About the company
M&S is one of the leading retailers in the UK, tracing its history back to 1884 when Michael Marks opened a stall in Leeds market. Thomas Spencer joined him in 1894 and both created Marks and Spencer. M&S has 703 stores in the UK with over 76,000 employees and over 360 wholly-owned, partly-owned, or franchised stores in 42 territories around the globe, which accounts for 10% of the Groups revenue. M&S sells high quality, exceptional value clothes and food products as well as home products such as electronics, furniture. They also added homeware in 2000.
Primarily all of M&S goods were British made, however the retailer faced more challenging times, especially in the last decade and found it hard to compete with other supermarkets and retailers, this caused them to outsource to cheaper labour countries in Asia such as China and India.
Marks and Spencer is the largest UK clothing retailer with a market share of 11.7% selling high quality, good value clothes for everyone. It also has a market share of 27.1% for lingerie which makes them leaders in womenswear in UK. 51% of their revenue comes from groceries with market share of 3.9%, the remaining 49% of the revenue comes from clothing and homeware. M&S was the first retailer in the UK to produce a pre-tax profit of £1 billion.
M&S core values are: quality, value, service, innovation and trust. These values helped M&S to gain and maintain their leadership in the market, as shoppers are more conscientious nowadays and are looking for more than just good value.
Their mission statement is “to make aspirational quality accessible to all” (Marks & Spencer, 2011) was a key to increasing both market share and revenue.
Their main competitors are Next and Arcadia group in the clothing industry, John Lewis in homeware and Waitrose with Tesco in the food sector.

Corporate social responsibility * M&S launched Plan A in 2007, the main aim of which is to become the “world’s most sustainable retailer” (How we do business report, 2010, p. 5). They initially planned 100 commitments and further added another 80 in 2010. They include becoming carbon neutral and reducing waste. * Introduced 5p charge for a plastic bag, it reduced usage of plastic bags by 80% and raised £500,000 for charity. * Pay fair wages; provide training and education as well as basic health care in Sri Lanka, Bangladesh and India. * Ensure that their key materials are fully traceable and do not contribute to deforestation. * M&S is the largest UK retailer using fair-trade cotton available at 40 stores as its stock is limited. * Reduced salt and stopped using hydrogenated fats and removed artificial flavourings and colours from children meals and all soft drinks.

PEST analysis Political factors influencing M&S * Recent VAT increase from 17.5% to 20% in 2011 had a direct effect on retail prices of all items. This caused a drop in sales as consumers have less money. * M&S shops that are larger than 280sq/m are affected by Sunday regulations which have restrictions on their opening hours as they can only be open for six continuous hours between 10.00 and 18.00. * Since most of the M&S goods are imported from outside the EU it has to pay duty and import VAT. Whereas goods imported from EU have minimal control and generally do not pay duty or VAT. * All M&S shops that sell more than 32kg of batteries per year must have a recycling bin free of charge which enables customers to drop off their used batteries. * The waste regulation 2011 introduced a new system as to how a business has to deal with their waste, although this should not have a major impact on M&S as they are already recycling and reusing most of their waste.
Economical factors * The price of cotton has increased, hitting an 18 year high due to a shortage. This increased the price of clothing and therefore some consumers are forced to shop at lower priced retailers such as Primark or H&M. * The recent recession affected M&S, causing them to shut 27 stores in 2009. This was due to a drop in sales as shoppers were forced to switch to discount brands such as Tesco, Asda, Aldi and Lidl. * Low national interest rate (0.5%) has weakened the pound; this influences the cost of international trade making it more expensive. Moreover China increased minimum wage to 21% increasing M&S production costs. However low interest rate makes borrowing more attractive, hence M&S are able to invest more in new technology and factories.
Social factors * Increased ageing demographics in the UK could negatively affect sales in the future as their market set up is generally targeted to younger consumers. * ‘Fast fashion’ impression encourages consumers to keep up with the latest trend and makes them shop more often, thus increasing retailer’s revenue. * Consumers are becoming more alert to health issues which change their attitudes towards foods. M&S are prominent in the health food market and 38% of their range is healthier food.

* As a result of changes in consumers taste, M&S has to stay on top of the game by keeping both fashionable and reasonably priced products on their shelves.
Technological factors * Advances in technology influence the type and quality of goods to be produced and type of equipment to be used in their factories. This can reduce their manufacturing costs and increase sales as quality improves. * E-commerce has been getting more popular in recent years and to stay on the top of the game M&S launched their new website in 2007, this increased 78% of their online sales. * Use of RFID is one of the key success factors of M&S as they are the largest retailer in the world to use this tagging system. It proves that if items are on the shelves, people will buy them.

Conclusion
Selling own brand high quality products is the most important factor of M&S. Due to working closely with suppliers they are able to reduce costs which then benefits the consumer. Since introducing Plan A, M&S has moved towards being the world’s most sustainable retailer and put themselves ahead of its major competitors; it has also generated £70m benefit for M&S. As UK demographics are aging, there is more scope for targeting older generations into the future and their large investment in IT and distribution will reduce their costs from supply chain and increase profits. These attributes will help to ensure they remain the market leaders for the foreseeable future.

References

* Business link. Seasonal and Sunday trading [online]. Available from http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1073792285&type=RESOURCES [accessed 15 December 2011]

* Poulter, S. (2009). Not even M&S is safe as recession forces closure of 27 stores [online]. Dailymail. Available from: http://www.dailymail.co.uk/news/article-1107564/Not-M-S-safe-recession-forces-closure-27-stores.html [accessed 15 December 2011]

* Business in Asia. China Raises Minimum Wage Up To 21% [online]. Available from: http://www.business-in-asia.com/china/workers_wage_ch2011.html [accessed 17 December 2011]

* Fairtrade Foundation, (2010). Marks & Spencer's programme to become the world's most sustainable retailer [online]. Available from: http://www.fairtrade.org.uk/press_office/press_releases_and_statements/march_2010/marks_spencers_programme_to_become_the_worlds_most_sustainable_retailer.aspx [accessed 16 December 2011]

* Jeavans, C. (2004). Welcome to the ageing future [online]. BBC News. Available from: http://news.bbc.co.uk/1/hi/uk/4012797.stm [accessed 20 December 2011]

* Business Link. Benefits of improving your environmental performance [online]. Available from: http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1079416877&type=RESOURCES [accessed 20 December 2011]

* BBC News (2010). Battery recycling rules in force for stores [online]. Available from: http://news.bbc.co.uk/1/hi/8490175.stm [accessed 19 December 2011]

* Computer weekly. Marks & Spencer extends RFID technology to 120 stores [online]. Available from: http://www.computerweekly.com/news/2240080090/Marks-Spencer-extends-RFID-technology-to-120-stores [accessed 21 December 2011]

* Marks and Spencer (2011). How we do business [online]. Available from: http://corporate.marksandspencer.com/documents/publications/2011/how_we-do_business_report_2011 [accessed 21 December 2011]

* Marks and Spencer (2010). Our plan A commitments [online]. Available from: http://corporate.marksandspencer.com/documents/publications/2010/planacommitments2010 [accessed 21 December 2011]