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Marks And Spencer Strategic Corporate Development Background Marketing Essay

Marks & Spencer (M&S) is a major British retailer, which has more than 895 stores in over 40 territories about the world plus more than 600 home and 295 international stores. M&S hq is in the town of Westminster, London, England. It is also regarded as the greatest clothing retailer in the United Kingdom and 43rd most significant retailer in the world as of 2008 relating to its established website. M&S was founded in the entire year 1884 by Michael Grades and Thomas Spencer.

Looking back again at its background in the 1950s almost all the goods in those days were sold under the "St Michael" label and M&S lingerie, women's clothes and girls' school standard were brand name under the "St Margaret" label before whole range of general products became St Michael.

The business has always maintained its main focus on differentiation strategy where the quality and the initial attributes were respected by the clients, this value added by the uniqueness of the merchandise experienced allowed M&S to impose a premium price, where M&S hoped that the higher price will more than cover the excess costs incurred in offering the unique product, however on the other hand it also experienced a reputation for offering fair affordability. Later, the reputation that M&S had been offering that was quality and price started out to waver it experienced serious complications. M&S acquired the uncompromising attitude towards the client relations that no others were even close to them, therefore in 1953 M&S came out with a new strategy to create a new slogan that summarized the customer relations that was "The customer is always and completely right" in fact this slogan somehow little by little build assurance on customers attitude to look and choose the merchandise confidentially.

Since, 1958 M&S sold Xmas cakes and Xmas puddings it was created as a technique to increase the quality with their Swiss roles, in addition they hired food expert of that time Nat Goldberg, who made a significant improvement across their entire wedding cake range, which experienced lost the public favour couple of years earlier. As a result, measure to enhance the quality of food; food labelling was increased by phasing "sell by times" in between 1970 and 1972.

Again in 1959 smoking was banned from all M&S outlets as a result of fire dangers it posed. Later it became a permanent rule after serious concerns were raised by health conscious people and customers having medical condition like asthma.

M&S again followed a new strategy for market growth through the use of market development. It's a name directed at a growth strategy where in fact the business looks for to sales existing products into new marketplaces by discovering new geographical market segments or in different ways exporting the product to a fresh country.

M&S gradually opened up its stores in continental Europe in 1975 and in Ireland after four years. All the international stores are handled under franchise, the reasons M&S operate as a franchise in several countries were probably it was less risky, and would cost a lower amount as establishing from scratch themselves and needed less abroad knowledge nonetheless it also proved to possess disadvantages like it could be less profitable then setting up their own procedure in the long run and the main thing is to make sure that the franchisee doesn't ruin the image of the business, on the other hand apart from the stores in the Republic of Ireland and Hong Kong which stay in company ownership. The first M&S store in Central Asia was built-in Kabul, Afghanistan in the 1960s nonetheless it was later turn off.

In 1973 M&S widened into Canada with one stage it developed so generally that it got 48 stores all over Canada. Since it was growing swiftly at exactly the same time it was apparent that it was also facing huge risks from its rivals. The weaknesses that the Canadian retailers confronted were that it was smaller than English Outlets and in addition it didn't bring the same choices. The huge mistake M&S carried out on market segmentation was that it targeted senior citizen and expatriate British isles people. Alternatively Canadian children and teenagers found the sellers to be very boring and respect the products as stodgy and unfashionable. M&S had struggled to develop against its competitors in that period of energy as other stores were providing discounts and also the arrival of "big field" experienced big impact to lower its sales. In the late 1990s efforts were designed to modernize the stores and increase the customer basic and unprofitable locations were closed, despite various efforts to really improve its image the Canadian Procedures continued to reduce money and the last 38 stores in Canada were shut in 1999 as mentioned by CBC reports November 10, 2000 on the website.

The strategy of market development was not only carried out in North America and Asia but also in Western markets too. Extension into France began with stores starting at Boulevard Haussmann in Paris and another city in France called Lyon in 1975, accompanied by another opening of any store in Paris at Rosny 2 in 1977. Later further growth into other French and Belgian locations followed into the 1980s. Although Paris stores remained popular and profitable, M&S was taken over by the French retailer Galeries Lafayette SA whereas the entire western European procedure from countries like Belgium and Germany didn't show much revenue and eighteen stores were closed down down in 2001.

Acquisitions by M&S commenced in 1988 when they required over American clothing company called Brooks Sibling and Kings super market, a food chain of USA. They were sold off respectively in 2001 and 2006; The Fiscal season of 1997-1998 was the period of growth for M&S. Experts had predicted gains to be somewhere within 1. 17bn ($ 1. 9bn) - up from 1. 102bn. During the time of constant success the tenure going by Sir Richard Greenbury, profit margins were forced on shaky earth levels, and slowly and gradually the loyalty of its customers were significantly eroded. The other reasons were the growing cost of using British isles suppliers appeared to be somewhat burden, as the rival retailers increasingly imported their goods from low priced countries which proved to be competitive benefits to the competitors but M&S's belated turn to the suppliers overseas weakened a central part of its demand to the public. Another important factor was not agreeing to any bank cards from the customers rather developing its own store greeting card and accepting only M&S card. The situation with the credit card itself was there have been no real bonuses or loyalty savings for associates instead the members only bought a complimentary backup of the M&S mag and later slowly but surely began to offer 5 off vouchers off clothing only if you spend "at least 50" on clothing this plan became less gain to the customers weighed against other store credit cards which offer 10% off on less than 20 least spend. Later in 2001 M&S started to accept all bank cards and presented "per una" clothing range designed by George Davies, which along with a redesign of its basic business model, profits began to recover reasonably and M&S recovered some of its market talk about, but it was soon observable that problems continued to be.

M&S was rated 17 in THE CHANGING TIMES "Top 100 Graduate Employers 2008". In February 2007, M&S announced the beginning of the world's most significant M&S store beyond your UK at Dubai Festivity City and again in October 2008, M&S exposed its first mainland China store in Shanghai. The up market Zandra Rhodes collection, that was modelled and created by the British designer Zandra Rhodes, was launched into the bigger stores by late 2009.

In the entire year 2006 M&S presented a new marketing campaign called "Look behind the Label" that was aimed to highlight the various ethical and environmentally friendly aspects, of the development and sourcing methods employed in by M&S which included fair-trade products, ecological fishing and environmentally friendly textile dyes. All of the coffee and tea sold in M&S stores were in Fair-trade moreover the company offered clothing lines created from Fair-trade cotton in chosen departments.

2 Current Strategic Situations

Today, M&S is one of the leading stores in the united kingdom with over 21 million people browsing the stores every week. Overall, clothing and home ware sales accounts for 49% of the business and the other 51% of the business is food, where they sell from fresh produce and groceries, to partly well prepared meals and ready foods.

M&S made faults on the subject of important marketing factors including the target market segment, the merchandise combination, promotional needs, the degree to which products would have to be improved for the market segments, and distributional differences however, M&S has modified operations based on its understanding and is now successful in the majority of the international locations where it operates.

Market Segmentation - It allows M&S to treat similar customers in similar ways, whereas distinguishing between dissimilar customer teams. M&S uses demographic segmentation to select its target marketplaces because of its products also called the emphasis strategy. M&S targets its customers by era, income, social school and occupation. M&S focuses on the 30 plus age group with high income and professional vocation. M&S also bases its market segmentation through value. Many products in M&S's clothing range have a finest listed, high quality segment, a mid priced segment (M&S, Clarks, Faith), a mid priced section (Top shop, River Island) and low price segment (Barratts) e. g. In that market, fashion and quality differences can be more important than price versions.

Strengths & Weaknesses: M&S strengths are their attention to detail in terms of distributor control, products and store structure. The success of M&S under Simon marks was often attributed his knowledge of customer preferences and fads. M&S provides the highest requirements of quality. The suppliers use the most modern and efficient creation techniques, however M&S need to concentrate on their weaknesses too that happen to be basically stocked common clothing range with wide appeal to the general public, buyers often have to make alternatives, which would outlast the fashion and trends observed in other high street stores, this lagging behind in case of presenting up to dated classy clothing to keep pace with the environment actually made them susceptible to their competition. They always used English suppliers believing that it could give them highest quality with low costs but actually sometimes make sure they are weak to challenge its challengers. Some competitors are employing international suppliers to keep the costs down.

The Five Causes Model: As explained by Porter that there are five makes inherent in a market, which will jointly decide the strength of competition and profitability of M&S and the food retailing industry. New entrants are the first hazard, the high capital costs and self-assurance of customers represent significant obstacles to entry and the market is also hypersensitive to reputation however, the emergent of low priced manufactures create an important danger. Since, there is certainly opportunity in low price sector, Top Shop or ASDA and Morrison could consider adding low priced home products. The second is the threats from substitutes, as there are many sellers of other high quality brand name food, such as Sainsbury, John Lewis, and Rackham's etc. The 3rd pressure is the threats from the bargaining vitality of buyers, this can be strong for M&S and the rest of the similar food retailing industry having large numbers of suppliers the effect is an extremely strong competitive rivalry in the industry. Finally the goodies from the suppliers bargaining electricity is relatively lower in the food industry, due to the dual sourcing strategies, by using a range of choice sources of supply for products.

Macro Environment Analysis

Political- Following the free trade agreements and the Western european integration, the market has opened up for British Companies to invest in Eastern Europe in the same way more companies will be looking to create their stores in the U. K which may be a threat to M&S.

Economic- The retail industry is rather prawn to recession and also delicate to changes in interest rates. After the recent economical recession, many of the countries are out of the recession and many are on the road to recovery. Individuals are positive and the retail industry like M&S is once again booming.

Technical- Changes in retailing methods as such clothes sales via the internet is now a common place in retailing. Paperless procedure, the management and administration of the company are undertaken on IT systems;

Using the Internet to sell Using the internet for information and also to sell its products proved to be successful for M&S, a few of advantages for M&S are it has become convenient for customers to shop online which enticed more customers who didn't have sufficient time to look, the other benefits were it also fascinated customers from areas which have no M&S stores local and most importantly this strategy became suprisingly low cost. M&S launched online shopping since 1999 and today has drawn customers from everywhere like the customers who don't have access to M&S stores easily.

Environmental - M&S in now focusing on "Plan A" strategy. In January 2007, M&S launched an initiative know as "Plan A" to increase the environmental sustainability of the business within 5 years and likely to cost 200 million. The plan protects 100 commitments over 5 years to handle the key social and environmental issues facing M&S today and in the foreseeable future with the tag-line "Because there is no Plan B". The commitments span five topics: Weather change, waste, sustainable raw materials, reasonable collaboration and health.

Some of the cases are M&S and Oxfam Clothes Exchange and Prostate Cancer Charity.

Marketing Mix - The marketing combination includes all the requirements related with the products that affect whether the consumer chooses to buy or not. There are clearly many factors which effect a consumer's decision to buy something and these are all part of the marketing combination (the 4Ps)

Price- M&S charges prime prices through its differentiation strategy

Product- M&S trading markets its products predicated on superior quality and dependability

Place- M&S products are sold through its large number of stores in city and town centres. More recently M&S has extended its sales syndication stations through the internet visa its website (online shopping)

Promotion- M&S contained marketing communication is provided through media in a variety of forms, advertising, TV, national magazine and newspapers as well as through the web site.

M&S has endowed extremely on interior and exterior resources a few of the internal resources will be the well trained staffs or organised human resources, strong balance sheets, diverse amounts of products which range from clothing, financial products, furniture, wines and home, strong cashflow position and strong management. The external resources include strong resource string, new infrastructure at new locations and strong corporate and business cultural responsibility.

The stakeholders at M&S play an important role for the proper options for present and for future years; each stakeholder takes on a significance role as

Employees: Employees will want secure jobs, good pay and fair treatment.

Customers: Customers want high quality, good service, and good alternatives of products.

Shareholders: Shareholders want income and expansion.

Supplier: Suppliers want secure contracts and reasonable prices

Local communities: Local neighborhoods want jobs and good shopping options.

Pressure Communities: Pressure groups want M&S to pay attention and be ethical.

Local and national governments: Government desires jobs and taxes paid.

For example a good story to web page link this up may help us understand better how to conclude the issues which can be linked between your public, exterior pressure groupings, stakeholders and use of ICT. In 2009 2009 M&S created an insurance plan of price discrimination in the lingerie section, they charged an extra 2 for over measured bras called DD plus bras and pressure group "Busts 4 Justice" has been setup on Face e book with an associate over 110, 000 who had been campaigning because of this surcharge to be removed. The group's founder, Beckie Williams, who is also the business's shareholder marketing campaign against the price and imagine all the sizes, should be of same price. This challenge was finally earned finally by Busts 4 Justice group.

3 Strategic Guidelines for the Future

The important component of M&S is to target the entire organisation on the united kingdom business, with a quest to make aspiration quality accessible to all or any because this is actually the heart of the business and it's really very essential.

Each and every one of the products must and will display quality, value and improvement that M&S are famous for. That's quality reinterpreted for the times in which we live. Before, quality recommended the clothes which you could wear for a long period and years. Today's customers are more complicated more demanding. They need quality clothes that previous, nonetheless they also stress other conditions such as style and energetic. M&S must gratify these objective as well as a lot more traditional requirements.

Opportunities

To survive nowadays globalization is important. M&S have a broad possibility to go more global to improve and extend its business. They also have the opportunity to consider more abroad supplier which will actually give them cost advantage, alternatively than suppliers available on an area level. There is also the chance to maximize the utilization of available technology to boost their functioning also to gain competitive benefits.

Threats

They are in strong competition with Space, Oasis and next, who are offering similarly priced products yet more fashionable. M&S is also in competition from discount stores like Matalan, and George range at Asda. M&S is also in hazard from Tesco and Sainsbury's who migrated into offering added value foods, which includes been pioneered by M&S.

By 2012 its aim is to be carbon neutral, send no throw away to landfill, stretch ecological sourcing, help increase the lives of individuals in their supply string and help customers and employees live a wholesome life style.

In repairing these fundamentals, M&S must make the stores more attractive and much easier to shop in, while concentrating more sharply on its classically stylish, key customers. At exactly the same time, reinforcement the retail business by building on the fantastic asset which they have in markings & Spencer Financial services.

How has M&S diversified in recent years?

M&S have diversified by starting stores abroad and UK franchises, it diversified in to the financial sector in to the 1980s

M&S wants to continue its differentiation strategy by delivering freshness, quality and innovation

Recommendations-

M&S continues to carry out well and has earned customers' trust for providing quality, invention and convenience. The business enterprise is a key platform for potential development and the company is considering opportunities to enlarge its reach through new locations and advertising channels.

Improve the source chain: M&S continues to see significant advantages from the reframing of the supply basic, being shown in a clothing primary margin that is increasing highly. The priorities now are to eliminate duplication and increase transparency. By re-building closer working relationships with its resource partners, historically a unique strength, Markings & Spencer will achieve further advancements in quality, value, product charm and convenience.

Financial Services: Another future ideas include expanding M&S store credit card as an important partner for development of retail sales which is a stronger presence for financial services to get may lead to continues development of the credit business and faster rates of growth of non credit areas, which might involve attracting external partners.

Build on food chains: M&S foods shows positive results from its customers and the region continues to perform perfectly and has received customers trust for providing quality, improvement and convenience. The business enterprise is a key stage for the future growth and the company should consider increasing its reach through new locations and selling channels.

Cost Slicing: To be able to concentrate all its initiatives on the recovery of the united kingdom business, M&S must close its noncore businesses and property, with consultation with its employees.

In summary, I feel that even although future is unstable, and there is nobody sound theory for strategies, undergoing the procedure of tactical planning is vital for the ongoing existence of any company, it isn't there to build up specific action programs, but to do something as a medium for well-organized organisational progress. Strategic planning comes with an overall positive result on any organisation; it increases efficiency therefore of increased efficiency and effectiveness of decision making.

Strengths:

What do we prosper?

How are we much better than our challengers?

Weaknesses:

What could be done better?

What is being done terribly?

Opportunities:

What are the opportunities that may be exploited?

What will be the interesting developments?

Threats:

What obstructions are being encountered?

What is the competition doing?

Are the technical specs for the merchandise or services changing?

Is changing technology threatening our business?

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