Marks Spencer Essay Example

Marks Spencer Paper Marketers use PEST analysis in order to investigate the outside environment in which an organization is operating. PEST stands for: * Political factors affect the activity of the business. Political developments are generally out of the control of an organization, but it needs to forecast and anticipate change and then react accordingly. The development of the European Union has provided both opportunities and threats to British organizations. Its recent enlargement meant the market for British products expanded by 45 million customers. * Economic influences look at how the performance of the economy impacts on organizations. All economies go through cycles of prosperity, recession and recovery. The business cycle is especially important because of its direct effect on consumer and business spending. During times of prosperity, both consumers and business customers buy more goods and services. * Social environment describes the characteristics of society, the people who live in that society and their values and beliefs. The first area of study tends to focus on the population demographics revealing information about size, gender, ethnic groups, income levels, educational attainment, occupations and family structure. This information is very useful to marketers in predicting the size of markets for many products from food to clothe. We will write a custom essay sample on Marks Spencer specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Marks Spencer specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Marks Spencer specifically for you FOR ONLY $16.38 $13.9/page Hire Writer * Technological developments affect many organizations. Growing ownership of computers and the influence of the Internet is allowing people to buy virtually anything without having to leave their homes. Mobile phones are also now being used for advertisements. Political Factors MS: Political factors affect MS in a lot of ways. Some of those ways are explained below: The Sex Discrimination Act 1975 makes it illegal for anyone to be directly or indirectly discriminated against or harassed on their grounds of gender. It applies to all aspects of employment, training, treatment at work, dismissal and redundancy. There are some expectations such as acting and live in jobs, but however these are rare. Marks Spencer follows the Sex Discrimination Law in order no to get sued. However if MS choose not to follow this act they will get sued which will mean they will have more expenses in the business. Also if MS also get sued they will be in the newspapers probably all around the world which means MS will then end up loosing their customers as well as publicity which will also go into their expenses. The Disability Discrimination Act 1995 protects people with disability against discrimination in employment, when obtaining goods and services, buying/renting land or property and gaining access to business premises. Employers must make reasonable adjustments to the workplace to enable a disabled person to do the job. Public bodies must have policies and action plans to tackle discrimination and no employer must treat a disabled person less favourably than able bodied people without justification. Discrimination is not divided into direct or indirect but is based on the grounds that less favourable treatment cannot be justified. Marks Spencer must follow the Disability Discrimination Law. The things that MS do to follow this law are they have lifts in all of their stores if the stores have stairs, they have lowered cash tills which is easier for the disabled person to reach, they also have electric wheel chairs which are good for the disabled people if they can not walk. If MS did not follow this law they would get sued and loose profit from the business. National Minimum Wage Act 1998 the minimum wage in the UK is  £5.73 for all adult workers. MS are paying most of their staffs the minimum wage  £5.73 per hour The mandate trade union proclaim on Tuesday, 24 February 2009 that they have made and agreement with MS for a new pay deal which is above the terms of the national wage agreement. Normally Marks Spencers staffs receives 5.73 per hour but it depends on how old they, if they are 22 years then they will receive that amount if below the age then they will receive less. Although a complex retail environment and call from employers groups for an extended pay pause, MS agreed to increase staffs wages above the current rates of pay to 6.7%. Mandate Assistant General Secretary, Gerry Light said, This deal is significant both in terms of Marks and Spencers recognition of the contribution from its staff members and also in terms of the local partnership process which can work successfully, even in difficult economic times, between employers and trade unions. The deal will see the implementation of the first phase (3.5%) of Towards 2016 paid to all staff from 1 January 2009 which means Marks and Spencer staff will not see a three month pay freeze as was negotiated in the National Wage Agreement and will instead see their pay increased ahead of schedule. The National Minimum Wage Act 1998 creates a minimum wage across the United Kingdom, currently  £5.73 per hour for adults. It was a flagship policy of the Labour Party in the UK during its 1997 election campaign and is still pronounced today in New Labour Party circulars as an outstanding gain for at least 1.5 million people. The national minimum wage (NMW) took effect on 1 April 1999. No national minimum wage existed prior to this date, although there were a variety of systems of wage controls focussed on specific industries. Part of the reason for Labours minimum wage policy was the decline of trade union membership over recent decades (weakening employees bargaining power), as well as a recognition that the employees most vulnerable to low pay (especially in service industries) were rarely unionised in the first place. The minimum wage was opposed by the opposition Conservative Party, including the Conservatives current leader, David Cameron. all employers must pay a minimum hourly wage to workers over the age of 18 regardless of where they work the size of the firm or the workers occupation. From the 1st October 2004 the national minimum wage was extended to workers aged 16 and 17 but this does not include apprentices aged 16-18. Apprentices aged 19 and above qualify for the minimum wage after the first twelve months of their apprenticeship. Marks Spencer pay all of the workers at least the minimum wage and even more for other workers. It is good for Marks and Spencer that the minimum wage isnt so big because they dont have to over pay their workers. However if the minimum wage keeps increasing then MS might have to cut jobs which means their sales and profits will be lower. Economic Factors MS: Economic factors affect MS in a lot of different ways. Some of those ways are explained below: Costs of credit (borrowing): Cost of borrowing influence MS in a good and bad way because they have to borrow money to expand however the bad way is that they have to pay back interest rates in return Marks Spencer has to be careful with the amount of money that they borrow from the bank. The reason for this is because when you borrow money from the bank you have to pay them interests because the bank is sacrificing their ability to use that money. Marks Spencer has to be careful not to borrow more than they actually need because interest repayments may rise causing MS more expenses which at the end of the day for them is profit that could be made. Competitive pressures: Competition affects MS in a bad way because they have to fight in order to sell their products. Competition is one of the biggest influence to MS. Marks Spencer competes against businesses such as Tesco and Asda for market share by making their products high quality and healthy as well as having good prices on them. Marks Spencer has many different ways that they could beat the competition. However they are already beating the competition because their main competitor is Waitrose and MS is more popular and has better prices than Waitrose products. This is a good for MS because they are one of the healthiest retailers in the UK and have competitive prices. Energy prices: Energy prices are an important cost of MS and are a bad impact because MS has more costs to pay. This is because MS stores use electricity for light, cash machines, heating and air conditioning. When energy prices increase MS then have to figure out ways how to use less electricity whether that would be installing solar panels in their store or something else. This has a big impact on MS because their business costs increase which means that they have to raise costs of their products in order to retain their profits. Social factors MS: Social factors affect MS in a lot of different ways. Some of those ways are explained below: Ageing population: The number of older people in the UK is increasing all the time. This has a good impact on MS because their target market will increase in age meaning more sales. This means that MS must produce things such as clothes for older people. However this is a good affect on MS because this will increase their profits more due to the amount of people that are going to buy their products is increasing. The old people will also eat healthy foods and MS food is really healthy if not the healthiest out of all the different food organisations in the UK such as Tesco and Asda. Hosting a major sporting and cultural events: Marks Spencer Celebrity culture: Celebrity culture is a good impact on MS because a lot people want to become celebrities. If they can not become celebrities they try to dress and live like celebrities. This is why Marks Spencer has to pay celebrities such as Twiggy to advertise their products to customers in positive ways. When MS use celebrities to advertise their products customers will buy them more because they will think that they will look like the celebrity that is advertising those products. It costs MS a lot of money to employ celebrities in order to advertise their products however it is like an investment for MS because their sales will increase on the products that they will advertise. Technological factors: Technological factors affect MS in a lot of different ways. Some of those ways are. Internet: Internet is a good impact for MS because they are able to sell their products online. MS have a website which is www.marksandspencer.co.uk in their website you can everything online and get it delivered straight to your home. This means that MS is able to expand their business to those who can not leave their home but want to use MS products. Internet has made a good opportunity for MS to expand their business globally.