CompanyIntroduction
The basic concept of retail in the market is dealing in the buying or selling of goods or services. As they involve a direct connection with the customer and then accordingly strategies are made with respect of fulfilling their needs and wants in a better way. The structure of the retail sector is to buy goods from the manufacturers and then sell it to consumers, through the aspects of increasing sales in business (Ko, Phau and Aiello, 2016). In respect of determining the matter related to the retail industry in the context of fashion, it is undertaken on the basis of buying or designing the clothes from the manufacturer and then selling it to customers by fulfilling their needs and wants in a better way. Fashion retail sectors use various procedures to build a large customer base such as organising fashion shows, any charity function to attract customer interest or also promoting business through using reusable products to design innovative and attractive clothing.
Introduction to Marks and Spencer
In respect of undertaking matters related to fashion retail sectors, Marks and Spencer carries the renowned brand name in the global market, People are attracted towards the services which are provided by them in respect of designing such products which attract their interest towards such services for a longer time period. The concept of M&S was founded by Michael Marks and Thomas Spencer in 1884. the main business or headquarters is located in London and they carry the operation work in many places (Baker and Saren, eds., 2016). They are engaged with around 80,787 employees carrying the business at a global level and also reaching out to customers towards building a strong base with them. M&S are located in around 1463 places and also currently it is examined that in the UK they engaged their business in around 959 stores including 615 stores which are mainly based on food-related products. In respect of the clothing division, they deal in around 11% market share in the UK. The mission which is carried out by M&S relates to building a strong base among customers with respect to maintaining values, quality services or innovation in existing products or bringing new products to the market.
In the context of determining the position of M&S in the market, they mainly carry the premium pricing methods in which they carry the pricing high by providing quality products to their customer (Rocamora, 2017). This helps them build a sustainable position in the market by reaching large customers through promoting the products in the market.
Macro Factors That Affect the Fashion Industry
Macro factors are such factors which affect the working of the industry by undertaking external aspects such as:
|
Factors |
Aspects |
Fashion industry |
Marks and Spencers company |
|
Political |
Government taxes |
In this, the impact arises in respect of motivating people to prefer the fabrics from their own country in respect of charging or imposing higher taxes in respect of import of goods. |
In respect of positive impact which arises from taxes is related to undertaking free trade procedures in respect of expanding the business or dealing in various countries globally (Marks and Spencer SWOT and PESTLE analysis, 2019). In the context of negative aspects, it resulted in facing issues at the time of Brexit. As there is a loss of free trade policies which results in increasing the cost of production with less demand in the market. |
|
Economic |
Fluctuation in interest rate |
In the context of the fashion industry, the fluctuation arises with respect to changes in the global economy with respect to expanding the business. This results in bringing recession in the country and also there are low rates of employment with respect to working in a company (Kim, and Kim, 2017). |
In this aspect, the economic factors related to undertaking the premium pricing strategy affect the customer interest in respect of getting low-priced products from the competitors. Thus, this aspect, results in facing issues in respect of retaining customers towards the services for a longer way. |
|
Social |
Changes in demand and culture of the customer |
In the fashion industry, the social factors which affect the industry are relevant to facing the different demands of the customer. Due to changes in time, the demand of the customer is also changing, thus affecting the industry with respect to reaching a large customer base. |
In M&S, the factors are affecting are in respect of not adapting the trendy procedure in business. Customer demands trendy clothing which can suit their personality but in the UK they do not deal in any such new names in the market (Pan, 2016). |
|
Technological |
Digital Platform |
As every person prefers to shop online instead of visiting to shops or waiting for their numbers. Thus, in such cases online is the biggest impact which is faced by the fashion industry in respect of reaching to large number of customers. Thus, through innovative aspects in respect of promoting the business online increasing more number of customer towards their products. |
As M&S carry the strong presence in respect of promoting the business through e-commerce and fulfilling the customer needs through providing the accurate services. The impact arises in respect of promoting the business through unique and innovative advertisements. This helps them attract customers for a longer time period. |
|
Legal |
Tax rates, export restrictions and data protection |
As fashion industry mainly carries their business at larger sales and thus also deals in mainly companies (Fildes, Ma and Kolassa, 2018). The issue is raised with respect to boycotting the fashion brand in respect of imposing high charges in exporting the brand to different countries. |
In respect of M&S, the impact which arises with respect to the working of the business is related to the lack of data protection security of customers. The customer complained that they are facing a lack of security with respect to protecting their personal information. |
|
Environmental |
Climatic changes, harmful ingredients used in products |
In the context of the fashion industry, the impact arises in respect of harmful ingredients used in products which affect the environment. It also resulting in affecting the interest of the customer in respect of charging extra prices in the context of shipping costs. |
The impact arises with respect of demanding the eco-friendly products in the market which results in the production or reusing of waste products. Through these aspects, they sustain the business in the market for the longer time period. |
Micro Environmental Aspects
Porter's five forces is the model which generally used to identify the five forces of the external environment which used to shape the industry and help the organization in finding out the strengths and weaknesses of the organization.
(High) Competition in Industry: Marks and Spencer used to operate in a very competitive retail industry in the UK. There are many clothing companies who used to operate in this sector. This eventually has an impact on the price of the company product as the company has to keep the profit margin low to sustain the company's image in the market. The biggest competitor of the organization, specifically in the clothing sector is a Swedish multinational clothing retail company and Next Plc, a British multinational clothing store (Zhao And et.al., 2016).
(High) Threat of New Entrants: This force used to affect Mark and Spencer very badly in their functioning as a new organization used to bring innovation in the industry which sometimes attracts the eye of the customer. This eventually brings extra pressure on Mark and Spencer to use the different strategies to sustain the customer.
(Medium) Bargaining power of Supplier: As in the clothing sector of the retail industry all the organizations used to buy the product from numerous suppliers, suppliers are in the dominant position to decrease the margin of the company. This force is not used to affect Marks and Spencer as much as M&S had built a good and efficient supply chain with multiple suppliers in the market (Carraher, 2018).
(High) Bargaining power of Buyer: Buyers are the ones who used to be in the demanding position of new and innovative products to satisfy their needs in the market at as low a price as possible. Mark and Spencer have to lower down there profit margin to satisfy the customer base. As number of the loyal customers is high M&S. Company has to offer discounts to maintain the same.
(High) The threat of substitute products: This force also affects Marks and Spencer in the long run of the business as there are many companies which used to offer the product of Marks and Spencer at a lower rate but with degrading quality. This eventually affects the brand of the company and also has an impact on the sales of the company in the long run of the business (Mathooko and Ogutu, 2015).
Read Related Sample: Fashion Retailer
Different Strategies and Tactics Used in Retail Sectors:
In the context of applying the retail theories with respect to determining long-term strategies is relevant to undertaking the technological factors which affect the working of the retail sectors externally. Marks and Spencer mainly adopts the traditional way in respect of dealing with the business through online presence. The taste of customers is related to attracting the quality of the products and also trying those products before buying that product (Petersen, Mackinney-Valentin and Melchior, 2016). Thus, in such a manner, the issue arises in respect of reaching customers through online platforms. They can build a strong relationship with them by attracting the customer towards the products through providing offers or discounts on particular products or services. Thus, this retail life cycle theory is applied to the technological factors related to the
Introducing the products in the market through using promotional tools such as advertisements to reach a large customer base. Advertisement is one of the most important aspects in respect of interacting with the customer and understanding their needs in a better way. It also helps in introducing the company to the market and reaching customers by attracting them to the company's products or designs.
Growth: If M&S planning to sustain itself in the market for a longer time period, they are using the platform of technology in respect of retaining the customer interest towards the services for a longer way. The growth can be examined with respect to disclosing the products at a low ratio, with respect to determining the needs of the customer towards the products (Ashby, Smith and Shand, 2017). This helps M&S to gather information regarding customer satisfaction after attaining the particular products or services.
Maturity is examined by using innovative ideas to build a strong base with customers. This can be attained through adapting the procedure of the advanced technology with respect to determining the stability of innovation at a particular time period. Declining the procedure in respect of changes in time and taste of the customer. As in this, the role of competitors is examined with respect to approaching customers through new innovation.
Thus, in respect of comparing the external factors with the microenvironment challengers are resulting in the bargaining power of the buyers. As M&S mainly adapts the premium pricing strategy in which they set the prices which is higher in comparison to other fashion industries products. Thus, in such a manner, the challenges occur with respect to distracting the minds of the buyers with respect to providing offers or discounts by other companies regarding promoting the clothing brands (Petermans and Kent, eds., 2016). As Customers verify the products of different companies and then choose the right brand with the best quality products. Thus, in such aspects, it results in facing issues in retaining the customer interest towards the products for a longer time period.
In the context of undertaking the planning relevant to tactics which are imposed in respect of gaining advantages on short-term bases is relevant to the environmental factors. In this, the theory is applied in respect of conflict theory which is mainly based on legal aspects in respect of imposing taxes on importing or exporting goods and services. With respect to environmental evolution theory, changes occur with respect to delivering products or services on a timely basis (Carter and Yeo, 2016). Conflict arises in respect of changes in weather conditions which restricts the transportation company from delivering goods within the stipulated time. In the context of M&S, the issue also arises with respect to using harmful ingredients or smoky elements in clothing which harms the environment at a larger scale.
Thus, these elements can be compared with the microenvironment aspects in which the threats of new entrants are examined with respect to undertaking the company's overall procedure. Threats are examined with respect to innovating the products in the market so that they can retain their position in the market and also provide such products which are eco-friendly (Long and Morpeth, eds., 2016). Through these aspects, they can retain their interest towards such services and also fulfil their needs with respect to changes in time and climatic changes.
These are the major aspects which result in identifying the factors which affect the external environment in respect of comparing with the micro factors. This aspect, it related to examining such aspects in respect of undertaking such factors which result in bringing changes in the procedure of working (Fernie and Grant, 2019). They can also gather reviews from customers by adapting innovative procedures through technology by building a large base of customers in the market.
Recommendation
From the above study, the following aspects are to be examined with respect to overcoming the challenges resulting:
- Appointing a skilled person to handle the queries of the customer as M&S is lacking in reaching and building a strong base with the customer. Through these aspects, they can handle the queries that arise through online platforms and they also resolve such queries in a better way.
- Another factor which is to be recommended to M&S in respect to reusing the waste products due to changes in demand. Customers are attracted if they find a company dealing in any such activity which results in saving costs and also reusing the waste products to produce new products in the market. This can be done with respect reaching to large customers regarding putting the waste clothes in particular areas and or also conducting any such events in which the usage of products will result in a new identity by designing such products in the market.
- High-security codes are imposed with respect to dealing the business online. A lot of complaints are raised by the customer regarding the lack of security of their personal information. Thus, in such a manner, their rights are protected in respect of using the high-security code system which is imposed on company websites to protect their rights in a better way.
Conclusion
From the above study, the report carries various aspects which relate to determining the concept of the retail industry. As the fashion industry mainly carries a wider range of services they had to use various aspects to retain the customer interest towards the services for a longer time period. In respect of examining the factors relating to M&S through which they cause impact in respect of external factors or also they cause impact through internal working. Thus, in such aspects using the premium pricing strategy and targeting the products in appropriate market segments results in gaining higher products in the company and they also maintain the reputation in the market to sustain the business for a longer time period.
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