Merger

1.0 Introduction

1.1 Company background

Marks & Spencer plc (known also as M&S, Your M&S and sometimes colloquially as Marks and Sparks, Marks or Marks's) is a British retailer, with several branches outside of the UK. It is one of the most widely recognised chain stores in the UK and is the largest clothing retailer in the UK, as well as being a multi-billion pound food retailer. Most of its shops sell both of these categories. It also has a third line of business selling homewares such as bedlinen, but this is far smaller than the other two. In 1998 it became the first British retailer to make a profit before tax of over Ј1 billion. though a few years later it plunged into a crisis which lasted for several years. As of 2007 it is growing again, and rapidly increasing profitability, but it is now less than one quarter of the size of the UK's largest and most profitable retailer, Tesco.

Leading standards wherever we trade epitomises the Marks & Spencer approach to both the way we serve our customers and the way we run our business.

As one of the UK's leading retailers, we have annual sales in excess of Ј8 billion. We employ more than 60,000 people worldwide, operate more than 450 stores in 30 countries, and serve tens of millions of customers every week.

1.2 Our Vision

To be the standard against which all others are measured.

1.3 Our Mission

To make aspirational quality accessible to all.

1.4 Our Values

Quality, value, service, innovation and trust.

Whether we're working at home or abroad, within our own stores or in partnership with our franchisees, our Vision, Mission and Values remain the same. Ensuring we meet our customers' needs with appealing, superior quality products at attractive prices.

Marks & Spencer has been built on a philosophy of:

* offering customers a selective range of high quality merchandise;

* encouraging suppliers to maintain high quality standards in production and working environment;

* store expansion planned for the convenience of customers, with a greater width of product choice;

* simplified operating procedures;

* supporting British industry and buying abroad only when new ideas, technology, quality and value are not available in the UK;

* fostering good human relations with customers, staff, suppliers and the community.

2.0 General External Environment

The broad external factors that indirectly impacts upon an organisation are consist of political, legal, economic, social and technological factors. These factors use to analyse how macro-environment affects Marks and Spencer to make their marketing decisions.

2.1 Political and Legal

The political environment presents some important issues to Marks and Spencer. As the debate about whether the UK should join the Euro goes on, Marks and Spencer already decided to accept payment in that currency in their stores. However, the final decision about whether the Euro will be introduced in the UK is going to have an impact on the company, with the decision to join the Euro probably benefiting Marks and Spencer.

Generally, it is important for companies to follow government policies and global organisation systems, such as World Health Organization, while they make marketing plans. Governments, especially in the developed countries, consider ecological environment and human's life. Governments set up policies and organisations to monitor firms and their products, such as energy saving policy and genetically modified food control.

The UK government has introduced energy saving organizations, such as 'Climate Change Levy' and 'Green Tax' on energy use to reduce CO2 by 2010 by 20% against 1990 levels, and supplied subsidies to improve its policies (Marks & Spencer, 2002a).

In recent years, gene technologies have increased substantially. Some of these technologies have used to produce food. However, some of these technologies may cause natural environment pollution and endanger human's health. "Some European supermarkets are moving towards selling only meat from animals produced fed on non-GM feeds. This is building on moves by many retailers in the UK to go non-GM" (Meat & Livestock Australia, 2001). Marks and Spencer also announced that it supplied all non-GM foods on its shelves (BBC News, 1999).

On the other hand, different countries own a different law especially advertising laws. Mark and Spencer should make sure laws are always taking into account when decision making in marketing strategy.

2.2 Economic

Economic factors have affected companies to extend their business or retrench its business, such as close down loss-making operations and sale their non-core business. For example, the 11th September 2001 accident in USA has caused many companies to face the recessions in North America and European countries.

The 11th September accident in USA caused economical crisis in North America and other countries. It caused consumers to change their purchasing habits, and retailers were seeing sales decreases (BBC News, 2001). In fact, M&S lost its profits around 8.6 million pounds between 2001 and 2002 from its international retailers (Marks & Spencer,2002b). M&S has closed its loss-making operations in Continental Europe and sold its non-core business in North America (Marks & Spencer, 2002b).

In addition, recession in Far East and a severe, more general down slow in the global economy has major implications for Marks and Spencer. Accordingly, the company's decision to rely on high cost UK-based suppliers is debatable, especially in an economic situation, which leaves the UK's economy and currency relatively strong compared to other countries, whose suppliers would therefore most probably offer cheaper services.

Intense competition is one of the reason M&S loses its market share. Sainsbury and Tesco are the tough competitors for M&S. (Wilson and Gilligan, 1997: 302). M&S has some competitive advantages