Have you ever thought about why it takes us hours to buy our desired products when we go out to shop? I’ll tell you. We waste an entire day shopping because to buy different products, we have to visit different markets and stores.
For example, if we plan to buy clothes and groceries on the same day. First, we will go to the clothing store to buy clothes. After that, we will go to the grocery store to buy groceries.
However, what if I tell you that a brand exists that offers food, clothing, beauty, and home products in a single store? Isn’t that crazy?
Today, we will discuss a brand that provides all sorts of products used daily. This brand is known as Marks and Spencer, and it is one of the most renowned retailers across the globe.
Today’s article will provide insight into this amazing brand since I will be conducting a Marks and Spencer SWOT Analysis in this article, having already covered some ground on our PESTLE Analysis of M&S.
Marks and Spencer is a British retailing brand that was established in 1894 by two individuals named Michael Marks and Thomas Spencer by getting into partnership.
Initially, Marks and Spencer worked together by selling different products on the permanent stall, which was acquired by Michael in Leeds. Later, it spread its operations by opening “Penny Bazaars” in cities such as Birkenhead, Bolton, and Warrington.
However, it established its headquarters in Manchester, opening its first warehouse in 1897. Marks and Spencer was spreading its operations everywhere due to its attractive marketing policies.
Marks and Spencer Bazaar was famous for having a section where all the products used to cost one penny. In that section, there used to be a placard that said, “Don’t ask the Price. It’s a Penny.” Such offers were new and attractive to the customers, so more people started visiting Marks and Spencer.
Later, it came up with a policy that allowed customers to return any Marks and Spencer product and get a 100 percent refund without any time limit.
Such policies helped Marks and Spencer grow over time and become one of the top retailing brands globally. Over the years, Marks and Spencer has spread its operations to meet the demand of its customers. Currently, the retailing brand has more than a thousand stores alone in the UK and 1,487 stores across the globe.
Now that we have analyzed Marks and Spencer in detail, let’s move ahead to carry out the brand’s SWOT Analysis. However, to understand this article better, you must know what SWOT analysis is.
SWOT analysis is used by business analysts for making business strategies since it identifies the external and internal factors that affect the operations of a business. So now you must be thinking about why this tool is called SWOT. Well, the answer to this question is very simple.
SWOT is an acronym used to represent strengths, weaknesses, opportunities, and threats faced by a company. A SWOT template helps us analyze all four factors mentioned above in detail regarding any company.
Now that I have given you some basic understanding of SWOT analysis, let’s start with the SWOT analysis of Marks and Spencer.
Every company has strengths that enable it to compete and snatch market share from its competitors. This section will identify some of the strengths of Marks and Spencer due to which the brand has kept itself relevant after 128 years.
All the brands look forward to penetrating international markets to increase their customer base. A brand that operates internationally is considered strong since it doesn’t rely on a single market.
Marks and Spencer’s global operations are considered its strength because they make it financially strong. The brand that started its operations in the UK from a single stall now has 1,035 stores in the UK and 452 stores in other countries.
Besides the physical stores, it also reaches its international customers through online platforms like Amazon. Such a high global presence benefits Marks and Spencer by reducing its reliance on one market.
The success of any business revolves around its customers. Therefore, if customers are satisfied, the business is considered successful. Brands often evaluate their performance by analyzing the feedback of their customers to see whether the customers are satisfied or not.
One of the greatest strengths of Marks and Spencer is its satisfied customers. Over the years, Marks and Spencer has been accommodating its customers by providing them with attractive offers, due to which it has managed to survive in the market for more than a century.
In a recent survey, people voted Marks and Spencer as Uk’s favorite in-store supermarket. Such love and support of people for Marks and Spencer provides the brand confidence that it is on the right path.
To perform well in the market, having experience is very important. At times businesses have to deal with unprecedented situations. Having no experience in dealing with such situations can result in bad outcomes.
Marks and Spencer has been in the retail industry for over a century. It has experienced World Wars, economic recessions, pandemics, and whatnot. Such experience enables the retailing company to deal with challenging situations and emerge as a winner during tough times.
Where brands have strengths, they also have some weaknesses. In the first section, we discussed some of the strengths possessed by Marks and Spencer. However, in this section, we will look at some of the weaknesses of Marks and Spencer.
Decline In Sales
Businesses look for ways to increase their sales to maximize their profits. Therefore, a decline in a brand’s sales should be considered alarming since this will lead to a decrease in revenue which will cause adverse effects on the company.
Marks and Spencer has been observing a decrease in the number of sales for quite some time now. The prime reason for this decline is the mismanagement of Marks and Spencer.
The company’s annual sales dropped significantly in 2019 due to poor supply chain management. Besides that, there was a supply shortage during the Christmas of 2017, which also led to a decline in sales.
High Number of Outlets
Widespread domestic and international operations are considered a strength of a brand. However, as a company expands, it faces several problems.
Marks and Spencer has a strong global and domestic presence. Although this is considered its strength, on the other hand, it poses its weakness too. Due to the large number of outlets, it is difficult for Marks and Spencer to manage all the branches efficiently.
Moreover, since the brand’s operations are so widespread, it becomes almost impossible to keep checks and balances on the operations of each branch which can be considered its weakness.
High Operating Costs
Businesses need to have a low cost of operations to earn maximum profit. Otherwise, businesses can face troubles related to finances. Currently, Marks and Spencer is facing problems of having high operating costs.
Marks and Spencer did not mechanize their operations to improve their business performance. Instead, the company uses various manual techniques that take time, resources, and manpower. This ultimately results in an increase in cost as well as reduced profitability.
This is the third section of the SWOT analysis, and it identifies the opportunities that lie for companies in the future. After analyzing Marks and Spencer’s strengths and weaknesses, we’ll now look at the opportunities ahead of Marks and Spencer.
Shift to Automation
The use of labor may be effective in some conditions. However, machines can replace humans and perform tasks more efficiently. As a result, automation can help a company reduce its operation cost and maximize its profits.
Marks and Spencer is currently facing the problem of the high cost of operations. One of the solutions to this problem can be the adaptation of automation. For example, suppose Marks and Spencer replace machines with workers. In that case, this will not only increase the company’s efficiency but will also help the brand to earn more profit.
As the usage of the internet has increased over the years, eCommerce has emerged as a significant platform that provides retailers an opportunity to expand their operations.
Although Marks and Spencer has an online store, it is not up to the mark. Marks and Spencer can use eCommerce to expand its operations online. This will help the company to tap into new markets without any additional fixed costs, such as the cost of setting up a store.
Increase Global Presence
Businesses focus on expanding their operations in the international markets to enjoy more profit and reduce their reliance on the local market. Currently, Marks and Spencer has more than a thousand stores in the UK, while only 452 are outside the UK.
Marks and Spencer has the opportunity to spread its operations in untapped international markets. For example, it can establish itself in developing countries or countries like China and India with high populations. This will increase the sales of Marks and Spencer and generate high revenue.
No matter how strong a business is, it does face threats from the external environment. In this last section of the SWOT analysis, we will analyze the threats that Marks and Spencer face.
Businesses always feel threatened by their competitors because they have the potential to snatch a company’s market share anytime. The retail industry is famous for having tough competition. As a part of this industry, Marks and Spencer has to face tough competition from its competitors.
Although Mark and Spencer has been a part of the retail industry for more than a century now, it still has to compete in the market for its market share from big retailers like Macy’s and Tesco. As a result, Marks and Spencer continuously has to innovate, or else its competitors can push it out of the market.
A recession is a nightmare for businesses. Whenever a recession occurs, it causes severe damage to businesses. This is because it causes the demand to fall and the cost of operations to increase due to inflation.
The last recession which was witnessed by the entire world was in 2008. However, currently, the world is anticipating another global recession. If a recession takes place, it will affect the operations of Marks and Spencer adversely, and it may push the brand out of the market.
COVID-19 has harmed businesses all over the globe. It made businesses suffer a lot. Although the world has opened up and is trying to operate normally,the threat of new variants of COVID-19 is still present.
Marks and Spencer observed significant losses during COVID-19 lockdowns like any other business. In case of new waves of COVID-19, the company will suffer immensely.
This article discussed one of the top retailing brands, Marks and Spencer. We started by discussing the brand’s operations and then shed some light on how it was established more than a century ago.
After that, we discussed Marks and Spencer’s relevance in the industry currently by evaluating its current revenue and number of employees.
We then carried out a Marks and Spencer SWOT analysis, which helped us identify some of the brand’s strengths, weaknesses, opportunities, and threats.
If you have reached this far reading this article, I am sure you’ve understood how to conduct a SWOT analysis. However, if you are confused, look at some examples of SWOT analysis. The findings of this SWOT analysis can also be displayed in the form of a SWOT matrix or a table so that it is easier to analyze the internal and external factors affecting the operations of Marks and Spencer.