Unit 1: Exploring Business
Narges Ahmadi
Learning Aim A: To explore the features of different businesses and what makes them successful. D1 Task: To evaluate the reasons for the success of two contrasting businesses, reflecting on evidence gathered.
Introduction I'm going to discuss the two contrasting businesses, Marks and Spencer's, and the National Cruelty to Children Prevention Society. I am going to talk about how good their company is and what makes them successful.
M&S Recent Performance The 2008/9 recession had a major effect on Marks and Spencer's. Marks and Spencer's company was thriving until the recession of 2008/9. It reported that the company of Marks and Spencer lost about 30 percent of their income due to the recession, according to The Guardian article in 2008. Their income was £297.8 million in 2008, but £451.8 million in the year before their earnings. That year, Marks and Spencer nearly lost half their earnings. They have, however, managed to pick themselves up from the rough times and get their company back on track. While they have managed to pick up themselves since the recession, to this day their company is still affected by it. In particular, companies in the industrialised Western world. Six years later, after the recession hit Marks and Spencer, their company got back on track and profits again looked fair. In 2015, Marks and Spencer 's made a £661.2 million group profit before changes and tax, which rose by 6.1 percent from the previous year. The organisation looked safe and successful. In my view, because of their food business, which had a turnover of £ 5.2 billion, which rose by 3.4 percent from 2014, the company was effective during 2015.
One would argue that the success of companies was also influenced by the clothing and home industry, but I believe it was mostly focused on the food industry, in my view. This is because the clothing and home industry created £ 4 billion in annual sales, which decreased by 2.5 percent from 2014. The apparel and the home industry also contributed to the overall success of the company, although the figure was not as high as the food revenue. This then left the group 's sales for 2015 at £10.3 billion. Marks and Spencer's had 852 UK stores and 480 international shops in 59 territories during 2015. Overall, in 2015, the company was successful. Marks and Spencer's also seemed to be doing well in 2016 and the food industry was booming and highly profitable. Food profits rose by 3.6% and jumped from £5.2 billion to £ 5.4 billion. This led to the success of the companies that year because of the rise in food industry revenue. Profit before changes and taxes for the company group rose by 3.5 percent and for the year sat at £684.1 million. There was a big decline in the clothing and home industry and it didn't seem to be doing well. Clothing and household income was £3.9 billion, which declined by 2.2% compared to the previous year. The food industry was compensating for the losses in the clothing and home industry, one might claim. I believe in my view that the company was still competitive in this era and collapsed. I believe that the increase in the number of stores in the United Kingdom, which is now sitting at 914, was another reason for Marks and Spencer 's success. The number of UK shops rose by 62. The number of international stores, however, has declined to 468 and is actually in just 58 territories. The food industry was thriving and highly profitable in 2016. Marks and Spencer's also seemed to be doing well. Food revenue rose by 3.6%, rising from £5.2 billion to £ 5.4 billion. This contributed to the success of companies that year because of the increase in food industry sales. Profit before adjustments and taxes for the business group increased by 3.5 percent and for the year stood at £684.1 million.
Clothing and home income continued to decline, falling by 2.8 percent this year and then remaining at £3.8 billion. The number of shops has increased, while UK stores have increased by 65. I think the Marks and Spencer's in the clothing and home industry were even less successful with less success. I think this might not have been their most fruitful year, but I'm going to find a way to get up and get back on track. In 2018, the group profit was £580.9 million before changes and tax, which decreased by 5.4 percent. I think his is not a good sum that the company hoped to produce, but by taking a closer dive at their clothing and home business, it could increase this because that is where the company is suffering most. They will do this by taking a closer look at their demographics and how they can not only extend their apparel and home industry for the older generation to a broader spectrum of the population, but also aim to attract the younger generation. For the year, their clothing and home income was £ 3.7 billion, which only dropped by 1.4 percent. I assume that the food industry has been good and has risen by 3.9%. The production from food for the year was £5.9 billion. In the United Kingdom, the number of locations increased substantially by 56 more new stores. The UK Marks and Spencer's were successful, but one could argue that the international side of Marks and Spencer's was strained because international shops seemed to be closed. There are now 428 global stores, a decline of 26. For Marks and Spencer, 2019 looked like a difficult year. Their most profitable business, the food department, drops by 0.6%, which is still £5.9 billion. Their effective clothing and home industry continued to decline over the following years, at £ 3.5 billion in 2019, which decreased by 3.6 percent. The company profit was £532.2 million before changes and tax, which decreased by 9.9 percent. The company income that fell by 3.0 percent and is now at £10.4 billion was another value that dropped. I believe that during 2019, Marks and Spencer's were good but did not achieve their full potential. One might argue that this may have been their least profitable year compared to 2018. I agree that M&S has been struggling over this year, but I can also pick up and learn what they have done wrong and how this can be improved. Profits and sales for this year were also impacted by the Covid-19 pandemic. The pandemic struck M&S by surprise, and to ensure no damage, M&s had to adapt quickly. This may be the explanation for the enormous drop in the food and clothing and home industry that generally affected the revenue of the company.
In 2020, the Covid-19 global pandemic affected Marks and Spencer's. The pandemic did not interrupt the journey of Marks and Spencer to success and, in my view, it proved good for M&S. I feel this because it illustrates how M&S can cope with a last-minute situation that could have a huge effect on the organisation and continue to leverage it in a way that would help them. While their numbers were not higher than the year before, in most sectors, as in the overall community profits, they were not that far off. Group revenue was £10.2 billion, which decreased by 1.9% and was not that far from the figures for the previous year. During the pandemic, the clothing and home sector also took a knock and was sitting at £223.9 million. The apparel and home industry plunged by 37.0 per cent and decreased. In my view, the apparel and home industry has been struggling for years and has only shown how M&S needs to step up their game and improve some aspects in that industry that can have a positive effect on the company and boost revenue and profits overall. I assume that M&S can do this by gaining a broader public opinion about the apparel and home industry and assessing what they can change to meet the needs and desires of the people. They did, nevertheless, pick up on the food industry. During the Covid-19 pandemic, the food industry managed to raise its food sales by 2.1 per cent. The production from food now stands at £6.0 billion. I assume that because of the national lockdown that influenced more consumers to buy more with the thought of shops not having any more stock left, this industry has increased. This resulted in consumers purchasing more and more in bulk and boosted the sales of companies in the food industry overall. There was a closure of shops in the UK in 2020, however the number of foreign shops increased. There were 1038 UK shops, and the number of foreign shops was 481. Thirtyseven more international stores have opened. I feel that through the unexpected pandemic that took them by surprise, Marks and Spencer's were still successful.
Years 2015 2016 2017 2018 2019 2020
Food revenue £5.2 billion £5.4 billion £5.6 billion £5.9 billion £5.9 billion £6.0 billion
Increase or decrease +3.4% +3.6% +4.2% +3.9% -0.6% +2.1%
Years
Group profit before
Increase or decrease
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020
adjustment and tax £661.2 million £684.1 million £613.8 million £580.9 million £523.2 million £403.1 million
+6.1 % +3.5% -10.3% -5.4% -9.9% -21.2%
Years 2015 2016 2017 2018 2019 2020
Group revenue £10.3 billion £10.4 billion £10.6 billion £10.7 billion £10.4 billion £10.2 billion
Increase or decrease
Years 2015 2016 2017
Clothing and home revenue £4.0 billion £3.9 billion £3.8 billion
Increase or decrease -2.5% -2.2% -2.8%
+0.8% +2.2% +0.7% -3.0% -1.9%