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Marks and spencer competitive strategy
An introduction to marks and spencer
Marks and spencer competitive strategy
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Analysis of the Current Strategic Situation facing Marks & Spencer
What started as a penny bazaar over 120 years ago grew to be one of
the most successful international retail stores and became a household
name. However, in the late 1990s there was a drastic turnaround in the
otherwise consistently high growth of the organisation. The once
multi-million pound profits turned into losses. This case study
analysis looks at the reasons why the organisation began to fail, its
current situation in the market environment today and options open for
it in the future.
In the late 1880's the company started by Michael Marks became a huge
success and due to its rapid expansion Tom Spencer, previously a
cashier, became a partner and Marks & Spencer was formed which showed
steady growth. From the initial core competency of value clothing
others developed. The value-clothing competency evolved in quality
clothing at good prices. Simon Marks assumed the role of management
from his father and implemented aggressive marketing strategies. After
research and investigation of similar American organisations Simon
Marks decided to implement several changes to the organisation which
allowed it to more closely meet the needs of the market segment at the
time and secure strong future growth. These included:
Ø turning the penny bazaars into stores
Ø establishing a simple pricing policy
Ø introducing the 'St Michael' brand
M&S employees also had good working relationships and could be said to
have a 'family' working atmosphere as they were well treated and paid.
Higher positions in the firm were also recruited internally; until the
late 1970's ...
... middle of paper ...
...egments they can begin to differentiate
their merchandise within that market segment and further strengthen
their position. Finally, M&S can begin to once again expand by looking
at new product possibilities in completely new markets such as
financial services. Therefore I would recommend M&S firstly disinvest
loss-making subsidiaries to allow the organisation to concentrate on
rebuilding its core business strength. This can be helped by forming a
strategic alliance with other organisations not to encroach on each
others market for the time-being. Smaller competitors should not be
acquired at this stage until M&S is in a stronger financial position.
References:
Marks & Spencer case study
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by Nardine Collier
Exploring Corporate Strategy
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Throughout the past decade, costs of everything have skyrocketed. According to Source C, America used to have “five and dime stores;” now its a dollar store. In addition, no one can buy anything with just a penny anymore. The source also made a fair observation that these worthless zinc disks are, “behind chair cushions or at the back of sock drawers next to your old tin-foil ball. Quarters and dimes circulated; pennies disappear because they are literally more trouble than they are worth.” According to a New York Times article, “it takes nearly a dime today to buy what a penny bought back in 1950.” The penny is still stuck in the 1950s while America just keeps moving on. As stated by Mark Lewis in his concept of establishing a bill, “the bill would not ban pennies, but merely discourage their use by establishing a system under which cash transactions would be rounded up or down.” (Source A) This motive will help keep the America exceed and
The story of the penny starts on 1792 it came with several different coins including the dime, nickel, quarter, and half penny. The pennies were first made out of 100% copper but the price of the copper went up, because of inflation the power of the penny went down. The cause of the mint to reduce the amount of copper in pennies first from 100% to 95% but then to 5% copper and 95% zinc. Despite the debate in 2006 the value of metal on older pennies rose over one. They became more dead than alive so people began to melt and sell.
Back in the 1900’s kids all over would be so grateful to find a penny. Doing so meant they got to run to the local candy store. William Safire, author of “Abolish the Penny” agrees with the notation of abolishing the penny. In Safire's article he makes a strong claim stating that you, “can’t buy anything with a penny any more” (Safire). Expanding on that claim, there is no point in keeping something around that is taking a resource of zinc and copper, when the resource is being wasted to the garbage. Back in the day it would be absurd to throw such a useful coin away. There is no real need for the coin so keeping it around is simply
will have to make sure that they get enough profit to be able to open
Segmentation, targeting and positioning are the fundament of modern marketing (Proctor, 2002, p. 188, as cited in Harris and Schaefer, 2015).
Business strategy is the means by which firm’s plans to achieve its goals and objectives. It can also be termed as organization long-term planning. The strategy covers periods between 3-5 years and sometimes longer. Businesses use two major types of strategy, general or generic and competitive strategies. The overall strategy involves strategies of growth, globalization and retrenchment. The competitive advantage includes low pricing, product and customer differentiation. We will look at the business strategy used by Marks and Spenser (Cole, 1997). The company is a British multinational located at Westminster London and specializes in clothes and luxurious food products.
4.2 Analysis of Resources, Capabilities, and Core Competencies. Selecting a business strategy that details valuable resources and distinctive competencies, strategizing all resources and capabilities and ensuring they are all employed and exploited, and building and regenerating valuable resources and distinctive competencies is key. The analysis of resources, capabilities and core competencies describes the external environment, which is subject to change quickly. Based off this information, a firm has to be prepared and know its internal resources and capabilities and offer a more secure strategy. Furthermore, resources and capabilities are the primary sources of profitability.
In a competitive environment where market is changing instantly, organizations are in a fix to design a strategy that could market their products enticing the consumers to buy their products and services. Market is the arena for business gladiators who fight out for maximum share and profitability and this is possible only through effective marketing strategy. Competing in present economy means finding ways to break out of commodity status to meet customers’ needs better than competing firms (Ferrell and Hartline, 2010). The intensity of competition has increased after the introduction of media and internet where the companies present their product in the best way through advertisements, product reviews, blog entries, etc. With the advancement in technological innovations, companies have found various ways of providing services to the consumers in a cheaper and effective way and this has resulted in communication revolution in late 1990’s as the cellular technology was unfold in most of the regions. Singtel Optus Pty Limited (Optus) is one such company that has evolved during this period as a leader in integrated communications and this paper is assumed to make an analysis of the company’s marketing strategy and its financial position in the market industry.
Marks and Spencer's Definition of Performance Management Performance management provides Marks and Spencers with needed information on their employees. The information helps Marks and Spencers develop the skills of the employees based on the information collected at the appraisal, it helps recognise when training is needed. Performance management helps M&S by improving their service by having able workers that work to their full abilityand by improving the relationship between workers and the company. Here is Marks and Spencer's definition of performance management: Performance management is a joint process that involves both the supervisor and the employee, who identify common goals, which are linked to the goals of the organisation. This process results with the establishment of written performance exceptions later used as measures for feed back and performance evaluation.’
Marks & Spencer is one of the UK's foremost retailers of clothing, foods, homeware and financial services, boasting a weekly customer base of 10 million in over 300 UK stores. Marks & Spencer operate in 30 countries worldwide, and has a group turnover in excess of £8 billion. It has specific values, missions and visions. It’s main vision is ‘to be the standard against which all others are measured’, it’s main mission is ‘to make aspirational quality accessible to all’, and it’s main values are quality, service, innovation and trust. (www.marksandspencer.co.uk).
Wal-Mart Stores Inc. is in the discount, variety stores industry. It was founded in 1945, Bentonville in Arkansas which is also the headquarters of Wal-Mart. Wal-Mart operates locally as well as worldwide. It operated 1209 discount stores, 1980 super centers, and 567 Sam’s Club by January 31, 2006. It has also extended its operations to many international countries. It runs its retail stores in two forms: Sam’s Club and Wal-Mart Stores. The Sam’s Club sells assorted product lines such as hardwares, electronics, jewelry, and to mention a few. The Wal-Mart stores also offer similar products in addition to the following: health and beauty products, apparel for women, men and children, household appliances etc (www.yahoo.finance.com). The Vision Statement, Mission Statement, Values and Code of Conduct, Corporate Governance: Directors, Executive Management, Committees and Stakeholder will be the key elements that will discussed in this report as it relates to Wal-Mart. In addition to that, the major trends in the general/macro environment and industry will be analyzed.
In the case, Marks & Spencer and Zara, it discusses two business process designs that each company took. You first had Marks & Spencer, who had a more traditional approach. Their chain started of with the buying team, design, developers, merchandisers, technologist, suppliers, logistics, and lastly the store. Zara, however, comes up with a new innovative design. With this new design in effect the delivery of new collections only has a lead-time of 5 days. They were able to cut down this time due to the fact that products where mainly produced on Galicia.
The case looks at prescriptive strategy as applied to multi-product group of companies. Unilever is based in over a hundred countries where multiple products are being made in each. However, the market is mature which means that growth is stagnant and innovation is almost non-existent. In order to improve on growth and sales, the strategies that are needed look at how to come up with new products that have high profit margins and penetrate new markets. The prescriptive approach was used to come with a strategy to improve growth and profit. In order to improve on innovation, both the prescriptive and emergent strategies can be used since both support innovation. From the case study, not much profit was made when the ‘Path to Growth’ strategy was first implemented (2001-2004). The strategy was initially based on cost cutting. There was a need to also build volumes through existing portfolio of branded products through innovation and marketing. By focusing on increasing sales in developing countries where growth prospects were high and increasing investment in personal care products where profit margins were higher, it was possible to improve the profit portfolio.
Value chain analyses a firm 's internal activities such as planning, production, and development, packaging and distribution so as to create value for clients. The function of the value chain is to identify the sources for cost reduction along with quality improvement. It means value chain is used to identify the strong and weak points, positive and negative points, the scope of improvement; in a nutshell, the advantages and disadvantages of the activities taking place in the system. The value chain is also called as a strategic analysis tool and it is a well-known concept in business management industry.
show the amount of vacancies in a job centres, if they can see if they