Paper type: Essay Pages: 3 (740 words)
M&S has been affected by the Brexit which made the trade with EU difficult and raise the costs. The outcome of the British EU referendum on 23 June 2016 resulted in a dip in the companys sales in its last quarter (Davey, 2016). Due to the higher cost structure, the company has also losses market shares when entering new markets (Marks & Spencer, 2019).
Following the UKs decision to exit the EU, the company probably will face legal issues. Losing access to the international market will affect M&S chain.
The decision will require new VAT rules and import duties and tariffs will be imposed (Dentons, 2016). Jointly with the reduced buying power of the pound and with ?1.1 billion in revenue coming from international markets, the company needs to put together a strategic plan on how to minimize the likely impact of Brexit.
While competitors such as Lidl, Aldi, Asos or Debenhams followed a strategy of discounted pricing, M&S accentuated higher quality products and better consumer satisfaction (The Marketing Society, 2010).
this strategy led to a decrease in sales, however, it resulted in an increase in consumer preference and desire to seek both value and quality. In 2018, this strategy helped the company maintain its market share internationally. Furthermore, clothing sales reached a ten-year lowest level in the UK (Davey, 2016)
Moreover, other retailers like Waitrose, Morrison, and Tesco have high-quality food products at very reasonable prices compared to M&S food the same with clothing products as well.
M&S has to redirect its attention to the new generation. There are a big difference in customers behaviors and the technology they use to satisfy their needs for fashionable products. There is a widespread assumption that M&S is out fashioned and nontrendy and has repeated brands such as Autograph and Per Una. As well as according to the M&S distribution system Finance director Dyson worked on a 20:20 project which indicates that many stores were located in the wrong place causing very low sales. However as part of its sustainability plan Plan A.Is to build relationships with customers, suppliers and the communities (Corporate.marksandspencer.com. 2019). In 2015, food surpluses were allocated by working with redistribution partners through a ‘Community Shop’ program. In addition, The Home Christmas campaign ‘ #MyMarksFave ‘ this Christmas launches on social media on 13th November 2018. And a monthly first Instagram series ‘What’s New at M&S’ gets a festive makeover with two special Christmas episodes on 15th November and 14th December (Mail Online, 2019).
Implementing a digital transformation strategy in 2010, the company has come too late into the digital retail market. Its own M&S.com was only launched in 2014 after three years of development (The Telegraph, 2019). In addition, the company has technical difficulties and on its website when introducing their members at the end of 2015 leading to a temporary website broke down (Curtis, 2019).
M&S has to
1. Restructure its supply chain especially after Brexit in order to reduce the cost of goods by providing the right products at the right time and price. Once it loses access to the EUs open market and UK citizens working in stores in the EU as well as EU nationals employed in UK stores may be affected when the freedom of movement of workers is no longer applied in the UK (Dentons, 2016).
2. Develop a team of new designers together to develop new, modern and fashionable products using the latest technologies and rebranding scheme. In order to Segment young age customers in the target market.
3. Reposition its brand according to the competitors and reduce the sub-brands (Torrance, 2019).
4. Advertise more in the social media and email the customers with every new product.
5. Start a new customer loyalty scheme, rewarding the loyal customers, as well as promotions.
6. Invest in the digital development by selecting a professional team in e-commerce in order to maintain their website and socialized it more to include customer’s reviews and top-selling rating.
7. Redistribute its stores in order to reduce renting and communication costs, and open new caf? and restaurants in its stores.
8. Focus more on its human resources by investing in the recruitment, hiring and training new employees.
9. Invest more in marketing to meets its target in business, and gaining market share.
10. Sell unique products at reasonable prices in order to encourage customers to buy more and attract new customers.
11. Invest in the customer service sector. Introduce new services like click and collect and home delivery.
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MS has been affected by the Brexit which made the trade with. (2019, Dec 12). Retrieved from https://studymoose.com/ms-has-been-affected-by-the-brexit-which-made-the-trade-with-best-essay