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External Forces That Effect Marks and Spencer

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    Marks and Spencer has many external forces that affect the company. These are known as macro environmental factors. There are six of these forces, Political, Economic, Sociological, Technological, Legal and Environmental factors. These external factors affect the types of products/services Marks and Spencer offers, the nature of its market positioning and strategies, there relationship with their customers and their suppliers. These external factors allow Marks and Spencer to develop: * A clear vision and an expressed statement of goals Detailed objectives and effective strategies for achieving these goals * Effective and efficient policies and procedures to implement strategic plans to achieve these goals. Political Factors There are lots of examples to do with political factor such as government stability and relations with other countries, government spending and taxation polices. If any of these factors change then it would affect the company Marks and Spencer. Any one of these factors could affect the Marks and Spencer’s ?nancial results. To face these problems you use a policy guidance.

    On the 30th of January 2006 Marks and Spencer would be the first major retailor to go down the Fair-trade route on both clothing and food. The fair-trade policy included cut salt and fat in Marks and Spencer’s foods, recycled packaging and animal welfare protection. Economic Factors There are lots of examples to do with economic factors that affect Marks and Spencer such as inflation, unemployment, income, interest rate, economic growth, exchange rates and price of factors of production. Currently the economic outlook is very uncertain in these recessionary times. This has affected Marks and Spencer hard in their retail sales.

    People do not have the money like they did during the Celtic Tiger to spend their cash on luxury items such as clothing and food luxuries. Marks and Spencer, because of this, have closed number of stores and have had to make job cuts up to 20% of their 70,000 staff. They also introduced a 20% off all wine and Champagne to keep up with their competitors. This shows how the recession has hit Marks and Spencer hard over these recessionary times. Sociological Factor There are many social factors that affect Marks and Spencer such as level of education, lifestyle, mobility of population and income distribution.

    To keep up with the social affect Marks and Spencer has now a shop online selling its food, clothing and any other product they would have in stores. This is part of their plan to become a multi-channel retailer. It is obvious to us all that the real factor is to keep up with its competitive market such as Dunnes Stores. Marks and Spencer appeal to different markets in terms of social class and other demographics. Also to keep up with the social change Marks and Spencer bought their clothes range up to date to keep up with latest trends and to keep their customers interested.

    Consumer purchases are influenced by many factors like cultural, social, and personal. Marks and Spencer cannot control these factors but they must take them into account, which they have done as they are a well-positioned and a competitive player in their market. Technological Factor Technology is very important in the retail market. In order to grow your business, make their business more secure and complete with the competitors, Marks and Spencer has to move along with the new technology. To do this they must manage their brands carefully.

    Major brand marketers often spend huge amounts on advertising to create brand awareness and to build preference and loyalty. Marks and Spencer have heavily into advertising. They have celebrity icon Myleen Class as the face of Marks and Spencer. She appears on the adverts on the TV and on the website modelling their clothing. Marks and Spencer’s adverts appeal to women in their 20’s and also mature women, so they are covering all areas with their advertising campaign. Also their website is very appealing with bright colours and very easy to use, also it’s constantly updated.

    Their online shopping and website show they have internet technology which is vital in this time. Legal Factor Legislations are always changing. For instance, if there is a tightening of health and safety legislation and regulations, it will increase costs. Premises failing to meet the higher standards may be closed down. To avoid this, Marks and Spencer carry out re-training and update every year. They keep up to date with the new laws and legislations, and with issues regarding Health and Safety. They also make sure that their legal protection is updated.

    Marks and Spencer invite business changes to the company, tax changes to the company and products change amongst many other things to imply its company for re-training. They also invite goals/methods that need to be changed and new training and also on-going development. An example of legislation is the ‘’Fair packaging and Labelling Act (1996) –Provided for the regulation of packaging and labelling of the consumer goods, requires that manufacturers state what the package contains, who made it, and how much it contains’’.

    Marks and Spencer show they are devoted to this legislation by having this statement on their website ‘’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 Factor All companies, industries and organisations are being persuaded to change their ways when it comes to the materials they use and how they manufacture because of the way the climate stands. Marks and Spencer have established their own Green Policy.

    They have a five year plan to re-engineer it to be more carbon neutral, zero waste to the landfill, ethical-trading, sustainable-sourcing, health promoting business. Market Structure The market structure of Marks and Spencer can be considered as Oligopoly, ‘’few sellers’’, the market being dominated by a few firms. The less competition there is the more opportunities for the larger profits arise. There is lack of price competition between these firms, and tend to use non-price competition by using advertising and relying of reputations of brand name.

    Marks and Spencer is one of the largest leading retailers but in the recent time the competition has increased. Due to this increase in competition and decline in Marks and Spencer, they are in threat of joining the imperfect competition structure. Where there are many firms who own a smaller share in the market. Competition Marks and Spencer focuses its business on the quality and service. Next and Tesco are their competitors. Marks and Spencer have some competitive advantage in their business.

    Marks and Spencer don’t buy its products ‘’off the shelf’’ from suppliers like other competitors would do. Marks and Spencer has a simple philosophy that says if it sells, restock it quickly and avoid stock out: if it doesn’t sell, get it off the shelves quickly and replace it with something which will sell. This is a smart tactic to have the upper hand in the market. It is an advantage to have online shopping, which its competitors also have. Marks and Spencer’s online shopping is different in the way it is more appealing to the public eye and very well advertised.

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