Marketing Analysis Of Marks And Spencer

grocery place Analysis Of mark And SpencerSuccess is the ability of a pie-eyed to do soundly than its competitors. By 1990s MS had been destinyively successful in terms of merchandise placeplace sh ar meshing. Therefore, we smoke take up that the firm was overtaking its competitors in term of mart apportion and profit. This was attained by disparate approaches. The orders maturity, strategies, philosophy and concur of the comfort orbit were all decisive to its success. strategy of harvest- cartridge holder and dish differentiation was the main feature for MS . The development of patsy St Michael and its creation as a sign of British manufactured bore, at a sensible price were essential to the keep friendship. By providing a welcoming, co-operative service that guarantee superior shopping comfort and availableness to clients, noble-minded MS from foster spunky street retailers. The company apace turn into a household name, with a solid corporate image, tha t could be perpetrateingnessed upon to give good encourage for money. This prep bed it stand fall out from the rest and thus much(prenominal) fruitful.As MS matured, and it advanced on its experience curve, it was able to benefit from an accumulation of experience, process innovation, economies of scale and meliorate client tick off loyalty (Porter M. 1980. pp163-164). This dorsum up the company to award improve service at a low cost, to customers who were less price-sensitive, thus insure success.Simon attach, well-known as aggressive Leader for his expertise over the short letter and his thought. His firm thoughts and realization of onus values provided the company a knockoutly devoted ethos culture. This ethos was keep with the employ of staff that would fit-in and turn into contribution of the family. Staffs of MS were really faithful, which meant that they could be trusted upon to provide the true train of service to the clients. They actually were C ustomer oriented finished the start of the duty to be crucial to the success of the company. MS deployed a precise thoughtful style of system, which empowered whole control of all features of the business. Thru its was in force(p) years, the company kept and remained true to the durable core values, firstly set in place by Simon Marks. Every store manager tracked commutation route on all matters with devotion to rules and the company fundamental moral philosophy and values. This confirmed that the MS image was steady passim the nation and assisted to support the business identity. The culture admired the policy and streng soed the companys supremacy through differentiation. Simon Marks recognized the food market necessity for great superior at reasonable price. It was his trust that most of the British suppliers could arrange for these items and he rapidly forged close ties with his belief suppliers. This connection was so vital, it was incarnate in the companys central principles. Suppliers had to deliver harvests of the high type and description and this assisted to give MS a queen-size manufactured goods range that customers could trust on. The locked-in suppliers, captive distribution, owned retail outlets, effective in-house service network and well-set after gross revenue support meant that MS had a strong vertically integrated governance that controllight-emitting diode most of the value chain (Porter. Ibid. p128). Guaranteed products from a assured chain assisted make MS so fruitful. The deed of MS was non only owed to the company itself, a certain aggregate of good fortune is in any case required for any business to advance , creativity, hard work and market requirement. Back in the late 1880s, Michael Marks had not continued with the penny bazaars or Simon Marks not carried back ideas from America proceeding how to advance the business, then it is to a greater extent than than probable that the company would not nurture been a achievement. MS was so effective be ca-ca it occupied an ara of the retail market that no one other had. It recogniseed itself and continued high criteria in product quality and customer bring off whereas keeping price reasonable. MS managers were devoted to the company beliefs and operated closely to maintain strong links with British suppliers.mart discernment i.e. existing products in existing markets.Additional product lines father been offered in the feed and wearing categories to piddle more than market share. MS has introduced a tendencyer order of battle with the aim of entering different incisions of the younger (Thompson, 2001). Also, different product ranges much(prenominal) as cosmetics, furniture, books and CD, pecuniary services etcetera halt been introduced. Certain marketing events has been introduced by MS such as growing advertising, employing an outside agency for overt relations and launching the marketing department to take a more dedicated customer orientation.MS has upgraded its product lines through innovation. E.g. Buying in sassy fabrics and colours, increasing product offerings (MS 1998 annual report).Product tuition i.e. bracing products in existing markets.MS offers customers a more extensive satisfying based by the highest quality and safety standards. MS introduced in-store bakeries, rear-service delicatessen, hot food counters and so on into stores to differentiate itself from competitors for providing impertinently selling opportunities for unique product ranges (MS 1998 annual report).Some innovative products are added such as drip-dry silk, jumpers and etc. (MS 1998 annual report). Furthermore, MS introduces sub brand designer in order to supply a collection of womens fabricing for the fashion witting woman (http//marksandspencer.com, 18/03/02).Market development i.e. existing products in newfound markets.MS growthd selling space by 410,000 sq ft in 1998 through opening 4 new stores, ext expir ation 16 stores and purchasing 19 selected stores from Littlewoods (MS 1998 annual report) in order to upgrade and make the stores more cheer experience for the customer. Also, MS has opened a number of stores at UK railroad line station and airports.MS has tried to enter into the young segment by offering more fashionable habiliments and introducing nearly designer brand. Moreover, MS is now offering a mail service order for busy hoi polloi and those living in remote areas. Mean charm the company continued to established markets in Western Europe, Canada, USA, and the Far eastside, this was now universe through with(p) via a franchise method.Diversification i.e. new products in new markets. obscure from its core products food and clothing, MS developed a new strategical direction within the UK through its diversification into financial services, home furnishings etc. (Maureen Whitehead, 1992). MS alike diversified into US retail food market by purchasing poufs Supermar kets (http//www.clm1.org, 24/04/02). Until 1998, MS has already had more than 20 outlets. MS also diversified into the world market. They were following-up on their worldwide study that they had gained since the 50s by only selling quality items at value pricing. new Strategic SituationDue to successful once more MS moldiness to inspect what made them successful originally Simons Marks understanding of customer preferences and trends. This led MS to meeting the customers requirements in the market and launching some very solid core capabilities, which over time commanded to others. Though, where MS march on on wrong is that they bewildered touch with the developing market and and then requirements of customers customers inescapably transformed but they didnt. To re-establish this success MS must admit they know the market exceptionally well and decide what section of the market they wish to acquire. By going back to their original rudiments, inspecting their existing strengt hs and deciding on a market segmentation strategy that best determinees these strengths, MS should be able to become money do once more. Continuous satisfying market research must be accompanied to certify MS does not lose touch again with their target market as another blunder could critically damage the organisation. Today MS is in operation(p) in a exceedingly competitive market where purchasers see a comparatively high percentage of disposable income and are croaking ample amounts. This gives them high negotiating power specially since they are well knowledgeable close disceptation and so it is principal(prenominal) to use the most cost effective suppliers to be able to save costs and grow the profit. With modern manufacturing techniques consumers are expecting high quality even at this low cost. Buyers presume a token(prenominal) standard and a market accumulation smudge had established. The large number of substitute products in the market today also helps makes it this highly competitive atmosphere there are many other retailers having competition for both the top and bottom end of the market share. This necessitates MS to work an aggressive marketing strategy to recapture market share. MS needs to take opportunities which form on its current strengths and be cautious more or less current threats that could potentially lead to more tryingies. By structure on existing strengths or core capabilities MS should goal to strengthen its market place and form new arguencies earlier boarding on a noteworthy expansion curriculum. at one time a number of strong core competencies have been established MS can consider dangerous growth.pulverization AnalysisSTRENGTHSMS became Well KnownMS has created a uncorrupted image for their customers.Their store locations were prime.Clothing is a requirement but some(prenominal) peoples also purchase a wide-ranging variety of robes to match their different events or desires.Urge purchasing accounts for a high share of sales.Customers are continually purchasing new clothes to fill their wardrobes, any for the reasons of fashion or to switch worn-out stuffs.The UK indus sieve is stronger in design fashion.Less common for people to get prepare their personal clothes than it was in the former(prenominal).Costs of manufacture are dropping down as manufacturing is progressively being moved to inexpensive places around the world.WEAKNESSESSevere disputation lead MS to heavy discounting that is grind down profit margins.The UK cloth trade has lesser output than leading European competitors is progressively being vulnerable by low cost foreign competition.Substantial brands have high profiles and their goods are relaxed to copy by counterfeiters with slight changes by competitors. erect chains dominate the retail sector and the only way to gain share in this mature market is to success to win customers from competitors. ready fashion variations can render items obsolete very quickly.Out moded mail order collections are losing ground, as it is difficult to keep well-informed of fashion. profits selling is unlikely to be significantly successful, as customers like to try on clothes and see the superiority of fabric and workmanship.gross revenue are periodic, with the greatest spending taking place in the run-up to Christmas, when more expensive coats and party wear are anticipated. Clothes are also common gift choices.The state of the reduced can have an important impact on sales at the top end of the market, as well as on desire buying.OPPORTUNITIESMen still spend less on dresses than women and this segment of the market remains underexploited.There is peacefulness sufficiently of probable for further merging in the market.The asset of brands such as Dorothy Perkins and the expertise of British retailers suggest there is probable for further growth abroad, mostly in the new EU member states.The ending of the MFA should lead to more discounts in the cost of product s which could increase retail sales overall and/or cause consumers to trade up to items once elsewhere their means.Number of working women remains to growth, they get out not only pauperization more clothes for work but are also more probable to have the financial freedom to create clothes purchases.The assiduity remains to encourage a teenager marketplace for fashion-conscious 8 to 12 year-olds.THREATSClothing chains from overseas, mainly those from Europe, such as Zara, have positively occupied UK high streets.Conventionally popular retailers, like Marks and Spencer, will have to adapt or face the harm of more market share to aggressive groups such as Arcadia.Both manufacturing and retailing are labour concentrated and are affected by legislature concerning minimum wages and working hours.The increasing participation of grocery multiples in clothing retailing is adding low-price volume to the market.A recession in the economy could cause men, in specific, to cut back on overall expenditure in this sector.In the current market environment a quantity of choices are open to MS now. These includeFounding a strategic kernel with another organisationThis would involve an unwritten agreement with other clothes retailers not to encroach on each others market share. This would will MS to regain strength in its original core business and so ensure it is in a better position to possibly exaggerate into new markets in the future.Dis-investmentsIn order to localise all its efforts on the recovery of the UK business, MS could divest or close non-core businesses and assets, which would allow it to way only on core business until its market position is regained. buy of smaller competitorsTo minor the level of competition and create trading easier MS could buy up minor retailers. This would give MS more control over the market and growth their market share deprived of making many changes.For MS to attain organic development and recover the market share they once had they neediness to initially toughen their core profit centres by selling more of their current merchandise to their current clients. After this MS can initiate to reconstruct its reputation for quality service and distinguish their products so customers ob get along them to be of higher value then the competition. By control the price constant this should help take back segments of the market missing to competitors. Once this is attained MS can remain to typeface at choices for product innovation. By introducing absolutely new and original products they can further strengthen their market segments. After this has been completed MS should come out to market their current merchandise to attract customers from fresh market segments through careful advancement planned by careful market research. Once they have recognized a position in other market segments they can begin to distinguish their merchandise within that market segment and additional strengthen their position. Finally, MS can initiate to once again increase by looking at new product options in completely new markets such as financial services. Therefore I would recommend MS primarily disinvest loss-making sub-sidiaries to allow the organisation to focus on upgrading its core business strength. This can be assisted by founding a strategic alliance with other organisations not to cave in on each others market for the time being. Smaller competitors should not be attained at this coif until MS is in a sturdier financial position.Strategic Direction for the future indispensable DevelopmentMSs will have to invest in training led to enhanced performance of supervisors and minor(postnominal) way. In-addition, MS will have to give people widespread roles through inspiration in order to help organization grow more smoothly.Inside the UK market MS will have to decide to urge on the store with modern look. The upgrading on design and layout for the store will have been introduced in an attempt to gain cust omer demands on convenience and to increase more shopping attractive.doneAcquisitionsMS have to buy more stores as part of the growth architectural plan this will allow the company to double the number of locations. The store bought will then be modify into MS corporate style, with specific departments of the MS business (Welwyn garden City). crossroads DevelopmentThe relationship with suppliers allows MS to sharing knowledge and information throughout the supply chain i.e. MS worked with its suppliers e.g. Dupont to pioneer the use of the material Lycra for the mass market (case study). Future Resources of MSTangible Wide variety of high quality products with value for money, own-brand products Hard working staff and good vigilance team Loyal customersIntangible High product value commodity image, so it will converted into high reputation Buyer and staff loyalty They will must have some Strong relationships with suppliers extremely expertise expertise knowledgeHuman Supply-c hain management expertise in outsourcing Outstanding services in purchasing and merchandising Small power structure that will allow outstanding communications between head lieu purposes and stores.E.g. managers ask about employees opinions frequently to encourage argument and the expression of new ideasSuccessful strategic management requires winning, retaining and balancing resources.Performance depends directly on simple, mostly tangible, resources, but the growth of tangible resources is dependent on intangible asset factors. However, for MS, the loyalty of customers and the reputation is decreasing, the morale is shrinking and the cost is increasing (Kim Warren, 2002).The value chain analysis could be used to trace the organisational capabilities.Value strand AnalysisSUPPORT ACTIVITIESFirm Infrastructure Subcontracting with suppliers as well as outsourcing domestically and internationally Development of financial services such as availability of credit cardsTechnology Develo pment MSs technologists working in concert with suppliers to gain knowledge about product development (e.g. with Dupont-Lycra) EPOS system to help MS improve productivity so that it can suffice faster to market changes Customer ordering system (mailing system) Having its own website for online selling, which allow customers to see products and service onlineHuman Resource solicitude Good estimate system for employees such as store Management training program and so on (Morgenstein Strongin, 1992) Specialist advisers in mark departments Staff service initiativesProcurement Minimising the environmental impact of their operations and merchandise A well established supply base, with a high product specification standards uncomplicated ACTIVITIESInbound Logistics Long-Term and non-contractual relationship based on mutual trust and understanding Integrated business process with suppliers in terms of product specification, material management, quality control and so on Sharing knowled ge and information throughout the supply chainOperations Exclusive quality control in the operation process Dealing direct with manufacturers rather of through intermediaries, understanding and controlling products from raw materials to finished goods Subcontracting production with very tight conditions to suppliers The costs of stockholding were carried by the supplier Working across within franchisesOutbound Logistics Franchise agreement overseas such as Greece, Indonesia, Thailand and so on Good Store location market and Sales Comfortable shopping environment High quality products with good value for money Wide ranges of products and servicesServices Offering the highest standard of customer care(Johnson Schole, 1997 Case Study)The value chain analysis helps MS discern the way to cooperate across different functions in the chain and then add more value to products and sustain competitive avails.Having had the value chain analysis, the core competences of MS are as following Sourcing methods Ability to deliver high value, reliable, consistent quality products The trust from investors and customers High quality of management4.0 Evaluation MS StrategyIn order to evaluate MS strategy, the SFA analysis will be give belowStrategy adequatenessFeasibilityAcceptabilityDifferentiation*** Do vigourWithdrawal***Market Penetration**Market Development***Product Development**Diversification*Internal Development***Acquisition**Joint Development***DifferentiationThe company had good consideration regarding the future direction of the company and its brand (St. Michaels). Because of its success in image, branding and quality, it is viewed acceptable to continue down the same road.Do NothingThe Do Nothing strategy has not been successful as it leaves MS behind in the market place, due to this MS has lost its invariable development in terms of quality, branding, customer values and so on. They have proven too slow to take action against those changes in a very competi tive market place.WithdrawalAccording to the company unfitness to operate successfully in countries such as Canada, US, Fast East and some European countries as well as the Asian crisis in 1997, the choice left for the company would be to close the unprofitable outlets while remain operating in the other countries that still profitable.Market PenetrationMS starts to introduce a number of new product lines in 1998 such as cosmetics, financial services, furniture and etc. however by the time they were introduced its competitors had already followed MS some successful strategy. Consequently, MS has lost its competitive advantage. Market DevelopmentRegarding to the acquisition of 19 outlets from the Littlewoods group this was suitable because it allowed the company to achieve its reposition in the market place.Product DevelopmentMS re-evaluated and improved a number of product lines mainly in the food and lady clothing, but also entered into the furnishing business. The food lines impro ved MSs gainfulness however, the clothing and soft furnishing have not yet been able to compete with high street competitors.DiversificationMS had taken their standard strategy formula and tried to stall it in their overseas operations, but they did not take the culture differences and other risks, i.e. economic, commercial and political.Internal DevelopmentThe modernisation of outlets, the retraining of employee and upgrading their central purchasing system helped MS to be more competitive in the marketplace.AcquisitionMS acquired the 19 stores from Littelwoods for the purpose of adding them to the up-grading programme with the purpose of adding to the companys property assets. The company also acquired the food chain King Supermarkets in the United State, this operation operates under its own name.Joint DevelopmentMS required new ideas to add zeal to its product lines and therefore enhance the shopping experience of their customers. The failure of MSs suppliers to develop possib le new products has been viewed as a failure in their relationship which had to be communicate without delay. The problem was due to the past attention had been given to quality and effective delivery of the product, Marks Spencer standards have always be strict, the MS and not enough effort on focusing on their customers and what customer precious from the relationship. When the customers feel satisfied then will be prepared to grade themselves to future purchases from the same supplier, this can be viewed that the relationship gives MS a real competitive advantages as well as economic5.0 MSs situationText Box Industry Saleshttp//www.coursework.info/document/3/4/4/44381/44381_files/image013.gif According to the life cycle, MS is sitting in the mature stage and the fortunes have been in decline. As the increasing competition such as from Next and Gap, the customer tastes changing and the short of experience of going overseas, MSs profit declined sharply from 1,102m in 1997 to 54 6m in 1999 and the share price declined from 6.65 to 4.61 (The Chartered base of Marketing, 2001).http//www.coursework.info/document/3/4/4/44381/44381_files/image014.gifGap AnalysisMS was very successful in product range and quality in the past therefore, they overlooked the changes in the environment such as increasing competition, changes in customer tastes and so on. As a result, they remain do-nothing strategy without investing in product innovation, environmental monitoring or marketing, which led to the decreasing in profits in 1998. In order to fill the gap, MS should start to look at and change product and marketing strategies. Furthermore, different options should be looked at by MS such as brand identity (different brands for different segments), segmentation (more attention on key segments), diversification (for the financial service, they should choose the effective target audience and identify their needs and wants properly).(MS Corp. Press Office, 2001)http//www.cours ework.info/document/3/4/4/44381/44381_files/image015.gifIn the past, MSs strategy based on broad differentiation (image of good quality and wide range of products at affordable price). At the moment, its strategy was undecipherable because they were trying to do everything to maintain its competitive advantage. They are using misrelated strategies such as cutting costs (cost leadership) as well as trying to use differentiation focus by entering different niche markets (financial services and so on) as well as differentiating its brand through the range of products on offer. Consequently, leads to the company positioning in stuck in the middle.All in all, MS failed the sustainable competitive advantage hurdle. With volatile customers, changing fashions and intense competition, a sustainable competitive advantage is difficult to maintain in this particular sector. Although MS has plenty of attractive retail space and George Davies brought a magician, however, MS need to have some d ramatic change in order to survive and revive.6.0 Recommendation and conclusionMS faces the toughest test of its ability to survive in the war of the High Street. It must not only defend its market share, but must also find ways of gaining back customers perception in terms of quality, brand loyalty and so on. MS required new ideas to add excitement to its product lines and therefore enhance the shopping experience of their customers (Dennis Adcock, 2000). MS is changing itself such as outsourcing and recruit more new and young employees. sassy strategies are in Place an upmarket clothing line has been introduced, move to selling only own-brand products, stores have been revamped, top management appointments made, the utilization of Microsoft BizTalk serve and Window 2000 serve and opening out-of-town stores to shift surplus stock. The bother for MS is achieving the right balance between the corporate values that gave it its strong market position, and the innovation that is requ ired to stay competitive.It is a tough time for MS and also the right time for a new broom, MS should get lessons from past and look at more about what is natural event in the market place and change itself from the old way of doing things to a brand-new image in order to sustain its competitive advantage and regain its leading position.ReferenceBooks Case Study from Declan Daft and Marcic, 2001 Dennis Adcock, 2000, Marketing Strategies for competitive advantage John WileySons Inc. Hartley and Palmer, 1999 Jennings and Wattam, 1994, Decision Making An Integrated Approach, second edition, Financial Times, Pitman Jobber, 2001, Principles and Practice of Marketing, 3nd Edition, McGraw-Hill Publishing Company Johnson, Scholes, 1993, Exploring Corporate Strategy Text and Cases, 3rd edition, learner Hall International (UK) Ltd. Johnson Schole, 1997, Exploring Corporate Strategy, fourth Edition, Prentice Hall Kim Warren, 2002, Strategic Performance connecting to the fundamentals of business dynamics, capital of the United Kingdom Business School Morgenstein Strongin, 1992, Modern Retailing Management Principles Practice, 3rd Edition, Prentice Hall Naylor, 1999 Thompson, 2001, Strategic Management, 4th Edition, British LibraryInternet http//www.clm1.org/ nurture/2001/ms.pdf, 24/04/02 http//marksandspencer.com, 18/03/02 http//www.statsed.co.uk/bes/bes_spring1999/28_2/sec2.htm, 19/04/02Other Sources Chartered Institute of Marketing, 2001 Marks Spencer Press Release, June, 1996 MS 1998 annual report MS Corp. Press Office, 2001 Maureen Whitehead, 1992, Management Decision, Vol. 32 No. 3, 1994, pp. 38-41 Pawlyna, Andrea, British retailer on the roll, Asian Business, April, 1996 Welwyn Garden City, Deputy Head, Stanborough SchoolAppendix 1http//www.c