Analysis of Marks & Spencers Business Environment

2810 Words Apr 5th, 2012 12 Pages
Introduction
The aim of this report is to discuss and analyse the business environment of M&S. It will identify and analyse the appropriate key factors and issues affecting the environment in which the organisation operates in. This will be completed through the use of strategic analysis tools, Porter’s 5 force, PESTLE, SWOT, financial trend analysis and lastly ration analysis. The report will also discuss and evaluate the findings from the tools in order to provide appropriate recommendations in which the organisation can act upon to improve their business performance.
Company Background
Marks and Spencer plc (also known as M&S and Marks & Sparks) is a British retailer headquartered in the City of Westminster, London,
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but buyers can easily go to a rival store so this makes them more powerful.

5. barriers to entry - dependent on the industry, it may be hard or easy for new firms to enter the market. examples include economies of scale - m+s obviously has as it is so large, therefore difficult for small independent retailers to enter the market. However ther may be little brand loyalty in the fashion market so new entrants may not find it difficult to gain new customers. the industry is not highly specialised or patented (like, for example, pharmaceuticals) so this is not an issue, the knowledge needed to enter is easy to acquire.

Financial analysis of Marks and Spencer

ANALYSIS OF FINANCIAL RATIOS

The assessment of financial ratios in this report is not meant to provide an extensive analysis of the performance of Marks and Spencer. This would be an analysis based on a few key measures that would provide an indication of the performance of Marks and Spencer. The ratios included are across five areas: profitability; efficiency; liquidity; gearing; and, investor ratios. These ratios provide a view across various areas and provide an indication of the overall performance of Marks and Spencer. The results and the analysis of these ratios are discussed further. The absolute measures presented are in £ millions except for the per share figures which are in pence per share and the percentages which depict the ratios.

1.1 Profitability Ratios

Exhibit 1 shows the
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