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Paper Topic:

MARKS AND SPENCER

Organizational Analysis : Marks and Spencer UK

Introduction

We present an analysis of Marks and Spencer - one of the world 's largest clothing retailer - in this . The offers strategic insights into the performance of Marks and Spencer in terms of a SWOT analysis , a PEST analysis , and an industry analysis through Porter 's 5 forces Finally , the provides a recommendation as to the course of action to be pursued by the firm

Company Overview

Marks and Spencer is one of the largest and well-recognized retail brands in the world . The company

has a network of 450 stores across the UK , employing over 65 ,000 people . The network of stores offer a range of products and services - however , the bulk of products include apparel The three main business segments of the company include clothing and home , food and the international business group . These segments account for 45 , 50 , and 5 of the company 's Annual Report , 2005 . The consolidated sales revenue for the company was ?7 .5bn in 2005 . The company was once the mainstay of British home shopping - however , with the emergence of low-cost retailers and competitive pressures from Asia , the company has seen its sales revenue and margins decline

Table 1 : Sales and Margin Analysis

2001 2002 2003 2004 2005

Group Sales ?m ) 7 ,712 .6 7 ,268 .6 7 ,689 .2 7 ,971 .5 7 ,710 .3

Group Operating Profit 362 .8 538 .5 642 .7 767 .3 585 .7

Group Gross Margin ) 4 .7 7 .4 8 .4 9 .6 7 .6

Source : Mintel Report : UK Apparel , 2006 Excluding Sales Tax

Performance Evaluation

The relative stature of the Marks and Spencer brand can be identified through the sheer volume of stores and size of revenue that the company enjoys . However , from a strategic management perspective , it is important to place the company 's performance in context of its external and internal operating environment

SWOT Analysis

Strengths

The Marks and Spencer brand name enjoys substantial brand equity . The company 's products are respected , and are considered synonymous with quality and reliability

The company has adequate retail strength in terms of distribution network and store portfolio . The product offerings at stores cater to a wide variety of consumers

The company , through operating three business segments , has diversified its risk across these three groups . Many retailers which made single-line offerings have had to contend with competitive pressures within their singular businesses

While the company has been underperforming over the recent years , it is understood by analysts to have a practical recovery strategy in place

Better buying practices leading to lower purchase costs

The Per Una brand introduced recently has been doing exceptionally well heralding a company emphasis on building core brands targeting specific customer groups

Consistent customer service backed by competitive pay scales for employees

Weaknesses

The brand , while well-respected , is also perceived to be old and archaic , thus alienating some of its potential younger consumers . This is especially troublesome for the company , since this younger consumer market...

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