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Research and analyseCompany Y interms of its market / marketingenvironment and CSR practicesTutor’s Name: Chris BestleyCompany for CW2: Marks and SpencerCompany for CW1: Boots OpticiansWord Count without references: 3067Introduction
Marks & Spencer is a British multinational retailer which specialises in selling clothes, luxury food and home products. It was founded in 1884 by Michael Marks and Thomas Spencer. The current chairman is Robert Swannell and the CEO is Steve Rowe. The current head of marketing is Patrick Bousquet-Chavanne who joined in Marks & Spencer in 2013. In 1998 it was the first British retailer to have over 1 billion pounds pre-tax profit. Currently they have 1,382 stores worldwide, which includes 914 stores throughout the UK. Their largest business is their food business which accounts for 58% of their turnover and they are the UK’s largest clothing retailer by value and have market-leading positions in womenswear, lingerie and menswear. They operate through three different business models - owned, franchise and joint venture. Owned shops are shops which are completely owned and run byMarks & Spencer. The benefit of owned shops is that Marks & Spencer would have complete control over the shops and what they can do. However, this would be expensive due to the large capital investment needed. Franchises are when the shops are run by individuals or firms other than Marks & Spencer but still use all of Marks & Spencer’s branding and products. The benefit of franchising for them is that Marks and Spencer only have to provide their products, however they would lose some control over the stores and therefore if the store gets negative publicity this could damage their reputation.This way they do not have to provide any capital. Joint venture is when Marks & Spencer’s runs a shop in partnership with another firm. All of Marks and Spencer stores in India are through a joint venture with Reliance Retail. The benefit of this to Marks & Spencer is that it provides them with access to new markets as the partner would have knowledge of the market and so they wouldn’t have to risk entering on their own.Performance
In 2016 Marks and Spencer had a total revenue of 10.6 billion pounds, which was a rise of 300 million pounds from 2015. From this amount, 5.4 billion pounds was due to its food business. There was a 3.6% rise in its revenue for food compared to 2015. The main reason for this is that Marks & Spencer added 1700 new products (25% of its range) to its product line. Even though M&S.com sales increased by 23.4% to 791.5 million pounds and their total number of customers increased to 24.7 million, their clothing and home revenue had a fall in revenue to 3.9 billion pounds. Furthermore, Marks & Spencer internationally had a fall in revenue of 2% to 1.1 billion pounds. This is largely due to the closure of 12 stores in 2016. Marks & Spencer’s profit before tax had fallen 19.5% to 483 million pounds, which would worry the managers and shareholders as they are earning less. Their profit after tax hadfallen to 404.4 million pounds. Due to this their earnings per share fell by over