Marks Spencer Strategic Analysis

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1 Introduction……………………………………………………………………………………….2 2 How M&S does business: “Plan A”……………………………………………………………...2 3 M&S performance………………...………………………………………………………………3 3.1 Group operating profits………………………………………………………………………3 3.2 Food market performance……………………………………………………………………4 4 Three C’s…………………………………………………………………………………………..5 4.1 Customers……………………………………………………………………………………...6 4.2 Competitors……………………………………………………………………………………7 4.2.1 Competitors Analysis Framework……………………………………………………….8 4.2.2 Competitor’s Current Strategy ………………………………………………………….9 4.2.3 Competitor’s objectives …………………………………………………………………10 4.2.4 Competitor’s assumptions………………………………………………………………11 4.2.5 Competitor’s resources and capabilities……………………………………………….12 4.2.6 New Entry………………………………………………………………………………...13 4.3 Corporation…………………………………………………………………………………..14 5 Internationalization……………………………………………………………………………...15 5.1 Mode of Entry ………………………………………………………………………………16 5.2 Food Internationalisation…………………………………………………………………...16 6 Conclusion………………………………………………………………………………………..17 7 References………………………………………………………………………………………..18

1 Introduction
Marks and Spencer is one of the most iconic and widely recognized British chain store in the UK with over 600 shops located throughout the country and 240 worldwide including over 219 franchise businesses, operating in 34 countries with a relatively high concentration in Turkey and Greece. Its business includes food groceries, clothing retail and home products generally all sold in the same shop, although during the last two years there was a large diffusion of simply food stores. The company employee over 75.000 people and during the 2007 the total revenue was 8588.1 £m.

This study will be focus on the company food market in UK and Ireland, with a final analysis of the company internationalization. We had analysed the actual organization current strategy and performance, considering the competitors environment and identifying the key success factor in the industry.

2 How M&S does business: “Plan A”
For better understand the environmental analysis it is essential to have a general knowledge of Marks and Spencer’ politic and objectives. In January 2007 the organization launched the "Plan A" an ambitious programme that will completely change the company image and the way it does business. The plan is a five-year “eco plan” based on five points (M&S 2008a online): 1-The climate change: M&S aims to make all their UK and Irish operations carbon neutral by 2012. 2-Waste: by 2012 M&S will ensure that none of the clothing’s or pickings wills ends up in landfill. 3-Sustainable raw materials: the goal is to make sure that all the raw materials come from the most sustainable sources available. 4-Fair partner: M&S will help to improve lives of hundreds of thousands world wide through the supply chain. 5-Health: M&S will help customers to choose healthier lifestyles through clear labelling and easily accessible information.

3 M&S performance

Summary financial review

Summary of Results200520062007
£m£m£m
Revenue7490.57797.78588.1
operating profits649.1855.81004.0
Net finance costs-93.0-104.4-78.8

profit before tax556.1751.4956.2
loss on property disposals-0.4-5.71.9
Exceptional operations charges-50.6-- 30.4

Group profit from tax from continuing operations505.1745.7936.7
Earnings per share
Basic earnings per share17.6p31.3p39.1p
Adjusted earnings per share19.2p31.4p40.4p

Table 1

Observing the financial review table it is immediately clear that the company economical situation is positively improving during the last three years. One can also see that the earnings per share are increasing, which is a good indication for investors to buy shares in M&S. It was announced on 31 of March 2007 that there was 224,520 private shareholders and 8,282 institutional and corporate holders, which gives us a total of 232,802 holders. We...
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