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Marks & Spencer Company’s Strategic Analysis in 2015 Report (Assessment)

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Updated: Apr 25th, 2021

Company Profile

Marks and Spencer (M&S) is a British multinational company that specializes in food products, clothing, home products, and other luxurious domestic products (M&S: the official board 2010). Its headquarters are at Westminster in London. It was started way back in 1884 by Mark and Spencer. In the United Kingdom, M&S has a total of 622 stores and 270 others in 34 countries. The company’s mission is “to make aspirational quality accessible to all” (M&S: the official board 2010). As per the company’s mission statement, the company’s strategic direction is coined around meeting the needs of its customers by providing them with high-quality products and services at affordable prices.

Through differentiation and positioning of its products, goods, services, and operations, M&S has managed to place itself in a strategic position as far as competitiveness is concerned. It has also penetrated several markets across the globe through mergers and acquisitions. However, the organization has some gaps, which if properly addressed can enhance its competitiveness in the retail industry.

M&S’s main strategy is to sell goods and services of high quality at affordable prices while its objective is to transform itself into a leading player in the retail industry. Over the last 12 months, M&S has taken measures aimed at boosting its position at the global level. At the local level, it has taken various measures aimed at boosting growth in the UK. It has also taken initiatives to strengthen its foundation and improve customer satisfaction. In addition, it has done serious campaigns to expand its international market. The organization’s positioning initiatives are likely to remain the same over the next 12 months. The reason is that it aims at delivering quality and affordable products and services to all its customers over the next three years.

The marketing success

M&S operates in dynamic social, political, and economic environments. Its main competitors include NEXT PLC, GAP, and H&M. The last three years have been useful for the organization because it has developed a strong foundation for the growth of its business. Over the last 3 years, the business environment for M&S has had a mixture of fortunes and misfortunes. However, the organization has remained relatively stable. According to the Chief Executive, Mr. Marc Bolland, the organization’s focus over the last 3 years has been to strengthen its foundation by investing in areas that improve customer satisfaction. According to his assessment, the organization has made good progress. For example, its food division outperformed all other food retailers in the UK. However, its general merchandise did not produce impressive results as expected (HelpMe.com: Marks & spencer strategic analysis 2015).

According to Chairman Mr. Robert Swannell, the organization is currently better positioned than it was three years ago. The positioning is based on Porter’s theory of five forces that shape business strategy. Due to the huge investments which it has made over the last three years, the organization expects the next three years to be a time of reaping the benefits of the investments (M&S: From transformation to delivery 2014).

PESTLE analysis for M&S

Political environment

The political environment under which the organization operates is very stable. There are minimal political risks for the business, both in the UK and in other countries where it has operations. The organization also enjoys the goodwill of the host governments, which has enabled it to invest heavily without the fears associated with political risks (Slideshare.net: Marks & spencer strategic analysis 2015).

Economic environment

In 2008, the world underwent a global recession, which was the biggest since the great depression of the 1930s. Just like other multinational corporations, M&S was not exempt from the effects of the recession (Slideshare.net: Marks & spencer strategic analysis 2015).

Social environment

M&S also enjoys a friendly social environment in all the countries where it operates. The friendly social environment has been achieved through the sensitivity of the organization to the needs of the local customers as well as the provision of very friendly goods and services at affordable prices. The organization also engages in charity work and other corporate social responsibility activities, thus creating a very conducive social environment for its operations.

Technological environment

The organization has adopted technology in most of its operations and service delivery. It provides its customers with various online services. It also operates a website where it posts business information for access by potential customers (M&S: student information 2010).

M&S targets various segments of customers such as the youth, low-income earners, high-income earners, and the elderly. However, its main target is women who earn a high income. The reason is that such women are known to purchase expensive products in bulk as opposed to the other customers.

M&S’s market is broadly classified into two categories named below:

  • UK market
  • International market (M&S: 2015 – A year in preview for sustainable business 2015).

Its market is broadly segmented as follows:

  • Food -48% of UK market (Newstatesman.com: Marks & Spencer: great food, bad clothes 2013).
  • General merchandise- 41% of the UK market (Marks & Spencer: company profile 2013).

M&S’s market segments are based on the following criteria

  • Demographics
  • Behavioral factors
  • Geographic factors
  • Psychographic factors

The market is further segmented using the following criteria

  • Social status
  • Economic status
  • Educational status
  • Levels of income

In terms of income, the customers are further segmented using the following criteria

  • High-income earners
  • Middle-income earners
  • Low-income earners

In terms of age, customers are segmented as follows:

  • Children
  • The youth (18-35 years)
  • People aged between 35 and 54 years
  • The elderly (55 years and above)

Among all these segments, those that are most attractive to M&S include the following:

  • High-income earners
  • Middle-income earners
  • The youth

M&S has an excellent communication strategy which has enabled it to maintain a good relationship with its customers and stakeholders. The strategy has also enabled the organization to constantly update its customers and stakeholders on its undertakings.

M&S’s communication strategies interface with the prospective consumer in the following ways:

  • Branding
  • Differentiation
  • Positioning
  • Corporate social responsibility
  • Market research

M&S has incorporated technology in its business and as a result; it has been able to boost its revenues by 40% in the past decade. M&S’s e-business model is focused on marketing and sales (Strinfellow 2010). The marketing strategies of the organization involve advertisement on various platforms on the internet as discussed below.

Facebook

The organization has a Facebook page where it posts information about what it does, the kind of services and products it deals with, its uniqueness, and how customers may get its products and services. Facebook has a function that allows people to ‘like’ the organization’s page by clicking on the ‘like’ button. When people ‘like’ the page, they are able to access the organization’s business information such as services offered, physical address, the organization’s mission and vision among other information. The organization invites those who ‘like’ its Facebook page to give their views regarding its operations. In other words, the organization operates an online suggestion box, which it uses to improve its services (Bodnar & Cohen 2012).

Twitter

The organization also has a Twitter handle where those who want to know more about it are requested to ‘follow’ the Twitter handle. Once they ‘follow’, they are able to access the organization’s business information. The organization uses its Twitter account to advertise and market its business. It also uses it to update customers on new products and services. In other words, the organization uses Twitter for acquiring and retaining customers (Jones & Silverstein 2009).

Google +

M&S uses the google+ feature to market its products and services. One of the interesting features of google+ is YouTube. This feature enables the organization to store videos and pictures of various products. Due to its ability to store huge files, google+ enables the organization to share as much information as possible with its customers, a feature that is missing on Facebook and Twitter. As a result, it becomes easy and convenient for the organization to reach many customers with comprehensive information about its products and services (Harman 2014).

E-mail Lists

M&S uses e-mail for advertisement purposes. Through e-mail, the organization has been able to increase its audience on social media. The reason is that over 85% of people who have an e-mail account are also on social media. For instance, Facebook has a feature for customizing audience using e-mail. Once Facebook users ‘like’ the Facebook page of the organization, the feature directly connects Facebook to the users’ email accounts. Once that happens, the users are able to receive updates on various products and services in their e-mail inbox (Pearson & Saunders 2013).

SWOT analysis for M&S

Strengths Weaknesses Opportunities Threats
  1. Many customers perceive M&S’s products as having ‘value for money’. The reason is that the products are not only of good quality but they are also provided in different varieties. Shopping at M&S is also convenient for customers due to the availability of online shopping services
  2. M&S is a powerful brand
  3. Loyal customers
  4. Customised brand labels
  5. More than 1000 stores in over 30 countries
  6. A huge workforce (estimated at 80,000 employees across the globe.
  1. Stiff competition which leads to limited access to the market
  2. Competitors have many varieties of brands which limit the popularity of M&S’s brands
  3. Inability to adequately deal with the misuse of the M&S brand by fraudsters.
  1. Ability to develop a website
  2. Presence of expansion opportunities in China and India
  3. Variety of market segments.
  1. Competitors offering discounted prices is a threat to M&S’s brand and profit margins
  2. Strict government regulations governing the retail industry in different countries
  3. Exposure to different political environments poses the threat of instability of M&S’s stores in countries that have unfriendly and unstable political climates.

Reference List

Bodnar, K & Cohen, J.L 2012, The B2B social media book: become a marketing superstar by generating leads with blogging, LinkedIn, twitter, facebook, e-mail, and more, Wiley, Hoboken, N.J.

Harman, W 2014, , Web.

2015, Web.

Jones, S.K & Silverstein, B 2009, Business-to-business internet marketing: seven proven strategies for increasing profits through Internet direct marketing, Maximum Press, Gulf Breeze, FL.

2010, Web.

2010, Web.

Marks & Spencer: company profile 2013, Web.

M&S: From transformation to delivery 2014, Web.

M&S: 2015 – A year in preview for sustainable business 2015, Web.

2013, Web.

Pearson & Saunders 2013, Strategic management of information systems, John Wiley & Sons, Hoboken.

2015, Web.

Strinfellow, A 2010, About flat organisation structure, Web.

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