategy in the new market. Strengths and weaknesses of Marks & Spencer. Right now the investment in technologies is not at par with the vision of the company. This will make the employees to have a good relation and to work more for the company. Financial planning is not done properly and efficiently. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning. Some of the topics covered in Marks and Spencer Ltd. This cookie is set by GDPR Cookie Consent plugin. The main negative factor with M&S was by focusing on the exports and countries entered, M&S found their main failure was because of not having proper research and not looking on the pre-conditions of the target market. Marks and Spencer is a highly regarded retailer in the United Kingdom. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies. All rights reserved. The matrix is only a starting point for a discussion on how proposed strategies could be implemented. In order to sustain the brand reputation, the company worked closely with suppliers to ensure the highest levels of quality control. Its just matter of time and planning to overcome this obstacle. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. Clearly defining the objectives of the SWOT analysis. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors. This first mover advantage had made them to conquer the hearts of the entire UK customers. - Customer Dissatisfaction Even though the demand for products have not gone down but there is a simmering sense of dissatisfaction among the customers of Spencer Marks . SWOT analysis is meant to spark the strategic ray and to calculate the facts and figures which help for the strategic planning (Mintzberg 1994).This research shows the SWOT analysis of the Marks and Spencer's to analyze the current situation and to implement the strategies to give a tough competition to its competitors by 2030. Weakness are the areas where Marks & Spencer can improve upon. It is written by Cynthia A. Montgomery and deals with topics in areas such as Strategy & Execution Managing people, Organizational structure In addition to the planned strategy the success of M & S can also be described in terms of the core competences. This can lead to a time based SWOT analysis exercise where Marks & Spencer leaders conduct SWOT at a fixed interval and assess what it needs to tinker to achieve the stated goals. SWOT Analysis stands for Strengths, Weaknesses, Opportunities, and Threats that Spencer Marks encounters both internally and in macro environment that it operates in. Spencer Marks can use two approaches - building on present strengths, or analyze the trend and build processes to two pronged market penetration approach. This has enabled the company to charge a premium compare to its competitors in Retail (Department & Discount) industry. Automation of activities brought consistency of quality to Marks & Spencer products and has enabled the company to scale up and scale down based on the demand conditions in the market. Ultimately we have seen the key components of Marks and Spencers weakness and strength, we may now investigate how different theoretical strategic models account for the success of Marks and Spencer. EssaySauce.com is a free resource for students, providing thousands of example essays to help them complete their college and university coursework. In the same way Marks and Spencer has the opportunity by dividing the customers by establishing small shops which will reduce the maintenance cost and increase the profits as the manual power will gradually decrease when compared to mega stores and even the investment on the publicity will be less , keeping in mind all the features it has the opportunity of spreading the business by market segmentation. As stated by Pearson a core competence is a combination of capabilities such as advanced technologies and superior management skills, which provide a firm with a leadership position in the development of core products (Pearson 1999, p170). However, last but not least, the maintenance of standards was also a franchise issue that they least bothered to address. This will set out how the company emerged from its humble beginnings and what challenges it has faced in its more recent history and present market today. In the short term SWOT is an effective tool to improve business processes, part of business, or both together. SWOT analysis is meant to spark the strategic ray and to calculate the facts and figures which help for the strategic planning (Mintzberg 1994).This research shows the SWOT analysis of the Marks and Spencers to analyze the current situation and to implement the strategies to give a tough competition to its competitors by 2030.
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