Marks & Spencer PESTLE Analysis Essay

Major Firms can non break through and continue to prosper without analyzing their general purlieu and acting upon the trends identified. Scanning and supervise the general environment atomic number 18 activities they can non afford to ignore. Discuss this statement with university extension to the performance of the UK retailer label & Spencer all over the last 10 years. existence attach and Spencer is a major British multinational retailer headquartered in Westminster, London. It has a net clear of 766 stores in the join Kingdom and 418 stores spread across more(prenominal) than 40 countries. It was make uped in 1884 by Michael tag and doubting Thomas Spencer in Leeds. It specializes in the selling of turn and luxury food products. Michael attach was from Russia and Thomas Spencer was a cashier from Yorkshire. In 1884, Michael mark started his own business in Kirkgate Market, Leeds by opening a penny bazaar st either(prenominal). Then to rise his business he opened a shop at Manchester with the fusion of Thomas Spencer. Initially, the comp each used to be known as tag & Sparks but over the years, the play along decided to settle down for attach & Spencer. In 1998, it became the first British retailer to make a pre-tax income win of over ?1 billion. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.PESTLE analytic thinkingAn organizations environment is made up ofThe Internal Environment Staff, office engine room, wages, finance, and so on The small Environment External guests, agents, distributors, suppliers, etc. The Macro Environment government activityal, economic, mixer, technological, legal, environmental etc. This is besides known as the PESTLE environment. PESTLE analysis describes a framework of macro-environmental factors used in the environmental scanning component of st localizegic focussing. It is a part of the external analysis which gives an overview of the different macro-environme ntal factors that the company has to do into consideration in order to achieve its goals.Lets shed about the different factors of the PESTLE environment for tag & Spencer in depth.PoliticalPolitical factors be those factors that be made, run and changed by the government. These factors show the take aim of anticipation by the government in different trades and businesses. Specifically the sectors in which governments anticipation is the most are trade policy, struggle law, trade restrictions, tariffs, and political stability. These factors also embarrass goods and run hireed or provided by the government. This is decided by the government what kind and quantity of goods and serve can enter or go out of the country. These policies are instanter worked by government and can only be changed by them. some some opposite than these political factors government have a large anticipation in health, education, infrastructure and defense of the country. The government has its ow n sets of rules and regulations which e very(prenominal) company has to assume such(prenominal) as health & synthetic rubber, planning for hazard identification, risk management and risk surmount. If somehow a company doesnt follow these rules and regulations, the companies get out have to face strict consequences and outcomes, which include heavy fines or unconstipated closure of the company. label and Spencer was accused of not abiding the standards for and was charged for neglecting the safety regulation after a door fell on an employee. mark and Spencer was not pled guilty of this trial. attach and Spencer was the first company to achieve clear trade policy route which is cut salt and fat in M&S food. Marks and Spencers believes that it is very great to interact and work with the government to protect anorganizations legitimate interests and to rear policies which addresses wider public objectives. Marks and Spencers respond to the government queries which are visible (prenominal) publically on their sites. The company has full support from the government because of its flush historic values and fair means of trade practice. Because Marks & Spencer has require a very powerful organization in the retail world, tender competitors find it very difficult to keep up with the quality of products and services that Marks & Spencer provide. The two political factors that affect the company are political stability and VAT. Political stability is the government works their way whereas Marks and Spencers wants things differently. VAT is the terms known as value added tax which is set by the government and paid by the companies. It definitely affects Marks and Spencers because if the government step-ups VAT, M&S also has to affix their prices or else it would decrease the firms income.EconomicEconomic factors are determinants of an frugalitys performance that directly impacts a company and have grand term effects. For example, a rise in the inflation r ate of any economy would affect the way companies price their products and services. It would also affect the get power of a consumer and change deal/ cater models for that economy. Economic factors include inflation rate, interest rates, foreign exchange rates, economic growth patterns etc. It also accounts for the FDI (foreign direct investment) depending on certain specific industries whore undergoing this analysis. The United Kingdom has an open economy and ranks among the fourth largest in the world. Fiscal and monetary policies are properly managed because of that there is low inflation and strong government finances in the country. Marks & Spencer needs to organize a fat economic analysis. It is essential to consider the state of economy in the short- and long-terms. Issues such as interest rates, inflation, GDP, employment directs, etc. need to have clench in the marketing plan so that the strategies adopted encounter all such issues and ensure sustainability of compet itive position. Current economic situation in the UK is favorable with low-to-moderate interest rates which signal a healthy economy. A healthy economy is a sign of increasing disposable income which, in turn, is good for the business. Marks & Spencer needs to concentrate more in the spurt arena as youngergeneration spends most of their disposable incomes on clothing.SocialSocial factors are fundamentals that one cannot directly control but they definitely affect your business and marketing strategies. Basically, to know your tender environment and to allot with it, you have to think about heap here. The aspects that we need to consider in order to understand people are ethnical aspects, age distribution and emphasis on environment concerns. Trends in social factors affect the demand for a companys products and how that company operates. Marks & Spencer has modified itself a lot according to its consumers wants. M&S core shops typically feature a selection of the companys cloth ing wraps and a food hall. In UK, people are seen to proceed longer now, which means now they can spend more during their life metre. As Marks & Spencers most of the customer were people aged over 40, with a large proportion of them over 55, this is why the clothing range offered by M&S is of a conservative nature. Now, as peoples choices of attire have been changing since last ten years, Marks & Spencer is improvising its clothing course of consider in accordance with the customers changing tastes. The clothing line exchange and the space given to it basically depends on the locality and customer demographic. Say for example, some shops located in London do not stock the Classic assemblage, instead they go with the stock Limited Collection and a full Autograph range. The latest recession had played an important role in increasing the level of unemployment.This caused a decrease in Marks & Spencers sales as peoples acquire power declined. Eventually, Marks & Spencer lowered i ts price for customers convenience. As it was estimated there will be rise again in the level of employment, people would have currency to spend, eventually a rise in sales was seen. Now a days, people want to feel unique, up to date and convenient. Therefore, people have started using character reference cards to play their desires. Another factor is that since credit card came into action, an increase of more than 10% happened in all trade (BBC News, 2000). Since 18 April 2000, Marks & Spencer allowed its customers to pay with credit cards. They did so because they wanted to compete with its competitors who had started accepting credit cards a long time back. Another significant social effect that took typeset in the recent years is the environmental. Marks &Spencer have recognized an increase in the number of their customers who say they will take environmental action. It is not only the usual buying concerns such as price, quality and expression which attracts their custome rs but also making sure all these things are underpinned by sustainability. This sets Marks & Spencer apart from its opponents and assures its customers that they can trust them to do the right thing. Marks & Spencer are continuing to drive hard to reduce, reuse, recycle and reinvent to make out more capable across their operations. In UK, stores have been set as Simply Food that cater to customers demand in convenient locality. In 2009 the company also began selling a restrain range of other brands such as Coca-Cola and Stella Artois without dropping the number of Marks & Spencer goods they interchange.TechnologyConstant evolution in technology has helped businesses operate in force(p)ly in competitive markets such as retail as new IT systems help increase productivity & lower costs. Furthermore, consumers across the globe are harnessing the power of internet to purchase items online & get them delivered straight to their homes. Online shopping has enabled M&S to automate & a ccelerate purchases & reduce the supply cycle for products sold online. M&S has already invested ?100m on new technologies and ?150m on a new model for its website that will be completed by 2014. This all the way shows that M&S is investing heavily in technology to increase its efficiency. Analysts expect sales figures to be somewhere between ?800 million to ?1 billion once the website is fully revamped. Recently, M&S stores in UK were fit out with free Wi-Fi. M&S hopes that customers will use the Wi-Fi to explore other products the company has to offer. Additionally, customer assistants in stores have been given iPads to help shoppers by providing them with more information about different products. This move has helped M&S to integrate its internet & high street offerings.Other tactics request installing big screens in stores which promote clothing & interactive screens set(p) strategically which enables customers to browse through the products & place orders. M&S believes that their cordial reception offer is an advanced way to get more business. Probably the biggest forwarding in M&Ss books would be the opening of M&Ss distribution bone marrow in Castle Donington. The intellect for its remarkableness is that its a 900,000 sq. ft. by 25 metrehigh burden that has been exclusively made to serve as a warehouse for online orders. Because of its awful size, it is arguably the biggest distribution centre in UK. The centre is capable of bear on 1 million products per day & hold 16 million products as inventory. The centre is fully automated & fitted with world class warehousing technology which involves automated storage & retrieval systems. More than 150,000 different variety products are stored in the warehouse. Work goes inside 247 & 50 vehicles are uses every day for inventory management. As for employees, 1,200 people are utilize during peak seasons. Lastly, the site has been built with an eco-friendly outlook. The centre has solar panels installed on its outside(a) to harness solar energy & use it to heat the centre during bleak weather.LegalLike any other firm, Marks & Spencer has also had to deal with some legal issues. In September last year, BBC news describe that M&S was fined 1 million GBP over asbestos risk. It failed to protect the round and customers from the risk of asbestos which is a highly heat resistant silicate mineral. The judge, Chri relegateher Harvey claimed that the company was more interested in making profits rather than planning for asbestos remotion .However the company claimed that it acted responsibly and was disappointed. On 8th august 2010, M&S was accused for sweatshop scandal where Indian workers were paid just 25p per hour and labored to work overtime. Some workers have even claimed that they were paid half the get along for the overtime they worked and those who refused to work were asked to leave and find new jobs.M&S admitted that the suppliers had worked excessive overtime and that th eir own audits found a number of other violations which was described as high risk issues in documentations and conditions .The observer found that the company was using workers hired through middlemen and were being forced to work for 7 days a week, a practice that is condemned by their totality as, slave labor but the company again refused all these claims and express that they were ethical in their working and they would not tolerate anything in their supply chain. On 19th May 2013, it was found out that M&S was involved in a tax fraud like that of virago. Moreover, primitively M&S claimed to be doing the same business as Amazon whereas it wasnt. The sales revenue that was supposed to go to the UK was sent to Ireland because of the tax rate being26% in the United Kingdom and 20% in Ireland. Even though Marks and Spencer claimed to do the same business as Amazon, it was rather saving up on its sales revenue. M&S was actually engaging in unethical practices such as evading tax.e nvironmentalIt is to be noted that M&S is one of the most sustainable brands out there in the market. Infact, they launched an initiative called Plan A in January 2007. They set out 100 commitments that were to be achieved in a time frame of 5 years. Currently, theyve extended their Plan A to achieve one hundred eighty commitments by 2015 & with that they are aiming at becoming the worlds most sustainable retailer. integrity of M&Ss Plan A programs is shwopping. The idea of shwopping is simple. You donate your old clothes. Your old clothes are sold to Oxfam. Oxfam either recycles your clothes or re-sells them to third world markets where there is demand for clothes but consumers do not have enough money to pay for them. Over the four years, shwopping has seen more than 11 million clothing items get donated which comes out at around 8 million GBP of charity in the form of recycled clothes. By engaging in sustainable practices, the company has improved energy efficiency in stores by 10% & reduce packaging by 15%. Another thing is that the distribution centre M&S has in Castle Donington, its been equipped with europiums largest solar-wall. The walls of the centre are equipped with solar panels which helps heat the building. The ensure is carbon paper neutral & half of the structure has been built from concrete that was from a former power station.Currently, M&S charges 5p per plastic bag that a consumer needs for carrying items. All profits generated from selling plastic bags are forwarded to cornerstone which invests in projects that improve parks, play areas & public gardens in and around UK. One time, when concerns were raised by customers about the production of Angora Wool, M&S took action and conducted additional visits to the farms. On 12th December 2013 it announced that it would stop selling products containing Angora Wool and that it has updated its animal welfare policy to crawfish all Angora from its supply chain. By engaging in sustainable pr actices, M&S has been able to cut down on carbon dioxide emissions by almost 40%. The company also has been accredited with efficient electricity usage, reduced gas leaks & better waste recycling levels. They also encourage their suppliers to practice eco-friendlytechniques & helped them go green & achieve higher efficiency. deductionWith the help of PESTLE analysis, we were able to gain insight into Marks & Spencers business environment. Although there are a lot of factors which affect every business, we think were able to highlight the important factors that affect M&S on a macro level. No doubt, M&S has been very successful & highly competitive in their drive to provide singular high quality goods & services for decades. Economic slowdowns have compelled to compete against cheaper, younger & more fashion conscious clothing lines. The sustainable approach that M&S has adopted definitely deserves another mention. Firms like M&S actually make younger & smaller firms think about the ir practices & inspires them to foreshorten a similar approach to business. Agreed, there are some sign costs that have to be incurred while going green, but in the long run, there is a lot you get back, both from customers & drive Nature.References1. Marks & Spencer. 2014. Marks & Spencer. ONLINE Available at http//www.marksandspencer.com/. Accessed 01 March 14. 2. HubPages. 2014. Marks & Spencers PEST Analysis. ONLINE Available at http//mr-gadget.hubpages.com/hub/Analyse-your-own-organisation-or-division-in-organisation. Accessed 02 March 14. 3. Tripod. 2002. A Marketing Analysis of Marks and Spencer. ONLINE Available at http//betty-sung.tripod.com/marks_&_spencer.htm_Toc23588767. Accessed 02 March 14. 4. issuu. 2010. A case study analysis report of Marks and Spencer Plc. ONLINE Available athttp//issuu.com/emmabunce/docs/m_s_case_study. Accessed 01 March 14. 5. The Telegraph. 2012. Marks & Spencer installs wi-fi in e-commerce push. ONLINE Available athttp//www.telegraph.co.uk/f inance/newsbysector/retailandconsumer/9504384/Marks-and-Spencer-installs-wi-fi-in-e-commerce-push.html. Accessed 02 March 14. 6. Marks & Spencer. 2013. Marks & Spencer. ONLINE Available athttp//corporate.marksandspencer.com/investors/press_releases/mands-opens-new-distribution-centre-in-castle-donington. Accessed 02 March 14.