Topic: PESTLE Analysis (M&M)

Submitted By: Ahmed Raza

Roll No: 11239

Submitted To: Sir, Waqas Chaudhry

Semester: MBA Executive 4 th

Subject: Entrepreneurship

Date: 19-April-2020

Riphah International University

Faisalabad Campus
Q Marks and Spencer Group plc. Is a major British multinational retailer
with
headquarters in Westminster, London that specializes in selling clothing,
home products and food products. If they want to open their store in Pakistan,
what would you advise, produce a PESTEL analysis and guide them accordingly.

Introduction:

Marks and Spencer (M&S) is a renowned British retailer that deals with food,
clothing, and various home products. Founded in 1884, the more than a hundred-
year-old chain has long been a household name in the United Kingdom (and
elsewhere!)

HOW TO CONDUCT A PESTLE ANALYSIS

Following is a PESTLE analysis if M & M intends to launch its franchise in Pakistan. It

POLICTICAL FACTORS:
Political factors include following point for clear consideration.

a) Government Policy
b) Tax Law & Tariff
c) Stability of Government
d) Entry Mode of Regulation

Here are two Political factors affecting M&S:

Free trade

One of the most positive aspects of today politics of Pakistan is the free trade that has
been established between multitudes of countries. Marks and Spencer, which chiefly
operates in the United Kingdom, but also has locations abroad, benefits greatly from
this. Free trade allows Marks and Spencer to import foreign products for sale in their
stores at cheaper prices than otherwise, while maintaining a healthy profit margin.
While free trade has been around for quite some time, especially for European brands,
the United Kingdom’s decision to leave the European Union might affect this.

Brexit

Dubbed “Brexit”, the United Kingdom’s decision to leave the European Union is a
Political factor that might hugely impact Marks and Spencer’s operations. It’s unclear
where the United Kingdom will stand following Brexit, especially in terms of trade
regulations and tariffs, but many of the possible outcomes are less than ideal for UK
retailers. For example, if the United Kingdom were to leave the European Union in a
so-called “hard Brexit”, this might result in the loss of numerous free trade policies
with European suppliers, resulting in a higher product cost for end consumers.

ECONOMICAL FACTORS:
Economical factors include following point for clear consideration.

a) The Inflation Rate

Here is an Economic factor affecting M&S:

Discount competitors of Marks and Spencer

Price has always been a big factor in the retail industry, but the last few decades have
seen numerous budget retailers pop up in the United Kingdom. From budget clothing
stores to budget supermarkets, these new competitors are stealing away market share
from more premium brands (like Marks and Spencer), by encouraging customers to
enjoy similar products at much lower prices. In fact, Marks and Spencer’s 1999
decision to switch to using foreign suppliers was probably fuelled by these discount
competitors. 

SOCIAL FACTORS:
a) The Cultural Implications
b) The Gender and Connected Demographics
 c) The Social Life Style
d) The Domestic Structure
e) Educational Levels
f) Mode of Distribution of Wealth

Here is a Sociocultural factor affecting M&S:

Non-trendy

Marks and Spencer is no new name in the United Kingdom. Having been around since
the 1800s, the retail chain is now a household name among the youth, the elderly, and
everyone in between. However, this long-standing reputation has had an unfortunate
consequence: consumers are beginning to associate Marks and Spencer with the
past. As new and trendy retail chains pop up every year, Marks and Spencer’s
reputation may become a less trendy brand for consumers — especially younger
consumers.

Marks and Spencer in the ready meals sector

Within the last ten years, society has seen a wide-scale increase in the consumption of
ready meals. This may be because ready meals are more palatable than ever thanks to
advances in food technology. In any case, this huge new industry is a massive
opportunity for any food store. Marks and Spencer has long sought to dominate this
industry; while it’s unclear just how large a market share the name captures, it’s
reportedly one of the UK’s top ten ready meal distributors.

TECHNOLOGICAL FACTORS:
a) New Discoveries
b) Rate of Technological Obsolesce
c) Rate of Technological Advances
d) Innovative Technological Platforms

Here are two Technological factors affecting M&S:

Self-checkout

One of the biggest trends in modern-day retail, especially in food stores, is self-
checkout. This industry-wide trend is designed to help retailers save money that might
otherwise be spent on cashiers, while simultaneously offering customers a checkout
experience that is usually faster. Like most other UK food stores, Marks and Spencer
has already implemented a number of self-service checkout systems across its stores.
Online shopping

Another big trend in retail is that of online shopping. As you’d expect, Marks and
Spencer has already established a strong eCommerce presence, offering almost all of
their goods from clothing to foodstuffs to home products. M&S takes the traditional
approach to online shopping with their clothing items, delivering goods directly to
buyers. However, it appears that Marks and Spencer does not deliver food items,
unlike some other major food stores in the UK.

LEGAL FACTORS:
a) Employment Rules & Regulations
b) Product Regulations
c) Competitive Regulations
d) Patent Infringements
e) Health and Safety Measurements

We couldn’t find any Legal factors affecting M&S.

ENVIRONMENT FACTOR:
a) Location of Franchise
b) The Climate and Weather Changes
c) Waste Controlling Laws
d) Energy Consumption Regulations
e) People’s Attitude toward Environment-Be Green

Here are two Environmental factors affecting M&S:

Sustainable produce

Wanting to maintain their image as a luxury brand, Marks and Spencer has pledged to
become a more sustainable retailer on numerous occasions. This relates to a multitude
of Environmental factors that are present in the acquisition of food, clothing, and
home products (such as carbon emissions from manufacturing processes and
deforestation for farming land). Marks and Spencer’s move to become a more
sustainable retailer is nothing too unique, however, as many other UK retailers have
pledged to do the same.

Fair trade

Fair trade, which is an initiative created to better compensate foreign producers, also
has an impact on the environment. This is because smaller producers, who receive the
most benefits from fair trade, generally follow more sustainable business practices
than larger competitors. As a result, Marks and Spencer’s decision to sell fair trade
products also has an Environmental benefit.

Final Thoughts for Marks and Spencer

With over a hundred years on the UK market, and now operating across all corners of
the globe, Marks and Spencer is no small fish in the world of retail. While the
company has faced serious financial issues over recent years that can certainly
change.

In the current macro environment, issues for Marks and Spencer include Brexit,
numerous discount competitors, and a name that’s increasingly associated with a
sense of antiquity. On the flipside, Marks and Spencer certainly has some upside in
the current business arena, what with extensive free trade policies, a trend towards
ready meals, numerous technological trends, and a push for eco-friendly products and
brands.

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