Marks and Spencer

About the company

M&S is one of the leading retailers in the UK, tracing its history back to 1884 when Michael Marks opened a stall in Leeds market. Thomas Spencer joined him in 1894 and both created Marks and Spencer. M&S has 703 stores in the UK with over 76,000 employees and over 360 wholly-owned, partly-owned, or franchised stores in 42 territories around the globe, which accounts for 10% of the Groups revenue. M&S sells high quality, exceptional value clothes and food products as well as home products such as electronics, furniture. They also added homeware in 2000.

Primarily all of M&S goods were British made, however the retailer faced more challenging times, especially in the last decade and found it hard to compete with other supermarkets and retailers, this caused them to outsource to cheaper labour countries in Asia such as China and India.

Marks and Spencer is the largest UK clothing retailer with a market share of 11.7% selling high quality, good value clothes for everyone. It also has a market share of 27.1% for lingerie which makes them leaders in womenswear in UK.

51% of their revenue comes from groceries with market share of 3.9%, the remaining 49% of the revenue comes from clothing and homeware. M&S was the first retailer in the UK to produce a pre-tax profit of £1 billion.

M&S core values are: quality, value, service, innovation and trust. These values helped M&S to gain and maintain their leadership in the market, as shoppers are more conscientious nowadays and are looking for more than just good value.

Their mission statement is "to make aspirational quality accessible to all" (Marks & Spencer, 2011) was a key to increasing both market share and revenue.

Their main competitors are Next and Arcadia group in the clothing industry, John Lewis in homeware and Waitrose with Tesco in the food sector.

Corporate social responsibility

 M&S launched Plan A in 2007, the main aim of which is to become the "world's most sustainable retailer" (How we do business report, 2010, p. 5). They initially planned 100 commitments and further added another 80 in 2010. They include becoming carbon neutral and reducing waste.

 Introduced 5p charge for a plastic bag, it reduced usage of plastic bags by 80% and raised £500,000 for charity.

 Pay fair wages; provide training and education as well as basic health care in Sri Lanka, Bangladesh and India.

 Ensure that their key materials are fully traceable and do not contribute to deforestation.

 M&S is the largest UK retailer using fair-trade cotton available at 40 stores as its stock is limited.

 Reduced salt and stopped using hydrogenated fats and removed artificial flavourings and colours from children meals and all soft drinks.

PEST analysis

Political factors influencing M&S

 Recent VAT increase from 17.5% to 20% in 2011 had a direct effect on retail prices of all items. This caused a drop in sales as consumers have less money.

 M&S shops that are larger than 280sq/m are affected by Sunday regulations which have restrictions on their opening hours as they can only be open for six continuous hours between 10.00 and 18.00.