Marks and Spencer aim is to “continually exceed expectations wherever customers choose to shop with us”.
Source: www.marksandspencer.co.uk
Marks & Spencer Finance Analysis for last three years;
www.marksandspencer.co.uk
Aims of Marks and Spencer:
- Market Leader
- Profit maximize
- Growth/ expand in different countries
- Meeting customer needs and wants all the time
- Remain competitive
- Reduce costs, as to attract as many potential customer as possible
- Survival/ very important in Any Business
- Improve product quality to the best possible level
- Providing good working condition, for Staff and equal opportunities for all
- To make sure the staff of Marks and Spencer is working in the safe environment
- Supporting the well being of the local community and the protection of the environment
- We (Marks and Spencer) try to develop the talents of its people/ Staff by training practices
Objectives of Marks and Spencer:
- To be a market leader by giving discounts of 3% to its customers
- Increase our market share by 2 % by mid of 2008
- Increase the sales of £10,000 every three month within the stores of East London
- Ensure 90% punctuality of staff
Source: www.marksandspencer.co.uk
Market Coverage
After my brief research on the specfic terms of this assignment I came to know so many different terms which are described below in my words.
I personally think oligopoly is a market form in which a market or industry is dominated by a small number of sellers. The other name for this is oligopolists.
My chosen business Marks and Spencer operates on the cloths market. Marks and spencer has their stores in 30 countries world wide.
As being one of the UK's leading retailers, Marks and Spencer has annual sales in excess of £8 billion. The company employ more than 68,000 people worldwide, operate more than 550 stores in 30 countries, and serve tens of millions of customers every week. Marks and Spencer Company can be considered as oligopoly inside of the market structure because Marks and Spencer and other cloths companies like Debenhams, Burton are the few clothes businesses who control the market supply of the business so I personally think they some how control the market price and the quantity of the products (clothes) supplied. Although there are other businesses like JD Sports, Foot Locker, which are providing the clothes, but the clothes which Marks and Spencer and Burton is providing to customers is different from these sports shop.
Demand and Supply:
Theory of demand:
In my view the theory of demand means that if all other factors remain equal, the higher the price of a good, the less people will demand that good. The example I would like to explain this point is that how many people will be interested in buying the pair of shoes if it cost for example £3000. The amount of products that buyers purchase at a higher price is less because as the price of a good goes up, so does the opportunity cost of buying that product goes up. As a result, people will naturally avoid buying a product that will force them to forgo the consumption of something else they value more the example of the products customers value more are food, shelter.
Theory of supply:
In my understandings Theory of supply explains the quantities that will be sold to the consumer of the product at a set price set by the production department of the business. The most important point to consider here is that unlike the law of demand, the supply relationship shows an upward slope. This means that the higher the price, the higher the quantity supplied. Producers supply more at a higher price because selling a higher quantity at higher price increases revenue for them. More revenue means business is likely to be making profits, the profit business then can use to either expand or develop the business.
Theory of elasticity:
In my view elasticity measures a sensitivity of one variable to another. More specifically, the degree to which consumers respond to price changes.
The important concept in understanding the supply and demand theory is elasticity. In the context of this assignment, it relates to how supply and demand changes in response to prices. One way of defining elasticity is the percentage change in one variable divided by the percentage change in another variable (known as arch elasticity because it calculates the elasticity over a range of values.
A measure of sensitivity of one variable to another. More specifically, the degree to which consumers respond to price changes.
Source: www.bized.co.uk
The demand for Marks and Spencer products will depend on the following factors.
The price of the goods:
Businesses sell products to gain money from the customers. The businesses then use this money to pay bills, rents, and staff wages. The money, which remains after paying all the expenses businesses, keeps this money to expand or improve their services and products.
It is therefore very important for Marks and Spencer to ensure that they charge their customers the reasonable price for the products. If the price is too high majority of customer are unlikely to buy the product, if the price is too low the majority of customers are likely to think the quality of this jumper is not likely to be good because we are paying less money.
Customers tend to think if the product they are buying is expensive the quality is likely to be good if however on the other hand if the product is cheap the quality of the product is below the average.
The prices of other products which Marks and Spencer competitors are selling:
This is another important factor, which needs to be taken into consideration; this factor will also assess the demand for the products and services Marks and Spencer offers. All businesses have competitors, which they need to compete with in order to stay in the business. It is therefore crucial for Marks and Spencer to ensure that the prices of the products are reasonable before they go into shops in the country. This is because now day’s customers are not only concerned about the quality of the products but they also concerned about the prices they are paying for to obtain the particular product such as mobile phone or shoes and so on.
Tastes or quality:
This is another factor, which will affect the demand of a particular product or services. This is because each of us has different tastes and likes. That’s why it is important for businesses like Marks and Spencer to ensure that they provide the product, which are meeting the wants and needs of the customers. In today competitive world it is important for businesses to develop and improve their products in order to retain the customers of the business.
The numbers of consumers (buyers) of a particular product I believe this is another important factor to be taken into consideration by businesses like Marks and Spencer.
Demand:
In my understanding the term demand means the quantity of the product or service the customer will be willing to buy at a set price. Usually the concept is the higher the price the lower the demand, the reason behind this is that less people will be after to buy the product at expensive price. However on the other hand lower the price the higher the demand, the reason for this would be more people would be after to buy the product.
I personally think the quality of the products which Marks and Spencer is selling, are good quality. However the price for some products is high but still the demand for the Marks and Spencer’s product is high. Some customers are concerned only with the price of the product before they take the decision to buy the product on the other hand some people want the good quality product regardless of the price of the product.
As we can see from the above financial analysis of Marks and Spencer that the profit of Marks and Spencer is increasing every year.