Marks & Spencer SWOT Analysis Sample UK

Parent Company: Marks and Spencer Group plc

Category: Retail

Sector: Consumer Discretionary

USP: Premium retailer with over 1,000 stores worldwide

Founded: 1884

Headquaters: London

Marks and Spencer Group plc (also known as M&S) is a British multinational retailer headquartered in London. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. It specializes in the selling of clothing, home products and luxury food products. M&S was founded in 1884 by Michael Marks and Thomas Spencer.

M&S has over 1,000 stores across the UK and Ireland, as well as over 300 stores in more than 40 countries internationally. The company employs around 85,000 people worldwide. In 2017/18, M&S generated revenue of £10.3 billion.

M&S is a premium retailer and is therefore exposed to risks associated with the economic environment. Rising costs, such as labour and raw material costs, could eat into M&S’s profitability. In addition, M&S competes against a number of strong rivals, such as John Lewis, Tesco and Next. Therefore, it is important for M&S to differentiate itself in the market in order to compete effectively.

Marks & Spencer Strengths

1. Strong brand value and awareness: M&S has a strong brand value. It is ranked at number 77 in the world’s most valuable brands list with a brand value of US$5.8 billion.  The brand has a strong presence in the UK and Ireland with over 1,000 stores. It also has a significant international presence with over 300 stores in more than 40 countries. The company’s long history and heritage also contribute to its strong brand value.
2. Diversified product range: M&S offers a wide range of products across categories such as clothing, home products and food. The company has a diversified product mix which helps it to cater to a wide range of customer needs.
3. Strong online presence: M&S has a strong online presence with its e-commerce website mands.com. The website offers a convenient shopping experience for customers and allows them to purchase products from the comfort of their homes. In addition, M&S also has a mobile app which allows customers to shop on the go.
4. Loyal customer base: M&S has a loyal customer base which it has built over the years. The company’s long history, strong brand value and quality products have helped it to develop a loyal customer base.
5. Flexible store formats: M&S offers a number of different store formats to cater to the needs of its customers. The company has large format stores, smaller format stores and even outlet stores. This flexibility allows M&S to reach a wider range of customers.

Marks & Spencer Weaknesses 

1. High dependency on the UK market: M&S is heavily dependent on the UK market for its revenues. In FY2017/18, the UK contributed to around 62% of the company’s total revenues. This high dependency exposes M&S to risks associated with the UK economy.
2. Slow response to changing consumer trends: M&S has been slow in responding to changing consumer trends. The company has been slow to embrace online shopping and has only recently started investing in developing its e-commerce capabilities. In addition, M&S has been slow to respond to the trend for casualwear and has only recently started investing in this area.
3. Product recalls: M&S has had a number of product recalls in recent years. In 2016, the company had to recall a range of products due to safety concerns. This put a strain on M&S’s reputation and harmed its brand value.
4. High costs: M&S faces high costs, such as labour costs and raw material costs. These costs could eat into the company’s profitability and hamper its ability to compete effectively.
5. High Competition: M&S competes against a number of strong rivals, such as John Lewis, Tesco and Next. Therefore, it is important for M&S to differentiate itself in the market in order to compete effectively.

Marks & Spencer Opportunities

1. Expanding its international presence: M&S has a significant presence in international markets with over 300 stores in more than 40 countries. The company is looking to expand its international operations and open new stores in countries such as India, China and the United States.
2. Developing new product lines: M&S is looking to develop new product lines to meet the changing needs of its customers. The company has recently launched a range of new products, such as yoga clothes and active wear.
3. Investing in technology: M&S is investing in technology to improve its operations and offer a better customer experience. The company has recently launched a mobile app and is investing in e-commerce to improve its online presence.
4. Opening new stores: M&S is looking to open new stores in order to reach a wider range of customers. The company is planning to open a number of new stores in the UK and internationally.
5. International expansion: M&S is looking to expand its international operations. The company is planning to open new stores in countries such as India, China and the United States.

Marks & Spencer Threats

1. Changes in consumer spending: M&S is exposed to changes in consumer spending. If there is a slowdown in consumer spending, this could adversely impact M&S’s sales and profitability.
2. Economic uncertainty: M&S is operating in an environment of economic uncertainty. This could impact consumer spending and put pressure on M&S’s sales and profits.
3. Competition from online retailers: M&S is facing competition from online retailers, such as Amazon. These retailers are able to offer a wider range of products at lower prices. This could put pressure on M&S’s sales and profits.
4. Changes in exchange rates: M&S is exposed to changes in exchange rates. If the value of the pound were to fall, this would make M&S’s products more expensive for overseas customers and could impact its sales.
5. Fines and other challenges: M&S has been fined a number of times in recent years for breach of regulations. In addition, the company has faced a number of other challenges, such as the horsemeat scandal. These issues could damage M&S’s reputation and negatively impact its sales.

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