Generally looking at the retail industry, it could be said to be within a very dynamic and a fast changing sector. In terms of transactions and turnover; it represents a large sector in the economy and so as a result it is quite a sophisticated industry which is very competitive. In this report, a critical analysis of Marks and Spencer, a company who is amongst the large retail industry will be given.
Business Overview A Russian born Polish refugee opened a stall at Leeds Kirkgate market in1884, his name was Michael Marks.And it was on that day which could be said as the day Marks and Spencer was born. Marks and Spencer is now a very large and dominant company and can be classified as a public limited company, it sits within the top 6 UK retailers. It is a century old retail sector organization, (they are currently celebrating their 125th anniversary) that has seen tremendous growth in the retail business across the globe through innovative methods of business and marketing.
It is a business that provides goods and services e. g.clothes, finance and so therefore comes under the tertiary sector. Marks and Spencer is a profit making company, which belongs to the private sector. It operates in over 600 stores in the UK and is present abroad. Its international operations consist mainly of franchises, 295 stores to be exact in 41 territories but it also owns a number of stores in Hong Kong. Marks and Spencer has a turnover of i?? 9062. 1million, however since costs have increased net profit is at a low, as a result leave Marks and Spencer at quite a weak financial position.
The organisational structure for Marks and Spencer is tall, it also has a tall hierarchy; there are many levels of management but all operating within a very consumer driven and positive culture. Overall, their clothing and homeware sales account for 49% of their business. The other 51% of their business is in food. Profit maximisation: This is often the main aim of the private sector business and so it can be said that Marks and Spencer are aiming to gain as much profit as possible.In the UK retail of Marks and Spencer the turnover and operating profit according to the FTSE 100 Index, last year was i?? 821. 0 million, this year was i?? 506. 8 million.
So at the moment Marks and Spencer UK retail business clearly isn’t successfully profit maximising, however the current economic climate and the recession can be held liable and account for the blame. This can be achieved where the difference between the total. Market leadership: Marks and Spencer already have a very large proportion of market share, as mentioned in the beginning they are within the top six leading retailers.As of 2008, Marks and Spencer became the 43rd largest retailer in the world, however this objective still remains, it has started expanding into other ranges such as homewares, furniture and technology.
In addition to that, plans for a new executive chairman Marc Bolland (formerly from Morrison) to take over so to became market leader in the expanding segments still remains. Offering high quality service: As long as Marks and Spencer are in operation so will the objective for providing high quality service. Marks and Spencer are well known for their quality.
They claim that no one cares more about quality it is said in their annual review report. Growth/Diversification: Like for all businesses, growth is an important objective of Marks and Spencer. Business critics argue that the firm must grow in order to survive; failure to grow might result in a loss of competitiveness. Marks and Spencer own 885 stores in more than 40 territories around the world, over 600 domestic and 285 international.
If Marks and Spencer are able to grow, they could dominate their expanding markets, and probably take it into using it to enjoy some monopoly power and raise its price.If they do so successfully the benefits of economies of scale can be used to full advantage. Regarding the strategic objectives, sales have been falling especially with the arrival of store such as Primark. Former chairman and chief executive Luc Vandevelde announced in 2001, “Its objectives will not surprise you. We wanted to return Marks & Spencer to its former position as the standard against which others are measured. We want M&S to be famous once again for its quality, value, service and innovation, drawing on strengths which still exist but which may have been overlooked.We want to inspire trust in our customers, and we want to reward you, our shareholders, for loyally standing by us. “Both external and internal issues influence how the company decides to operate.
The external issues will, of course remain the same for all the players in the market. With regard to Marks ; Spencer, the main stakeholders can be summarised as the shareholders, customers, employees, government, local community, and suppliers. They each influence the business decisions in different ways. Here are some of the major influences the different stakeholders have on the business.