M&S Case Study Essay

Introduction As stated by Andrew (2001), the Porter’s generic strategies framework assist the business to evaluate a competitive atmosphere. The five Porters force mainly deal with entry threat, power of buyers and suppliers, substitute’s threat, and competitive rivalry. The threat of entry According to Porter (1980), entry freedom into a new market is normally considered an indication of the extent of company’s competitiveness. Porter further states that the larger the barriers to entry, the less the threat of new companies moving into the market. Marks and Spencer individually can keep prices low strategically to minimize possible entrants into the market. This is called entry deterring pricing that establishes a barrier to other competitors. As stated by Anthony (1999), these barriers are unique characteristics of an industry that defines it. The barriers decrease the pace at which new firms enter the industry thus maintaining low profits levels for other companies. The power of buyers For Marks and Spencer to root to its customers, it has to emphasis on grassroots acquisition of customers so as to offer an enlarged bargaining power to them. Consumers can improve their bargaining power suppose the services or products of an organization are not affordable or are of low quality. The consumers an also have strong bargaining power suppose they purchase standard, undifferentiated goods from suppliers. The buyers will be weak if producers can over own retailing if the producers are not standardized and the buyer cannot switch to another product (Johnson and Scholes, 2002). The company has tried to minimize such cases for high competitive advantage. The company has also to find new delivery methods that will improve customer satisfaction. Power of suppliers According to Porters (1980), a supplier can have influence suppose the company works within a limited market and there is a degree of substitutability. As asserted by Grant (2005), there are some factors that determine the power of the company to attain all the needed account to meet the relevant profits. There are credible onwards integration threats by suppliers, supplier’s concentration, cost of switching suppliers, and its powerfulness to boycott low quality products (Anthony, 1999). The company has to maintain a chain of suppliers for its products to beat the competition. Threat of Substitutes Porter (1980) describes the threat of substitution as the identification of substitute products that can perform the same function as the product in question. Marks and Spencer experiences some threats from the products of other companies. To an economist, intimidation of competitors take place supposes the product demand is affected by change in price of the competitors. Marks and Spencer’s products demand have been adversely affected by the strategic change in prices of other companies (Coyne, 1996). The new fashions available and the changing dressing mode are creating high competition between Marks and Spencer and other competitive companies. Rivalry Marks and Spencer faces high competition because various companies have emerged producing high quality products at affordable prices. This high concentration shows that the company has many competitors and majority has an important market share. To counter competition, Marks and Spencer has managed to lower prices so as to gain a temporary advantage. It has also strived to improve their product features and qualities during the manufacture (Grant, 2005). References Andrew, H., 2001. Understanding Potters five force analyses in the industries: view in the global world. Macmillan publishers. pp.22-27. Anthony, W., 1999. Strategic comparison of business to consumers’ relationships. Macmillan publishers. Coyne, K., 1996. Bringing obedience to policy. The McKinsey Quarterly. No.4. Grant, R., 2005. Modern policy investigation. The Blackwell Publishing Ltd., Oxford (U.K.). Johnson & Scholes, 2002. Strategic Management. 6th ed. Exploring Corporate Strategy Text & Cases.