Marks & Spencer Case Study

6101 Words Jul 6th, 2004 25 Pages
Marks & Spencer

Case Study

Introduction........................................................................ Page 3

EXTERNAL ENVIRONMENT

1.0 PEST Analysis................................................................ Page 3

2.0 Porters Five Forces Model................................................. Page 4

INTERNAL ANALYSIS

3.0 Auditing the Resources of M&S.......................................... Page 5

4.0 Value Chain Analysis....................................................... Page 8

5.0 Analysing the Culture & Stakeholders in 1998 ....................... Page 11

6.0 Evaluation of M&S´ Strategy............................................. Page 15

6.1 SWOT
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2.0 Porters Five Forces Model

This model was developed by Michael E. Porter in 1980. He identified 5 forces that shape every industry and determine its attractiveness and potential profitability. These forces as described as follows:

The Porters 5 Forces analysis for M&S is given below:

Bargaining Power of Buyers

In general, bargaining power of buyers is high. It very much depends on the segment we target. Buyers´ power is lower in the exclusive segment (i.e. cloths from luxury designer firms) and higher in other segments, as they can usually choose from a variety of companies.

M&S gained customer loyalty from high quality products that were priced competitively. One of M&S´ current problems is that people demand either brand names or discounted products. M&S is therefore stuck in the middle. M&S´ product-orientated strategy in the late 1990s has become ineffective. The bargaining power from buyers is increasing and therefore, a more consumer-orientated strategy is needed.

The Bargaining Power of Suppliers

M&S´ success has a lot to do with its long-term relationships with its suppliers. Some of them had supplied M&S for over a hundred years (i.e. Dewhirsts). M&S bought directly from a few UK suppliers, without the use of an intermediary, like most of its competitors. This created a heavy reliance of those suppliers on the company. M&S could then try to lower its costs by putting

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