This work examines why the clothing sales of Marks and Spencer have been falling in recent years and recommends a solution to minimize this issue that leads to the substantial financial losses. The work evaluates the internal and external environment of the company and concludes that the company must adjust a new strategy in order to compete efficiently in the industry. It is recommended to focus only on the basics which brought success in the 90’s; stock with the third- party brands; merger with another company or focus only on the food business which is successful on the market.
The work draws attention to the fact that in the 90’s the profits from the sales of clothing peaked and topped £1 bn. In 2008, there was an increase in the clothing sales and the profits peaked again £1 bn. However, after that year the profit has been constantly falling. Further investigations reveal that the drop of sales coincided with the appearance of many businesses which produce similar goods at the same or lower price. Moreover, the visibility of growing competition from the online angle of the industry and the fact that M&S was a latecomer with introduction of the online store have negatively influenced the performance of the firm in the clothing sector.
Table of Contents
1. Introduction
2. Case brief
3. Problem statement and analysis
3.1 Statement of the problem
3.2 Research method
3.3 Conceptual framework
3.4 Relevant literature review
3.5 Proposed plan of analysis
3.6 Sources of data
3.7 Ethical considerations
4. Analysis and Findings
4.1 An assessment of the current position
4.2 Alternative future scenarios
4.3 Resource Constraint Evaluation
5. Proposed solutions to the problem
5.1 Integrated discussion of the analysis
5.2 Recommendations and proposed plan of action
5.3 Critical assumptions to the analysis
5.4 Implications for stakeholders
5.5 Limitations of the study, scope for future research
6. Application to another case
6.1 Description of the competitive firm’s situation
6.2 Test of the M&S’s recommendations on the Next plc
Objectives and Research Themes
This case study examines the persistent decline in clothing sales at Marks and Spencer (M&S) in recent years, investigating the underlying causes—such as heightened online competition and changing consumer behavior—and recommending strategic shifts to restore financial stability and competitive advantage.
- Evaluation of the internal and external business environment affecting M&S.
- Analysis of financial performance and efficiency ratios from 2013 to 2017.
- Strategic benchmarking against competitors like Next plc and other market participants.
- Development of actionable solutions, including a focus on quality basics and potential strategic partnerships.
Excerpts from the Book
3.1 Statement of the problem
The British clientele was pleased with the easy- care fabrics of the dresses which M&S manufactured in the 50’s and 60’s. Furthermore, the store’s tailoring and quality knitwear became popular in the 70’s and 80’s. In the 1990’s, Marks and Spencer put an emphasis on the design, hence its £21 shirt appeared on the cover of Vogue. The presence of M&S in the fashion magazines led to the increase of the clothing sales what resulted in the £1bn profit in 1997 and 1998. Nevertheless, in 2000 after the incorporation of the sub-brands known as Autograph and Per Una which were focused on targeting more fashion-oriented customer, Marks and Spencer began to notice weaker performance related to the clothing. According to Sali Hughes (Espiner& Atkinson, 2016), fashion journalist, the retailer had lost its crown since it started selling high quality goods that were reflection of clothes from the catwalk. She emphasizes further that M&S was famous for its essentials such as knitwear, hosiery or underwear. In the past, the customers could purchase well- made cashmere cardigan or plain t-shirt. Nowadays, according to columnist, the clothes are badly cut, and the sizing is unconventional. The customers have a great choice among other high street retailers where can purchase similar product at lower prices (Espiner& Atkinson 2016). In 2008, the enterprise invested £31 million into the advertisement which positively affected sales and profit topped £1 billion. Nevertheless, since then sales have been repeatedly dropping. Despite the involvement of famous persons such as Katie Piper or Dame Helen Mirren in the advertising campaign, M&S was not capable of increasing its womenswear sales. For five years in a row, the sales related to clothing have been continually dropping, whereas the food products have been recording upward trend.
Summary of Chapters
Chapter 1: Introduction: Provides an overview of the challenging retail environment in Britain following the financial crisis and the subsequent changes in consumer shopping patterns.
Chapter 2: Case brief: Outlines the historical background of Marks and Spencer, its current business structure, and a summary of financial performance and key events affecting its market position.
Chapter 3: Problem statement and analysis: Defines the core issue of declining clothing sales, explains the chosen qualitative case study methodology, and introduces the analytical frameworks used.
Chapter 4: Analysis and Findings: Evaluates M&S’s current position using SWOT, Porter’s Five Forces, PESTEL, and financial ratio analysis to identify strengths, weaknesses, and market threats.
Chapter 5: Proposed solutions to the problem: Discusses the findings and offers strategic recommendations, including focusing on core quality basics, potential mergers, and addressing stakeholder impacts.
Chapter 6: Application to another case: Applies the findings to the competitor Next plc, testing the feasibility of the recommended strategies within a different organizational context.
Keywords
Marks and Spencer, clothing sales, financial performance, strategic management, SWOT analysis, PESTEL, Porter's Five Forces, retail industry, consumer behavior, online competition, e-commerce, competitive advantage, resource-based view, financial ratios, UK retail.
Frequently Asked Questions
What is the core focus of this case study?
The study primarily focuses on investigating the reasons behind the persistent decline in clothing sales at Marks and Spencer and identifying strategies to reverse this trend.
Which key factors have contributed to the decline in M&S clothing sales?
Key factors include intensified competition from online retailers and high-street budget chains, a late entry into the digital retail space, and a shift in consumer preference toward lower-priced alternatives.
What is the primary objective or research question of the work?
The main objective is to analyze why M&S’s performance has faltered in the fashion sector and to determine what strategic adjustments are required to improve its current market position.
What scientific methods were employed to analyze the company?
The research uses a qualitative case study approach, utilizing secondary data and applying strategic management frameworks such as SWOT, PESTLE, Porter’s Five Forces, and Financial Ratio Analysis.
What is covered in the main section of the report?
The main section evaluates M&S’s internal and external environments, conducts a rigorous financial ratio analysis, and assesses the company's competitive standing against industry rivals.
Which keywords best characterize this work?
The work is characterized by terms such as Marks and Spencer, retail strategy, competitive advantage, financial performance, consumer behavior, and e-commerce.
How did M&S perform in its food sector compared to clothing?
The analysis indicates that M&S performs strongly in the food market, occupying a "Blue Ocean" position due to high quality, while its clothing sector struggles in a highly competitive "Red Ocean."
Is the strategy of "Focus Differentiation" applicable to M&S?
The report finds that while focus differentiation works well for the M&S food business, it is currently ineffective for the clothing division due to the presence of numerous competitors offering similar quality at lower prices.
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- Katarzyna Szydlowska (Autor:in), 2017, The future business strategy of Marks and Spencer, München, GRIN Verlag, https://www.grin.com/document/512516
