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STP Analysis of Marks and Spencer

GSM University of Plymouth

Code: MCOM4040

Learning Outcome:

1. Identify and explain the marketing concept, the marketing mix and the components of the marketing communications mix.  

2. Explain the relationship between the marketing environment, its impact upon organisational decision making and consumer behaviour.  

3. Discuss the factors that determine competitive advantage within organisations  

4. Explain key theories, concepts and models underpinning business communication to create effective communications.  

5. Examine and discuss organisational issues and challenges that impact on the effectiveness of business communication through the use of pre-defined criteria to assist in improving communication within the organisation.  

6. Demonstrate an application of concepts and techniques related to business communication processes used within the workplace.  


Answer

1. Executive summary:

The following report is about the organisation Marks and Spencer. This institution is running its business successfully in a most ethical way. It is one of the major food and clothing store of Britain. The report will focus on the all the factors by which the organisation can improve their business and maintain sustainability in the market. The STP analysis, the marketing analysis is discussed here. This report also evaluated all the major and minor factors that can improve the organisation’s potentiality in many ways.


Part 1:

Marketing Plan

2. Company overview:

The organisation here is Marks and Spencer. It is a retail shop in Britain. The head quarter of Marks and Spencer is in City of Westminster. Marks and Spencer is one of the leading clothing stores in Britain. It has almost 1,300 stores all over the world. Not only that, this retail shop is also serving the customers with their luxurious food products. They serve different kind of food products to their customers. Marks and Spencer is one of the major stores that produce high quality clothing products from women’s wear and men’s wear to kids wear. However, this organisation is more famous because of the women clothing and lingerie. Marks and Spencer tries to follow certain value system to maintain the good quality of the product.  It also has almost 460 stores in Europe. They are doing business in a most ethical way. The organisation even has branches in the Middle East and in Asia (Neutens et al. 2012, p. 90). The online business and through it they share their business with local franchise in some of the major market places.


3. Current marketing situation analysis:

Marks and Spencer is currently doing a good business all over the world. The organisation is growing every year. Moreover, almost every year they are selling a huge amount of quality products. According to the present competitive scenario Marks and Spencer is implementing some crucial strategies in their business and that is helping them to maintain a sustainable business throughout the year. This is almost 12.5 billion British retail shop is now trying to expand their business in Australia (Marks et al. 2012, p.860). The plan of expanding their business will not only help the management system but also the organisation. It has now an excellent position in the market. Along with that, the rust that the customers have for the brand works as an additional support.


The marketing situation of an organisation determines its position in the market. The chosen organisation deals different kinds of clothing and food products. Thus, the market situation of the organisation deals with many factors. There are some internal situation and external situations.


As Marks and Spencer is dealing with two different kinds of products, thus they are currently earning a huge profit every year. In last three year, the institution has earned almost more 9500.5 UK pound each year. The human resource management system in the organisation plays a crucial role in the organisation’s business; they work from managing the employees to all the stakeholders of the organisation. The team also helps to increase the profitability of the organisation in every financial year. The institution has almost 600 stores in the United Kingdom and the most successful and largest store they have is at the Marble Arch in London. These are the internal marketing situation of Marks and Spencer. All the major internal marketing factors instigate the external market potentiality of the business (Martínez et al. 2012, p. 70).


If the SWOT analysis of the organisation is evaluated then the current external marketing analysis can be rendered.

i) Strength: delivering a high quality product and a huge customer is the major strength of the organisation (Sevkli et al. 2012, p. 20). Customers always get a variety of clothes and fresh food items from Marks and Spencer. The organisation has many options for the vegetarian and the non-vegetarian people in food section. Apart from that, they give a good shopping experience to its customers in their retail shop. In addition, they do not limit themselves only in selling the product but also they provide a good after sell service to the customers,


ii) Weakness: the organisation is unable to attract the younger generation, as there is lack in the clothing segmentation in their retail shops (Kajanus et al. 2012, p.8). Apart from that, there are many cases where the customers complain about their online shopping experience. On the other hand, Marks and Spencer has many stores, however, the selling ratio is has not increased in comparison to the number of stores.


iii) Opportunities: in the 21st century, the online community has revolutionised the face of the business. Thus, the demand of the organisation’s product is increasing hugely. This process is very user friendly, thus, its popularity may come as a huge opportunity to them. The trend of healthy eating is nowadays a huge trend, for this reason, the organisation now offering fresh and variety of foods to their customers. The globalisation is helping the organisation to take their business internationally (Van et al. 2012, p. 35).


iv) Threats: almost every day new organisations are launching their business with different idea and perspective (Reihanian et al. 2012, p. 25). Thus, the competition is huge in the market. Organisations like Wal-Mart, Zara, Subway, and Tesco are few of the major competitors in the market. Along with that, the change in the social market is appearing as the new challenge in front of the Marks and Spencer, as customers taste and demand are changing almost every day.

Apart from these factors, some political, economical factors also are there that determine the marketing situation of the Marks and Spencer.


4. Objectives:

An organisation needs to maintain an overall objective in their organisation. If the organisation set yearly objectives then it is easy to achieve for them and for this reason Marks and Spencer set different objectives for each year. The organisation is raising their level of objectives almost every year (Alvesson, 2012). The present motto of the organisation is to improve the customer’s and the stakeholder’s experience, as they know if they improve their experience in the business then the success will come automatically. Their objective is to increase their level yearly basis. Every year, the institution is planning to expand their profit margin (West, 2012).


5. Strategy & Segmentation, Targeting and Positioning:

The STP analysis of an organisation plays a crucial role in the organisational behavioural patter. It assists the organisation to understand the customers and to develop a product that the customers can relate. With targeting and positioning Marks and Spencer are able to understand their current business scenario. Each factors of the STP analysis describes the profit measures that can be taken by Marks and Spencer. Also in this process the organisation, find new market and consumers.


i) Strategy and segmentation: According to the market the organisation Marks and Spencer divide the market in few segments. Segmentation assists the organisation to maintain sustainability in their business (Boudreault et al. 2012, p. 200). Marks and Spencer divide their audience in few parameters. According to the demographics, the institution divides the consumers into age, gender, education et cetera, geographically by country, region or state. Psycho graphically by consumers’ attitude, values, risk aversion et cetera. The behavioural pattern also determines the consumer’s retention on their products (Butler and Yellowlees, 2012, p. 75). It also helps to understand the customer and according to that, the organisation takes important steps. Then the institution needs to improve by concentrating on the consumer’s satisfaction factor.


ii) Target: though with an ethical business structure Marks and Spencer is running a successful business. Still they need to maintain some market oriented target in their business to maintain sustainability in the organisation. According to the size and potentiality, the organisation needs to set a target (Olofsson, et al. 2012, p. 30). Calculating their threat and opportunities the organisation need to evaluate yearly target so that they can gain from it. Money is a huge matter in this, they need to set up a yearly budget and according to the budget the organisation need to some quick action. Marks and Spencer needs to set up a target that is easily accessible to them. If the target is not achievable then they must think of an alternative target for their organisation.


iii) Positioning: marketing mix helps the organisation to position their products and business structure properly. Four P’s are there in the mix marketing policy. The four P’s are product, place, price and promotion. Marks and Spencer needs to focus on these four elements to improve more. For example, the institution needs to plan their products according to their customers need. As the organisation deals with clothing and food business, thus, the organisation needs to concentrate on their customer’s choices more and according to that the company needs to be specific on their price list (Armstrong and Taylor, 2014).


6. Tactics & Action:

To make the clothing and the food business more successful Marks and Spencer needs to make a plan or tactics at first and according to the tactics they need to take action.

At first, the organisation needs to increase their business valuation more than before. It is only possible by identifying their customers and their market place (Wang and Soule, 2012, p. 1720). Marks and Spencer is a place where the customers get fresh foods and quality clothing brand. Thus, they need to improve their quality of the food products; they need to deliver it as fresh as possible. On the other hand, the organisation needs to expand their clothing collection so that they can the customer’s need in different countries in different regions. The institution needs to identify their ideal customers by distinguishing the customers into audience and loyal consumers. As only their loyal consumers can assist them to expand their business, it also brings motivation in the work place (Mosley et al. 2012, p. 285).


On the other hand, Marks and Spencer needs to check continuously their revenue stream to make their financial year more profitable. Checking their budget and revenue time to time also helps the organisation to increase the revenue amount in a financial year. The organisation also needs to recruit fresh talents. Recruiting fresh talent helps the organisation to think about many new ideas. Marks and Spencer also needs to maintain a good environment in the workplace so that the workers get satisfaction working in the organisation, as it will help them to increase their productivity. Thus, it is proved that, a successful plan and its proper application can change the fate of the business.


7. Budget:


2 Apr 16 (in pound, million)% var
26 March 
(In pound, million)
28 March 
(in pound, million)
% var
Group revenue10,555.4+2.410,391.010,311.4+0.8
UK9,470.8+2.79,324.89,223.1+1.1
International1,084.6-0.31,066.21,088.3-2.0
Underlying operating profit784.9+2.9777.6762.5+2.0
UK726.7+8.4721.8670.2+7.7
International 58.2-36.955.892.339.6
Underlying profit before tax689.6+4.3684.1661.2+3.5
Non underlying items(200.8)n/a(200.8)(61.2)n/a
Profit before tax488.8-18.5483.3600.0-19.5
Underlying basic earnings per share35.0p+5.734.8p33.1p+5.1
Basic earnings per share24.9p-16.224.6p29.7p-17.2
Dividend per share18.7p+3.918.7p18.0p+3.9


8. Control:

The process of retaining all the organisation authority is all about controlling the organisational process. Marks and Spencer is a larger business to maintain. It has many branches all over the world from Britain to UAE. Thus, a basic control is very necessary in the institution. Marks and Spencer needs to direct and organise all the employees’ works in the institution. This control might come as a guideline for the employees. However, it needs to be taken for the organisational benefit. The institution needs to control the financial stability of the organisation. Regulating the financial stability means to maintain their main objective (Butler and Yellowlees , 2012, p. 75). On the other hand, it also protects the organisation from fraud and fallacy. Marks and Spencer needs to set up a committee that can look all of this matter all together. To run a business properly a business goes through legal compliances. The threat of these lawsuits needs to be looked after by concerned executives of the organisation.


9. Conclusion and Recommendation:

As previously discussed Marks and Spencer is running the business in a most ethical way. Still to improve their organisation they need to prepare a marketing plan. The above-discussed report is all about those crucial marketing plans. Thus, in conclusion, it can be said that there are many important major and minor factors that the organisation can apply to improve their overall business structure. The STP analysis, the SWOT analysis can majorly support the organisation in this matter.


It is clear that Marks and Spencer is running a successful business. Still there are many possibilities of improvement there. The organisation needs to improve their human resource team. A good human resource team always hold the capacity to run an organisation more accurately.  The institution needs to upgrade their business structure time to time; it will help them to maintain sustainability in the business. Along with that, the organisation needs to use modern technologies to make their business structure more fast and accurate.



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