Marks and Spencer: Strategic marketing

Résumé du document

Marks and Spencer, a partnership formed in the late 1800s, is today one of the UK's leading retailers of clothing, food, home products and financial services. Employing 65,000 people, the company has 448 stores located throughout the UK, as well as a further 202 stores managed under franchise in 30 countries throughout the world (Europe, the Middle East, Asia and the Far East). (Marks and Spencer, 2006). This report will be focused on Marks and Spencer and will try to analyze its success as well as its business environment, its strategy and its resources and capabilities.

On the one hand, this part will analyze the different factors which illustrate the achievement of M&S. The success of M&S can be exposed by several points: Firstly displayed by the fact that this company has existed since the end of 19th century; that shows the sustainability of this company. Nowadays, it can be considered among the biggest companies of the world.

Secondly, the number of stores opened since 1894 (the first) has considerably increased to reach almost 450 stores situated in UK and 202 stores worldwide (2007), including over 130 franchise businesses, operating in 30 countries. The UK market is the primary market of M&S, that is why this is where M&S is the most efficient. From the 1970s, M&S has adopted a market development strategy that includes open new stores all around the world., in beginning by
Europe.

Thirdly,by 1998, some companies had been suppliers to M&S for more than 100 years, and it is important to note than theses relations were based on trust and not on contracts. This shows the success of M&S with its suppliers.

Extraits

[...] (The corporate citizenship company, 2007) 10 / Application of Value Chain Analysis: The term value chain refers to the idea that a company is a chain of activities for transforming inputs into outputs that customers value (Hill & Jones P133) The value chain, Porter (1985) is the primary model used to help understanding how added value is created within companies. Thus, to determine how M&S adds value to its products or service, it is indispensable to analyse the activities of the company and its value chain. The value chain can be divided in two parts: primary activities and support activities. The "primary activities" include: Inbound logistics are the suppliers of M&S sourcing of materials and equipment. Operations (production) are the manufacturers. M&S suppliers now sourcing of 70% produce from foreign manufacturers. [...]

[...] Productive tasks require the cooperation of teams of resource i.e. organisational capabilities or competence. Selznick refers to distinctive competence.” (Bannon, 2004) M&S has relationship with its employees through internal architecture and relationship with its suppliers, subcontractors and franchises through external architecture. The reputation of M&S has developed an organisation, which is seen as reliable and supportive of long-term partnerships, particularly among suppliers. Some suppliers are with M&S for 100 years. Management structure and experience in retailing Embedded culture among employees (now focusing on making the culture more customer focused) customer service/ value focused New design team organisational operations 14 / 23 M&S has the capability of providing quality and effectiveness in customer services thanks to resources in the area sales and distribution. [...]

[...] (Marks and Spencer, 2006) 21 / 23 V. REFERENCES: Bannon, D. (2005) Strategic Marketing Course Notes, Lecture University of Paisley Bannon, D. (2005) Strategic Marketing Document University of Paisley Grant, R. (2002) “Contemporary strategy analysis”, (Fourth edition) Hill, C.W.L & Jones, R. (2001), “Strategic management: An integrated approach” (Fifth edition) Johnson, G & Scholes, K (1993), Exploring corporate strategy: Text and Cases”, (Third edition) Johnson, G & Scholes, K (2002), Exploring corporate strategy: Text and Cases”, (Sixth edition) Marks and Spencer (2006), “Business in the community”, (on-line). [...]

[...] CUSTOMERS Price Service Quality Branding and loyalty Medium price segment. Provide a good service is crucial to maintain a competitive advantage for M&S Also a key driver for competitive advantage Quality and service before price to keep loyalty of customers COMPETITION Costs comparisons Quality issues Market dominance Distribution Price comparisons Lot of firms with lower costs than M&S because they use foreign manufacturers. Still be seen as one of the best quality retailer 10,5% of clothes market share in the UK in 2005 M&S has still a lot of supplier distribution points compare with its competitors Sometimes more expensive in clothes and almost the same for food / 23 CORPORATION RESSOURCES Knowledge Experience Innovative ability Labour costs Sunk costs Economies of scale Possess strong skill in human resources Good experience thanks to its durability Crucial in the maintenance of its market position Becoming increasingly important Not the lowest costs operator M&S possesses economy of scale in size, R&D and distribution. [...]

[...] Same as precedent but focuses on specific market niche. Direction, Ansoff matrix: Let the business go into Withdraw/ Divest liquidation or withdraw one particular product Concentration and development of Market penetration resources and competencies in specific market Market development Attempt to spread products in other markets The delivery of Product development modified or new products within existing markets Take away from the Diversification related current markets and products -related: an extended D. unrelated range -unrelated: total change 20 / 23 IV. [...]