The aim of this report is to discuss and analyse the business environment of M&S. It will identify and analyse the appropriate key factors and issues affecting the environment in which the organisation operates in. This will be completed through the use of strategic analysis tools, Porter’s 5 force, PESTLE, SWOT, financial trend analysis and lastly ration analysis. The report will also discuss and evaluate the findings from the tools in order to provide appropriate recommendations in which the organisation can act upon to improve their business performance. Company Background
Marks and Spencer plc (also known as M&S and Marks & Sparks) is a British retailer headquartered in the City of Westminster, London, with over 700 stores in the United Kingdom and over 300 stores spread across more than 40 countries. M&S was founded in 1884 by Michael Marks and Thomas Spencer. The firm is one of the top retailers in the UK with “over 21 million visitors each week in the M&S stores, and 76,000 employees globally in the UK and 41 overseas markets” (Marks and Spencer, 2010). In the UK, the firm has 690 stores with most of these stores having been recently refurbished to show the importance of customers to the firm. M&S had group revenue of £9.5 billion in 2010, a 5.2% increase from the previous year, and a group profit before tax of £702.7 million in 2010, a 0.5% decrease from the prior year (Marks and Spencer, 2010). Overseas, in the 41 international markets of Marks and Spencer, the firm has established 320 stores to cater to the requirements of the customers of Marks and Spencer. Business Activity
The industry sector in which the company operate in is the tertiary Sector, the products and services consist of clothing and quality food products. The services provided are; Loans
Personal Loans- This offers consumers a borrowing option for the short/long periods. M&S have the competitive advantage of offering one of the lowest APR rates compared to their competition. Insurance
Saving & Investing
In 1998 it became the first British retailer to make a pre-tax profit of over £1billion, though a few years later it plunged into a crisis which lasted for several years. In November 2009, it was announced that Marc Bolland, formerly of Morrisons, would take over as chief executive from Stuart Rose in early 2010; Rose will remain with the company until mid-2011. The organisation is also listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. Porters Five Forces
1. Supplier power - for examples are there alot of similar suppliers? For m&s (i assume u mean their clothes) it will probably be easy for them to find alternative suppliers as it is a standard product, so the suppliers have little power. However for a hi tech product, such as they have a line of tights which are to keep you cool, would not have many alternative suppliers. Therefore the supplier has more power because they know m+s cannot find someone else easily.
2. Rivalry - a market which is fragmented is more competitive. eg lots of clothing retailers therefore more competition. low switch costs - there are similar products available at a similar price so it is easy for a consumer to switch to a rival brand. also the rate of growth of the market - if it is not growing, the competitors are fighting more for market share
3. Substitutes- this refers to a product from another industry replacing m+s products. it does not mean a consumer shopping at another clothes shop. It means them finding a different product that meets the same needs. cant think of a good eg here,....maybe an example is if a customer were to buy a quality food from bakery, flowers frozen...it is a different product but serving the same need. but obviously you can get both these things at m+s so not a good eg.
4. buyer power - if there is a small market, it is difficult...