This assessment will cover following questions:
- Evaluate the business environment of Marks & Spencer, both internal and external, in which information systems have to operate.
- Marks and Spencer are a luxury clothing brand. Determine how information technology can provide solutions to business problems and provide opportunities for organisations.
- Develop problem-solving skills in a business information and technology environment.
Information and technology plays a crucial role in making the organisation successful as with this all the resources are managed effectively as per the priorities of the organisation. For this the organisations need to procure various resources such as computer hardware and software, data centre facilities and various networking facilities (Stein and Barron, 2017). With the help of this, the functions in which analysis is required are performed effectively such as budgeting, change management, staffing, organising and controlling etc. The organisation which is taken into consideration in this report is Marks & Spencer, which is a multinational retailer having specialisation in selling high quality products and services. In this report the competitors analysis and the value chain analysis for the organisation is done as this helps the company in determining the level of changes and the innovation to be introduced to be competitive.
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Introduction of the organisation, their background and the products and services offered by them
Introduction of MARKS & SPENCER:
Marks & Spencer group Plc usually abbreviated as M&S. It is a British multinational company of retailing with headquarter in London. This company deals with high standard clothing, stylish household products and award winning eatable products. It was founded by Michael Marks and Thomas Spencer in 1884 & get listed on London Stock Exchange, they are currently having1463 stores over world. In 1998 they became the first ever retailer in UK to earn profit before tax of £1 billion. They renowned themselves as a company which sells only British made products, although eventually they faced an unforeseen sink by which company and its stakeholders got amazed. the CEO of M&S is Steve Rowe from April 2016 to present.
The company is working with 80,787 with revenue of £10.4 billion (Marks & Spencer revenue worldwide, 2010-2019) and operating income of £601.0 millions and net income of £37.3 millions. It carries its business over 157 countries of the world and established them as a UK market leader of men and women's wear. Mission of M&S is to deliver quality and innovative products to customer in long run and company carries it vision of working digitally in a sustainable, more simple and appropriate manner. The target customers of M&S are between the age group of 33 to 55 or the audience who are fond of wearing designer clothings, keen to use stylish home ware and standardised food items. The chief model of M&S is denim so they launched their high selling jeans with three three new shapes and this enlarged it's sale by 20%. Recently they introduced prawn sandwich made with Atlantic king prawns and with glossy Marie Rose sauce and promptly became prime selling product. The M&S is ceaselessly working to reinforce its brand so that it can uphold in the market for life long, for this they have reduced depleted its temporary promotions and lowered the prices of some product and retained the same quality which a customer requested for. Currently M&S hankered to re-establish itself as superior quality products with inexpensive rates and for this they are using mid term marketing plan of actions (Mark and Spencer, 2020 ).
It can be stated that company is growing year by year on its profitability. In 2010 M&S earned 9536.6 GBP and it grew year by year and was maximum in 2018 with decrement of 320.9 GBP in 2019. The company wants to regain its share in the market by application of marketing strategy like introduction of innovative and smart home items and high fashioned clothes.
On comparing with other UK based brand M&S is high on consumer attention and awareness, most of the consumer rated it as five star on the basis of quality as well as customer service. Before 2009 M&S ranked at 8th number for customer satisfaction as per Buzz score and after that it started declining because customers were not happy as old time. M&S shares 37.5% share as of 2018 (M&S MEDIA, 2020)(Annual report, 2019).
Analysis of the Porter's Five forces
Porter's five force model is a framework of industry analysis which consist of five models which influences an industry intrinsically and extrinsically. Five forces given by MICHAEL H. PORTER are as under:-
- Rivalry among existing competitors:-This force is used in assessment of circulating magnitude of market contention , it can be measured by the present amount of competitors existing in the industry, variations in production done by the companies in the industry and the capableness of each rival. In the context of M&S it can be said that rivalry is broad since it deals in clothing as well as food as so many substitutes are available in the market and they have to compete with supermarkets like Sainsbury's, Tesco and textile retailer like GAP, Zara, Next etc. At the same time M&S is underrating prices for clothings so that every class of people can afford their cloths and this may result in shrinkage of brand image in the market where distinctiveness is more significant than monetary value (Mudambi and Puck, 2016).
- Bargaining power of suppliers:-This force audits about the level of control is hold by its suppliers and the ease of them to belt up the disbursement of inputs. It means the amount of power possessed by supplier of an industry to deviate its prices. It is subjected to number of suppliers and uniqueness of the input product of supplier. It is higher in case when number of suppliers are few so the reliance on those suppliers increases hence supplier get more ability to deviate its prices. In the scenario of M&S this force is less fermented, as M&S purchases goods in bulk from if suppliers are at price making stage they can acquire raw material from another supplier. On the other hand M&S are offered to take raw material from many international suppliers, since they manufacture their inherent brand merchandise so they are not so dependent on them and this gives them authority of price maker firm. M&S is a private organisation so shifting cost to another supplier will not lead them to occur any additional expenditure and they rely on labelling so it gives potential above its suppliers (Lloyd, 2017).
- Bargaining power of buyer:- This represents the number of purchaser, their ordered size, competency to transition of brand, transition cost. This force depicts buyer's sensitivity on disparity of prices and choice of a product. In the reference of M&S the bargaining power of buyer is very low since switching cost for customer is very low since availability of other alternative brands are very high but still M&S holds price sensation. M&S is trying to built customer faithfulness so that they can grab more customer and sustain in long run market. M&S holds high percentage in retail market so this makes it irrelevant that what bargaining power a customer is holding. M&S is continuously trying to serve superior quality products to their customer so that they can get maximum capture over the market share and customer may get fuller satisfaction over quality and prices offered by them. For getting more attraction of customer they are working on customer relations and they re working more attentively and protecting shielding their roots.
- Threat of substitutes: This aspect of porter focuses on the existing number of substitute prevailing in the market for that industry which helps in recognising the intensity of product differentiation. For determination of substitute one should reckon products that are branded differently and for similar products. The more number of substitute the more will be the threat and persisting competition. In the plot of M&S the threat of substitute in the company is quite higher as compared to other forces as there are so many retailers in the market who are selling products with cheaper rates than M&S. It is very easy to manufacture latest fashioned clothes so lower brands can manufacture that fashioned clothes with economical cost and this is creating difficulties for M&S and for food business M&S is having large competitors like Sainsbury, Tesco etc which are having homogeneous variants of products and they are already well established stores in UK. So what M&S can do to stay in the market is they can standardise their product so that their product can be differentiated among other products available in the marker and M&S is doing the same, they are introducing unique food items and new denim fits in clothings so that their customer can identify M&S for its USP i.e. providing quality products and standardisation for every class of people (Julita and Arianty, 2017).
- Threat of new entrants :-A fresh launch of new product gives new capacities to the economy market, which gives motive to new firm and to share profit in the market. This can be defined by the degree of attachment a customer is having towards a brand and the interventions made by government in that industry and all the ways to get entry in the market. In the frame of M&S since the entry cost is high it is not easy to enter in the market and capture market and impact minds of customer. M&S belongs to retail industry and to enter a retail industry one need to have large capital which is not unchallenging. M&S is having trump card of product quality and product differentiation and this make them a market leader and ability to sustain in the market. Although many potential competitors of M&S are proposing products with cheaper rates and some customers are tempted towards them but the customer who are loyal towards brand are still adhered to M&S and by taking advantage of this only M&S is making profits and running globally.
Analysis of the value chain analysis of the organisation
Porter's value chain helps the businesses to analyse the activities which they undertake so that the improvement can be made in them. This will help them in introducing the changes in the process so that the value can be increased which helps the organisations in increasing the margins in sales. For Marks & Spencer, it is important to identify the activity which are crucial for them as all cannot have equal important. With the help of this value chain analysis the Marks & Spencer can analyse all the primary and support activities so that they can improve the value for the customers. Various primary activities which are undertaken by the Marks & Spencer includes the inbound logistics, operations, outbound logistics, marketing and sales, services whereas the secondary activities which adds value to the products and services includes the firm infrastructure, human resource management, technology development and procurement (Jäckering, Fischer and Kehlenbeck, 2019).
The primary activities of Marks & Spencer includes various activities that helps them in directly producing and selling the goods and services to the customers. Analysis of such activities are given below:
- Inbound Logistics: This activity is related with developing strong relations with the suppliers so that the raw material can be procured on time. The better relations with the suppliers facilitates the company in getting the support so that the process does not get delays. For Marks & Spencer, it is important to analyse the inbound logistics as this helps them in identifying the challenges that they can face in the transformation process of the raw material to the finished goods. The activities which are part of this are procuring of the material, storing of the inputs etc. on the basis of this analysis the managers of Marks & Spencer can ensure the delivery of the material on the right time so that the production process does not get affected.
- Operations: In this the raw materials are transformed into finished goods and this activity initiates when the raw material is received by the company. The activities of Marks & Spencer which are included in this are machining, assembling of the products, packaging of the products, testing etc. Analysis of this activity will help them in improving the productivity and maximising the efficiency so that they can get the competitive advantage. With the improved productivity consistent growth can be achieved by them (Falkheimer and Heide, 2018).
- Outbound logistics: The outbound logistics are the activities with the help of which the product are made available to the customers. The activities of Marks & Spencer which fall under this are handling of the material, scheduling, processing of the order, transportation etc. With the help of analysis of this activity the Marks & Spencer can determine the sources for competitive advantages. In this the cost and time is managed as the products are put into the delivery process and analysis of this will minimise the possibility of getting delays for the delivery.
In addition to the primary activity there are various supportive activities which are performed by the organisation so that they can coordinate and facilitate the primary activities. The Marks & Spencer follows various support activities which helps them in increasing the value to the customers. The supporting activities are:
- Technological development: The technological development is important for the organisation as with the help of this they can take the competitive advantages. For Marks & Spencer this activity is important as it adds various values to the activity of production, distribution, marketing etc. With the help of this support activity they can differentiate between the processes in the technology and in the products. The way it supports them includes the automation in the processes, research on the designs of the products etc. The activities of the research and development falls in this category with the help of which the values can be improved (Barca, 2017).
- Procurement: The procurement activity of the value chain depicts that the company needs to procure various raw material, equipments, funds etc. that helps in developing the finished goods. Marks & Spencer need to consider the activities as with this the cost can be managed and the inbound and outbound logistics of the organisation can be managed effectively. Even the operational efficiency can be improved with this because the products can be manufactured on time only if there is efficiency in the logistics.
Summarise and reflect how IT can help business to take competitive advantage in the market.
It is the modern era where every single work is being conducted with the help of information technologies. The main benefit of including IT sector in it is that it simply allows to perform better and even gives idea to take corrective measures. It can be one of the way which can gives the better platform to any of the organisation to perform their task in a systematic manner. In context of Mark & Spencer, they are one of the organisation who is needed to perform better in each and every situation because they are getting direct competition from organisation like TESCO Plc, ASDA and many more. If company like M&S wants to improve their result then firstly they are needed to focus that how they can introduce of the latest trending technologies. For example: if management bring out the way through which online payment can be accepted then it will become easy for the customers to pay money through online mode. Firstly it will save the time and even there will not be any of the requirement to carry the cash in pocket. The second example which can be included is that company mus focus on online stores rather then physical stores because it will allow the customers to connect with organisation at large. It will give the option to do shopping even sitting in home which gives more comfort at the time of shopping (Baller, Dutta and Lanvin, 2016).
Although, this are some of the way which can be effective for the company like M&S but addition they had the option to introduce Robots within the store who can guide the customers regarding the products with their benefits. It will bring on the new concept through which customers can be easily attracted towards the store. For the purpose of giving tough competition to rivalry firm, the management has the option to adopt the technologies like automatic check which is being used by the organisation like Amazon. This is one of the technologies where customers will not have to wait in queue as at the time of checkout automatic payment will be done which will not consume unnecessary time of customers. Also, there is the option to use Smart mirrors where video will be prepared and it will allow to see that how any of the cloths will look on any of the person whenever they wear it. This will allow the customers to not use any of the changing room. This are some of the technologies which can be really beneficially for the business organisation like Mark & Spenser in that particular situation where competition is quite very tough. It is required to understand that this are some of the latest technologies which will allow them to compete within the market.
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After having the detail analysis on the file, it can be concluded that in any of the situation company can only perform better if they are able to introduce latest technologies. This technologies will allow the company to to attract new customers which will directly allow to accomplish the goals of an organisation. External and internal factor is very helpful for the company like M&S because it will allow them to understand that what are their positive through which they can compete with rivalries. Secondly, they will be able to determine that what are the external factor which can create issues in accomplishing the goals of an organisation.
Books and Journals
Baller, S., Dutta, S. and Lanvin, B., 2016. Global information technology report 2016. Geneva: Ouranos.
Barca, M., 2017. Economic foundations of strategic management. Routledge.
Falkheimer, J. and Heide, M., 2018. Strategic Communication: an introduction. Routledge.
Jäckering, L., Fischer, S. and Kehlenbeck, K., 2019. A value chain analysis of baobab (Adansonia digitata L.) products in Eastern and Coastal Kenya. Journal of Agriculture and Rural Development in the Tropics and Subtropics (JARTS). 120(1). pp.91-104.
Julita, U.M.S.U. and Arianty, N., 2017. Porter’s Five Force Model For Superiority Of Micro Small And Medium Enterprises (Sme’s) In Face The Asean Economic Communiy (Mea). KUMPULAN JURNAL DOSEN UNIVERSITAS MUHAMMADIYAH SUMATERA UTARA. 4(2).