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"Marks & Spencers" and the EMU.

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Introduction

ECONOMIC MONETARY UNION "MARKS & SPENCERS" REPORT To: XXXX. From: XXXXX Date: 15 May 2004 Subject: "Marks & Spencers" and the EMU. MACRO ENVIRONMENT AND PEST ANALYSES The macro-environment or general environment more and more affects the industry environment. Changes in the wider macro-environment may not be as close to the marketing firm's day-to-day operations, but they are just as important. Managers should in fact understand the current environment as well as any upcoming environmental changes that have implications for their strategy. Certain trends in today's macro-environment place greater pressures on companies. Foremost are: * Rapid technological change Pioneers of change will benefit; those who fail to keep up will fall by the wayside. Technology is a major macro-environmental variable which influences the development of many of the products we take for granted today, for example, television, calculators, video recorders and desktop computers. Marketing firms themselves play a part in technological progress, many having their own research department or sponsoring research through universities and other institutions, thus playing a part in innovating new developments and new applications. We must remember that technology costs a big amount of money but at the same time technological change can create changes in cost structures, new products, e.g. flexible manufacturing systems increasing variety of choice at lower costs, well utilised by the Japanese. One example of how technological change has affected marketing activities is in the development of electronic point of sale (EPOS) ...read more.

Middle

Many of the legal, economic and social developments, in our own society and in others, are the direct result of political decisions put into practice, for example the privatisation of state industries or the control of inflation. Whatever industry the marketing firm is involved in, changes in the political and legal environments at both the domestic and international levels can affect the company and therefore needs to be fully understood. * Increasing environmental awareness and environmental pressure groups Companies will have to conform to ever more exacting standards of environmental protection. * The economic environment Economic factors are of concern to marketing firms because they are likely to influence, among other things, demand, costs, prices and profits. These economic factors are largely outside the control of the individual firm, but their effects on individual enterprises can be profound. Political and economic forces are often strongly related. A much quoted example in this context is the "oil crisis" caused by the Middle East War in 1973 which produced economic shock waves throughout the Western world, resulting in dramatically increased crude oil prices. This, in turn increased energy costs as well as the cost of many oil-based raw materials such as plastics and synthetic fibres. This contributes significantly to a world economic recession, and it all serves to demonstrate how dramatic economic change can upset the traditional structures and balances in the world business environment. ...read more.

Conclusion

Pricing it for 59.99 Euro would look more attractive, but would cost the company a lot of money, while a price of 64.99 would still look good but could cost the trust of customers. But according to the M&S' policies, the price will not be hidden: "Retaining the trust and confidence of our customers is more important than good-looking prices." OPPORTUNITIES * With a single currency it is easier for a company to set up in a nation where they don't already operate. This means that M&S will be able to exploit new markets and expand their business in an attempt to increase profits and brand awareness. * A single currency will allow marks and Spencer to reduce costs through avoiding taxes when exporting to other nations in the EMU. Also with no costs involved when converting currencies they will save money when buying goods from suppliers within the EMU. * The harmonising of currencies would mean that consumers shopping in M&S from nations outside the UK would be getting a better deal as they also will not incur the charges of exchanging currencies, this could lead to M&S having a larger consumer base and hopefully increased sales revenue. THREATS * Companies that benefit more than M&S from the EMU will become stronger competitors meaning that M&S may lose some of their market share and therefore sales revenue. * Pressure from trade unions over equal pay may mean higher wage bills for Marks & Spencers, this is considering that all EMU countries that they operate in will expect equal wages to those who work in the UK. ...read more.

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