The main aim of this paper is to give a situation analysis of Marks & Spencer in Spain from a view of a marketing consultant. This assignment will also demonstrate an analysis of the marketing environment for Spain and also a critique of any models that was chosen to use to construct the situation analysis for Marks & Spencer in Spain. This report includes three parts: firstly, it analyses the macro-environment and micro-environment of M&S, secondly, it shows the aspects of SOOT. The paper is required on the twenty fifth of October 2010. . Procedure There was used a secondary research so that to create this individual report paper. The secondary data that was used in this document was found in the squired textbook, in the seminar material, in journals and in the Internet. For the full list of all sources, please see the enclosed references and bibliography. 3. Findings M&S is an international company, which spreads through Europe, North America and Asia, it sales clothing, footwear, gifts, house appliances, and food.
At Present Marks and Spencer has over 450 stores located throughout the KICK, this includes the largest store at Marble Arch, London. (corporate. Merchandiser. Com/? Intend=gift_company, 2010) In addition, the Company has 1 50 stores worldwide, including over 130 franchise businesses, operating in 30 countries. (Ibid) On the background of the company it is important to mention that Marks and Spencer (M&S) of Britain is a general retailer that sells clothes, gifts, home furnishings, and foods under the SST.
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Michael trademark in the K, Europe, the Americas and Far East The company also operates financial services segment, which accounted for about 3% of the company’s 1 998 profits. Marks & Spencer started as a stall in 1884 by Michael Marks in the Leads market. In addition, its philosophy is to sell durable merchandise at a moderate price. It has merchandise made to its pacifications. Therefore, by 1901 , the company acquired 35 Outlets as well as a new partner, which is Tom Spencer. (corporate. Merchandiser. Com/ about, 2010) By 1 949 all the company’s stores carried mostly private label products produced by British.
Moreover, with nearly 300 stores in the United Kingdom, M&S is the country’s largest retailer: it holds 17 percent of the UK clothing market. For the reason that M & S is so well known, it spends little on advertising, decorates its stores austerely, offers very little personal service and provides no dressing rooms or public bathrooms. Other than that, the company admits that the percentage has slipped to about four-fifths and will likely fall further as its British suppliers move more of their production abroad. Vectoring. Com/major-companies/a-case-study-on-marks-and- Spencer’, 2008) 3. 1 An analysis of the marketing environment for Spain According to Remuneration, Spain is in deep economic crisis and although Spaniards began suffering from the economic crisis later in 2008, it hit strongly, especially in terms of unemployment which according to ‘EN, the Spanish National Statistics Institute, reached almost 18% in 2009. This has vapidly translated into a strong drop in consumption levels and high level of savings.
As a result the amount of money available for non-essential goods has dropped, dragging down the overall performance of retailing. (Remuneration, 2010) As unemployment approaches 18%, Spaniards’ shopping habits are changing, with price the main factor taken into account when making purchasing decisions. This fact is increasing the importance of private label references. The importance of price is resulting in the growing importance of discounters as a place to make daily purchases. Discounters recorded a positive reference in 2009 and it is a good sign for Marks and Spencer.
There is the arrival on to the Spanish market of low-cost outlets such as Kebab or Primary, and the good performance of second-hand shops which will not have a significant change on opening M&S in Spain. (Ibid) Marks and Spence’s main competitor would be El Cortes angles and Mercado. Also, the Spanish retail market continues to be dominated by small, mostly family-owned companies. However, chained retailers increased in importance over the review period. In 2009, Mercado led the Spanish retail market, taking El Cortex Ingleg’s position.
Mercado is benefiting from the dropping price strategy in order to help Spanish consumers deal with the crisis. Also, the company is seeing sales through its website increase at a strong pace. Meanwhile, El Cortex Ingles has suffered from the poor economic conditions mostly due to its overpriced image. (Ibid) As seen in previous years, non-store retailing saw a much stronger performance than store-based retailing in terms of growth in value sales. This was due to the strong performance of Internet retailing, albeit from a still very low base.
The growing popularity of online shopping is a consequence Of the heaper prices available via the Internet. Furthermore, in a gloomy economic environment a growing number of Spaniards are using the Internet to find the best deals, compare and plan their purchases, underpinned by the convenience and time saved. (Denominator) 3. 2 A SOOT analysis of Marks & Spencer PL for Spain Possible Strengths for M and S in Spain: According to Denominator, M&S has a strong market position in the UK. M&S is the market leader in the general merchandise (GM) sector in the K.
For the period (52 weeks ended September 2008), the company retained its rakes leadership in GM with a market share, significantly higher than its competitors Next (6%) and Arcadia (5%). Moreover, in PAYOFF, M&S recorded its biggest volume increase in sales in eight years; with volume market share in clothing and foe;ear at 1 12% and value market share of for clothing and footwear. (Denominator) The company’s strong market position is supported by its large network of stores in the UK and international markets. Thus, m and S will be ready for entering Spain.
It operates 665 stores in the K. In addition, M’s international franchisees operate 291 stores in about 0 countries. The company’s strong market position and market leadership enhances its brand image and provides M with a competitive advantage. (Ibid) In addition, M has been a strong brand for decades. It stands for high quality products at reasonable prices with five key values: quality, value, service, innovation and trust. According to market trends M as ranked fifth in the list of Top Performing European Retail Brands for 2008.
M, the company’s major brand, has been significantly strong. This major brand was supported by M&S’ strong portfolio of private brands including: Autograph, Blue Harbor, per Nun, Body and Collection. In women’s wear expanded its ‘Autograph’ range and the fast fashion choice in ‘Limited Collection’. In menswear, M&S’ ‘Blue Harbor’ remains the Auk’s biggest men’s casual wear brand. That means that the company has been strengthening its brand image by offering a wide range of private brands, which facilitate a quick and easy shopping to its customers.
The strong brand image of the company aids customer loyalty and helps promote repeat purchases. In addition, the company leverages its brand strength to easily expand into new lines. (Ibid) Weaknesses: Due to declining sales in KICK, it can also affect the M& S in Spain. The company’s UK sales declined 1. 1%. The UK being the major market for the company with 92% share of total revenues, declining sales would affect the Spain’s company’s overall revenues adversely. (Ibid) The company recorded weak cash position in Spain recently.
A decline in the company’s operating cash may lead to short term liquidity problems, as well affect the company’s ability to meet its commitments towards its capital expenditures. (Ibid) A decline in operating cash flow could negatively impact on Spain’s Marks and Spence’s liquidity and bottom line. (Ibid) Opportunities for M&S in Spain: Competitive pricing can be a possible problem for M&S in Spain. M&S has implemented its price restructuring across product categories and brands in 2008. In the process of restructuring, the company reviewed its pricing architecture in order to attract a broad range of customers.
The company is now achieving a wider price span – staying in touch with the supermarkets at entry levels, while extending its offers above and beyond other high street retailers in Spain and Cortes Angles. (Ibid) In menswear and home, the many competed hard on opening price points while improving ‘betted and ‘best products for the Spanish shopper. With this competitive pricing strategy, the company maintained its volume market share in women wear and lingerie, and also improved market share in men’s wear.
Competitive pricing might help in generating more revenues. (Ibid) Moreover, the Spain’s online retailing has grown at a fast pace in the last decade. The amount of money spent on similar to M&S products online by consumers in Spain increased in the past years. Spanish M&S can present in online retail market through M&S direct. The company is well positioned to leverage the growing UK online retail market. (Ibid) The company has expanded its network and added new merchandising contents two years ago which will is a significant change for introduction M&S in Spain. Ibid) In addition, another opportunity for M&S in Spain is expanding the company’s store network and merchandising content will allow to reach out to new customer segments and expand its revenue base. (Ibid) Threats One major threat facing the company comes from the intense competition that exists in the Spanish food retailing market. The company has a 4. 3% hare of the UK food market, and remains a significant distance behind food retailers like Tests, Ginsburg and SAD Thus, the same can happen to Spanish M.
The intense rivalry that exists between such competitors like Cortes Angles can lead to a price war within many areas of the food industry. (Ibid) The increasing dominance of Cortes Angles, Mercado and companies like it are adding to the growing pressures facing the traditional supermarket channel and are also reshaping the interactions between manufacturers and retailers in all markets, including foods, apparel and financial services. The intended expansion of such companies is likely to affect operations of M.
Moreover, unemployment is rising in Spain and it is a significant threat for in Spain. (Ibid) 4. Recommendations It can be a good option for the company to build up Marks and Spencer stores abroad and particularly in Spain, because many of British people move to Spain. Consequently, being so already dominant, M may become Spain’s shop keeping leader. As stated Sicker, in order to enter a new market it is important to consider market segmentation which is based on the premise that companies have to try to search for consumers in different countries ho share similar needs and desires. Sicker: 428, 2009) It may be useful to recommend Marks and Spencer to rebuild the company’s image with continued advertising such as the successful M & S food adverts and also to focus on core market. UK has an ageing population, therefore introducing wider ranges such as Per Nun, Autograph and Classic collection to stores. Also, the Use of younger more contemporary models to attract younger generation of Spain can be helpful for the launch Of M and S in Spain. In addition, they can introduce other services such as banking insurance and savings. (Denominator) .
Conclusion In conclusion, Marks & Spence’s has significant financial information for instance, in the report was shown that its turnover is predominantly accounted for by clothing and food sales which accounted for a combined share of over 95% of total sales which is a good percentage to enter Spanish market. Moreover, Mark’s and Spencer would have to add new products or appeal to new market segments to maintain its growth rate. Also it should attempt to move into higher-priced clothing into a more fashion-conscious market it Spain may result into successful option. Also, to comment on the
SWAT analysis, as a result it can be seen that Marks and Spencer is a leading UK;based retailer of clothing, foods and home ware. The company has a strong market position with 665 stores in the ELK, 291 franchisee stores in about 40 countries. This helped the company to become the Auk’s largest clothing and footwear retailer in terms of both value and volume. The company’s strong market position enhances its brand image and provides M with a competitive advantage over its peers. However, intense competition would adversely affect the revenues of M. Words count: 2061 excluding Bibliography and Appendices .
Appendices Marks & Spencer Fact files (Key Events) 2007 Environmental profile ; Unveils a IEEE million plan to become carbon neutral by 2012, as part of a contribution to limit climate change. Geographic expansion ; Under a joint venture agreement with the Taiwanese retailer President Chain Store, a first outlet is opened in Taiwan. Another two stores are planned by the end of 2007. 2006 Acquisitions ; Acquires 28 Iceland Foods stores. Corporate image ; Launch the Look behind the label” campaign outlining the company’s ethical trading strategy, covering aspects such as animal welfare and retread.
Divestment and demurrers ; Announces the sale of its Kings Super Markets chain in the US to an investor group comprising Angelo, Gordon & Co, MAT Capital Partners LLC and Bruce White, for IIS$61. Million. Geographic expansion ; Plans to open new buying offices in India (Delhi) and China (Shanghai). ; Marks & Spencer plans to open 10 new stores across Ireland over the next three years. ; First store in Latvia opens. ; Plans to expand the Simply Food chain from 187 outlets to 400 are announced, and to open up to 200 new Simply Food outlets on BP forecourts.
Internet / e-commerce Marks & Spencer announces an agreement with online retailer Amazon, which will provide technology to the new Marks & Spencer site. A wider product range will be offered on the new site. ; Plans to increase sales through internet retailing from around El 00 million to IEEE million over the next two years. Product launches ; Launches Fair-trade clothing range,and a new daring new clothing range for young women- Per Nun Due. Restructuring ; Announces plans to relocate under-performing town centre outlets, extend or reconfigure successful ones and open new out-of-town stores. 05 Acquisitions ; Acquires Roaches Stores in Dublin and Galway with the effect from June 2005. Plans to acquire the remaining shares it does not own in its Indian venture and convert it into a wholly-owned subsidiary. Divestment and demurrers ; Announces to close Kent distribution centre. Geographer ICC expansion ; Enters Russia. ; Opens Asian purchasing office in Hong Kong. ; Strikes deal with Amazon to sell M&S clothing on Amazon. Co. UK next year. Legal / regulatory affairs ; District Judge Miles McCollum fines the company El 0,000 and orders it to pay
E,390 costs after admitting that clothes from its designer Italian range were actually made in Eastern Europe, Asia and the Middle East. Product launches ; Plans to move into the home electronics market and launching a range of mobile phones to boost sales. The new range will be introduced in 59 stores around the UK. 2004 Business agreements ; Announces its plans to extend its franchise contract with Motto, part Of catering group Compass. Opening 6 more Simply Food stores at motorway service stations. Divestment and demurrers ; Plans to scrap its Lifestyle concept. Opens first homeward store, the Lifestyle in Gathered. Other topics ; Plans a overhaul of its supply and distribution network. Product launches ; Launches new Spring catalogue for women and plans to launch a ‘quality for less’ clothing range in 150 stores. 2003 Business agreements ; Strikes a deal with Telecoms company Cable & Wireless, expanding Marks & Spencer Money’s contact centre operations to accommodate 750 agents while also enhancing customer service. ; Strikes a ;o year deal with Australian Wool Innovation Ltd (AWE) to develop new wool and wool blend products and and bring them to market.