Marks and Spencer’s Company Analysis Essay

Custom Student Mr. Teacher ENG 1001-04 8 November 2016

Marks and Spencer’s Company Analysis

Marks and Spenser is the largest retailer in UK, and 43rd in the world. The company owns more than 1103 stores, of which 703 – in the UK, and the remaining 400 in 44 other countries (Marks & Spencer, 2013). M&S has been known as a manufacturer of clothing, but since the 2000s, the company developed in other areas, including: food, household good, financial services. In 1998, M&S became the first British retailer profit of which exceeded £ 1 billion (Bevan, 2002). This essay will focus on origin and key developments. Also, it will touch on strengths, weaknesses, opportunities and the threats the organization faces. M&S started as a small household shop which established by Michael Marks in 1884. Because he frequently traded with a supplier, he knew Tom Spencer who was a cashier in this warehouse.

It is the person who invested £300 into M&S to further expand (Harvey & Walker, 2012). From this year, the small shop began to trade under the name ‘Marks and Spencer Penny Bazaar’. Simon Marks, Michael’s son, took over M&S in 1916. In order to be outstanding from fierce competition, Simon went to America for gaining experience and absorbing useful ideas. During the period from 1930s to 1940s, M&S witnessed a rapid growth. In 1927, M&S went public. Between 1929 and 1939, its profits rose by about 21million to nearly 25 million. At the same time, M&S introduced the concept of CRS, which is one of the key determinants for its success. CRS is responding to the needs of a company’s stakeholders, especially staff. In the late of 1940s, the Second World War collapsed. Britain went through a huge recession. A considerable number of people live in impoverished, the gap between different classes broadened. Some people showed their anger by ruining infrastructures and stores.

The implement of CRS improved the condition of employers and established good image. As a result, M&S recovered quicker than other companies. According to Marketline, 2012, quality is a major strength of Marks & Spencer since the company was founded. It makes Marks & Spencer recognised as a high-valued company which offers its outstanding quality goods as well as reasonably priced products. Consequently, this results in advantages regarding foods over its competitors such as Sainsbury and Tesco. A wider range product than other rivals is also the key of Marks & Spencer’s success; namely, menswear, womenswear, childswear, household goods and foods. By its strategy, it contributes company to launch specific products
to respond consumers’ needs and satisfaction, for example gluten-free bread and cakes for egg-allergic patients.

A variety of foods is the essential part for Mark & Spencer with regard to company’s profit, with 51% of total revenue (Marks & Spencer, 2013). Conversely, Marks & Spencer is heavily criticised in terms of clothing and stocking. Clothing design is one of the most factors in which customers are likely not to buy because of its old-fashioned design compared to other up-to-date clothing retailers; Top-shop, Next, Zara (FT, 2012). It significantly leads to the decline on clothing business for Marks & Spencer. Meanwhile, stocking was an area that M&S has to improve in the way which the company cannot meet the demands of its customers. The shortage of clothing causes customers losing their confidence in Marks & Spencer, and therefore, has an impact on somewhere, especially clothing sales (FT, 2012).

According to M&S company website, Shwopping is a brand new environmentally commercial marketing strategy, which could be used to get a new cloth by changing an old one. Owing to this programme, M&S is able to collect as much second-hand clothing as it could, taking advantages of these materials to make new stuff; or donating them to poor regions. For M&S, this is a “one stone, three birds” commercial opportunity, as it may enjoy being a friendly-environmental company which contributes to a positive reputation; also it is likely to get a cheaper resource to make clothing; in addition, a growing number of customers would like to shop M&S, resulting from the “buy one, get one” culture. On the other hand, M&S’s clothing department is facing a huge risk.

Hickman (2012) states that although M&S is popular with older women, it is losing the market for younger generation due to its out-of-date style. That is because there are many more fashionable shops on the high street, such as ZARA, H&M and NEXT. According to Butler (2013), M&S has witnessed a drop of 3.8% in revenues of clothing and homewaes in the last three months of 2012. Unlike M&S, for example, ZARA has created a “fast and cheap fashion” culture for all ages (Hickman 2012). As a result, there is a strong likelihood for M&S’ managers to think about ways in order its old-fashion image. In conclusion, it has been seen that Marks and Spenser is a successful company that has always offered best quality products, which is how it was able to keep afloat and succeed.

Also, It has been shown that recent years Mark and Spencer has been faced difficulties with customer loyalty and “not fashionable” trends. In order to keep its unique position in the market, M&S needs keep a solid hold on its values and principles, but at the same time leave some space for change. Also, M&S should expand to new market places to countries like China and India, and consider essential moments about that a different market will always have different demand. Finally, Marks and Spenser should keep up with the latest fashion trends, constantly reviewing interior design of its stores and sustain the feel good factor of shopping in M&S.

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