Porter Five Forces Analysis of Mark and Spencer (M&S)

&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad1" id&equals;"quads-ad1" style&equals;"float&colon;left&semi;margin&colon;0px 0px 0px 0&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;<p align&equals;"justify">Porter’s analysis works on tabulating the five forces and analyzing the impact on M&amp&semi;S&period;<&sol;p>&NewLine;<h2>Threat of New Entrants &lpar;Barriers to Entry&rpar;<&sol;h2>&NewLine;<p align&equals;"justify">Retailing market has high entry barrier as the capital investments are huge to enter the market and to achieve cost efficiencies and economies of scale that retailers like M&amp&semi;S has would be very difficult to achieve for a new player&period; The case of peers is different&comma; however M&amp&semi;S popularity and focus on quality ware would make competition fight hard for breaking M&amp&semi;S loyal customers&period; Also matching the channel efficiency by M&amp&semi;S would be difficult for new entrants&period; Keeping peers at bay would be difficult as although M&amp&semi;S has quality products advantage&comma; competitors are offering discounts and price offering that woo away many of the potential customers&period;<&sol;p>&NewLine;<h2>Threat of Substitute Products<&sol;h2>&NewLine;<p align&equals;"justify">M&amp&semi;S requires continuous innovation to keep brand position strong and to remain distinctive to meet the demands of its customer base&period; The clothing business is beset with substitutes – it is very easy to copy designs and get similar design at much reduced cost elsewhere&period; The food business is already under attack by the big stores – Tesco&comma; Sainsbury and ASDA which have a similar range of products&period; M&amp&semi;S private label product line still offers some distinction&period; Going forward M&amp&semi;S focus on its food line is expected to offer clear advantage over the competitors &lpar;ivory research&comma; 2016&rpar;&period;<&sol;p>&NewLine;<h2>Bargaining Power of Buyers<&sol;h2>&NewLine;<p align&equals;"justify">Customer’s bargaining power is significant&period; Customer’s price sensitivity can force the hand of the retailer&period; Customer has very low switching costs and has many alternatives available&period; M&amp&semi;S needs to build up its loyalty and offer its customers unmatched value and conveniences that are difficult to match&period; M&amp&semi;S is also vulnerable to negative shifts in customer perception in UK&period; Any move towards disloyalty towards British products is likely to have significant effects on overall company outlook&period; M&amp&semi;S competitors are also focusing on customer relationships so M&amp&semi;S needs to be vigilant and protect its turf&period; According to Euromonitor M&amp&semi;S had 40&percnt; value share in departmental stores&period; High share in this segment makes M&amp&semi;S vulnerable as well as in 2016 stock surplus in apparel and footwear because of unseasonable conditions led to value decline&period;<&sol;p>&NewLine;<h2>Bargaining Power of Suppliers<&sol;h2>&NewLine;<p align&equals;"justify">In late twentieth century M&amp&semi;S suppliers were primarily British&comma; but competitive pressures forced M&amp&semi;S to outsource and reduce its costs weakening the power of suppliers&period; Focus on private label also gives M&amp&semi;S power over external suppliers&period; Further switching costs for M&amp&semi;S suppliers&comma; especially since M&amp&semi;S depends on outsourced suppliers&comma; are quite low&period; <&sol;p>&NewLine;<h2>Intensity of Competitive Rivalry<&sol;h2>&NewLine;<p align&equals;"justify">Competition is strong for the retail sector from other supermarket chains for its home wear&comma; clothing and fashion products as well as for food products&period; The competition is further growing in online segment where users are choosing click and collect to have a pseudo in-store shopping experience at reduced costs than in-store shopping&period; M&amp&semi;S has been able to build up its online sales with percentage of online in total retail sales growing steadily YoY&period; Loyalty membership cards can help stem this trend but the same strategy can also be followed by other supermarket chains&period; As per Euromonitor M&amp&semi;S is currently benefitting from highly personalized Sparks loyalty program&period; The focus has shifted to older female customers and everyday low pricing than discounting&period; The low cost strategy has resulted in decline in sales of clothing business&period; Also M&amp&semi;S has announced plans to open new &OpenCurlyDoubleQuote;simply food” outlets&comma; which have upmarket positioning&period; <&sol;p>&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad2" id&equals;"quads-ad2" style&equals;"float&colon;none&semi;margin&colon;0px 0 0px 0&semi;text-align&colon;center&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad3" id&equals;"quads-ad3" style&equals;"float&colon;none&semi;margin&colon;0px&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;&NewLine;