Marks & Spencer Group Plc (MAKSY) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Marks & Spencer Group Plc (United States)
Based on various researches at Oak Spring University , Marks & Spencer Group Plc is operating in a macro-environment that has been destablized by – geopolitical disruptions, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy,
supply chains are disrupted by pandemic , there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Marks & Spencer Group Plc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Marks & Spencer Group Plc can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Marks & Spencer Group Plc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Marks & Spencer Group Plc operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Marks & Spencer Group Plc can be done for the following purposes –
1. Strategic planning of Marks & Spencer Group Plc
2. Improving business portfolio management of Marks & Spencer Group Plc
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Marks & Spencer Group Plc
Strengths of Marks & Spencer Group Plc | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Marks & Spencer Group Plc are -
Digital Transformation in industry
- digital transformation varies from industry to industry. For Marks & Spencer Group Plc digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Marks & Spencer Group Plc has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Highly skilled collaborators
– Marks & Spencer Group Plc has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of Marks & Spencer Group Plc have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Marks & Spencer Group Plc has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Marks & Spencer Group Plc has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Marks & Spencer Group Plc staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Marks & Spencer Group Plc is present in almost all the verticals within the industry. This has provided Marks & Spencer Group Plc a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Training and development
– Marks & Spencer Group Plc has one of the best training and development program in industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Low bargaining power of suppliers
– Suppliers of Marks & Spencer Group Plc in the sector have low bargaining power. Marks & Spencer Group Plc has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Marks & Spencer Group Plc to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Marks & Spencer Group Plc has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Marks & Spencer Group Plc has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to lead change in
– Marks & Spencer Group Plc is one of the leading players in the industry in United States. Over the years it has not only transformed the business landscape in the industry in United States but also across the existing markets. The ability to lead change has enabled Marks & Spencer Group Plc in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Marks & Spencer Group Plc are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Strong track record of project management in the industry
– Marks & Spencer Group Plc is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Marks & Spencer Group Plc is one of the most innovative firm in sector.
Weaknesses of Marks & Spencer Group Plc | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Marks & Spencer Group Plc are -
Capital Spending Reduction
– Even during the low interest decade, Marks & Spencer Group Plc has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of Marks & Spencer Group Plc, it seems that company is thinking out the frontier risks that can impact industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Marks & Spencer Group Plc supply chain. Even after few cautionary changes, Marks & Spencer Group Plc is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Marks & Spencer Group Plc vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Marks & Spencer Group Plc is dominated by functional specialists. It is not different from other players in the industry, but Marks & Spencer Group Plc needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Marks & Spencer Group Plc to focus more on services in the industry rather than just following the product oriented approach.
High bargaining power of channel partners in industry
– because of the regulatory requirements in United States, Marks & Spencer Group Plc is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Ability to respond to the competition
– As the decision making is very deliberative at Marks & Spencer Group Plc, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. Marks & Spencer Group Plc has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the industry, Marks & Spencer Group Plc needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on Marks & Spencer Group Plc ‘s star products
– The top 2 products and services of Marks & Spencer Group Plc still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Marks & Spencer Group Plc has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of United States, Marks & Spencer Group Plc needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Marks & Spencer Group Plc has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow decision making process
– As mentioned earlier in the report, Marks & Spencer Group Plc has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Marks & Spencer Group Plc even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Marks & Spencer Group Plc Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Marks & Spencer Group Plc are -
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Marks & Spencer Group Plc in the industry. Now Marks & Spencer Group Plc can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Marks & Spencer Group Plc can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Marks & Spencer Group Plc can develop new processes and procedures in industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Creating value in data economy
– The success of analytics program of Marks & Spencer Group Plc has opened avenues for new revenue streams for the organization in industry. This can help Marks & Spencer Group Plc to build a more holistic ecosystem for Marks & Spencer Group Plc products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. Marks & Spencer Group Plc can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Marks & Spencer Group Plc to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Marks & Spencer Group Plc to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Marks & Spencer Group Plc has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Marks & Spencer Group Plc can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Marks & Spencer Group Plc to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Marks & Spencer Group Plc is facing challenges because of the dominance of functional experts in the organization. Marks & Spencer Group Plc can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Marks & Spencer Group Plc to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Leveraging digital technologies
– Marks & Spencer Group Plc can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Better consumer reach
– The expansion of the 5G network will help Marks & Spencer Group Plc to increase its market reach. Marks & Spencer Group Plc will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Marks & Spencer Group Plc can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Marks & Spencer Group Plc External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Marks & Spencer Group Plc are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Marks & Spencer Group Plc in industry. The industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Marks & Spencer Group Plc can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Marks & Spencer Group Plc prominent markets.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing wage structure of Marks & Spencer Group Plc
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Marks & Spencer Group Plc.
Technology acceleration in Forth Industrial Revolution
– Marks & Spencer Group Plc has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, Marks & Spencer Group Plc needs to keep up with the evolution of technology in the sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Shortening product life cycle
– it is one of the major threat that Marks & Spencer Group Plc is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Marks & Spencer Group Plc will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Marks & Spencer Group Plc business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– Marks & Spencer Group Plc high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Marks & Spencer Group Plc may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Marks & Spencer Group Plc can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Marks & Spencer Group Plc needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the industry regulations.
Weighted SWOT Analysis of Marks & Spencer Group Plc Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Marks & Spencer Group Plc needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Marks & Spencer Group Plc is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Marks & Spencer Group Plc is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Marks & Spencer Group Plc to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Marks & Spencer Group Plc needs to make to build a sustainable competitive advantage.