Swot Analysis Of M & S

Nihao ni aho ahi shjshdsjhdsjbnbccbjdjdcPESTEL Analysis
Political
 * The dissolution of the Communist bloc and the accession of new member states to the EU has opened up geographical and economical borders for Western companies struggling to make profits in their mature markets and wishing to establish a presence in fast-growing Eastern European and Asian regions. As East European countries now have to open their boundaries to goods, services and capital from the West - in line with EU trade directives - it makes it easier for the likes of M&S to set up subsidiaries or franchises there. Thus, M&S has opened stores in Croatia, the Czech Republic, Hungary, Bulgaria, Bosnia and Herzegovina, Baltic states and Russia (M&S, 2008).
 * Similarly, when China acceded to the WTO in 2001, it committed to removing all protectionist trade barriers and encourage free flow of foreign goods (WTO, 2008). Although M&S do not yet have stores in China, they are seriously considering the possibility, as the Chinese with their rising incomes and fascinated as they are by all Western brands, present a great business opportunity (M&S, 2008).
 * In the UK, the Government is to decrease the rate of corporation tax from 30% down to 28%, which will save big companies such as M&S millions of pounds (HM Treasury, 2008).
Economic
� The so-called credit crunch has already started affecting major Western economies. Warren Buffet, the billionaire founder of Berkshire Hathaway, hailed as the most successful investor ever, described the US economy as already in recession (ABC News, 2008). Invariably, the economic downturn will reach Europe and the UK as well. This will mean that people's disposable incomes may go down. At the same time, consumer spending will slow down even more in the face of higher inflation and job market uncertainty.
� This may directly affect M&S, as it is viewed as a more expensive option as opposed to Tesco or Asda. Consumers may switch to cheaper stores and start shopping in M&S as a 'treat'.
� At the same time, incomes are rising in Eastern Europe, Russia and Dubai where M&S recently opened its stores. Revenues from these markets may partly offset the decrease in consumer spending in the West.
� One can assume that people tend to eat out less in times of economic turmoil. This may, actually, benefit M&S as people stay home and buy its foods, perceived to be of higher quality.
� Rising oil prices are adversely affecting all companies including M&S. Both WTI and Brent oil traded for more than $100 a barrel as at the time of writing (FT, 2008).
Social
� Greater work mobility means that people have no time to cook, and often eat on the go. Food stores can benefit from this by offering a variety of ready meals, snacks and sandwiches.
� People now live longer, which means they can spend more during their lifetimes. As M&S' main customer base is people aged over 40, with a large proportion over 55, this presents a good business opportunity for M&S (The Economist, 2008).
� At the same time, fashion trends are changing with people wishing to look younger and more fashionable, which explains the success of Topshop, Next and Zara. M&S lines have long been criticised for being too conservative. Although new designs have been introduced, the brand has not to date established itself among younger customers (Armstrong, 2008).
Technological
 * The Internet has become a powerful selling channel in the West. It is predicted that by 2011 online retail sales in Europe will have reached Eur263bn, with British shoppers accounting for more than a third of all revenue. The Internet accounts for 8% of global advertising spend and is growing rapidly (The Economist, 2007). M&S online sales reached £100m in 2007 - an increase of 60% year-on-year. The goal is to generate £500m in online revenues within 5 years (M&S, 2007).
 * Mobile phone shopping is just taking off but it is

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