A firms relationship with its business environment - Marks and Spencer
making a phone call you can have goods delivered to your door. Mail order catalogues are also popular.
If the substitute product rises in price then demand for the product in question will produce a rightward shift. If a dress rises in price the demand for a skirt will increase.
Demand for the skirt will shift left if the dress is reduced in price.
SHIFTS IN DEMAND IN MARKS AND SPENCER
Many issues have to be considered when thinking of reasons that may shift demand.
If the demand increases the demand curve shifts to the right.
If the demand decreases the demand curve shifts to the left.
Some factors that shift a demand curve are;
Customers’ tastes and fashion - if the customer wishes to have more of the good the demand increases shifting demand to the right. If the product is unpopular then the demand decreases shifting demand to the left.
Advertising and Marketing- these efforts should shift the demand to the right but if the adverts are poor and publicity is bad then this will decrease sales and shift demand to the left.
Quality – if the quality is high then a shift in demand will go to the right. People tend to pay more for quality.
Other factors, which have an effect on changing demand, are customers’ incomes, and changes in the P.E.S.T. factors.
INPUTS OF MARKS AND SPENCER
Inputs refer to the ‘factors of production’. These factors are used in conjunction with each other to begin production of goods or services. 4 major factors are;
Land – Buildings, Construction, Materials and Energy sources
Labour – The workforce, Factory workers, Managerial staff, store staff
Capital – Resources like Machinery, factories, offices and wages
Knowledge- Skills and experience of staff that can benefit the firm and production of the firm.
Marks and Spencer interacts with the resource market by acting as a customer and negotiates its share of the resources available. The factor markets supply the firm with their inputs.
THE MARKET STRUCTURE OF MARKS AND SPENCER
The market structure of Marks and Spencer can be considered as Oligopoly. This refers to a ‘few sellers’, the market being dominated by a few big firms. The less competition there is the more opportunities for larger profits arise. Even so, there is a lack of price competition between these firms, and tend to use non-price competition by using advertising and relying of reputations of brand name. Marks and Spencer has, for many years been one of the largest leading retailers but in [next page]