Marks and Spencer

Most of it’s domestic stores sell both clothing & food, and since the year 2000 Marks & Spencer have started to expand into other ranges such as homewards, furniture & technology. Marks & Spencer became the first British retailer to make a pre-tax profit of over El billion “BBC News online 1998” Though a few years later Marks & Spencer were hit by the “credit crunch” which has had a dramatic effect on the company as they struggle in the current economical climate. There are plenty of observers who will claim that Marks & Spencer is dying, and I’m inclined to agree.

I’m to suggesting that the retail monolith is going bust, or is about to be bought by Wall- Mart and rolled into one brand with USDA. It’s Just that the old M&S is dying and a new Marks & Spencer is forming. The latest blow came when Marks & Spencer announced it would sever its coos, 30-year-old supply agreement with its fourth largest supplier, William Braid. Marks & Spencer first started to buy direct from manufacturers in the Twenties, a rather radical initiative in those days, when wholesalers were taken for granted. Since then, Marks & Spencer has been a mainstay for the I-J retail industry.

Marks & Spence’s has increasingly moved overseas in recent years, to take advantage of the higher margins offered. In this Pestle Report on Marks and Spencer By reach report I am going to be looking at the Political, Economical, Sociological, Technological and Environmental factors that have affected Marks & Spencer and how they have overcome their problems. Political Factors The government sets regulations for companies to abide by such as Health & Safety British Standards such as, planning for hazard identification, risk assessment and risk control.

If companies do not abide by these regulations they will be fined or even n some cases be forced to close down. Marks & Spencer did not abide by the British Standards as they were charged for neglecting health & safety regulations after a door fell on an employee. George Blair was allegedly injured after a warehouse door in their store at Beebread, near Glasgow was left hanging on loose fixtures. Marks & Spencer are alleged to have ignored repair requests, allowing the door to fall into disrepair.

Marks & Spencer pled not guilty to this; there is still no outcome of this trial. Also according to “BBC News 30th January 2006” Marks & Spencer would be the iris major retailer to go down the Fair-trade route on both clothing and food. The fair-trade policy, which they have launched will include, cut salt and fat in M foods, recycled packaging and animal welfare protection. Marks & Spencer Chief Stuart Rose stated, “Customers want good value, but they care more than ever how food and clothing products are made”.

Economical Factors Currently the economic outlook is very uncertain and this is more than likely to affect retail sales, as people do not have the spare cash to spend on luxury items such as clothing and food luxuries. Marks & Spencer have been hit by this and have recently loses a number of stores and have had to make Job cuts of 2% of their 70,000 staff. And also to show what affect the recession has had, they took the decision to have two days of 20% discounts in the run-up to Christmas. They have also recently introduced a 20% of all Wine and Champagne to keep up with their competitors.

Marks & Spencer have had to change the way they market themselves so that they can try and stay ahead of the recession. Sociological factors In the last few year’s society has changed. In 2006 as stated by the Guardian, Chief Executive of Marks & Spencer Stuart Rose wanted to stretch the company brand, for example he considered selling food online as part of a plan to become a multi- channel retailer, this was obviously to keep up with the competitive market such as USDA. USDA and Marks & Spencer appeal to different markets in terms of social class and other demographics; this has a major influence on the way they respond to current issues.

In response to the current cheap clothing industry supermarkets have increasingly over the last few years caught up with fashion trends, helping them to rival the high street clothing stores with their less expensive versions. Marks & Spencer is no exception to this and they have bought their clothing ranges up to date to keep up with the latest trends and to keep their customers interested. “Consumer purchases are influenced by cultural, social, personal and psychological characteristics. For the most part, marketers cannot control such doctors, but they must take them into account”.

Armstrong, G and Kettle, P (2007) Marketing: An Introduction, 8th Deed. Prentice Hall. Technological Factors Technology is vital in the retail market. “Companies must manage their brands carefully. First the brands position must be continuously communicated to consumers. Major brand marketers often spend huge amounts on advertising to create brand awareness and to build preference and loyalty’. Armstrong, G and Kettle P (2007) Marketing: An introduction, 8th Deed. Prentice Hall. For Marks & Spencer to continuously communicate to consumers they need to be heavily into advertising, which they are.

They have Celebrity icon Mullen Class as the Face of Marks & Spencer who appears on the adverts on the TV and she is also on their website modeling the M clothing, also other M girls include Twiggy, Erin O’Connor and Anomie Lenore too, so their adverts appeal to women not only in their ass’s but also to he more mature lady so they are covering all areas with their advertising campaign. Also their website is very appealing with bright colors and very easy to use, it is also constantly updated with the new M brands. Legal Factors Legislations are always changing.

Marks and Spencer carry out re-training & update every year, they keep up to date with new laws or legislations, and with issues regarding Health & Safety they also ensure that their legal protection is updated. For re-training Marks & Spencer invite business changes to the business, tax changes to the business & products changes amongst many other things. Marks & Spencer invite objectives/methods that need to be changed and new training, and also on going development. An example of legislation is the “Fair Packaging and Labeling Act (1996) – Provided for the regulation of packaging and labeling of consumer goods.

Requires that manufacturers state what the package contains, who made it, and how much it contains”. Here is an example from Marks & Spence’s website to show that they are adhere to this legislation, “Packaging helps to protect the product between being produced and used by the customer. It prevents product wastage, carries important instructions and information on ingredients and helps the product look its best in the store”. Environmental Factors With the current environmental climate as it stands, issues are being promoted daily on the television, in magazines and newspapers and on the radio.

All companies, industries and organizations are being pressured to change their ways when it comes to the materials they use and how they manufacture. Marks & Spencer have established their own Green Policy which they call “Plan A” The chief executive of Marks & Spencer states that it is called this because there is no “Plan B”. Marks & Spencer has today announced a 100-point five-year plan to re-engineer itself to become a carbon neutral, zero-waste-to-landfill, ethical-trading, sustainable-sourcing, health-promoting business. BBC News January 2007″ Conclusion In my opinion Marks and Spence’s have been highly successful and competitive with a drive to provide a high quality service for many years. The economic change has forced Marks and Spencer to compete against cheaper products, younger, more fashion conscious clothing chains and more recently a recession, which has hit shoppers hard. Without previous pressure to improve M has never before had to think its policies in such a way as it does now.

Political, economical, sociological, technological, legal and environmental policies all have to be considered in a competitive world, Marks and Spencer now have a rival their competitors and fight to survive. The business needs a complete overhaul, management needs to be streamlined, the marketing mix needs to be changed and the business structure needs to be re-organized to make it more efficient in its business strategy and to make it more appealing to shoppers. Bibliography BBC News online Armstrong, G and Kettle, P (2007) Marketing: An Introduction, 8th Deed. Prentice Hall

As a marketing consultant for Marks and Spencer PLC (M&S), the task is to conduct a situation analysis for a European country where M&S does not have a store for the selling of its products. The country in question is Italy, where M&S is currently not present. The paper begins with a short back ground of M&S and the various products and services that they provide.

The subsequent discussion is a comprehensive situation analysis which includes a PEST framework to analyze the Italy environment for new businesses; followed by an application of Porter’s five forces model to analyze the industries that M&S will operate in Italy; and finally an analysis of the Italian customers and market to which M&S will provide their products. This is followed by a SWOT analysis of M&S PLC for the Italian market in general, where the internal strengths and weaknesses are analyzed, as well as the external opportunities and potential threats to M&S.

In the end a conclusion is provided with recommendations as to what should be the desired plan of action for M&S. M&S – An Introduction The history of M&S ps more than a century, when in 1903 the two partners Michael Marks and Thomas Spencer registered M&S Ltd as a company. The company has since then grown to become one of the most respected and popular retail chains, particularly in the United Kingdom where it is headquartered (Marks and Spencer Plc, 2009).

M&S is one of the pioneer retail firms in the United Kingdom that offers “stylish, high quality, great value clothing and home products as well as outstanding quality foods, from around 2,000 suppliers globally. ” M&S has a large and diverse work force of more than 75000 people both in the United Kingdom and in other nations around the globe. There are more than six hundred stores in the United Kingdom and a large number of international stores that are set to grow even further as based on the plan of the company (Marks and Spencer PLC, 2009).

M&S has wide and diverse categories of products and services to offer its clientele. They have diversified and besides for women’s wear and lingerie, men’s wear and children’s clothes, they also offer a varying range of products such as books, DVD’s, toys and games, travel related products, home furnishing and accessories and electrical items, technology related products such as TV’s, iPods and computers, flowers and gifts including greeting cards, and food and drinks including liquor.

Besides this huge assortment of products and services, M&S also offer E-Catalogues, Financial products, and Energy products for residences (Marks and Spencer Group Plc, 2008). Country Analysis A PEST Analysis is applied here to analyze the various environmental forces that are affecting the Italian market and consequently all the firms that are operating in that market or plan to do so in the future. This includes my current project as a marketing consultant of launching M&S in Italy.

The PEST analysis is an abbreviation for Political, Economic, Social, Technological, Legal and Environmental Analysis. Each of the factors is discussed below for the Italian market. Political Factors Italy is one of the most advanced countries in the world and also a member state of NATO, G-8 and the EU. The current government gained power in 2001, and is led by “Prime Minister Silvio Berlusconi, leader of the Forza Italia party” (EIA, 2003). After the majority victory of Berlusconi against Veltroni, it signified a more stable political climate for Italy in the forth coming years. Read Marks & Spencer market structure

This new found potential political stability would greatly assist the Italian economy as well, where the position of power has been changed among the parties more than sixty one times in the last sixty years. According to Pope Benedict XVI, this would help Italy “overcome its difficult period” (Krause-Jackson, 2008). This shows that political seats have changed once every year, which is a frightening ratio especially for a foreign company like the company in question, M&S. However, since the new government has assumed power, the forecasts have changed to become more positive as compared to previous years.

Economic Factors Italy has been severely affected by the global financial crisis like many other nations. Many promises made by the newly elected government have not been fulfilled due to the deteriorating economic position faced by the country. Italy has a massive public debt that is almost a hundred and five percent of the Gross Domestic Product. The GDP in itself has declined by around 0. 6 percent in 2008. The forecast prepared by the Economist is that GDP will fall further in the following years.

The fiscal budget deficit which was already almost 3 percent of the Gross Domestic Product in 2008 is expected to increase to over 4 percent in the next year or two. The ratio of Public Debt to the Gross Domestic Product which already was at an astronomical high in the year ended 2008 at around a hundred and five percent is expected to rise further to more than a hundred and ten percent in the next year or two. The deficits might be much higher if tax cuts which were originally promised during the election campaign are implemented (Intelligence Unit, 2009).

Abstract

Marks and Spencer Group is ranked 55 in terms of market capitalisation on the FTSE 100 as of close of business on Friday 7th October 2011. This essay briefly touches on the key elements of Marks and Spencer’s existing and past strategies, exploring how specific resources have influenced strategies, and how these account for the company’s performance. A very brief analysis of the difficulties that the current strategy might possibly encounter in the future is included.

Methodology

Due to the time constraints for this assignment, research resources have focused primarily on those available via the internet, with some textbook references added where available and relevant. Internet resources include M&S news releases, media articles (BBC online, Financial Times, Guardian, Telegraph) and relevant academic papers that were readily available online, without requiring a subscription.

The analysis is based on Porter’s Five Forces model: Bargaining Power Of Suppliers; Bargaining Power Of Customers; Threat Of New Entrants; Threat Of Substitute Products; Competitive Rivalry Within An Industry

Introduction

Marks and Spencer Group is ranked 55 in terms of market capitalisation on the FTSE 100 as of close of business on Friday 7th October 2011.

At the turn of the millennium, M&S was hit by a major crisis, which lasted for several years. In May 2000 Chairman Luc Vandevelde announced a boardroom cull and forced the resignations of three executive directors. The dividend payable to shareholders was slashed for the first time in the 74 years for which M&S had been a public company.

By January 2001 the sales figures for the Christmas period revealed that M&S was the worst performing company of all the high street chains for the third year in a row. Profits and stock trading were both down (Left, 2001). The more recent recession has brought more problems for the company, as has been the case for the majority of high street retailers (Rayner, 2008). Robert Swannell became Chairman in January 2011.

Corporate Strategy Analysis: a Resource Based View

Initial Company Strategy

‘The brand is where the company’s identity lies’ (Kapferer, 1992, p31

The original strategy employed by M&S was to build its brand. The company’s resources included the St Michael logo, the policy of using mainly British suppliers, and good customer relations. Quality control was achieved by working closely with suppliers, and the M&S management system focused on a top-down approach that became standard in all stores. Customer satisfaction and loyalty was secured and there was steady growth in market share and profit until the 1990s, when competition at the top and bottom end of the market rendered this strategy obsolete.

Core Competencies

M&S core competencies resulted in the development of a strong brand, excellent quality control and good customer service. Pearson described a core competency as:

• ‘… a combination of capabilities such as advanced technologies and superior management skills, which provide a firm with a leadership position in the development of core products.’ (Pearson 1999, p170).
• However the rigid management structure proved inflexible in changing market conditions: decisions and policies made at the top were not challenged.

A Move to Restructure

The top-down management approach caused M&S to become vulnerable to market changes so new resources were created, including a department with a remit to seek out new business opportunities; more autonomy for store managers; different procedures for buying. M&S began to look overseas for suppliers. Simon Marks’ management style was directly linked to this strategy.

Restructuring was designed to reposition M&S at the market’s core and to restore and enhance some of its key resources. The close working relationship between suppliers, employees, management and loyal customers was enhanced. New customers were attracted by campaigns featuring Twiggy and younger models – so M&S could widen the appeal of its clothing range.

Current Strategies

The techniques of broadening its appeal, responding to customer preferences and introducing new products in food and finance have assisted M&S towards recovery.

The development of the quality food market has been a particularly successful new resource. Using designers to create unique food areas M&S has continued to sustain consumer interest in its food range.

‘Marks and Spencer’s chief executive Marc Bolland is stepping up the battle for the upmarket food shopper, introducing delicatessens and bakeries as part of a ?600m store overhaul. Mr Bolland revealed on Monday that ?400m-?450m would be spent on the first phase of improvement, such as the changes to food.’ (Felsted, 2011 (a))

M&S plans to make continued investment in premises, specifically:

• ‘ … an overhaul of the high street bellwether’s stores, highlighting its in-house brands and revamping food operations.
• Mr Bolland said in May that he intended to spend hundreds of millions of pounds on M&S stores … ’ (Felsted, 2011 (b))

Also, M&S will develop its e-commerce operations:

• ‘In November 2010, Marks and Spencer Group announced plans ‘to grow our multi-channel ecommerce business both in the UK and internationally’, which was followed up by the appointment to the board of Laura Wade-Gery as Executive Director, Multi-channel E-commerce…’ (M&S Corporate Press Release, 2011).
• Chief executive Mark Bolland believes future growth will come from international expansion, creating new products and rebuilding the company’s website.
  Danger Sign

In today’s marketplace most M&S competitors are using the model of a ‘shop within a shop’ (Ognjenovic, 1980). Supermarkets have introduced ‘high quality’ food ranges, such as Sainsbury’s ‘Taste the Difference’ and now supply many other goods – others have developed inexpensive ranges of clothes with ‘designer labels’ – for example, George at Asda.

M&S has lost experienced staff:

• ‘Ms Lusher brings some 30 years of experience at M&S to Tesco. She has worked across all of the clothing areas, including womenswear, menswear, lingerie, childrenswear and accessories.’ (Felsted, 2011 (c))
• Not all areas have been successful for M&S:
• ‘… general merchandise – clothing and homewares – was weaker, with same-store sales just 1.7 per cent higher.’ 3 (Barrett, 2011)

Proposed Future Strategies

Food: M&S should build on this resource. The ‘Dine In’ campaign has proved a winning response to the competition for quality food, so far. A higher profile for food should provide increased volume of sales.

Finance: discontinue chargecards. The M&S Credit Card can be used in other places.

E-commerce: further development needed. The in-store pick up (free of delivery charges) is attractive.

International expansion: proceed with caution. A second attempt to establish a successful store in Paris is planned this year.

Homewares: eliminate. Now being sold by a vast range of retailers – supermarkets, DIY stores, independent furniture shops and competitors Debenhams and Next.

Conclusion

In terms of determining the rate and level of success a business can achieve, relative to the market competition, strategy plays a major role. M&S developed along fixed lines for a lengthy period of time, however its original strategy became too cumbersome to cope with changing market forces. It now needs to recognise and retain those elements that work well for it and to continue to seek out innovative new resources for the future. Plans for expansion, especially into international markets, should be considered very carefully indeed.

Bibliography and Reference

Barrett, C., 2011. ‘M&S sets course to combat dull high street’. Financial Times. Online. July 13th. Available from: http://www.ft.com/cms/s/0/71d22ed8-ad25-11e0-a24e-00144feabdc0.html – axzz1arqwGrO3 [Accessed 15th October 2011.

BBC, 2009. ‘BUSINESS | Marks & Spencer profits top expectations’. BBC News. May 19th 1998. Available from: http://news.bbc.co.uk/1/hi/business/96531.stm. [Accessed 16th October 2011].

Burdett, C., 2011. ‘Complementors’. Online. Available from:
http://www.clintburdett.com/process/05_research/research_05_3_complementors.htm [Accessed 15th October 2011].

Evans, M., 2011. ‘Excellence in Financial Management: Course 12: Competitive Intelligence (Part 2 of 2)’. Online. Available from: http://www.exinfm.com/training/pdfiles/course12-2.pdf [Accessed 15th October 2011].

FTSE All-Share Index Ranking (unofficial guide), 2011. Online. October 7th. Available from: http://www.stockchallenge.co.uk/ftse.php [Accessed 15th October 2011].

Felsted, A., 2011 (a). ‘M&S targets foodies with delicatessen counters’. Financial Times. Online. September 15th. Available from: http://markets.ft.com/research/Markets/Tearsheets/NewsSearchResultss=MKS:LSE&source=FTNews&dateRange_to=10%2f3%2f2011+6%3a03%3a28+PM&dateRange_from=&wsodIssue=201870&keyword=&sortByRelevance=False [Acessed 15th October 2011].

Felsted, A., 2011 (b). ‘Marks and Spencer plans overhaul of stores’. Financial Times. Online. September 9th. Available from: http://markets.ft.com/research/Markets/Tearsheets/NewsSearchResults?s=MKS:LSE&source=FTNews&dateRange_to=10%2f3%2f2011+6%3a03%3a28+PM&dateRange_from=&wsodIssue=201870&keyword=&sortByRelevance=False [Accessed 15th October 2011].
Felsted, A., 2011 (c). ‘Clarke shakes up Tesco’s clothing business’. Financial Times. Online. Available from: http://www.ft.com/cms/s/0/c7bed82c-be7e-11e0-ab21-00144feabdc0.html – axzz1arqwGrO3 [Accessed 15th October 2011].

Harrison, D., 2011. ‘Retailers watch M&S’s plans for auto enrolment’. Financial Times. Online. September 4th. Available from: http://markets.ft.com/research/Markets/Tearsheets/NewsSearchResults?s=MKS:LSE&source=FTNews&dateRange_to=10%2f3%2f2011+6%3a03%3a28+PM&dateRange_from=&wsodIssue=201870&keyword=&sortByRelevance=False [Accessed 15th October 2011].

History of Marks and Spencer (2002), Sourced from the Marks and Spencer website April 2002. Available from: http://www.examstutor.com/business/resources/companyprofiles/marksandspencer/history.php [Accessed 16th October 2011].

Kapferer, J. 1992. Strategic brand management. London. Free Press.

Left, S., 2001. ‘The highs and lows of Marks & Spencer: M&S results ‘not good enough’’. The Guardian. January 23rd 2001 [Accessed 16th October 2011].

M&S Corporate Press Release, 2011. Online. February 7th. Available from: http://corporate.marksandspencer.com/page.aspx?pointerid=1c334d0e7c3f483ab62a0b7ad685ba54 [Accessed 15th October 2011].

Danica Ognjenovic, 1980. ‘Shop Within A Shop’. International Journal of Retail & Distribution Management, Vol. 8 Issue: 2, p. 42 – 44.

Pearson, G. 1999. Pearson Education Limited.

Porter, M., 2006. ‘The Five Competitive Forces That Shape Strategy. Harvard Business Review. January. pp 23-41

Rayner, G. 2008. ‘Financial crisis: Marks & Spencer to announce drop in sales as slump fears grow.’ The Telegraph. October 1st 2008. Available from: http://www.telegraph.co.uk/finance/financialcrisis/3116808/Financial-crisis-Marks-and-Spencer-to-announcedrop-in-sales-as-slump-fears-grow.html [Accessed 16th October 2011].

Appendix

Three Frameworks for Analysis

The choice of available frameworks is extensive. This assignment does not permit detailed reviews of each, therefore a short summary of three is given below:

Porter’s Four Corners Model
Drivers; Management Assumptions; Strategy; Capability

This is a predictive tool that helps to anticipate a competitor’s plan of action. It is unusual because it strives to go beyond the competitor’s capacity and strategy, in order to identify likely motivation (based on internal value systems and company culture). The overriding goal is to anticipate a competitor’s response to a given set of circumstances.

‘The purpose of Four Corners Analysis is to predict future moves of your competitors based on your own strategic moves.’ (Evans, pp11-12)

Porter’s Five Forces
Bargaining Power Of Suppliers; Bargaining Power Of Customers; Threat Of New Entrants; Threat Of Substitute Products; Competitive Rivalry Within An Industry

Developed as a reaction to the SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) the five forces’ model includes three external forces and two internal ones that are used in combination to define this framework for analysing a business or industry. The forces are the threats posed by the entry into the market of new competitors, substitute services or products, the intensity of the competition and finally the bargaining power of both supplier and customers (Porter, 2006).

Source: http://en.wikipedia.org/wiki/File:Porters_five_forces.PNG

Six Forces Model
Competition; New entrants; End users/Buyers; Suppliers; Substitutes; Complementary products/ The government/ The public

Academics and business strategists have challenged Porter’s five forces’ model because some of the assumptions made about competitors, suppliers, buyers and the level of certainty in the market were deemed to be doubtful. The sixth force added in this model is that of intervention by the government or the public, or ‘complementors’. (Brandenburger and Nalebuff, as reported in Burdett, 2011.)

Other frameworks include:
• Value Chain
• Delta Model
• National Diamond
• Industry Classification
• Nonmarket Forces

Appendix

Brief Company History

In 1884 Michael Marks opened a stall at a ‘penny bazaar’ – Leeds Kirkgate Market. In partnership with Tom Spencer they steadily expanded the business. Marks and Spencer (M&S) created a philosophy in relation to their business that was founded on close-knit family ties – the board comprised family members only, a situation that was sustained until the late 1970s. Sales staff benefited from good terms and conditions. Both original partners had died by the end of 1907, and a new generation of family members had taken over.

In the 1930s cafes were introduced, providing nutritious food at a reasonable price. In 1931 M&S introduced a food department that sold tinned goods and other produce. The company continued its policy of good treatment to employees and by 1933 pensions and subsidised canteens had been added. In 1934 the first research laboratory owned by any British retailer was set up by M&S, allowing the company to test new fabrics, and from 1939 until 1945 one of its scientists was chosen to help develop the government’s wartime Utility Clothing Scheme.

In the late 1940s M&S opened the first self-service shop in London, which was an enormous success. By 1973 wine was sold for the first time and the following year Chinese and Indian dishes were added. In 1975, European outlets were established in Belgium and Paris. During the 1980s, M&S brought in the chargecard scheme, added furniture to the goods it sold and opened its first Hong Kong stores.

The 1990s brought many changes: in 1998, when Sir Richard Greenbury was Chairman, M&S became the first British retailer to make a pre-tax profit of over ?1 billion; online shopping was introduced in 1999 and the same year the company published a code of practice designed to improve working conditions for employees of overseas suppliers. In 2000 M&S received ‘Millennium Product’ status for 12 different products and Luc Vandevelde became Chairman and Chief Executive.
Source: Marks and Spencer website.

Marks & Spencer 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. 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.

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.

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 expanding into other ranges such as homewares, furniture and technology, beauty and energy.

The Indigo collection (M&S, 2009) is a new range of clothing aimed at the core, 35-45, feminine businesswoman type. The shoes, trousers and jeans will be UK-sourced and the T-shirts will involve Fair trade cotton from Senegal, India and Pakistan. Beachwear may be added to the list if the success continues. Per Una, also a relatively new product for younger female’s clothing sold at M&S stores. The product was launched on September 28, 2001 as a joint venture between M&S and Next. All per Una items include the three hearts logo.

The BBC (2005) states Per Una has been a major success for the company. In 2006 (M&S, 2009) launched a range of domestic technology products. Thirty-six stores now offer this range. Additional services offered include television installation and technical help. Competitors: M&S does not have any one store that is a complete competitor in terms of products and services. Supermarkets such as Tesco, Asda and Sainsburys compete with M&S to a certain extent, primarily in the food industry. Marks ;amp; Spencer is predominantly a clothing store which obtains most of the company’s profit.

Yet due to the significant product differentiation, M;&S competes with many companies for example Cotton Traders are a competitor in their clothes, John Lewis competes in their home accessories whereas Waitrose competes in food. As a result M&S have to constantly innovate and outsource to stay competitive in the market and dominate. Marketing Strategies: By training and developing its staff well, M&S is in a position to develop a competitive advantage over its competitors Firstly, developing value-for-money products that customers want.

Training and development brings new skills which help to add value to its products and services, for example by cutting costs. This enables the company to keep prices lower to benefit the customer and increase consumer demand leading to profit in the long run. M&S provides good customer service through communication skills, this can have a positive impact on customer service. Training and development equips individuals with the skills they need to achieve their targeted role in the business.

When Steve Sharp joined as marketing director in 2004, he introduced a new promotional brand under the Your M&S banner, with a corresponding logo. This has now become the company’s main brand in its advertisements. The use of high profile television campaigns has been influential in the company’s recent success, particularly with the achievements of a new clothing campaign featuring high profile models, and the new TV ad campaign for its food range. These adverts have the tagline ‘This is not just food, this is M&S food’.

Furthermore the use of camera special effects and footage along with music and a pleasant voiceover leads to a very persuasive advertisement. A new store format designed by Urban Salon Architects has won much praise and is in the process of being rolled out across all stores, with a majority of stores being completed by the end of 2008. The full new look makeover is a reworking of store design, including the gutting of old stores. An increase in display and product walls, window display styles, larger fitting rooms, glass walls, till points, and general total updating of decals, equipment, and lighting.