Marks and Spencer Overview

Topics: 2009, Marks & Spencer, Fair trade Pages: 5 (1627 words) Published: November 30, 2010
An overview of Marks & Spencer plc

Marks & Spencer (M&S) is a leading British retailer, with over 895 stores in over 41 countries around the world. As of 2009, 600 stores currently located throughout the United Kingdom along with 295 stores planted internationally (M&S 2009). According to Deloitte (2009) M&S is the largest clothing retailer in the United Kingdom, as well as being an exclusive food retailer and as of 2009, the 43rd largest retailer in the world. The large majority of its domestic stores sell both clothing and food, and since the turn of the century it has started expanding into other ranges such as homewares, furniture and technology.

Figure 1 illustrates M&S’s overall sales in millions from the years 2005 – 2009. The graph trend shows a gradual increase in turnover every year. By the end of 2009 M&S revenue reaches 9,062.1 million compared to 2005 revenue of 7,490.5 million. A difference of £1571.6

Data taken from M&S 2009.

Figure 1: M&S Sales (2005-2009)

Figure 2 represents the operating profit of M&S. There is a steady rise in the growth of sales from 2005 to 2008. However in the year 2009 there is a decline in the growth of sales. This is fairly due to the economic recession resulting in less economical activity. M&S prices would have risen resulting in a decline in demand for their products and services.

Data taken from M&S 2009.

Figure 2: M&S Sales growth (2005-2009)

Figure 3 displays the two primary categories of business for M&S. Food as a whole and all other products falling under house hold products. Both areas of business are equally important as they hold a near perfect share of the business.

Data taken from M&S 2009.

Figure 3: M&S main business areas

Business strengths and weaknesses:

M&S has grown over the 21st and it is arguable that the company has moved from strength to strength. M&S are strong in many dynamics ranging from a politically, economically and highly strategic company. One major strength of M&S is its emerging image of an active environmentally friendly company. On 15 January 2007, M&S launched an initiative, known as ‘Plan A’ (M&S, 2009) to dramatically increase the environmental sustainability of the business within 5 years. In 2006 the Look Behind the Label marketing campaign was introduced. The aim of this campaign was to highlight to customers, the various ethical and environmentally friendly aspects, of the production and sourcing methods engaged in by M&S including Fairtrade products and sustainable fishing. As indicated by A. Fletcher (2006) all coffee and tea sold in M&S stores is now Fairtrade. According to the BBC (2006) the company offers clothing lines made from Fairtrade Cotton in selected departments. This aspect of M&S emphasises the equality and fairness to the public and helps promote its products to certain groups in the market who would not previously purchase their products for this specified reason. Although M&S is a highly recognised and established company it has fallen under heavy criticism in the past. War on Want (2007) criticised M&S, in its Growing Pains report for using its influence to force overseas suppliers to continuously diminish their costs while boosting their own profits. Political issues have also arisen, the company has been criticised for its support for the State of Israel during wars and conflict. According to J. Smith (2004) activists have campaigned against the company and some stores have had their signage altered and their goods re-labelled. As a result boycotts have taken place with little effect on M&S sales and profits yet this has led to a disruption in social cohesion of society demonstrate through protests.

Development of new products and services:

Most (M&S, 2009) stores originally sold both clothing and food, and since the turn of the century it has started...
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