Situation Analysis of Marks and Spencer in the Italian Market

As a marketing consultant for Marks and Spencer PLC (M&S), the task is to conduct a situation analysis for a European country where M&S does not have a store for the selling of its products. The country in question is Italy, where M&S is currently not present. The paper begins with a short back ground of M&S and the various products and services that they provide.

The subsequent discussion is a comprehensive situation analysis which includes a PEST framework to analyze the Italy environment for new businesses; followed by an application of Porter’s five forces model to analyze the industries that M&S will operate in Italy; and finally an analysis of the Italian customers and market to which M&S will provide their products. This is followed by a SWOT analysis of M&S PLC for the Italian market in general, where the internal strengths and weaknesses are analyzed, as well as the external opportunities and potential threats to M&S.

In the end a conclusion is provided with recommendations as to what should be the desired plan of action for M&S. M&S – An Introduction The history of M&S ps more than a century, when in 1903 the two partners Michael Marks and Thomas Spencer registered M&S Ltd as a company. The company has since then grown to become one of the most respected and popular retail chains, particularly in the United Kingdom where it is headquartered (Marks and Spencer Plc, 2009).

M&S is one of the pioneer retail firms in the United Kingdom that offers “stylish, high quality, great value clothing and home products as well as outstanding quality foods, from around 2,000 suppliers globally. ” M&S has a large and diverse work force of more than 75000 people both in the United Kingdom and in other nations around the globe. There are more than six hundred stores in the United Kingdom and a large number of international stores that are set to grow even further as based on the plan of the company (Marks and Spencer PLC, 2009).

M&S has wide and diverse categories of products and services to offer its clientele. They have diversified and besides for women’s wear and lingerie, men’s wear and children’s clothes, they also offer a varying range of products such as books, DVD’s, toys and games, travel related products, home furnishing and accessories and electrical items, technology related products such as TV’s, iPods and computers, flowers and gifts including greeting cards, and food and drinks including liquor.

Besides this huge assortment of products and services, M&S also offer E-Catalogues, Financial products, and Energy products for residences (Marks and Spencer Group Plc, 2008). Country Analysis A PEST Analysis is applied here to analyze the various environmental forces that are affecting the Italian market and consequently all the firms that are operating in that market or plan to do so in the future. This includes my current project as a marketing consultant of launching M&S in Italy.

The PEST analysis is an abbreviation for Political, Economic, Social, Technological, Legal and Environmental Analysis. Each of the factors is discussed below for the Italian market. Political Factors Italy is one of the most advanced countries in the world and also a member state of NATO, G-8 and the EU. The current government gained power in 2001, and is led by “Prime Minister Silvio Berlusconi, leader of the Forza Italia party” (EIA, 2003). After the majority victory of Berlusconi against Veltroni, it signified a more stable political climate for Italy in the forth coming years. Read Marks & Spencer market structure

This new found potential political stability would greatly assist the Italian economy as well, where the position of power has been changed among the parties more than sixty one times in the last sixty years. According to Pope Benedict XVI, this would help Italy “overcome its difficult period” (Krause-Jackson, 2008). This shows that political seats have changed once every year, which is a frightening ratio especially for a foreign company like the company in question, M&S. However, since the new government has assumed power, the forecasts have changed to become more positive as compared to previous years.

Economic Factors Italy has been severely affected by the global financial crisis like many other nations. Many promises made by the newly elected government have not been fulfilled due to the deteriorating economic position faced by the country. Italy has a massive public debt that is almost a hundred and five percent of the Gross Domestic Product. The GDP in itself has declined by around 0. 6 percent in 2008. The forecast prepared by the Economist is that GDP will fall further in the following years.

The fiscal budget deficit which was already almost 3 percent of the Gross Domestic Product in 2008 is expected to increase to over 4 percent in the next year or two. The ratio of Public Debt to the Gross Domestic Product which already was at an astronomical high in the year ended 2008 at around a hundred and five percent is expected to rise further to more than a hundred and ten percent in the next year or two. The deficits might be much higher if tax cuts which were originally promised during the election campaign are implemented (Intelligence Unit, 2009).