porter 5
Porter 5 forces analysis
The current UK market is still in recession, unemployment is high and consumer confidence is fragile as a result people are not spending as much at the checkouts. As a result, consumer spending has slowed down in the face of higher inflation and the job market uncertainty. With M&S renowned for selling higher quality items which by their nature are more expensive, they run the risk of consumers seeking cheaper alternatives.
Threat of entry
The recession has reduced the risk of new entrance of traditional high street retailers to the market; however, as per porter’s 5 forces M&S are under threat from online retailers and the ever increasing product lines of the supermarkets.
M&S has recently responded to the recognition that they must embrace online shopping otherwise they run the risk of loosing market share to better developed competitors. Trading online incurs lower overheads such as the cost of premises and staff and therefore allows competitors into the market. A prime example of a successful online brand is the speed at which ASOS.COM have grown since.
Supermarkets have now expanded product ranges, which include clothing and entertainment as well as homewares being available on the shelves. This poses a big threat to department stores. They benefit from an established distribution and store system and a loyal and regular customer base.
Threat of substitutes
Due the number of competitors in the market the threat of substitutes is high. Whilst M&S would see the likes of John Lewis and Waitrose as direct competitors the difficult economic times also mean that customers are more likely to seek cheaper alternatives within he likes of Next or even the Supermarkets. In addition, historically the company has been slow to react and provide alternatives to those seen on the runway quicker than ever before.
Power of buyers
With the many retailers available, buyers are able to shop around. M&S must maintain the trust of their
The current UK market is still in recession, unemployment is high and consumer confidence is fragile as a result people are not spending as much at the checkouts. As a result, consumer spending has slowed down in the face of higher inflation and the job market uncertainty. With M&S renowned for selling higher quality items which by their nature are more expensive, they run the risk of consumers seeking cheaper alternatives.
Threat of entry
The recession has reduced the risk of new entrance of traditional high street retailers to the market; however, as per porter’s 5 forces M&S are under threat from online retailers and the ever increasing product lines of the supermarkets.
M&S has recently responded to the recognition that they must embrace online shopping otherwise they run the risk of loosing market share to better developed competitors. Trading online incurs lower overheads such as the cost of premises and staff and therefore allows competitors into the market. A prime example of a successful online brand is the speed at which ASOS.COM have grown since.
Supermarkets have now expanded product ranges, which include clothing and entertainment as well as homewares being available on the shelves. This poses a big threat to department stores. They benefit from an established distribution and store system and a loyal and regular customer base.
Threat of substitutes
Due the number of competitors in the market the threat of substitutes is high. Whilst M&S would see the likes of John Lewis and Waitrose as direct competitors the difficult economic times also mean that customers are more likely to seek cheaper alternatives within he likes of Next or even the Supermarkets. In addition, historically the company has been slow to react and provide alternatives to those seen on the runway quicker than ever before.
Power of buyers
With the many retailers available, buyers are able to shop around. M&S must maintain the trust of their