Business approaches for marks and spencer

It is the world of large competition where business needs to survive and exist. In fact Marks & Spencer lies within top 10 10. It really is UK’s premier clothing, meals, financial services retailer having the position of top 6. Recently, retailers have been confronted with powerful competition from their counterparts and, those hateful pounds have somehow shed momentum. Marks & Spencer’s market talk about has dropped in 2004 to 11%, from 0.2% (Annual Report 2004). Generally affected was their attire segment. Mostly it is offering high price items and service. It should reduce the price because of recession customers want to buy goods in good deal. The strategy applied by Marks & Spencer is usually covering wider market share only among the rich people so it should follow low cost competitive strategy. The advancement of strategy can help Marks & Spencer to seize market place and proceed to new market with marketplace segmentation, penetration, production, integration and jv with different stores and whole sellers on the planet. It can cover wider area with huge capital expenditure. Since it has good location and market in European countries, in coming days it could proceed to Asian and Arabian countries of the world.

1.1. INTRODUCTION

The organization that i have selected for this assignment project is Marks & Spencer and I’ve got the details about it from its website (www.marksandspencer.com ). Because of this assignment, I will choose to carry out a PEST or PESTEL evaluation on a UK based mostly business and discover its position in the very best 10 list of retail grocery chains. Marks & Spencer is the United Kingdom’s premier attire, food, and financial solutions retailer. The company’s commitment to value, provider and quality was create in 1884 by Michael Marks; he opened a small industry stall in Leeds. In that case in 1894 he formed a partnership with Tom Spencer. They opened up a hq in Manchester and switched their stall in Leeds to a protected arcade. Then in 1905 Tom Spencer passed away and two years after Michael Marks passed away. In 1884 Michael Marks, a Russian born Polish refugee opened a market stall in Leeds. In 1930, he opened up a shop in Marble Arch, London with partner Tom Spencer, and M&S was born. A food section was opened a calendar year later. The business soon branched into ‘convenience food’, selling sandwiches from the ice cream counters in its shops. Its selection of ready prepared foods grew ever more exotic over the years, introducing international meals like lamb Rogan Josh (in 1974) and poultry Kiev (in 1979). Today, M&S nonetheless has one market stall which operates at Grainger Industry in Newcastle-upon-Tyne.

In 1916 Simon Marks became chairman and in 1926 Marks & Spencer started to be a public enterprise. In 1926 the business begun to sell textiles and in 1931 begun to market produce and canned products. In 1964 Simon Marks died and Israel Sieff got over as chairman. He created wine and continental food to the company. Then in 1999 the business launched their web page, allowing their customer to get online. As of the present day the chief executive of Marks & Spencer is normally Stuart Rose. Marks & Spencer has 600 shops through the entire UK and 240 shops worldwide. (http://www.marksandsepencer.com/gp/node/n/45999031/202-8056692-5511835?ie=UTF8&&mnSBrand=core) THE BUSINESS has annual sales more than £8 billion, and in 2005/6 the business had employed around 67,000 with 65,000 within the UK. Marks & Spencer now sells from healthy living food to kid clothes designed by David Beckham. It would be described as among the high streets most important tertiary businesses. http://www.marksandsepencer.com/gp/browse.html/ref=sc_fe_c_7_1_46004031_10?ie=UTF8&node=43472031&46004031&mnSBrand=core&me=A2BO0OYVBKIOJM

1.2. ENVIRONMENT

Environment is the broad external and internal state that may affect a business. They are also referred to as PEST, PESTEL or STEEPLE. Through this interaction agencies do things such as for example acquire recycleables, hire employees, secure capital and obtain knowledge. Specific environment consists of customers, suppliers, rivals and pressure groups. Whereas generic environment includes broad monetary, political/legal, socio-cultural, demographic, technological and global circumstances that impact an organisation (Buchanan & Huczynski, 2007). The factors which help to analyze organization environment are explained below

Environment

Economical

Socio-Cultural

Political

External Analysis

Hierarchy

Professionalism

Specialization

Formalization

Internal Analysis

Internal Analysis

Ecological

Technological

Legal

Size

Goal

Figure: 1 Environment Evaluation: www.provenmodels.com/…/PEST_analysis.gif

1.3. INTERNAL ENVIRONMENT

Internal environment contains those factors which influences the organisation internally. It incorporates man, materials, money, equipment, lobbyists, shareholders, workers and companions. It combines organisations mission, vision, objectives and targets to achieve what it can do well for creating well administration. It targets corporate culture, technique and plan about how to control overall work and actions of organisation. Marks & Spencer has well deal with corporate environment due which organisation possesses cover wider industry since long time. The factors of internal environment are:-

FORMALIZATION

Marks & Spencer do have written rules, procedures, principles and code of conduct. They govern the business overall actions Marks & Spencer has standard code of carry out and written rules to perform its business.

SPECIALIZATION

Mark & Spencer do possess various departments where various department brain controlling over organization and getting the information from outside the house environment. They do include individual tasks and roles to perform and getting the issues performed through lower level managers.

HIERARCHY

Marks & Spencer has flattened hierarchical layers of operations where every level of managers can interact for completion of activities easily and effortlessly. The hierarchy shows authority of each and every manager. For instance, marketing managers mostly manage marketing campaigns.

CULTURE

Marks & Spencer do own its own identical norms, values, beliefs and functioning environment. It comes after standardized regulations to cope with cultural obstacles observed in an organization.

PROFESSIONALISM

Marks & Spencer provides excessive professional training to the middle and senior level managers and low competent training to the low and new comers.

GOALS

Marks & Spencer has its written goal using its objectives, missions, visions and targets. What group is today and you will be in future by incorporating environmental scenarios.

SIZE

Marks & Spencer has covered large area through UK and all over the world with huge number of stores and employed large number of employees.

1.4. EXTERNAL ENVIRONMENT

External environment involves those factors which influences the organisation externally. It includes factors like political, economical, socio-cultural, technological, and ecological. The external elements of PEST OR PESTEL impacting Marks & Spencer are:

POLITICAL FACTOR:

Political factors include government’s restrictions and legal issues. It offers organizational tax policies, employment laws, environmental rules, political stability, trade limitations and tariff. European Committee decision to permit free stream of trade among themselves and different countries under foreign trade regulations makes corporations to import their products as time passes easier than before. Marks & Spencer opponents took advantage of its higher cost framework and bit off some its market share.

ECONOMICAL FACTOR:

Marks & Spencer rivals are specialized in niche market markets and consumers’ target which make them to provide much better consumers satisfaction. They like to import their products from abroad for expense saving, this fact puts Marks & Spencer in a cost disadvantage for a perceived "top quality".

SOCIO-CULTURAL FACTOR:

This social issue includes human population size, education level, cash flow level, ethnic origins and legends together with cultural factor include stability diet and housing state. For instance as employee has begun seeking even more balance lives, organization have had to adapt by offering spouse and children leave policies, flexible function hours and possibly on-site child-care features. These sorts of facilities ought to be provided to the personnel in the Marks & Spencer and which is immediately or indirectly affecting operation for excellence service. For instance, the online shopping unveiled by Marks & Spencer can introduce business profitability saturated in competitive business environment.

TECHNOLOGICAL FACTOR:

The most rapid change has happened in technology have already been unveiled by Marks & Spencer since long time. Information gizmos are shrinking however becoming more powerful. For instance, Marks & Spencer has applied today’s technologies to serve consumers in modern period compare to rivals. It consists of online shopping, introduce own retail store card and computerized self scan spot etc through the use of modern technology.

ECOLOGICAL FACTOR:

Ecological factors straight or indirectly influence the strong production process. It consists of ecological concerns that about client perception of a organization or product and customers buying habits. The production level of Marks & Spencer is highly affected by customers buying patterns worldwide as people

do originated from different part of community.

LEGAL FACTOR:

The legal factors consist of wage laws, worker safe practices laws, union laws, anti monopoly regulations, Sunday closing laws and regulations, copyrights and patents laws and environmental protection laws which directly or indirectly affect organization from outside environment. For instance, Sunday personnel want to relax, so Marks & Spencer should close down that will impact the profitability or efficiency of business.

1.5 SWOT ANALYSIS

It is a kind of tools which could be utilized to audit an organisation. It highlights the business’s strong and disadvantages and areas they can improve.

STRENGTHS

All stores have large trading space.

Reputation/Brand.

Good interiors, decoration and proper signage.

Well experienced retailers.

Decades functioning.

It gives recyclable eco-friendly bags.

Frequent locator and intercontinental coverage.

WEAKNESS

Weak public relation campaigns and expensive shopping.

Slow to change.

Dependent on suppliers.

Less promotional activity for stores and company.

Clothing: does not really reflect younger women’s taste.

OPPORTUNITIES

More advertisement and advertising.

Uses of very good CRM systems that will help them keep track of customers’ demands.

Online shopping facility.

Easy entering into new market segments.

Understanding competition for adding complementary items.

Achieving competitive advantage.

Stores refurbishment

THREATS

Price competition and high-priced.

Likely to enter different competitors.

Changing buyers requirements and tastes.

Growing competitive pressures.

Rising sales of substitute products.

Vulnerability to recession and business cycle growing.

Growing bargaining vitality of buyers and suppliers.Figure: 2 SWOT Analysis

CHAPTER: TWO

2.1. PORTER’S FIVE FORCES ANALYSIS

To determine how organization environment is changing the way the Marks & Spencer stands in today’s world this assignment will utilize the Michael Porter five forces of competitive placement version. The five forces theory of Michael Porter’s can be a business strategy tool that is used to analyse the attractiveness of an organisation structure.

Figure 3: Five Forces Analysis

Adapted from M.E. Porter, Competitive Strategy, Free of charge Press, 1980

Potential Entrants

The threat of entry looks out when it comes to differentiation for Marks & Spencer to the buyers’ loyalty that may discourage potential entrants. Marks & Spencer includes a long time developed focus which has served as an entry barrier. As such, it is unlikely for Marks & Spencer to have different entrant in its place. Marks & Spencer can be an expert in this field.

Existing Competitive Rivalry between Suppliers

Under competitive rivalry, Marks & Spencer really faced danger as others entered the sector with the same top quality goods but with affordable selling price and up-to-date fashion. This is actually the spot where Marks & Spencer failed the most. The firm was struggling to fight the current of competition.

Bargaining Power of Buyers

Marks & Spencer have the aim to provide value for its buyers. It is looking at the different areas of buyer’s power and tastes. It is delivering products to the changing needs of consumers on the market which makes competitors very hard for competing to improve their strategies and meet those needs which giving unique gain in the market inside industry.

Bargaining Power of Suppliers

More than 90 percent of Marks & Spencer suppliers had been British. Marks & Spencer bought straight from a few UK suppliers all their stock that they manufacture which created a situation where the dealer was reliant on Marks & Spencer and vice versa. The issue of this approach is that overseas suppliers produced goods on lower cost. The bargaining power of suppliers is pretty low when it offers concentrated purchasers. When the sales declined rapidly in overdue 1990s, Marks & Spencer outsourced, globally to lessen its cost similar to its opponents which result less bargaining vitality of its UK suppliers.

Threats of Substitute Products

Substitution can lessen demand for a specific ‘class’ of goods when customers switch to the alternatives. The alternatives originated from Tesco and Sainsbury because they acted on providing added value food. These alternatives offered threat to Marks & Spencer.

2.2. VISION

A Vision statement targets what a company really wants to be. It specializes in future strategy producing that summarizes goals and objectives of an organisation. It is just a source of inspiration which provides clear decision-making conditions. Marks and Spencer possesses dream or vision itself to get the leading provider in the ever growing competitive global markets forever.

2.3. MISSION STATEMENT

It is a brief statement of the purpose of a company or organization. The mission declaration should guide the activities of the organization, explain its overall goal, give a sense of path, and guide decision-making. It offers "the framework or context within which the company’s strategies are formulated". Marks & Spencer’s objective is ‘to be considered a socially responsible and profitable, by providing new quality products in the region of Cloths, Food, Home and Financial Services’

2.4. OBJECTIVES

The company targets includes building exiting popularity for reliability and services quality, strong customer target, team spirit, and dedication to transparency. Marks & Spencer is aiding for demographic or the border worth end of the market for client. Marks & Spencer offers customer high-quality merchandise at value for money rates, backed by its provider promise to consumers. Increasing the profit 20% by 2011, decrease the bad debtor, 25% upsurge in cashflow in 2011 and introduce a new item in 2011 etc will be the goals of Marks & Spencer.

2.5. MEASURES

Marks & Spencer can be an organisation which includes board of director to keep up controls over various activities maintained and performed though out all branches of entire countries where there can be business at all. It can measure performance by harmony score card, by considering product sales in a particular period and overall expense of company. Internal method could be evaluated or measure through the amount of self serving machine presented in Marks & Spencer and quantity of kilogram of foods wasted per year. During that we could measure the business objectives of the company.

2.6. BUSINESS APPROACHES FOR MARKS AND SPENCE

M&S Generic strategies

There are three main generic strategies open to all companies including Marks & Spencer, either become the lowest-cost store or differentiate products so that its valued by consumers to the extent that they will pay reduced price. By applying these strengths in either a wide or narrow scope, three generic tactics result: cost leadership, differentiation, and concentration. The circumstance of Marks & Spencer’s core products (food and garments), it implements a concentrate generic strategy as it specializes in a narrow segment (a specific buyer group (executives), market segment (high-end), product characteristic (freshness) and within that picked segment Tag & Spencer attempts to accomplish differentiation from Tesco’s Asda, BHS, Top Shop etc. The premise is definitely that the requirements of the group could be better serviced by focusing totally on it.

STRATEGY DEVELOPMENT

Strategy developments are the future plan of the business, where they want to move. We are able to analyse the strategy production of Marks & Spencer theoretically through the use of BCG Matrix and Ansoff’s Matrix. As a result innovative companies as well thrive on change. (Robert, 1995) Marks & Spencer selling own brand items where its motto is to supply quality goods and customer satisfaction. Market penetration provides been participating for Marks & Spencer since very long time. They have been following a growing route through joint ventures with founded suppliers and stores. In this approaches provider expand the product into numerous geographical areas.

Marks & Spencer have targeted their business actions into developing services in UK market in later on 1930s’ by offerings unique goods and providers. In this understanding based BCG matrix is employed to conceive the total amount of the portfolio of the firms with regards to relationship between market show and market growth. This is a company in market that has slow growth and its market share is consistently shrinking. The industry in which Marks & Spencer operate is normally mature and market may very well be stable so that it is more difficult to gain market share. It’s assumed that Marks & Spencer is normally a decline phase firm (Stockport, 2000). Marks & Spencer competitors in the growth level trying to gain market share, it is necessary to invest in buy to regain its marketplace share and dominance. This is often done by reducing the merchandise and service prices lower than competition and spend high sums on advertising and selling. Using the approach clock unit, the hybrid strategy is the foremost choice for Marks & Spencer to accomplish differentiation and a cost lower than its competitors.

To recommend new strategic developments for Marks and Spencer may also utilize the Ansoff Matrix.

In the Ansoff matrix,

the merchandise and market options avaiable to an organization. Markets may be defined as customers, and goods as things sold to customers (Lynch, 2003).

Figure: 4 Ansoff Matrix

(Source: http://www.easilyinteractive.com/blog/uploaded_images/ansoff-779433.jpg)

Market penetration is a growth strategy where in fact the business targets selling existing items into existing market segments (Ansoff, 1957). It seeks to attain four main targets: Maintain or increase the market talk about of current products – this is often achieved by a blend of competitive pricing approaches, advertising, sales promotion and perhaps more resources focused on personal offering. Marks & Spencer, as for the item "Clothes", the company has shown that they are providing top quality goods to clients over the UK and Europe. Marks & Spencer started acting in single marketplaces in its starting, increasing this amount to 895 yet. Restructure a mature market by driving out competitors; this might require a a lot more aggressive promotional marketing campaign, supported by a prices strategy designed to make the market unattractive for rivals. The foodservice market is probably the most demanding and sophisticated where the Marks & Spencer operates. Maximize use by existing customers – for example by introducing loyalty schemes.

Market development is a technique where in fact the business seeks to market its existing goods into new markets. This may entail exploration of latest segments of market, new uses for the company’s services and products, or brand-new geographical areas as a way to entice clients (Lynch, 2003). There are various possible means of approaching this strategy, including: New geographical market segments; for example exporting the product to a fresh country. In February 2007, Marks & Spencer released the starting of the world’s most significant Marks & Spencer store beyond your UK at Dubai Festival Town. On 2 October 2008, Marks & Spencer opened up its first mainland China shop in Shanghai, which are some exemplory case of market development.

Product development is a technique where a organization aims to introduce new products into existing markets. This plan may require the development of latest competencies and requires the business to develop modified products which can appeal to existing marketplaces. Marks and Spencer’s personal service and banking are some example of new product development

Diversification is an inherently more risk strategy because the business is getting into markets where it has little if any experience, which is often dangerous with regards to which ways of use. (Macmillan & Tampoe, 2000). For a business to adopt a diversification strategy, therefore, it will need to have a clear idea about what it expects to gain from the technique and a genuine assessment of the dangers. As the company has increased its number for 40 countries, the brand new market segments that it reached has been effectively met.

2.7. ACTION ARRANGE FOR STRATEGY Execution AT MARKS AND how to write dialogue in an essay: recommendations SPENCER.

To implement new strategies for Marks & Spencer, it is necessary to know the positioning of the organisation which includes analysing about the exterior environment (PEST factors), interior strength and weaknesses (SWOT), competition, products, suppliers, financial strength, ratios, processes, system, customs, skills of the personnel. Strong brand and stability could be interior strengths for Marks & Spencer. With the involvement of bigger management, it is possible task to evaluate the market opportunities for market expansion, product development and integration.

Marks & Spencer’s impressive and diversified culture could be a positive influential aspect for new strategy production. To learn right persons with appropriate skills are the important factors for implementations of approaches in an organization. The main element functions like marketing, finance, customer-care and network organization, their roles and essential is probably the inseparable needs of Marks & Spencer. Marks & Spencer can achieve its objective by enhancing customer focus and control. It can launch new products in order to achieve organisation goals. It is understandable, (Robert, 2000) always good strategies will help to anticipate focus on options and learning that its’ important to eliminate choice. To achieve the organizational goals, it needs to expand its support and products in several geographical areas. It really is hard to formulate corporate strategy for Marks and Spencer since it must apply various methods to the target segments which have been identified and arrive at value recommendations. Marks & Spencer, a respected company is seeking to enter into the brand new markets within the united states and abroad. Industry attractiveness could be evaluated. After careful evaluation it is understood there are growth prospects in all the identified regions of strategic expansion. Marks & Spencer must face several important parameters for success within existing opponents over competition.

Strategy and Activity

Time Frame

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Market Development

Geographical expansion- Asia/Arabia

Infrastructure development

Legal action

Budgeting

Marketing (Awareness)

New Product Development

Infrastructure development

Introduction of new product

Promotions and offers

Horizontal Integration

Promotions activities

Legal action

Figure 5: Technique, Activity and Time frame.

2.8. MONITORING AND EVALUTION

It is certainly hard to forecast, screen and make proper decisions at right period on ongoing activities and needs to recognize the constraints which we need to have and deal with for corrective action in order to put right strategy execution in an organisation. It offers a descriptive picture of what’s happening at a given time period at all. It needs to control and implementation well to monitor and assess within specified time period. It measures the performance and efficiency of the desired outcomes of the strategic plan. The output of the can be maintained and monitored through consumer responses, industry demand and market share. Evaluation provides better in-depth examination on whether implementation program has achieved its goals or not. At the conclusion of financial year, based on customer feedback market share, demand for item and financial profitability performance can be evaluated. Focus group evaluation customer interviews etc are the tools which are being used to evaluate market responsiveness.

CHAPTER: THREE

3.1. RECOMMENDATION

As recession is heat the business enterprise and income of individuals is decreasing day by day worldwide continually, Marks & Spencer is preserving its position within top 10 10. But also for making future safe and secure Marks & Spencer must enhance the business as competition are well maintaining the business in the global situation, by using various promotional tools and systems. Marks & Spencer should offer innovative services to the clients through the use of latest technologies available sector through e-commerce and e-business. It needs to increase its business worldwide, especially Parts of asia like Nepal, India or China.

To maintain steadily its position in the very best 10 forever, you will find a need for Marks & Spencer to improve its methods on its inbound logistics, operations, suppliers, store developing, layout and much more. Their warehouses should be made clear of old stocks to give way to brand-new up-to-dated stocks. The packaging of their products should also get due considerations. It is suggested for Marks & Spencer to consider purchasing supplies from overseas to save cost so as to provide customer merchandise at less price. There is also a dependence on Marks & Spencer to redesign their store with techniques that provide space, convenience, and relaxation to customers while they are browsing, fitting and browsing. Marks & Spencer management should eradicate delays in decision making and use digital manufacturing systems. Marks & Spencer needs to hire perfect, impressive, enthusiastic, punctual, honest, and reliable personnel.

3.2. CONCLUSION

Marks & Spencer is a leading grocery store which has covered wider market. It is the perfectly recognised organization which is set up to flourish the support with regards to clothing, food stuffs, residence ware and gift ideas, and accessories because of this survival and expansion of business. It is quite expensive but also maintaining the positioning in the very best 10 in UK. Products are tangible whereas companies are intangible which gives satisfaction to the human beings. Marks & Spencer is probably the most renowned glossary merchant store which how to write a psychology research paper includes understand the modern desires and needs of customers. It has played essential role in the program sector management. Though there are various retailed stores in UK and abroad but Marks & Spencer put them back and move ahead to provide quality products with standardized goods. Marks & Spencer should design fashionable clothes and try to increase its investment in advertising to be able to build its brand graphic on the ideals of fashion.