GUIDE M&S

What I need to write:

 The theory of PESTEL and Porter’s 5 Forces. Why are important for
marketers and M&S analysing it;
 How PESTEL (analysing each element) influence de retail industry (just
closeted department) and everything reported to M&S. The same for Porter’s
5 Forces;
 What M&S have done wrong and what it can improve such as business.

Political/legal factors for retailers

• Competition/ monopolies (www.competition-commission.org.uk)
• Tax policies
(http://www.brc.org.uk/policymaster04.asp?id=50&sPolicy=TAXATION)
• Planning guidelines
• BIDS
(http://www.brc.org.uk/policymaster04.asp?id=602&sPolicy=BIDS)
• Health and safety (http://www.hse.gov.uk/retail/about.htm)
• Minimum wage
• Bargain offer legislation
• Environmental laws (www.businesslink.gov.uk.)
• Brexit

IMPORTANT ECONOMIC VARIABLES

 GNP
 Consumer Spending
 Government Spending
 Investment
 Interest Rates
 Money Supply
  Inflation
 Exchange Rates
 Employment/Unemployment Rates
 State of the Economic Cycle

Main Demographic Changes

• Smaller households
• Two income households
• Movements to the suburbs
• Age mix changes
• An older population
• Increase in mobility
• Regional growth
• Increase in the number of male shoppers
• Lifestyles (inc. changing work patterns, holiday/leisure, income distribution,
exercise/sport, technology

Trends in Social Values

• Attitudes (consumerism, conscience)
• An increase in informality
• Higher aspirations
• A move towards individualism
• More exclusivity
• Value concept based on quality rather than quantity
• Focus on mental and physical well-being
• Decline of status
• A wider range of interests
• More concern with conservation and environment
(Source: Taylor Nelson)

Technological factors
 • Investment in technology / new technology
• Information systems
• Stock control

The Porters’ 5 Forces

Competitive forces

Competitive forces
Power of suppliers
• Brand strength
• Product differentiation (can it be substituted)
• Technical expertise
• Category leadership
• High switching costs (producers switching suppliers)
• Alternative channels available (forward integration?)

Competitive forces
Buying power: retailers
• Market share
 • Choice of supplier (inc. extent to which buyers want differentiated products)
• Low switching costs
• Own branding
• Profit levels
• Access to information
• International sourcing
• Alternative channels (backwards integration

Competitive forces
Buying power: customers
• Disposable income / availability of credit
• Available choice
• Mobility
• Switching costs
• Price sensitivity
• Loyalty / inertia

Competitive forces
Threat of substitutes
• New retail formats (e-retail, store formats)
• New products (form/fashion)
• Product obsolescence
• Product substitution
• Direct marketing
• Non-retail spending
• Impact on profits of substitutes
• Impact of the comparative price and quality of substitutes
Competitive forces
Threat of new entrants
• Market share/economies of scale existing
• Cost (of increasing market share)
• Possible retaliation (cost, reputation)
• Barriers to entry
• Government regulations
• Customers’ switching costs

Competitive forces
Rivalry between existing competitors
• Degree of concentration in the industry, competitors - number & relative size
• Competition for market share when industry growth slow
• Product differentiation (extent, nature)
• High fixed costs, perishable products?
• Demand capacity & characteristics
• Exit costs/barriers (low returns but companies stay)