Case Study: Marks and Spencer, Ltd. (A)
Marks and Spencer has a reputation of greatness and quality in the U.K. Their five tenets of operating principals are the cornerstone of the company’s strength in the industry. They fostered strong human relations with its customers, suppliers, and staff through offering selective range of high-quality merchandise at reasonable prices, encouraging suppliers to use top-notch modern technology, growth, and cooperation to enforce the highest standard of quality.
Breaking down Porter’s Five Forces identifies the competitive forces in Mark and Spencer: 1) Suppliers: M&S is not dependent on suppliers as other stores are, due to M&S producing and selling its own branded products. Raw products are supplied, which is an advantage for its margins. They have an astounding and long (some relationships dating back to 40 years) reputation with their suppliers, which allows for discounts. 2) Buyers: Buyers have a substantial influence by shopping around, forcing M&S to continue in supplying high quality garments and food products at reasonable prices. 3) Threat of Entry: Even though M&S has a very loyal customer base, online shopping was just at the early stages in the early 1990’s along with other super markets establishing a one-stop shop for all customers’ needs. 4) Substitutes: Threat of substitutes is high due to buyers’ looking for cheaper alternatives in other competitive outlets. Also, because M&S focused on essential clothing, and less on fads or trendy lines, competitors were quicker to react in offering more trendy clothing lines. 5) Competitive Rivalry: M&S has fierce competition from other food, clothing, and home wares retailers; such as supermarkets Tesco, Asda, and J. Sainsbury.
Due to M&S commanding market strength in the U.K., M&S expanded overseas. They had shared success in other countries, but also were also presented with challenges. For instance, France viewed M&S brand...
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